JUNE 2015 MARITIME PROTECTION SUCCESSFUL AZZAM AL FULAIJ ON HOW THE GOVERNMENT MUST DO MORE TO BUSINESS PROTECT KUWAIT’S WATERS READ THE CORRESPONDENT’S SERIES OF INTERVIEWS WITH MEGA PROJECTS THE GCC’S LEADING CHASE WARNE ON THE BIGGEST ENTREPRENEURS COMMERCIAL OPPORTUNITIES & DECISION-MAKERS IN THE GCC

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@CorrespondentUS NOTICE: The publishers regret that they cannot accept liability for errors and/or omissions contained in this publication, however caused. Washington D.C. with connections The opinions and the views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general use and may not be appropriate for the readers’ particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents to more than 300 destinations therefore may be reproduced without the explicit authorisation of the Editor in Chief or publisher in writing. ABCK, Ltd. (the trademark of the American Business Council Kuwait) is a member of the global network of American Chambers of Com- merce. ABCK, Ltd.’s mission is to promote trade, investment and goodwill between the United States of America, the membership, and across the Americas. the State of Kuwait. ABCK, Ltd. Is an independent, not-for-profit association as identified in US IRS Code 501(c) (6) comprised of leading American corporations present in Kuwait, their partner corporations, small and medium sized businesses, and prominent business lead- ers and entrepreneurs. The ABCK, Ltd. through its focus groups, committees and programs provides a forum for business executives to pursue and discuss issues impacting business operations between the U.S. and Kuwait. Through the support of its members, the ABCK, Ltd. is the recognized voice of American business in Kuwait and beyond. For more information, visit: www.abckw.org

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The launch of this inaugural issue of The Correspondent them should be heard. Yes, it is a business magazine but coincides with the 30th anniversary of the founding of every aspect of our lives is touched and influenced by the ABCK and this issue is in part, dedicated to the historic emotions including human factors that make us better or ties that Kuwait has enjoyed with the United States for worse; that have a profound bearing on the business that many decades. we conduct.

Any platform to express thoughts and ideas is a platform The Correspondent should be successful not only in its that can change the status quo, improve and build. As commercial mandate but I wish to also see it succeeding we launch this first revised edition of The Correspondent, first and foremost by sharing ideas, thoughts and opinions our aim is to do just that. We want to strengthen the ties from people whose experience is unique and inspirational. between the US and the Gulf Cooperation Council member The level of information and debate should be of the states through a quality magazine which showcases various highest quality and we aim to improve the quality of sectors, subjects and people. what we bring you as we progress on this voyage.

As a Kuwaiti, I feel it is imperative to showcase more I hope you will enjoy this first edition. If we can make a people who are creative and ambitious. Their dedication difference, no matter how small it is, we will have succeeded to positively changing themselves and the world around in our ambition to launch this new platform for ideas, quality debate and improving business opportunities.

Abdulaziz M. Al-Anjeri The Kuwaiti Kilma Media & Advertising Company

THE VOICE OF AMERICAN BUSINESS IN THE GCC EMBASSY OF THE UNITED STATES OF AMERICA Kuwait City, Kuwait - November 24, 2014 Mr. Douglas A. Silliman

Dear Readers : My wife Catherine and I are thrilled to be in Kuwait, and the people we have met through the ABCK have played a big part in making our first few months here so enjoyable. That is why I am pleased to introduce the latest edition of “THE CORRESPONDENT” by taking this opportunity to thank the ABCK for the excellent cooperation between our Embassy and the business community.

By now, I am sure that you are used to hearing just how strong the trading relationship between the United States and Kuwait has become, but did you know that our bilateral trade volumes grews by more than 167%, from $5.7 billion in 2009 to $15.2 billion in 2013? Contrary to popular belief, that is not U.S. imports of Kuwaiti oil: over that same period, U.S. exports to Kuwait grew by 33% making it abundantly clear that Kuwait’s market continues to offer a unique growth opportunity to those companies willing to make a long-term commitment.

I want to help American business take advantage of those opportunities in order to support job growth both in the United States and Kuwait. Over the coming year, my top three goals in the economic arena will be: i) improving the business environment for American firms; ii) advancing President Obama’s goal of doubling our exports from 2009 to 2015; and iii) attracting greater and more diversified Kuwaiti investments in America.

I want to commend the ABCK for its contributions to bringing the U.S. - Kuwait commercial partnership to where it is today. All of us - the American Business Council, companies, universities, non-govermental organizations, and the U.S. Embassy - have unique but mutually reinforcing roles to play in this endeavor. I look forward to talking with each of you about how we can better work together to achieve our goals.

I invite you to read more about ABCK and Embassy-sponsored initiatives and events in this edition of “THE CORRESPONDENT” to learn more about the Embassy’s activities and services please visit our website at www.kuwait.usembassy.gov, and follow me on Instagram and Twitter ar @AmbSilliman.

Sincerely,

Douglas A. Silliman Ambassador CHAIRMAN’S MESSAGE 9

WE ARE ALWAYS LOOKING AT WAYS TO IMPROVE OUR MESSAGE AND ENSURE WE PROVIDE MEANINGFUL BENEFITS TO EACH OF YOU . . .

Dear Members and Friends of the ABCK, I am delighted to As many of you know, for the past 30 years, the ABCK AD PLACE welcome readers to the inaugural issue of our new look has operated largely as an unrecognized business quarterly, The Correspondent. I hope the wide variety of association in Kuwait, formally organized but operating timely and in-depth articles and interviews will be enjoyed under the umbrella and goodwill of the US Embassy. I by members new and old and that you are all as excited am pleased to announce that as of January 2014, the as I am about the changes. ABCK was incorporated as a Delaware company and became the American Business Council Ltd. This milestone is the perfect moment to reflect on our past successes as well as future plans for enhancing this I would like to congratulate the entire ABCK team and organization’s work not only as an advocate for promoting the original founders whose hard work has provided the American brands, products and services in Kuwait, but drive behind the organization. Thanks also to the kind also by bringing together our Kuwaiti and US business and helpful Embassy team who have equally supported partners together through programs and events that our common goals. On behalf of the ABCK, I would like enhance that message. to take this apportunity to welcome Ambassador Silliman and his family to Kuwait! The ABCK continues to thrive I think we all agree, we have come a long way! as a result of its active and robust membership.

As we enter a new era of growth and opportunity for the I want to thank all the board members and volunteers ABCK and its members, the viability of our organization who work so hard to ensure the ABCK’s relevance. If rests on our members, sponsors and other business you have any ideas for the ABCK and The Correspondent, partners who share our goals. We are always looking at please feel free to contact me through the ABCK ways to improve our message and ensure we provide official website. Here’s to an exciting 2015! meaningful benefits to each of you. Yours,

Scott Beverly Chairman Of American Business Council in Kuwait

THE VOICE OF AMERICAN BUSINESS IN THE GCC INTERVIEW 10 PUTTING KUWAIT 11

THE CORRESPONDENT: KUWAIT TIMES WAS THE FIRST ENGLISH LANGUAGE PAPER IN THE GULF, ON THE NEWS STAGE FOUNDED IN 1961 BY YOUR LATE FATHER. WHAT Kuwait Times Editor in Chief, ARE THE CHALLENGES OF BRINGING A TRADITIONAL NEWSPAPER INTO THE DIGITAL AGE? Interview by MARYANN HORNE ABDULRAHMAN AL-ALYAN ABDULRAHMAN AL-ALYAN: This is a global debate Photography by LYNDA HIGGS speaks to The Correspondent within the industry because it has changed so much over the past decade. Our main concentration used about the legacy of reporting to be on reporting the news; but today, it is on reporting it in a way that is not time sensitive. The emphasis is Kuwait for an international audience on commentary, analysis and features. In short, material and the challenges of bringing that you cannot get when an incident happens. There is a risk of creating star writers because people will the Gulf’s first English-speaking look to them to have added value and bring readers perspective that they can’t access because of the newspaper into the digital age. nature of live reporting. A football match is a good example. Everyone can watch a game and get the score instantly these days. What the newspapers bring is helping to put events into perspective, write about what happened before and after the match, provide analysis and this is what keeps readers coming back.

TC: DOING COMMENTARY IN KUWAIT OBVIOUSLY HAS ITS CHALLENGES? AA: The good thing about Kuwait is that there is a clear law about what you can and cannot do. It is better than having taboos and not knowing whether you can write about certain things or cannot. The Kuwait Times and other newspapers here have been very active in pushing the boundaries and getting closer to the goal they want. The law is the best in the Middle East in terms of freedom of press, despite being restrictive. We will naturally continue to campaign for greater freedom. We make it a policy to challenge gagging orders, for example. If there is a story we cannot publish, we will print the actual order preventing us from doing so. This is a habit we picked up in the old days when the government censor used to go through the paper. In retaliation to censorship, we would leave the space where a censored article should have been printed blank. That went on for a couple of years until the government gave up.

TC: HOW HAS THE VISION CHANGED? AA: The vision of the Kuwait Times was the one of my late father, Yousef Al-Alyan. He wanted to showcase Kuwait to the world. The paper was established at a time when Kuwait was a British colony so the idea was to start showing Kuwait’s development and enable people to get to know our country. If you go through the archives of many embassies and governments across the world, you will find many articles from Kuwait Times.

THE VOICE OF AMERICAN BUSINESS IN THE GCC INTERVIEW 12 13

MARYANN HORNE

Maryann Horne is a former BBC and Reuters reporter. She has worked in Kuwait Times was the first english language newspaper in the GCC broadcasting and print journalism for TC: WHAT IS YOUR VISION NOW? protecting and defending the rights of twenty years. The British writer has AA: We carry on with this vision and all people, including women and those worked in Libya, Afghanistan, Sudan, want to ensure Kuwait is understood and who are foreign. We try to push for and other conflict regions covering is on the international news map. Our what we think are the right regulations news and current affairs. She main goal is the betterment of Kuwait in this regard. specialises in portraits and profiles from a national perspective. We also of economic and business leaders hold our regional morals and defend TC: WHAT HAVE BEEN THE BIGGEST and has widespread experience these. We are nationalistic but we don’t STORIES IN THE PAST DECADE? in TV and radio reporting. She is want to be biased. Of course, we get AA: From an international perspective, currently based in the GCC and accused of criticizing certain policies, the fall of Saddam was a huge works as a free-lance writer and for example those targeting expats. story. Locally, women getting their editor. But what we want is to see Kuwait as parliamentary rights was a very a regional icon. For example, we want significant story and development. Kuwait to represent Islam. Islam as the This story has changed politics all religion in the proper and true sense together here. In some regards, it and not the Islam linked to terrorism that has also put pressure on neighboring seems to unfortunately be the popular countries, particularly those where face of our religion. We want to see women can’t drive. My father Kuwait as a leader, for example by had reached A TALE OF OCCUPATION AND MADNESS the point where Walking around the Kuwait Times printing press is a walk The next morning, despite the pleas of his relatives, he returned down history lane. It is striking and one can see, smell and to the Kuwait Times offices, only to be told the soldiers needed feel authenticity. The original printing presses are intact, as are more time. It was then, in his own words, that he “lost it”. He he didn’t care most of the buildings. Their age is testament to the newspaper drove in a blind rage to the Iraqi General’s Headquarters, found as a local and regional institution. So why did the Kuwait Times his office and confronted him about his lack of authority by survive the occupation unscathed while the media was the shouting and even banging his fist on the table. He was in if he would systematic target of the Iraqi forces? The answer is testament such a furious state and displayed such audacity with men to the sheer courage and passion of Yousef Saleh Al-Alyan, who could have executed him on the spot, that the General the founding Editor. concluded he was crazy. He ordered his men to leave, as he be killed . . . came to the conclusion that the Editor in Chief was insane. When the Iraqi forces descended on the premises, Yousef Al-Alyan confronted them directly, requesting the appropriate “My father had reached the point where he didn’t care if he documents and then lecturing them about the law. He didn’t would be killed,” says Abdulrahman Aylan. “He had such high hide his anger as he physically tried to prevent them from values and passion that he was going to defend them no matter entering the premises, despite being threatened. He asked what. He himself told us he lost it. In fact, he didn’t remember them how long they needed and came back when the three some of the things he did or where he found the courage to hours were up, only to be told to come back the next day. do what he did.” THE VOICE OF AMERICAN BUSINESS IN THE GCC INTERVIEW 14 15

The media is one of the best indicators of economic AD PLACE growth

A LABOR OF LOVE, Abdulrahman with Alwatheq Darwish, press manager at Kuwait Times

TC: AND WHAT STORIES DO YOU staff, our readers and makes life weight to push his business, they can’t ANTICIPATE IN THE YEARS TO difficult in general. really start their own business. The COME? regulations make it difficult. In these AA: It all depends on how the country TC: WHAT IS THE ECONOMIC testing economic times, the whole grows economically. There is potential SITUATION LIKE IN YOUR SECTOR? world is suffering. In the West, there and there is cash. The private sector AA: The biggest indicator of are more reports of young people has the know how and experience economic growth in a country is starting their business from home. and infrastructure is there, even if it often the media. When the market This is not allowed in Kuwait. needs modernization. The only issue is doing well, the media does well is the regulation. It restricts business with advertising. When the situation TC: FINALLY, WHAT IS YOUR growth. From our perspective at is difficult, budgets are scrapped ADVICE TO ENTREPRENEURS? Kuwait Times, it is this regulation and the media suffers. The situation AA: You need to keep pushing to get which makes it difficult to move is improving but it is still not great. what you need and want. If you don’t forward. have wasta, you need to keep trying TC: YOU ARE ONE OF THE and have faith and perseverance. TC: WHAT CHALLENGES DO YOU MOST RESPECTED YOUNG It can seem daunting and it can ENCOUNTER? ENTREPRENEURS IN KUWAIT. take time. It took me six months for AA: The majority of our readers are WHAT DOES IT TAKE TO BE AN example to open a company. You foreigners and one of our biggest ENTREPRENEUR HERE? feel at times like giving up or starting challenges are the new regulations AA: Honestly? Wasta! This is where your business elsewhere. You have against expats and the threat of we, in Kuwait, face a real problem. to keep pushing because once you changes to the law. Every time a Nowadays, if you have a young get there, there is big potential. decision is made in this area, we entrepreneur who isn’t from a family that feel the full brunt of it. It affects our has the political connections or financial

THE VOICE OF AMERICAN BUSINESS IN THE GCC OIL & GAS 16 17 OIL PRICE FALL MAY HAMPER FUTURE SUPPLY GROWTH Two decades from now, energy price shock. The dramatic rise in US demand will have risen by 40%, production of tight light crude oil from What are the prospects in the energy market and how will the recent fall in prices equal to the combined current shale deposits, tepid demand from consumption of the US and China. China and India as well as continued shake it up? What will be the impact of the so-called shale gas revolution and how will To meet that demand the world will high levels of OPEC production all GCC countries fare in years to come? Find out more about the political and economic need to find an additional 50 million contributed to market weakness. barrels of oil — equal to 10 times changes and how they will impact on this increasingly receptive industry . . . the current production of Saudi The medium term outlook is relaxed Arabia — to make up for natural with the so-called shale gas revolution by KATE DOURIAN declines from producing fields and and the surge in tight and heavy bring on new capacity. That was oil production in North America the consensus that emerged from a more than sufficient to meet energy three-day industry gathering in Abu demand over the next five years. Dhabi last November. Beyond 2020, demand for OPEC’s oil picks up. BP’s highly anticipated It’s obviously a long term view based outlook to 2035 issued on February on the projections of international oil 17 says overall demand is expected companies like BP, Shell and Total as to rise to 111 million b/d by 2035, well as intergovernmental agencies at which time tight oil production in like the International Energy Agency the US will have gone into decline, (IEA) and OPEC, the Arab-dominated increasing the call on OPEC oil. oil producers’ group. Yet in order Fossil fuels — crude oil, natural gas to meet the projected demand by and coal — will make up 70% of the 2035, investment decisions have energy mix, roughly equal to current to be made now. Oil prices fell by percentages though the share of roughly 60% between June and gas will grow far faster than that of January, though they have recovered oil. By the end of the outlook period, somewhat to trade in a band either OPEC’s production will have risen by side of $ 50 and $ 60/B, a move 7 million b/d with increases expected that that Kuwait’s Oil Minister, Ali mainly from the UAE, Kuwait and Saleh Al-Omair, predicted would Iraq though the security situation occur earlier than some analysts in the latter means that Iraqi oil is had envisaged. the wild card in all projections of future supply. According to the BP Yet prices are still down from the outlook, OPEC will regain market 2014 high of $ 115/B, and should share lost to non-OPEC producers price weakness persist, the oil market and by 2030, demand for OPEC may be in for a future supply and crude will exceed the 2007 historic

THE VOICE OF AMERICAN BUSINESS IN THE GCC OIL & GAS OIL & GAS 18 19

The OPEC Secretary General, cost of battling the insurgency in the damage. Libya, in the grips of political Abdalla El-Badri says that energy north and northwest. Elsewhere in the turmoil, recently saw production fall projects worth $ 340 billion in the Arabian Gulf, political stability and below 200,000 b/d compared with medium term are at risk should oil four years of steady oil prices at an normal production of 1.6 million b/d. price weakness continue. average $ 100 per barrel resulted in Amid all this uncertainty, the onus the accumulation by Gulf Arab states is on the remaining three Middle The IEA warned in its latest World of comfortable cash piles that will Eastern producers — Saudi Arabia, Energy Outlook to 2040 that today’s allow major oil producers like Saudi Kuwait and the UAE — where picture of an oversupplied market Arabia, Kuwait and the UAE to ride capacity expansion plans are at should not lead to complacency, out lower oil prices in the short term. various stages of development. It given that the world will in future Kuwait, for example, has a higher is worth noting that many of the oil have to depend on a shrinking tolerance for much lower oil prices producing countries in the Arabian pool of key suppliers, many of to balance its budget compared Gulf are putting more effort into them in the Middle East. Recent with its peers. development of natural gas reserves geopolitical developments and to meet rising domestic demand deteriorating security conditions in There is also a question mark as in subsidized markets. Kuwait is several Middle Eastern countries, in to how quickly Iran can reclaim its reviewing its energy subsidies with a particular Iraq, have muddied the former position as the second largest view to raising prices of some refined picture. Iraq was to be the single producer in OPEC after Saudi Arabia products. Failure by others to follow biggest contributor to energy supply if and when international sanctions suit will result in continued high growth over the coming decade. Yet against it are lifted. domestic consumption of energy infrastructure constraints and the and erosion in oil export capacity security challenges it now faces have All this makes it difficult to predict just in the years to come. led to far lower growth forecasts. The how much investment will be needed IEA says Iraq will have to invest $15 from the other OPEC producers and Saudi Arabia expanded its oil record of 32 million b/d. These long- Survey (MEES) on 21 December OPEC believes the pain threshold billion annually to achieve moderate where the additional capacity will production capacity to 12.5 million term projections, which see declines that the OPEC heavyweight would is somewhere around the $ 80 per growth in output capacity. come from. Venezuela has large b/d in the last decade and is stopping in the production of unconventional not cut production unilaterally even barrel level and is waiting out the reserves of both conventional and there, at least for now. Kuwait’s plan oils in North America within the next if prices fell to $ 20/B, signaling that oil price slide, though technological Unlike the other Arab Gulf producers very heavy oil but its economy is to add 1 million barrels per day to five years, were doubtless in the the Kingdom would no longer play advances are expected to prolong like Saudi Arabia, Kuwait, the UAE in shambles. Angola, meanwhile, capacity, taking it up to 4 million minds of OPEC’s ministers when the role of swing producer and allow the life of shale fields. However, the and Qatar, Iraq is not flush with cash is staring at production declines barrels a day, has proved more they decided on 27 November to others to grab market share at its recent drop in the number of drilling due largely to the fact that its oil in the near future while Nigeria has challenging than anticipated, both maintain their production ceiling at expense. The world, he said, may rigs in North America, an indicator revenues have been hit by the loss of seen a flight of investors as a result technically and politically. 30 million b/d despite the obvious not see $ 100/B oil again. Tight oil of the impact of lower prices on its northern oil exports and the high of constant oil theft and pipeline supply overhang. The key Gulf Arab produced through the so-called producers of shale, has not so far had producers within OPEC — Saudi fracking process is more expensive any serious impact on US production, Arabia, Kuwait, the UAE and Qatar — to produce than conventional oil and which continues to rise though at KATE DOURIAN is Senior Editor at MEES, a weekly publication that is focused stuck to their guns and led the other suffers from a much higher decline a slightly slower pace than in the on energy and economic analysis. Kate has been published widely on energy members of the 12-nation organization rate than conventional reservoirs so previous five years. What is clear matters. She is a regular commentator on radio and television on energy toward an agreement that effectively the growth in unconventional sources is that OPEC producers — Saudi matters. Which include appearances on BBC television and radio, CNN, Al- ceded control of the oil market to of energy is unsustainable in the Arabia, Kuwait, the UAE, Qatar, Arabiya and CNBC. market forces. longer term. The jury is out on the Iraq, Iran, Nigeria, Angola, Algeria, lifespan of shale oil though there Libya, Venezuela and Ecuador — will She started her career as a journalist in 1980. She joined the Associated Press OPEC’s high stakes games is is general agreement that US tight have to cede some market share to in Beirut in 1980 as a correspondent. After three years, covering mainly the predicated on the assumption that oil producers cannot continue to independent producers, led by the KATE DOURIAN war in Lebanon, the assassination of Muhammad Anwar El-Sadat in Egypt the low price environment will affect operate in a sustained low oil price US and Canada, until 2019. At the and the Israeli invasion of Lebanon, Kate moved to Reuters, where she spent the higher cost producers of shale oil environment. same time, they have to prepare seventeen years working first as a correspondent in Beirut, then on assignments and oil sands in North America and for the period beyond 2020, when in Cairo, London and finally in Morocco, where she was the First Bureau Chief. is willing to wait out a period of lower Again, opinions differ as to how low oil their share of the market is set to She left Reuters in 2000 and joined Platts, the energy information division of oil prices rather than cede market prices will have to go before US tight grow and they need to do so even the McGraw-Hill Companies, where she was Editor in Chief for the Middle share. Indeed, Saudi Arabian Oil oil fields are forced to shut down or as their revenues are shrinking. East covering energy developments throughout the Gulf and North Africa Minister, Ali Naimi, said in an interview smaller developers sink deeper into until May 2013. with the Middle East Economic debt and are forced out of business.

THE VOICE OF AMERICAN BUSINESS IN THE GCC 20 21

Kuwait’s oil ministry recognizes that the development It is worth noting that these forecasts are being revised down of heavy oil fields in the north will require the help of the in line with weaker current oil prices. But low oil prices are international oil companies. This, however, will require not necessarily all bad. “The best cure for low oil prices is parliamentary approval which is far from guaranteed. The low oil prices,” is an industry mantra. Commodities’ price UAE is also planning to raise its production capacity to movements tend to be cyclical and the energy industry 3.5 million barrels a day by the end of the decade though is a long haul business. The International Monetary Fund some targets have slipped. makes the point that the decline in oil prices will boost global growth though the impact will be universal. A respite Another complication in deciding just how much investment from high oil prices will improve the external positions of will be needed is the divergence between the long term net oil importers though they pose an additional downside outlook for demand in the projections of the IEA and OPEC. risk for producers in emerging economies where growth The IEA sees oil demand growing to 103.9 million barrels a is decelerating. day by 2040 from 90 million barrels a day in 2013. OPEC will need to produce 6 million barrels a day more after 2020 The challenge is to find a balanced approach that will to meet its share of this demand growth, it says. OPEC, on encourage oil producers to invest in new capacity without the other hand, is more bullish, projecting demand growth prejudice while meeting climate change objectives and to 111.1 million barrels per day. The IEA and independent adapting to what might be a sustained period of low oil analysts expect the bear market to continue in the near prices. Current known oil and gas resources are abundant term as a result of uneven economic growth across the even without major new discoveries but they will be more globe and the current oversupply in oil markets. The leading costly and difficult to produce. This means the international international banks have already lowered their oil price oil companies with their superior technology and the main forecasts in the short term to levels closer to $ 85-$ 90 per resource holders in the Middle East, the national oil companies, barrel. Deutsche Bank, for example, lowered its forecast for or NOCs, will have to lock arms and find a way to get the Brent crude to an average $ 89-$ 90 per barrel util 2018. It oil and gas out of the ground to supply future generations. also cut its long term estimate to $ 90 per barrel from $105.

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KUWAIT’S OIL AND GAS MARKET BUOYANT After years of stagnation, the oil and gas industry in Kuwait has turned a corner. Over USD 23 bn has already been awarded with billions more in the pipeline. These developments have created a buoyant mood. After years of political turmoil and delays, Kuwait is now the biggest spender in the sector in the GCC. by KEVIN BAXTER

After several years of procrastination barrels a day (b/d), from 736,000 b/d across the country. The CFP and NRP However, in 2009, as the global financial This was swiftly followed by Kuwait’s and stagnation, Kuwait’s hydrocarbons currently. The Shuaiba refinery, which have been on the table since 2007 crisis drove oil prices down to USD 32 oil sector undergoing a massive project market sprang into life in 2014 sits between the two, will be retired as when it became apparent to KNPC a barrel, Kuwait decided to shelve both shake-up as Farouk Al-Zanki, the Chief with almost USD 23bn worth of projects its rehabilitation has been deemed that its existing refineries, the youngest schemes. It is likely that 2008/2009 will Executive Officer of Kuwait Petroleum awarded across various oil and gas economically unfeasible. of which was commissioned in 1968, go down as one of the worst periods in Corporation (KPC), was removed from sectors. were in dire need of modernization the history of Kuwait’s hydrocarbons his post, along with almost all of the The scheme will be followed by the and rehabilitation. sector with a combined USD 50bn-plus firm’s senior executives. The largest by far were the USD 12bn- construction of a USD 15bn New worth of deals going to the wall. As well The reshuffle was almost certainly plus worth of projects that make up Refinery Project (NRP), a facility built The packages: as the CFP and NRP being postponed, a triggered by the Dow Chemical KEVIN BAXTER the long awaited Clean Fuels Project to replace Shuaiba. USD 17.5bn joint venture between Kuwait’s compensation decision and Oil Minister (CFP), the huge refinery project being Mina Al-Ahmadi – USD 4.8bn: JGC Petroleum Industries Corporation (PIC) Hani Hussein was given the choice Kevin Baxter has been Energy executed by the state refinery Kuwait THE NEW Corporation (Japan)/SK Engineering and the US’ Dow Chemical. of resigning or facing questions in and Industries Editor at MEED National Petroleum Company (KNPC). & Construction (South Korea)/GS parliament over the ruling. He chose since 2010. He provides business REFINERY PROJECT Engineering & Construction (South Korea) THE COLLAPSE OF to resign. Mustafa al-Shamali, the former intelligence and world leading The CFP has been designed to revamp INCLUDES THE finance minister,was appointed acting exclusive content to the Energy three of Kuwait’s existing refineries Mina Abdullah 1 – USD 3.74bn: Petrofac THESE MEGA PROJECTS oil minister to replace Hussein, while business community. He is to improve their efficiency and meet CONSUTRUCTION (UK)/Samsung Engineering (South Korea)/ WAS FOLLOWED BY Nizar Al-Adsani was selected to head specialized in energy analysis higher international fuel standards. CB&I Lummus (US) KPC. and economic alongside market About 23 per cent of Kuwait’s exports OF THE LARGEST A COMPLETE SHAKE UP forecasting. Particularly in the are made up of refined products such Mina Abdullah 2 – USD 3.4bn: Fluor OF THE K-COMPANIES Despite the chaos of mid-2013, it is GCC sector and Saudi Arabia REFINERY EVER BUILT as gasoline, diesel and jet fuel and all Corporation (US)/Hyundai Heavy AT THE CEO LEVEL clear that the reshuffle worked. Despite in particular. Prior to his role at of these are subject to increasingly IN A SINGLE PHASE Industries (South Korea)/Daewoo being viewed as extremely drastic at the MEED, he worked for Arabian stringent standards regarding pollutant Engineering & Construction (South Korea) time, it allowed Kuwait’s hydrocarbon Oil and Gas and The Times of content. The NRP involves the construction of The fall-out from the collapse of these huge to start afresh and the USD 22.6bn London. a 615,000 b/d refinery atAl-Zour in the A combined budget of over USD 30bn projects has been severe and resulted that was lavished on projects in 2014 The scheme involves upgrades and south of Kuwait. The new facility would was mooted and KNPC even went as far in Kuwait having to pay Dow Chemical proves that it was needed. expansions of the Mina Al-Ahmadi and be the largest refinery ever built in a as to award engineering, procurement USD 2.2bn in compensation in mid-2013 Mina Abdullah refineries to increase single phase and is intended to supply and construction (EPC) contracts for after several years of arbitration with the To put some perspective on the sheer their combined capacity to 800,000 low-sulphur fuel oil for power generation the CFP. International Chamber of Commerce. scale of the project awards made in

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2014, Kuwait only spent USD 7.1bn combined for the previous five years BILLIONS PROMISED ARE NOW BEING SPENT IS A of 2009-2013. However, with oil prices SIGN THAT THE MARKET HAS COMPLETELY TURNED falling to six-year lows in early 2015 some industry sources are worried that AROUND AND IS OVERTAKING AS THE GCC’S the knock-on effect of that could slow LARGEST SPENDER IN THE SECTOR down some of Kuwait’s hydrocarbon projects. “There are several historical There will be a review. There will be While there is no question that Kuwait precedents that prove that the oil prices screening for projects. [If refining has turned a corner and is now ISLAMIC falling usually spells bad news for margins shrink], the more important starting to invest huge sums in its the larger projects in Kuwait,” says a projects will [still] move [ahead]. The most important sector, there are still Kuwait-based oil consultant. “Whether less important projects will see delays.” some to be convinced that all of the this will be the case in 2015 is a flagship schemes will be executed question many would like answered “The government is committed and on schedule. BANKING sooner rather than later.” KNPC is committed, and we are moving forward with the LNG import The CFP is likely to be one that does A MORE ETHICAL BANKING OPTION Mohammad Ghazi Al-Mutairi, CEO of facilities and the Al-Zour refinery,” go ahead to budget and to the agreed KNPC, recently said that some non- said Al-Mutairi. Kuwait has started timeline only because it is so essential essential projects at pre-construction the year positively by awarding the for the work to be done in order to export phases could be slowed down due UK firm Petrofac and Athens-based the product slate from each facility. It is one of the most successful methods of banking in the GCC, but what is Islamic banking? to the low oil prices. According to the Consolidated Contractors Company official, a review will be carried out (CCC) the EPC contract for the Lower However, there could be some Where did it originate and can it compete with conventional banking? What are the main trends to determine which projects will be Fars heavy oil (LFHO) development reluctance to invest an equally huge for the next five to ten years and how will new technology affect this traditional way of banking? affected. The review with judgments project, with a bid of USD 4.3bn. sum only a year after the CFP, which Special Report by ELSA MCLAREN, The Correspondent on project approval being made on The single EPC tender is for the first could mean the NRP is delayed until an individual basis with reference to phase of the project’s development there is more stability in the oil price. refining margins. and includes the construction of a Islamic banking is not a new concept. banking option. Today, Islamic Over the next five to ten years, the steam injection facility, production Despite the concerns with lower oil Interest in Sharia-compliant banking financial institutions operate in more main trends and growth in Islamic He also stressed that KNPC’s facilities, a support complex, tank prices, there is no question that Kuwait’s dates back to the 1950s, but it was than 58 countries. Islamic banks banking will come in the use of new strategically important schemes, such farms and a 270,000 barrel-a-day hydrocarbons project sector came alive not until the 1970s that Islamic banks offer a range of products for both technology and mobile banking, as the Clean Fuels Project (CFP), the (b/d) pipeline to transport the heavy in 2014 after years of uncertainty. Low oil started to take root, opening in the retail and wholesale markets and a which is becoming increasingly Al-Zour refinery and plans to build crude to the planned new refinery at prices may slow down progress slightly in UAE, Kuwait, Bahrain, Egypt, Saudi series of financial instruments have important for today’s retail customers. a new liquefied natural gas (LNG) Al-Zour in the south of Kuwait. 2015, but a clear strategy now seems to Arabia and Sudan. Islamic banking been developed to help financial If done properly, by applying best import terminal in the Al-Zour area, be in place and the future looks far more is based on the principles of Sharia institutions manage liquidity. In some international practices and adapting will not be reviewed or put on hold. The project will go some way to positive today than it did 12 months ago. which prohibits the payment or Muslim-majority markets, the share the technology to suit their customer alleviating fears about projects slowing acceptance of interest charges for of Islamic assets is greater than base, this can be a major growth “The biggest challenge [for KNPC] down in Kuwait and will be offered as the lending and accepting of money, conventional banking, with Saudi driver for Islamic banks. going forward is the stability of the proof by the KOC that the country is as well as carrying out trade and Arabia’s assets at 52%, and there market,” he said. “What is very committed to maintaining its oil and other activities that provide goods or is strong potential for future growth Successful Islamic banks will also important is both the crude market gas project spending in the face of services considered against Islamic given population growth and rising seek to expand out of their domestic and the refined product market.” falling oil prices. values. incomes. markets into countries like Turkey, Pakistan and Indonesia, to tap into Throughout the 2008-2009 global Yet, there is still a long way for Islamic the opportunities of their un-banked financial crisis, Islamic banks finance to go before it can compete populations. Likewise, mergers and proved to be more resilient than with conventional banking. Globally acquisitions will develop the industry conventional ones. While their in 2013, according to Thomson by creating mega-Islamic banks that growth slowed, Islamic banks were Reuters, conventional banking assets can compare with major global high still able to increase shareholder accounted for an estimated USD street names, such as the recent wealth by improving equity positions 123.7 trillion, while Islamic banking three-way merger between CIMB and generating profitable returns. assets only amounted to USD 1,320 Group Holdings, RHB Capital and As a result, Islamic banking has billion, or less than 1% of global Malaysia Building Society, valued become more popular with non- assets. at USD 22.3 billion that created Muslims searching for a more ethical Malaysia’s largest bank by assets.

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Released in 2010, it complements the Dr. Sultan Emir Hidayat, writing in the banks and lead to profitable and forerunners, Basel I and Basel II, by ICD Thomson Reuters Islamic Finance well-managed growth in the financial demanding higher capital requirements Development Report 2014, says: “The services sector. In addition to Basel on banks especially for Tier 1 capital more stringent liquidity requirements III, CBK is taking steps to increase CAPITAL WINDS OF (Total Common Equity), increasing may also have a direct impact on banks’ competition in the banking sector the capital charge for derivatives and incomes since more investment in liquid by allowing foreign banks to open securities transactions (trading book assets means lower incomes. The multiple branches in the country. exposures), increasing liquidity coverage implementation of Basel II will also add ratio and changing the definitions of compliance costs by 30-50 per cent.” Currently, a total of 12 foreign banks CHANGE SWEEP capital. For Kuwait’s growing Islamic banking operate in the country, including sector, Basel III regulations pose an National Bank of Abu Dhabi, Qatar CBK was one of the first to implement additional problem as the accord does National Bank, Citigroup and HSBC. Basel II and so its progression to adopt not take into consideration the different However, according to a source from ACROSS KUWAIT the latest accord is a natural one. In financial structure ofSharia-compliant Union National Bank, the Kuwaiti a statement, the CBK Governor Dr. institutions. Although these regulations sector remains restricted and less With the minimum capital requirements for Kuwait banks increasing Mohammad Y. Al-Hashel, said: “The CBK require substantial work at local level, profitable when compared to the UAE, is constantly upgrading its regulatory they represent an opportunity for Kuwait’s which is where, he said, the bank as of 01 January, 2015, we take a look at Basel III and what it means tools in line with best practices so as to banking sector. will focus its efforts in the short-term. reinforce banks’ resilience to financial Yet, the regulatory steps being for the banking sector. shocks, whilst capitalizing on well- A study by the management implemented in Kuwait are largely balanced and gradually introduced consultancy firm Strategy&, formerly welcomed by the banking sector by ELSA MCLAREN, The Correspondent regulatory policies that aim to Booz & Company, said that Basel III, and point to a longer-term strategy strengthen the banking and financial with its higher capital requirements to increase competition, implement system, without negatively affecting and more stringent definitions of international best practice and attract economic growth.” The adoption of capital, forces banks to examine new expertise to the market, helping Basel III will require banks to increase their capital allocation and deploy to ensure the country’s banking sector their equity capital by at least 25 per their capital more strategically. is better insulated against any future cent, an additional 40 per cent liquidity external shocks. buffer and extra 10 -15 per cent stable The accord will also strengthen Dr. Mohammad Y. Al-Hashel funding over current requirements. investors’ confidence in Kuwait Governor and Chairman of the Board of Directors, Central Bank of Kuwait

Kuwait has been proactive in introducing implementation of Basel III capital ELSA MCLAREN banking regulations to mitigate potential regulations for conventional and Islamic risks; possibly a lesson learned from bank segments. Elsa McLaren has worked as a the global financial crisis of 2008 and journalist in the UK and GCC for 2009, which saw the country’s banking The announcement raises the minimum over 10 years. Currently based in system suffer a severe drop in liquidity capital adequacy ratio requirement for Dubai, she writes about business and asset values. Since 2012, Kuwait’s Kuwaiti banks from 12 per cent in two news, specifically trade, African banking sector has stabilized and seen stages, to 12.5 per cent in 2015 and investment and Islamic finance. steady growth, with total assets of local to 13 per cent by 2016. Basel III is a banks worth $ 190.2 billion at the end of comprehensive set of reforms, developed the first quarter of 2014, up from $ 181.1 by the Basel Committee on Banking billion at the end of 2013 and $ 158.6 Supervision, to strengthen regulation, billion at the end of 2012, according supervision and risk management to Oxford Business Group. following the devastating impact of the global financial crisis. In February 2014, the Central Bank of Kuwait (CBK) announced the

THE VOICE OF AMERICAN BUSINESS IN THE GCC GREEN CANARY GREEN CANARY 28 29 A GREENER GRASS IN KUWAIT How a drought in California is inspiring the Gulf State to use a new technology. by The Correspondent Shawn Sahbari has over 25 years of experience with high purity, While Gulf states have always company founded by pioneers in electronic chemicals, and specialty known the perils of desertification green technology. GPS boasts over materials, having started and co- and the high cost of supplying two decades of expertise in the field, founded multiple companies in potable and non-potable water, including development of proprietary Silicon Valley. He holds a BS degree over 12,500 kilometers away on materials with US and global patents with distinct Honors in Aerospace America’s once famously fertile and trademarks. At the heart of GPS Engineering from SJSU, and has West Coast, Californians now face was the idea that they needed to be completed executive MBA courses a similar problem. “benign-by-design”, creating products through UC Berkeley. His pioneering A PROJECT WELL DONE FOR GREEN CANARY IN ONE OF THE MOST RECOGNIZED work with new materials and benign- that are good for the environment GARDENS IN KUWAIT In 2013, California saw the driest and consumers alike.“Grass was Grass painting has gained popularity by-design green chemistry led him to calendar year in 119 years; by the first victim of California’s housing in recent years mainly as a temporary in sloped applications.Usually of plastic turf. It is an immediate contribute to ex-California Governor, January 2014, the situation was so crisis” he says. Realizing that many solution for coloring dormant or dry applied and completed in under a solution and lasts up to three months Schwarzenegger’s, Green Chemistry severe that California State Governor, people wanted to find a way to keep grass in the off-season. However few hours, the formulation can be if applied correctly and will enhance Initiative where he provided direction Jerry Brown was obliged to declare lawns green without wasting water, Sahbari claims the product is used for residential and commercial any patch of dead or dormant grass” in Green Chemistry and alternative a drought State of Emergency. Sahbari and his team took 18 months much more than a temporary dye. applications. At the same time it he says with confidence. In fact, material lifecycle management Scientists are now warning that to come up with a novel solution, an Green Canary’s exclusive aqueous helps to mitigate seasonal allergies Green Canary has proven effective techniques. California may be facing a century- eco-friendly water-based green colorant polymer system is formulated to associated with wild plant growth. in reviving aged artificial turf that has long ‘mega-drought’, the economic that could transform grass without last 50% longer than conventional Ultimately the product’s inventors been exposed to extreme climate Mr.Sahbari also served on the consequences of which make grim causing harm. Not long after, his grass paint products. Customized say it offers significant cost reduction for extended periods. While Sahbari White House Round Table Green reading. California relies on its company Green Canary, was born. treatments are offered for aesthetic over traditional lawn care. is an environmentalist at heart, he Product Group and has served as groundwater to get it through lean improvement, water conservation, Now Shawn Sahbari is looking is also a realist. “Water will run the Executive Vice President of weed growth control as well as other further afield. A large part of Kuwait out before energy” he warns. “We Rohm & Haas’ (now Dow Chemical) times, and since the state hasn’t WE ENGINEERED IT SO been replenishing the water tables surface treatments for concrete, is desert which suffers from some will all need to find new ways to specialty electronic materials during years of excess, the situation THAT THE PRODUCT IS wood, and stone. When properly of the highest temperatures on save water and even replace it” he group, and also as the Director of gets worse when the water is scarce. applied, Sahbari says Green Canary the planet in summer. Just as in urges. The education of the next Kanto Chemical. His broad global According to estimates, during last KID-FRIENDLY AND can provide the added benefit of California, lush greenery is a luxury generation of environmentalists knowledge has led him to steer year alone, California may already PET-FRIENDLY. preventing weeds and unwanted in this part of the world. is core to this. Over the last few start-ups and Fortune 500 chemical have lost over 17,000 jobs and growth. years, California has brought in companies to leadership positions $2.2 billion in revenue because of Green Canary uses an eco-friendly, Shawn Sahbari believes that Kuwait draconian legislation to enforce in many markets. water shortages. Already hit by the aqueous and organic pigment system This can reduce many man-hours of stands to gain from Green Canary. water conservation. A new slogan 2008 recession and huge rise in to coat lawns, a solution that also weeding and the cost of chemical He has visited the Gulf state to look has emerged, it reads ‘Brown is the He is also a senior technical advisor to foreclosures, Californian realtors suppresses weed growth in a treatment throughout the year. The for opportunities and was able to new Green’. In Kuwait, people joke the International Water Stewardship were finding it hard to make house way that is not toxic to the planet, company also says that Green Canary sign an exlusivity deal with Al hamy that bottled water is more expensive Committee for the cradle-to-cradle sales as formerly verdant areas of people or pets. Green Canary spray can reduce traffic from deer, rabbits, International, a general trading than the locally-drilled petroleum, in innovative product institute. He is front garden went from lush green transforms dead and dormant lawns and other wild animals attracted and contracting company based truth it underlines how precious the the founder of Green Canary, an eco- to brown scrub. Golf courses, parks to give a lush, healthy grass look - to unwanted vegetation. Other in Kuwait. Al Hamy International is commodity is in a region that sees friendly aqueous solution designed and sports fields all suffered equally. and it doesn’t require irrigating to attributes of Green Canary include now the exclusive agent for Green nominal precipitation annually. What to enable water conservation and Then Shawn Sahbari arrived on keep green. “This is environmentally fire prevention and separation for Canary in the GGC.“While some is certain is that wherever Green improve the aesthetics of grass the scene. Sahbari worked with sound,” assures Sahbari, who is structures in areas of high density field people pay a lot for man-made turf Canary goes, the landscape will be lawns. Green Polymer Systems (GPS), a Green Canary’s president. growth. Currently under evaluation here, Green Canary can transform looking a whole lot better. are erosion control assessments a garden at a fraction of the cost www.green-canary.com

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are proud to offer services from Dubai, Kuwait City and them to the waiting Mercedes-Benz vehicle and drive them Bahrain” said Robert Humphries, Managing Director across the tarmac to the connecting flight, improving A CAPITAL Sales, Middle East, Africa and India. “United flights the travel experience and saving valuable time. offer fast access for our Middle Eastern customers to the most popular tourism and business destinations in United’s membership of Star Alliance, the world’s largest CONNECTION the U.S. as well as unparalleled connectivity to cities and most comprehensive airline alliance, offers additional throughout the Americas.” benefits to customers, including an increased choice In October 2006, United Airlines launched its successful of connections, a broader network of destinations, Kuwait City-Washington/Dulles service, and since then With three classes of service on every flight from the access to more airport lounges around the world and has responded to increasing demand for travel to the Gulf, United gives customers more control over their an even more valuable frequent flyer program. United United States from the Middle East, introducing Dubai- flying experience by enabling them to select the products can take Middle Eastern travelers almost anywhere they Washington/Dulles service in October 2008, followed and services they value: want to go, and if they can’t, one of their Star Alliance by Bahrain-Washington/Dulles flights in April 2010. partners probably can, with over 18,521 daily flights United Global First - a flat-bed seat with turn-down service, to over 1,321 airports in 193 countries. This direct service to United’s Washington Dulles hub a higher level of privacy and comfort, priority airport provides an important and convenient link between the services, more-personal attention and multi-course menus U.S. and the Middle East, holding great potential to open designed by United’s Congress of Chefs. up many business opportunities. As the capital of the United States, Washington, D.C. is home to the federal United BusinessFirst - a superior business-class service government and is the country’s fourth largest metropolitan featuring flat-bed seats, priority airport services and economy. Furthermore, the city’s iconic architecture, multi-course menus designed by United’s Congress world-class museums, distinctive neighborhoods and of Chefs. spectacular cherry blossom season make Washington D.C. a top destination for leisure travelers, attracting Economy Class – a full-service economy class cabin visitors in their millions every year. including Economy Plus seating, offering up to 6 inches (15.2 cm) of extra legroom and increased personal For Middle Eastern travelers, United offers the fastest route space, depending on aircraft type as well as the benefit from the region to many parts of the United States. United of a swifter exit from the aircraft on arrival. serves more than 300 destinations throughout North, Central and South America and the Caribbean, including Selected Global Services members and United Global more than 80 non-stop flights from Washington/Dulles, First customers connecting at Washington/Dulles from providing customers with fast and easy connections. the Gulf can also enjoy greater comfort and convenience “United is committed to serving the Middle East and we with a chauffeured tarmac transfer service. United representatives meet customers at the aircraft, escort

THE VOICE OF AMERICAN BUSINESS IN THE GCC CLIMATE CHANGE CLIMATE CHANGE 32 33 KUWAIT IN CLIMATE CHANGE SPOTLIGHT Climate change is threatening Kuwait’s low-lying infrastructure as well as the deterioration of groundwater quality and the coastal ecosystems. Inundation will severely affect cities, roads, agricultural dryness. In addition, there has been a of groundwater quality. Inundation dependent on desalinated water and marked increase in dust storms in the could severely affect cities, roads, fresh groundwater to meet drinking areas, as well as beaches and salt marshes last few decades, which are noticeable agricultural areas, as well as beaches water needs. On a per capita basis, across Kuwait if nothing is done to protect signs of change in climatic conditions and salt marshes across Kuwait. Kuwait has one of the highest per in Kuwait and neighboring nations. In the absence of reinforcement capita water consumption worldwide, the country from these rising threats. In 2008, Kuwait had the worst ever measures on Kuwait’s coastline, apart from having the world’s highest reported summer since 1991 with there is real likelihood that it would per capita production of desalinated by SALMAN ZAFAR, The Correspondent increase in intensity and frequency be damaged and altered from rising water. Brackish groundwater and SALMAN ZAFAR of dust storms. sea levels caused by climate change. reclaimed wastewater are used in Among the most vulnerable sites in agriculture and industrial applications. Salman Zafar is an expert in waste management, Kuwait is facing a wide range of climate change challenges Rise in Sea Level Kuwait are Bubiyan Island, Qaruh Desalination accounts for half of the environmental conservation, renewable energy and including sea level rise, water scarcity, desertification In Kuwait, most of the population and Island and Al-Khiran which are in real water supply in Kuwait. Overall water sustainable development in the Middle East. He is the and loss of diversity. Kuwait is characterized by high critical infrastructure is located along danger of disappearance on account consumption reached 1,202 million Founder of EcoMENA, a Doha-based popular voluntary temperature, high humidity and arid lands resulting in the coastline which extends over more of any potential sea level rise. Even cubic meters in 2011 with household initiative, to promote sustainable development and seriously degraded soil and land damage; in addition than 350kms. One of the main climate the all-important Gulf Road may face and agricultural sectors dominating create mass environmental awareness in the Middle to salt intrusion in the aquifers affecting the small scale change impacts is sea level rise on flooding if the sea level rise exceeds Kuwait’s total water demand. Water East. In addition, he is the CEO of BioEnergy Consult, agricultural lands, thus enhancing the food security threat coastal areas of all Arabian Gulf states. more than one meter. resource management is a huge a reputed waste management and biomass energy in the region. Kuwait is also highly susceptible to climate challenge for Kuwait as its per capita consultancy firm. change due to its total dependence on oil exports. Since 1975, Kuwait has experienced 1.5C to 20C increase in Kuwait is highly vulnerable to the Water Availability natural water availability is lowest in impacts of sea level rise as it could Kuwait is vulnerable to reductions in the world. With climate change, it is He is a prolific writer and has authored numerous temperature, which is significantly higher than the global lead to severe impacts on industrial water supply. Continued use of non- expected that balancing water supply articles in journals, magazines and newsletters on average. In recent years, there has been a sharp change and socio-economic development. renewable water is a major factor in and water demand will become an waste management, renewable energy, conservation in rainfall pattern in Kuwait, which may be attributed to Climate change-induced sea level depleting groundwater reserves in even greater challenge. Extraction of and environmental issues. Salman holds Masters as climate change impacts. The country used to experience rise may lead to flooding oflow-lying Kuwait and puts it at serious risk of water from deep aquifers in Kuwait well as Bachelors degrees in Chemical Engineering. 125mm of average rainfall each year, which has now been urban infrastructure, inundation of climate change impacts. Being a highly is a matter of serious concern as www.ecomena.org replaced by sudden spells of rainfall and long intervals of coastal ecosystems and deterioration water-scarce country, Kuwait is heavily freshwater supplies are non-renewable

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and have been severely depleted due which will have serious repercussions to over-pumping, over-exploitation and for the fish industry in Kuwait and unsustainable water policies. Over- neighboring countries. Erratic rainfall pumping of groundwater has led to and sand encroachment may lead to water quality degradation mainly due to loss in plant cover thereby causing salts and other pollutants. Meanwhile, runoff and flooding. Climate change Kuwait is also facing changes in will affect biological, biogeochemical climatic conditions, such as rainfall and hydrological functions of wetlands patterns which affect the water cycle in Kuwait. Economically and ecologically and limit natural groundwater recharge. important coastal ecosystems are significantly damaged by the effects of Biodiversity climate change, such as sea level rise, Kuwait is endowed with rich biodiversity changes in atmospheric temperature of terrestrial flora and fauna, however and variation in the rainfall patterns, as the potential loss of terrestrial and experienced in Kuwait. The greatest marine biodiversity due to climate impacts of climate change on aquatic of groundwater but accounts for less change is a major concern in Kuwait. ecosystems in Kuwait would be the than 5 percent of the GDP. Desert areas contain many species of worsening of already existing stresses annuals, which make up about 90% of resulting from anthropogenic activities. Conclusion plant species of Kuwait. Kuwait is also Kuwait is both physically and endowed with rich marine biodiversity. Agriculture biologically threatened by the Many endemic species can be found, Agriculture production is directly global warming phenomenon. including crabs, which are found on dependent on climate change and Over the next few decades, Kuwait biota-rich intertidal Sabkha zones. For weather. The possible changes could be potentially facing serious the marine environment, the Arabian in temperature, precipitation and impacts of climate change in the Gulf’s relative shallowness supports CO2 concentration are expected to form of floods, droughts, depletion a number of highly productive coastal significantly impact crop growth. The of aquifers, inundation of coastal habitats, including intertidal mudflats, potential of agricultural development in areas, frequent sandstorms, loss of sea grasses, algal beds, mangroves, Kuwait is very limited, as less than 1% biodiversity, significant damage to and coral reefs, together with a wide of the land area is considered arable. the ecosystem, threat to agricultural variety of fish species, some of which are Moreover, only a portion of arable land production and outbreak of diseases. endangered. With climate change, these area is actually cultivated due to hyper- There is an urgent need to implement species, such as migratory birds and arid climate, water scarcity, poor soils, climate change mitigation and dugongs would be adversely affected. and lack of technical skills. Because of the adaptation measures, and prepare An increase in seawater temperature nature of the terrain and water scarcity, a strong framework for socio-economic will affect the reproduction period of it is quite difficult to put new land into development which may be sustainable fish and shrimp and may result inlarge- agricultural production. Interestingly, in the long-run. scale migration of fish to other areas agriculture consumes around one-third

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PIONEER OF THE OIL & GAS INDUSTRY

Interview by MARYANN HORNE Photography by KATIE DELANEY-GRAVES

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SARA AKBAR is a woman born to lead. Today, she is one of the most well-known faces of business success in the GCC. The mother of three is revered across the Arab world and beyond for her courage and entrepreneurial flair. Her heroism has earned her global awards and accolades, some from the United Nations. In 2009, she was named “Leader in Energy”, for being the first and only woman leader in oil and gas within the Middle East. In 2013, she won the esteemed Charles F. Rand Memorial Gold Medal and last year Arabian Business placed her amongst the top 100 most influential Arab women in the world. As her industry is once again thrown into the spotlight, she speaks exclu- sively to The Correspondent about geopolitics, the challenges of success and what to make of the current developments in Iraq, Yemen and Egypt.

here are those who sit and big investments in the sector leading supports the economic needs of watch. There are many who to oversupply then a sharp drop the country regardless of the regime Tact. And there are the very rare, leading to big cuts in investment, in power. As a company, we need who trail-blaze. They are the first in which leads to dramatic decline in to be extremely alert at all times to everything. Sara Akbar has been spare capacity which in turn leads ensure the security of our staff and one of the acclaimed Kuwaitis to to price escalation. This has been operations. We have to constantly stride forward in her profession the story in the past and it is indeed have our ear to the ground and obtain as the first female Kuwaiti field the story today. The question is the best information to understand oil engineer. Years later, she how long or short is this cycle, I how to manage our situation and continued to pioneer by leading think that’s where the confusion is. security. the way in regions where most OPEC thinks it’s a year, some think companies only dream about. it will take more time, that is what TC: WHAT ABOUT THE LONG TERM? From Iraq to Egypt, Yemen to the confusion is all about. In this SA: Security and stability will come Afghanistan, Kuwait Energy has environment, we at Kuwait Energy to the region. We have no alternative. been pushing the boundaries with have to do just like every other oil I don’t know how long it will take and Sara Akbar at its helm. But what company, conserve the cash and how many casualties there will be on are the risks involved in working manage the investment to ensure the the road, I really don’t know. It is a in such countries, how will the continuity of the business and the road paved with a lot of uncertainty recent drop in oil prices affect execution of our strategic projects. but eventually this shake-up of the geopolitics and how easy is it to be systems will generate a lot of good a woman in this essentially male TC: THE REPUTATION OF THE MIDDLE for the region. Just watch what’s THE SHAKE-UP arena? The CEO of Kuwait Energy EAST IS AGAIN BEING TARNISHED happening in Egypt and you will see shares her views exclusively with BECAUSE OF WHAT IS HAPPENING it in the eyes of the people on the OF THE The Correspondent. IN IRAQ AND YEMEN. YOU WORK streets, you see the hope in their IN THOSE REGIONS, WHAT IS THE eyes and smell the winds of change THE CORRESPONDENT: WHAT ARE REALITY ON THE GROUND? which drives the Egyptians to want SYSTEMS YOUR VIEWS ON THE FALL IN OIL SA: What is important for people to to do more and change the country PRICES AND HOW WILL THIS AFFECT understand is that oil is not purely a for the better. So in short, there are THE MARKET LONG-TERM? commodity. It’s a strategic commodity good prospects for prosperity in every IN THE Sara Akbar: It’s a confused market that every country needs, especially part of the Middle East but we are at the moment. There isn’t a single those countries whose economies going through the transition and it is person who knows how oil prices depend upon oil. So, whatever indeed a painful one. As for the oil REGION WILL will act. Our business has been so happens in terms of unrest and and gas sector, the region is blessed cyclical in the past and there is no security, oil and gas has to continue by being the lowest cost producer in reason why it will stop being so. The to flow. Despite changes of regime, the world, which means that the last GENERATE cycle begins with high price due to oil still needs to flow because it barrel of oil will be produced from GOOD THE VOICE OF AMERICAN BUSINESS THE VOICEIN THE OFGCC AMERICAN BUSINESS IN KUWAIT AND THE GCC SPOTLIGHT SPOTLIGHT 40 41

OIL AND GAS WILL CONTINUE TO PLAY A FUNDAMENTAL ROLE IN THE ECONOMIC DEVELOPMENT OF MOST COUNTRIES IN THIS REGION

this part of the world. The region will being signed over this year. This we are currently in: Iraq, Egypt, former members of the Republican as solar and wind. That’s why people SECTOR. WHAT’S YOUR MESSAGE continue to be the centre of gravity for is excellent news for Kuwait. Some Yemen and Oman. We hope to guards. They are the people who believe we will not need oil and gas. TO THEM? oil and gas for many years to come of them are really essential for the have something in Kuwait if the were active in the past. Today again, The reality is that it is a sin to burn SA: It’s a combination of extreme hard and under all price scenarios the oil country. Kuwait will not be able opportunity arises but we want to they are terrorizing people. In the oil and gas in power plants and in work, good technical background, will continue to flow from this part of to market its products if it doesn’t grow the business and focus on the past, Iraq was closed and no one cars for transportation. This is a being entrepreneurial, and thinking the world. That’s why this commodity execute the clean fuels project. Your development of the largest discovery knew what was going on there. very valuable commodity that can out of the box. I like to think I control will be strategic in this part of the products will be discounted heavily. we have now in Block 9. We are For example entire villages were generate thousands of products that the glass ceiling rather than letting world and it will be the commodity So some of these have huge returns going to put a lot of our effort, our poisoned with gas. That is exactly can be used in every part of life. I the glass ceiling control me. Firstly, that will help bring stability to the for the country and they have to be capital, both financial and human, the mentality that is prevailing believe that governments, countries I encourage everyone to go into the region in the future as well. executed. into developing this project to its amongst these people. They were and institutions should spend money, private sector. I think there is no life optimum potential. Currently with doing it back then under Saddam’s time and research to developing in government as such. Secondly, I TC: YOUR BACKGROUND IS IN THE TC: WHY DO YOU BELIEVE THESE the oil prices and current security flag; now they are doing it under these products that benefit mankind encourage people to try to do their GOVERNMENT SECTOR IN OIL AND GAS CONTRACTS ARE ABLE TO GO AHEAD? situation in our core countries, the banner of ISIS. That is what the and the environment. Burning it own business because it is the best IN KUWAIT. WHAT IS YOUR ADVICE SA: Kuwait Petroleum Company there are fantastic opportunities world is fighting against. The world isn’t the best use of it. I advocate thing you can do for yourself and for TO COMPANIES IN THIS SECTOR? has the right management at the for companies like ours. has defeated them and now I think positive development and research your society. If you have an idea SA: Companies have to be very helm to push for all these projects with support from all these countries, to release more products that are and think you can do it differently, patient, stick to their ethics, stick to and execute them successfully. I’m TC: WHAT’S YOUR VIEW ON WHAT’S they will be defeated again. I don’t environmentally and economically then just go ahead and do it. People their best practice and eventually not only supportive of them but also HAPPENING IN IRAQ WITH ISIS? know how long it will take but I am beneficial to the world. This is the may be self-limited with their funding, they will get there. optimistic. SA: ISIS is a complete drain on one hundred per cent sure of the thing that is currently missing from the especially the youth. However if you Iraq’s energy, its development and end game. No ISIS. picture because we only think about have a great idea, there is plenty TC: THE SECTOR APPEARS BUOYANT? TC: THE RECENT MONTHS HAVE human capital. It is a tragedy. What is oil as fuel in our cars. It shouldn’t of money out there and people that SA: Massive contracts are being BROUGHT A LOT OF SUCCESSES happening in Iraq is horrible. Those TC: HOW WILL THE OIL BUSINESS be like this. would like to come out and support awarded in Kuwait in all sectors, FOR KUWAIT ENERGY. WHAT’S YOUR playing ISIS are a loose coalition of EVOLVE? your work. So, private sector all the including upstream, downstream STRATEGY FOR THE NEXT FIVE YEARS? disparate and mixed interests. There SA: People think we will find an TC: YOU ARE AN INSPIRATION TO way and if you can do it with your and midstream. I believe USD SA: We will focus our attention and are members of the old Ba’athist alternative source of energy. MANY WOMEN IN THE REGION, own idea, that’s the best. 40 billion worth of contracts are grow our business in the same areas, party, ex-military from Saddam’s time, Batteries are developing, as well CEOS AND LEADERS IN THE PRIVATE

THE VOICE OF AMERICAN BUSINESS IN THE GCC 42 43 Vectrus Powers the Large Scale Infrastructure, IT and Logistics Needs of the U.S. Military in Kuwait

VECTRUS IS A LEADING PROVIDER OF GLOBAL SERVICE SOLUTIONS IN THE AREAS OF INFRASTRUCTURE ASSET MANAGEMENT, INFORMATION TECHNOLOGY AND NETWORK COMMUNICATION SERVICES, AND LO- GISTICS AND SUPPLY CHAIN MANAGEMENT SERVICES.

Vectrus managing airfield operations at Ali Al Salem Air Base. Today Vectrus continues to provide transport, For more than 50 years, Vectrus has been the force behind some of the world’s most complex and demanding port and logistical support in Kuwait. projects, from spaceexploration to maintaining arctic installations to providing support for critical global networks. A Vectrus heavy equipment operator lays the groundwork During the Gulf War, the U.S. government called on Vectrus, which was a division of ITT at the time, for support. for infrastructure improvements. In Kuwait and Qatar, Vectrus, which is now an independent company, remains the largest provider of U.S. military support services Vectrus delivers a full range of services including in the region. In Kuwait, Vectrusprovides a wide range of services including IT support, logistics, warehousing, electrical, wastewater, security, emergency and other port operations, facilities management, businesssystems, airfield services, fleet maintenance, security and areas necessary to run a city or large enterprise. almost anything else needed to run a large community or enterprise. Vectrus provided extensive maintenance and up Vectrus is a key player in providing armoring of vehicles during the Gulf War. In this photo logistical support for the U.S. Army in Vectrus mechanics at a repair facility in Kuwait refurbish Kuwait. The movement of equipment Humvees that have experienced extensive wear and through the region has been called the tear on the battlefield. Vectrus continues to maintain largest logistical operation since World military equipment in the region. War II. This U.S. Navy photo shows thousands of tanks, trucks, trailers and Vectrus delivers advanced infrastructure support services other pieces of military equipment lined in Kuwait and Qatar such as power plantsoperations up at a Camp Arifjanstaging area in 2004. shown here, as well as emergency, utility, security, and During the Gulf War, Vectrus helped IT services. build, operate and maintain the largest, most dynamic battlefield network ever Vectrus provides logistical and warehousing support deployed. Today Vectrus continues to for the U.S. government in Kuwait and Qatar, as well support computer, telephone, video as many other locations around the world. and satellite communications as well as cybersecurity in locations such as Kuwait, Qatar, Europe, the US and Afghanistan. THE VOICE OF AMERICAN BUSINESS IN THE GCC ABCK EVENT ABCK EVENT 44 45

He thanked Mr. Gregory J. Stevens, ABCK MEMBERS GAIN A RARE INSIGHT former ABCK Chairman; Mr. Ernest Alexander, Honorary BOD Member and one of the original Founders of INTO THE U.S. AMBASSADOR’S PRIORITIES the ABCK ; and Mr. Dao Le, who until the end of 2014 was Senior Commercial Officer at the US The ABCK members met numerous new senior staff of the US Embassy. Scott also thanked Mr. Dao Le saying how his office had Embassy Kuwait at a networking and introductions night held at done exceptional work, and how they have been the most proactive and the Crowne Plaza Hotel in Farwaniya on November 5, 2014. energetic commercial office seen during his tenure in Kuwait. “They are the first point of contact for the business community and facilitate ABCK Chairman Scott Beverly introduced the Ambassador of the United States, His Excellency Douglas matchmaking for all parties seeking Silliman, who had arrived in August 2014. Also introduced were the new DCM, Consul General, Consul of to do business in Kuwait or in the AMBASSADOR SHARES A LIGHT MOMENT WITH GREGG STEVENS, PRESIDENT ABCK Consular Affairs and other new appointments. US”…They have helped to connect business leaders and work with the WORLD FUND, AND ABDULAZIZ ALANJERI, EDITOR-IN-CHIEF, THE CORRESPONDENT MAGAZINE In his introduction, Scott welcomed Ambassador Silliman, DCM Hood, Major-General Williams, Embassy Division ABCK to achieve its goals”. Chiefs and Staff and thanked the assembled for the large turnout. ABCK members were encouraged to take the opportunity of the event to meet Embassy personnel that had so generously made themselves available. The chairman stressed that such The new Ambassador His Excellency Department of State in 1984 and is Scott noted that it was rare for the membership to have access to most, if not all, of the Embassy division events bring the business community Douglas A. Silliman was warmly a career member of Senior Foreign chiefs in one room! At the event Scott spoke about the ABCK and its affiliation with the US Embassy over and their leadership as well as welcomed. The audience learned Service. Ambassador Silliman had the years explaining how, in the past, the ABCK had operated largely as an informal organization under the government leaders together for that, prior to Kuwait, he had served in earlier served as Director and Deputy umbrella of the US Embassy, working closely with the Commercial office to achieve the priorities of the sitting networking and discussion of topics 2013-2014 as a Senior Advisor in the Director of the State Department’s Ambassador and the local business community. that are of interest to all parties. “As Bureau of Near Eastern Affairs in the Office of Southern European Affairs, we have conducted our CEO and Department of State in Washington, as Political Counselor at the U.S. Business Roundtable discussions D.C., working on Iraq issues and the Embassy in Amman, Jordan, and as in the past, as well as the Discover U.S.-Africa Leaders’ Summit. He the Regional Officer for the Middle America Presentations on Cloud was Deputy Chief of Mission at the East in the Office of the Coordinator Security, FATCA and Intellectual U.S. Embassy in Baghdad, Iraq from for Counterterrorism. Ambassador Property, we plan to do more in the 2012 to 2013 and Minister Counselor Silliman worked as political officer near future, so please keep an eye for Political Affairs in Baghdad from in Islamabad, Pakistan, in the Office out for more information on future 2011 to 2012. He was the Deputy of Soviet Union Affairs, as Lebanon events” he added. Chief of Mission in Ankara, Turkey Desk Officer, and as Staff Assistant from 2008 to 2011. He joined the to the Assistant Secretary for Near Eastern and South Asian Affairs. He began his career as a visa officer in Port-au-Prince, Haiti, and a political officer in Tunis, Tunisia.

Ambassador Silliman received a Bachelor of Arts degree in Political Science summa cum laude from Baylor University in Waco, Texas, where he was also a member of Phi Beta Kappa. He earned a Master of Arts in International Relations from the George Washington

AMBASSADOR DOUGLAS SILLIMAN MEETS THE BOARD OF DIRECTORS (L-R 1ST ROW JOSEPH BEIJANI, DR. JULIET DINKHA, University in Washington, DC. He GREGORY J. STEVENS, OZZIE RUELDA, ERNEST ALEXANDER (HONORARY), TOP ROW NAWAF AL-KHUBAIZI, DAO LE (EX-OFFICIO), (L TO R) INTELLECTUAL PROPERTY ATTACHE AISHA SALEM, PRESIDENT ABCK has received numerous awards LUIS SUAREZ, CHAIRMAN SCOTT BEVERLY, AMBASSADOR, VICE CHAIRMAN SUDQI AHMED, FRED SHUAIBI, CHARLES NAHAS. WORLD FUND GREGORY STEVENS, AND PUBLIC AFFAIRS OFFICER LISA HEILBRONN from the Department of State,

THE VOICE OF AMERICAN BUSINESS IN THE GCC ABCK EVENT 47 including the Secretary’s Award for Public Outreach in 2007 and senior performance awards. The American Foreign Service Association gave Ambassador Silliman its Sinclaire Language Award in 1993 and the W. Averill Harriman Award for outstanding junior officer in 1988.

Ambassador Silliman delivered a speech to members in which he identified his key objectives for his assignment in Kuwait that he had discussed with President Barack Obama prior to his arrival while still in Washington, DC. His five main priorities are ensuring the safety and security of Americans, maintaining a strong defense partnership, DEPUTY CHIEF OF MISSION JOEY HOOD LISTENS AS AMBASSADOR SILLIMAN enhancing the business climate IS SPEAKING in Kuwait, encouraging an open asserted. each day. He continued by saying CHAIRMAN SCOTT BEVERLY PRESENTS A MEMENTO OF THE EVENING TO AMBASSADOR DOUGLAS SILLIMAN political system and reaching out Kuwaitis love American products and “the Embassy is eager to partner with to young Kuwaitis. this is reflected in the fact that Kuwait you to find new strategies, safeguard to increase and diversify Kuwait’s investment missions over the coming the benefits and ease of investing is America’s fifth largest export market intellectual property, tighten cyber investments in the United States, year. These will focus on high-growth in the United States by establishing Speaking on the business climate in the Arab world, and the United security and advocate for a more which will help Kuwaiti companies sectors such as education, Private factories, facilities, operations and he stressed the need to expand States is Kuwait’s largest foreign favorable business environment”. prosper while creating jobs in Equity, healthcare, safety and offices. The Ambassador stated that commercial ties, saying that this investor. This relationship supports America. Lastly, he stressed the need security, foreign direct investment the United States is doing everything priority had grown out of President thousands of jobs in both countries. Ambassador Silliman outlined the for ‘a level playing field’ in Kuwait for and oil and gas. These missions will it can to make the investment and Obama’s National Export Initiative. The Ambassador informed the broad goals ahead. The first goal American companies to operate in provide American companies with commercial environment as open “My staff and I are committed to attendees that bilateral merchandise was to double American exports, the same open and fair environment a chance to build partnerships with and appealing as possible, however work with the American business trade alone was worth $15.2 billion which will create jobs in America and that Kuwaiti companies enjoy in Kuwaiti government and private-sector unlocking the full potential of the community in Kuwait to expand our in 2013. This works out at over $41 supply high-quality, ‘Made-in-the-USA’ America. In support of these three leaders. While on these missions, U.S.-Kuwait relationship does require exports, increase investment and million in trade that is transacted products and services to Kuwait. goals the Embassy will be organizing it is hoped that Kuwaiti companies Kuwait to take similar steps. With only create more jobs back home” he between the United States and Kuwait Secondly he said there is a need and recruiting for several trade and can be helped to better understand small economic reforms, Ambassador Silliman said that Kuwait could attract significantly more foreign investment. Before closing, the Ambassador mentioned the importance of protecting intellectual property rights, which makes it difficult for innovative and creative companies – even Kuwaiti companies – to introduce new products and ideas into the Kuwaiti market and urged the passage of a strong copyright law that meets international treaty obligations.

The evening was concluded with a buffet dinner and much interactivity between Kuwait business community SARAH BELLMAN, SENIOR COMMERCIAL OFFICER AND AMBASSADOR SILLIMAN ARRIVING MG SCOTT WILLIAMS, CHIEF, OFFICE OF MILITARY COOPERATION (R) WITH MR. leaders, members and the attending CONSUL GENERAL AT EMBASSY NIGHT CHARLES NAHAS, FROM MICROSOFT Embassy staff.

THE VOICE OF AMERICAN BUSINESS IN THE GCC AVIATION AVIATION 48 49 OUR FLEET AWAKENS THE TRANSFORMATION OF KUWAIT AIRWAYS

Kuwait Airways remains determined to see its vast modernization program completed successfully. Step by step, and despite very strong competition, the first new aircrafts have been delivered in the first of a number of high profile events which will mark a new era for the Gulf airline. by CHASE WARNE, The Correspondent writer

A new beginning aircrafts between 2019 and 2020. Turbulent times strategic investors, initially reckoned approved in January 2013 setting Bright horizons Last year was a busy one for Kuwait’s The leasing deal, for an undisclosed The skies ahead look bright, but by Rothschild’s to be worth around the way for the recent restructuring Despite the challenges and delays, national carrier. Progress at long amount, will provide another 12 KAC has encountered a significant US$785 million. Several factors, and procurement. On the ground, KAC is pushing ahead with its last, as the state-owned airline took aircraft by May 2015. The Boeing amount of turbulence in getting to this but most notably a lack of interest the supporting infrastructure at restructuring program and is its first steps towards profit and deal is thought to be in the region of point. The ageing fleet of aircrafts, from investors, led the cabinet to Kuwait International Airport has beginning to make real progress much-anticipated privatization. In US$3.3 billion at list prices. Together, some approaching 20 years old, review the privatization plans. In been challenged by the rise in towards its target of privatization February, Airbus confirmed it had these deals will mean that the airline has placed a heavy burden on the April 2012 they issued new draft the number of passengers over within three years. Since the signing received orders from Kuwait Airways will operate a fleet of 18 aircraft airline in terms of maintenance and legislation that proposed a 3-year the last decade. The airport was of the privatization bill there has been Company for twenty-five new aircrafts. until the delivery of the new Airbus reliability. A string of highly public plan to restructure the Company originally designed with an operating some notable progress beginning In December the airline publically purchases in 2019. incidents, including an emergency with the hope of attracting new capacity of two million per annum. with the signing of an agreement with began a long-overdue fleet renewal landing by an Airbus A300 in Medina interest. However in October 2012 With incremental improvements the International Air Transport Association program when, under a separate in 2012, led to the grounding of five the National Assembly was dissolved capacity has increased to seven (IATA) for a 5-year program to leasing deal, it took delivery of the THE SKIES AHEAD of the carrier’s aircrafts for more than by Amiri Decree before it had the million, but by the end of 2013 assist in the transition to a private first of twelve new aircrafts from a month. As a result there has been a opportunity to vote on the new plan. the actual number of passengers company. This collaborative effort Airbus at a ceremony in Toulouse. LOOK BRIGHT, BUT significant impact on availability and, The privatization bill was eventually had exceeded nine million. The has undoubtedly given the process Not content with that considerable KAC ENCOUNTERED on occasion, the leasing of costly arrival of Low Cost Carriers such a boost, and IATA now assesses purchase, in November KAC went temporary replacement aircrafts. THE AIRPORT WAS as Kuwait-based Jazeera Airways that Kuwait is one of the five fastest onto place a further order with Boeing SIGNIFICANT and Fly Dubai has compounded the growing civil aviation markets. The for ten new aircrafts. Financially, the record has been DESIGNED WITH AN problem and placed added stress on changes have taken place under TURBULENCE IN equally dismal. Over the last 20 the airport’s main terminal facilities. the watchful eye of Rasha Al Roumi OPERATING CAPACITY The sums involved are sky-high and GETTING TO THIS years the airline has made losses This has brought about the need for who was appointed in December reflect the determination of KAC’s in the region of US$3 billion, all of OF 2 MILLION. alternative measures. In late 2013 Fly 2013 by the Kuwaiti Transport and Chairperson and General Manager, POINT, INCLUDING which has been covered by the Dubai moved its operations to the Communications Minister. Rasha Al Roumi, to transform the government. In 2008, ministers made TODAY, THE NUMBER previously private Sheikh Saad Al loss-making airline. The Airbus deal DUE TO FINANCES plans to counter the spiraling debt Abdallah General Aviation Terminal. As the existing Head of the company’s OF PASSENGERS HAVE In January 2014, Jazeera Airways is reported to be worth in excess of AND MAINTENANCE by drafting legislation to transfer Aviation Insurance Department, she US$4.38 billion at list prices, and the company to private ownership. EXCEEDED 9 MILLION also announced that it had been was well versed in risk management will see the KAC take delivery of ISSUES The plans were bold, with 35% of granted approval to build its own and had expressed clear views on ten A350-900 and fifteen A320 neo the company potentially on offer to terminal. where she assessed progress could

THE VOICE OF AMERICAN BUSINESS IN THE GCC AVIATION 50 51

be made. Her initial focus has been to build national confidence in the airline and win back the local market share, many of whose customers have migrated to cheaper and more modern regional airlines. Once this is achieved, she will be in a better position to tackle the challenges of free market competition with regional and international carriers. Moves to build that confidence are well underway. In July 2014, KAC was awarded two important aviation security certificates that allow the company to conduct air-cargo and mail operations throughout the European Union. Notably, KAC is one of the first regional airlines to KUWAIT AIRWAYS RECEIVES ITS NEW AIRCRAFTS IN JANUARY achieve this. Further, the company commissioned UK-based audit company Ernst and Young to evaluate its performance.

The final report was delivered last September and is being digested by the company’s senior members. Once the report has been submitted to the Minister of Commerce it may see the issuing of the company’s license and the passing of a significant milestone on the path towards privatization.

THE PRIORITY HAS BEEN THE AIRCRAFTS ARE PART OF THE NEW KAC STRATEGY TO FOCUS ON THE DOMESTIC MARKET

A defining moment? With the delivery of the first new Airbus A320 there is tangible mood of optimism at KAC. The path to this point has been long and bumpy, but it is hoped that the difficult times are now largely behind. KAC Chairperson and General Manager Rasha Al Roumi believes that ‘this is a defining moment’. Ultimately, that will be for the savvy air traveler to decide.

THE NEW AIRCRAFTS MARK THE START OF A NEW ERA THE VOICE OF AMERICAN BUSINESS IN THE GCC CONSTRUCTION CONSTRUCTION 52 53 BRAGGING RITES The Gulf’s Aviation ‘Megaproject Mania’ is needed and needed now. All the GCC capitals are engaged in extensive plans to create or expand their aviation facilities by spending billions. But are these mega projects sustainable? By Nigel Holt, The Correspondent

You could be mistaken for thinking Dubai, Abu Dhabi, Doha, Kuwait City: Figure 1’s data is merely the tip of the Worldwide revenue with passenger in air tra c from 2004 to 2014 (in billion U.S. dollars) and therefore a self-fulfilling prophecy. that the Gulf is engaged in a game of all GCC capitals; all with extensive iceberg, showing what are essentially, To this can be added the fact that airport poker. With ever-rising stakes plans to create or expand their aviation megaprojects. The figures vary — if not 650 passenger predictions are fair given 599

that appear to be spiralling, it seems facilities; all spending billions of dollars at least because of the ever-expanding 600 569 the nature of the market in the Gulf

merely a display of gamesmanship; to meet a demand for the capacity of scope of work. Since its inception, 539 region. John Strickland, Director of 550 gamesmanship stemming from petty half a billion passengers every year Dubai World Central has increased Aviation Analytics firm JLS Consulting, 500 national self-interest and braggadocio. by the mid 2020s. And yet, over the its projected passenger figures from 500 speaking to CNN said ‘I don’t think Nothing could be further from the next five years alone, construction 80-200 million passengers per year. 444 445 the big hub airports in the Gulf are 450

truth. As the world moves into the and infrastructure expenditure in the 399 particularly competing with each other, 400 374 second half of the decade, there is GCC is expected to hit US$1.67tn. Likewise, in Doha, they are to 365 they are more competing with other an appetite for construction that is Only China, with 69 planned airport construct a second terminal, tripling dollars in billion U.S. Revenue parts of the world…[and] the Gulf is 350 323

barely keeping pace with projected development and expansion projects their passenger forecast, and thus 294 positioned between growing markets growth figures pertaining to the Gulf in the pipeline is higher. final capacity to over 120 million 300 in Asia, Africa and Latin America, for the next ten to fifteen years. passengers a year. 250 and the airlines who operate out of 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 these hub airports have very long Project Name Country Status FIGURE 2: WORLDWIDE REVENUE IN AIR TRAFFIC (IN BILLION US DOLLARS) range modern aircrafts.’ 1 Abu Dhabi Airport Expansion UAE Construction This should not come as any great But is the rising number of passengers 2 Hamad International Airport Qatar Construction Kuwait’s ambitions are a prime surprise given the irresistible rise in itself sufficient cause for these example of how sustainability planning 3 Dubai International Airport Expansion UAE Construction of worldwide air traffic through the ambitious expansion programs? Like is part of the infrastructure plan for 4 Baghdad Airport Expansion Iraq Design greatest economic downturn since any good rhetorical question, this the next decade and a half. Kuwait’s 1929, with a doubling of income from is indeed not the case. The answer 5 Muscat International Airport Expansion Oman Construction 2035 vision looks for the country $USD 300 to $USD 600bn from 2004 to why such predictions are being to become a regional commercial 6 Expanion of Riyadh Airport KSA Planned to 2014. By 2024, by which time many made is in the plans for economic and financial center through its five 7 King Abdulaziz International Airport Expansion, Jeddah KSA Construction of these megaprojects will be full diversification that all the region’s strategic objectives: improvement online (with the possible exception players have been making for some 8 Middle Euphrates Airport in Karbala Iraq Design of GDP; private sector motivation; of DWC, which now anticipates a time: namely, that airport growth is human development; population and 9 Prince Mohammad Bin Abdulaziz Airport Expansion in Madina KSA Construction 2027 completion date) this figure is part of actual infrastructure growth, social development, and government 10 Bahrin International Airport Development Bahrain Planned likely to be dwarfed.

FIGURE 1: MIDDLE EAST AIRPORT DEVELOPMENT 2014 THE VOICE OF AMERICAN BUSINESS IN THE GCC CONSTRUCTION ENVIRONMENT 54 55

efficiency. As part of this a series which is achievable largely through the of public-private partnerships are inclusion of solar paneling for optimized envisaged (PPPs). Kuwait’s airport has energy use. The use of sustainable undergone extensive expansion and materials, especially those procured THE MENACE OF remodeling since the early 2000s, but locally to reduce carbon footprinting, as of 2011, when a new terminal was are also essential. Moreover, the future announced in addition to the existing of the project set against a falling oil Sheikh Saad terminal, the airport was price were dismissed as irrelevant by already struggling with notable over- Dr Ali Al-Omair, the Kuwaiti Oil Minister: LANDFILLS IN KUWAIT capacity issues. ‘Our major projects meet the interest of citizens, including services of healthcare, The prevalent solid waste disposal method in Kuwait is landfill burial. Despite being NIGEL HOLT The new terminal, which faced some and education and infrastructure will downtime in 2014 over contractual not be affected by the decline in oil a small country, Kuwait has astonishingly high number of landfills. There are eighteen Nigel Holt is an established British issues is now back under construction, prices.’ (KUNA) landfills and these are increasingly becoming health and environmental hazards. writer and Managing Director of and is due for hand-over in 2016. Again, the need for expansion has been intrinsic Although Dubai World Central is by far Stylus Communications based in by SALMAN ZAFAR, The Correspondent Dubai, UAE. Nigel writes for regional in the Kuwait story, just at it has in Dubai the biggest of the Gulf’s megaprojects and the other Gulf countries, although in the aviation sector, the regional magazines for a variety of industries, Kuwait, being one of the richest ranges from tens to hundreds of The Sulaibiya landfill site received on a somewhat rather smaller scale. construction industry can look more including travel, cars, real estate, countries, is among the highest per hectares with waste deposition depth more than 500 tons of waste per day Designed by Fosters and Partners, widely abroad for the benefits of hospitality, aviation, construction capita waste generators in the world. varying from 3 to 30 meters. All kind of from 1980 to 2000 with area spanning the new terminal offers an expansion government sponsorship. After the and finance. Each year more than 2 million tons wastes, including municipal wastes, 3 sq. km. Jleeb AI Shuyoukh, to 9 and then 13 million passengers reverses of the 2008 financial crisis, of solid waste is generated in the food wastes, industrial wastes, largest landfill site in Kuwait with per year. Although 2014 saw a rise there seems significant value ahead He is also a published poet, small Arab nation. High standards of construction and demolition debris area exceeding 6 sq. km, received in passenger numbers, that, already in the second half of this decade. blogger, whitepaper writer, living and rapid economic growth has are dumped at these sites. In fact, 2500 tons per day of household and threatens this with a figure of nearly As Figure 3 points out: there has award-winning radio and video been a major factor behind very high about 90 percent of the domestic industrial waste between 1970 and ten million. The USD 4.8bn (KD1.4bn) been significant expenditure in the script and his creative mind has per capita waste generation of 1.4 to waste is sent to landfills which 1993. Around 20 million cbm of contract has been awarded to Kharafi Middle East during 2014, which is only been applied to myriad media to 1.5 kg per day. The prevalent solid implies that more landfills will be waste was dumped in this facility National, a local Kuwaiti company, who, expected to rise as 2015 continues. produce imaginative, original and waste disposal method in Kuwait is required to tackle rapidly increasing during its operational period. Over it is believed, are looking to be part Sheikh Mohammed bin Rashid Al targeted content for companies of landfill burial. Despite being a small volumes of solid wastes. Most of the years, most of the dumpsites in of the plan to increase capacity to 25 Maktoum personally approved a USD every stripe. country, Kuwait has astonishingly the landfill sites have been closed Kuwait have been surrounded by million passengers by 2025 and up to 32bn extension of Dubai World Central high number of landfills. There are 18 for more than twenty years due to residential and commercial areas 50 million later on along with a metro alone in 2014, and with a further USD He has lived in Dubai for nearly landfills, of which 14 sites are closed operational problems and proximity due to urban development over the link to Kuwait City. The second aspect 4.8bn expected in Abu Dhabi, and two decades and has a thorough and 4 sites are still in operation. to new residential, commercial and years. Uncontrolled dumpsites were of Kuwait’s airport construction is also nearly US1bn in Sharjah, the UAE knowledge and understanding of These landfills act as dumpsites, industrial areas. These sites include in the past managed by poorly trained key to the new priorities of the century: alone demonstrates the potential for the Arabian Gulf, its people, and its rather than engineered landfills. Sulaibiya, Kabed, AlQurain, Shuaiba, staff resulting in the transformation sustainability. Kuwait has stressed that regional airport construction industry markets. He is a well-known speaker In fact, landfill sites in Kuwait are Jleeb AI Shuyoukh, West Yarmouk, of dumpsites in breeding grounds the new terminal will be the first in the in 2015. on Social Media, education and notorious for causing severe public AI Wafra among others. Migration for pathogens, toxic gases and world to achieve LEED Gold certification, the power of language. health and environmental issues. of leachate beyond landfill site spontaneous fires. 150B Besides piling up huge amounts of boundaries is a frequent problem His commercial work has been garbage, landfill sites generate huge noticed across Kuwait. Groundwater Most of the landfill sites have been published in a number of Gulf amount of toxic gases (methane, contamination is reported to forced to close which is excellent publications that include Bloomberg carbon dioxide...etc.) and plagued be a serious problem because news. However they were closed Businessweek and Prestige 100B by spontaneous fires. Due to fast- groundwater occurs at shallow before achieving their full capacity, Magazine, as well as in Jaguar, paced urban development, residential depths throughout the country. because of improper disposal methods Range Rover and Land Rover Middle areas have expanded to the edges The major landfill sites operated by and concerns related to public health East’s publications. of landfill sites thus causing grave municipality for solid waste disposal and environment. Due to fast-paced 50B

Investment (USD) Investment danger to public health. are Jleeb AI Shuyoukh, Sulaibiyah industrial development and urban and AlQurain. The AlQurain landfill, expansion, some of the landfills are Landfills in Kuwait with area of 1 sq. km, was used for located on the edges of residential, 0 The total land area of Kuwait is dumping of municipal solid waste as is the case of Jleeb AlShuyoukh Asia North Europe Middle Africa Latin Paci c America East America around 17,820 sq. km, out of which and construction materials from and AlQurain sites. Some may argue more than 18 sq. km is occupied 1975 until 1985 with total volume that this is endangering the lives of FIGURE 3: THE GLOBAL EXPENDITURE ON AIRPORT CONSTRUCTION AS OF by landfills. Area of the landfill sites of dumped waste being 5 million m3. hundreds of thousands of people. 08 -MAY2014- SOURCE: CAPA AIRPORT CONSTRUCTION AND CAPEX DATABASE THE VOICE OF AMERICAN BUSINESS IN THE GCC PROFILE PROFILE 56 57 FISH FARMING TO SAVE KUWAIT’S HERITAGE Entrepreneur AZZAM AL-FULAIJ is calling on the government to do more to save Kuwait’s maritime environment and heritage. The Kuwaiti CEO wants to protect the sea and regenerate fish farming in the Gulf waters. Interview by MARYANN HORNE Photography by STEPHANIE McGEHEE, Apache Photography

Azzam Al-Fulaij is what you call a marine patriot. The Kuwaiti entrepreneur is well known as a prominent businessman who has a variety of influential commercial interests. But his real passion is one that goes to the heart of Kuwait’s national heritage, health priorities and environmental concerns.

The former Chairman and currently Managing Director of Bubiyan Fisheries Company is calling for the regeneration of farm fishing in Kuwait. He also wants action to be taken to increase fish stocks after years of neglect and over fishing.

Kuwait’s bay is the biggest fish hatchery in the world after Mexico, according to Azzam Al-Fulaij. It’s a region to which millions of fish migrate to nest their eggs.

“The current state of affairs is deeply worrying and fish farming is the only real solution, he explains. Fish farming is vital Kuwait’s food security, as well as ensuring that prices remain affordable and that the sea is properly protected”.

More importantly, Azzam Al-Fulaij says farming in the sea is the only way to fight against fish stocks disappearing. “In the farms, the fish replenish in their natural habitat”, he explains.

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FISH FARMING IS THE ONLY ALTERNATIVE TO REGENERATE STOCKS, KEEP PRICES LOW AND ENSURE THAT THE SEA

“They can be farmed and then freed to increase the The disease, also known as Epizootic Ulcerative Syndrome, IS PROTECTED to Lebanon, some Gulf countries and Egypt. It sells fish reserves inside the Gulf waters. A single fish can has been associated with acid water run-off, particularly many species, including Zubaidi (pomfret), as well as lay one million eggs, so imagine how quickly the fish after heavy rain following a long dry spell and other Hamour (grouper). stocks can be regenerated”. factors such as hot temperatures, crowding and drought. AND STAYS “The price of fish such as Zubaidi is very high. It shouldn’t Bubiyan Fisheries stopped fish farming after Red Spot After this disaster, Bubiyan Fisheries didn’t give up be like this in a country like Kuwait that is facing the sea. disease struck. and started again, bringing over two million fish from We should be able to eat what the sea provides for us hatcheries; but in 2001, Red Spot struck again. “At the CLEAN without having to import from elsewhere”. The call for more to be done is a direct result of Bubiyan time we decided to stop fish farming because we came Fisheries’ fate. The company which was privatized in to the conclusion that in Kuwait, no one controls the He says the high prices are because approximately 1997, was amongst the largest farms in the Middle sea and pollution was a growing problem. While it was eighty per cent of fish is imported. East. Each of its cages was brimming with thirty five to good business and margins were good, the risk was fourty thousand fish; but disaster struck. The fish were becoming too high for us to continue”. Azzam Al-Fulaij is not just interested in improving the contaminated by Red Spot disease which struck for the situation for his own personal interests. “The government first time in the Gulf. The main issue which to this day is a huge problem must encourage and support all fish farms and there according to Al-Fulaij is sea pollution. “Sewage is poured should be at least ten, in future, in Kuwait. We should also into the sea and marine life is being contaminated. Sewage look towards Bahrain and places that are succeeding is not being treated properly. There are other issues with such projects”. as well, for example the legacy of waste coming from oil wells which wasn’t disposed off properly after the “People need to wake up. People of Kuwait love fish. The liberation of Kuwait”. population is growing, but the sea is being destroyed. In twenty years, the population of Kuwait will be between Bubyian Fisheries’ dream has been put on hold. It has four and six million. But the sea environment, if nothing been forced to travel beyond the Gulf waters for its fish. is done, will not change. That’s why the future is fish Today it imports from Bahrain, Iran, Pakistan, Turkey farming”, he concludes. and India. It has five shops in Kuwait and also sells

THE VOICE OF AMERICAN BUSINESS IN THE GCC INTERVIEW INTERVIEW 60 61 MICROSOFT: A MARKET WITH UNIQUE CHALLENGE Microsoft has been present in the Gulf region for over twenty years. The US giant works to foster partnerships and advance the country’s IT capacity and infrastructure. Through this network, Microsoft has created over 26,000 jobs in the Gulf region’s IT ecosystem. Interview by CHARLOTTE SHALGOSKY Photography by LYNDA HIGGS

THE CORRESPONDENT: HOW spending will place it as one of the to build on the lessons learnt from take into account the delay factor skills that will help them in future DOES THE GCC REGION DIFFER top three fastest growing IT markets the experiences in Dubai and other and ensure that we are looking at jobs. Our legacy therefore not only FROM OTHER MARKETS, SUCH in the world, surging at a rate of GCC countries and ultimately try to a solution in the second generation focuses on the business perspective AS THE US? about 7.3 per cent year-on-year. It is share them here in Kuwait. of the product. but also has a social impact. Charles Nahas: Today, technology superseded only by Latin America is ubiquitous. There used to be a and central Asia.Public sector TC: WHAT ABOUT KUWAIT? TC: HOW DOES MS SEE ITS TC: WHAT IS THE FUTURE FOR THE gap between market developments investments to improve government CN: We feel that Kuwait has a lot SUCCESS AND ITS FUTURE IN IT MARKET IN THE MIDDLE EAST? in America, Europe and the Middle services, education and health care of potential. Technology can still KUWAIT? CN: The market is growing and there East. But that gap has now closed as will be the main drivers for growth. do a lot here, especially in the CN: We really believe in this market. is a huge appetite for technology. you can see new technologies being The numerous smart-city projects in government sector for example, in There is a lot Microsoft can do to According to the IDC, The Middle implemented in the GCC before they the GCC in particular will increase improving the services it provides to help and we are investing heavily East IT Market is projected to reach even hit North America or Europe. machine-to-machine connections by its citizens. We are working closely in Kuwait, as well as increasing USD 243 billion by 2018, which will In some cases, the GCC is even 19 per cent to reach USD224m. This with the government to optimize these the headcount. We have two main represent 5.6 percent of worldwide leading in terms of technology. investment will encourage economic opportunities. In comparison to the focus areas relating to what we see IT spending. This creates demand Charles Nahas, General Manager growth through for example SME and rest of the GCC, the UK or North as our legacy over the next years. for better technology to deliver of Microsoft Kuwait and member TC: WHAT CAN YOU SAY ABOUT start-ups proliferation – Creating this America, Kuwait has a good idea The first is to help the government better services. IT is key in making of the ABCK Board of Directors, THE GCC MARKET IN PARTICULAR? unique environment for technology of its technological requirements. modernize to bring in the concept companies more competitive. You speaks to The Correspondent CN: The GCC is a key region for companies helps to evolve and This is an advantage. We are of ‘e-government’. The second is can see services being offered by about Microsoft’s aspiration to Microsoft in terms of growth and develop the economy, which is committed to working closely with related to the youth and the young some businesses or governments build on the GCC’s technology performance. The level of knowledge clearly becoming better positioned to the government and businesses in entrepreneurs. We want to help here in the Middle East that are achievements, for example, by of customers here is excellent. Global rely less on oil. Continuing to invest Kuwait to overcome any challenges the younger generation build their in fact better than those offered creating a social impact through considerations also help this. Today in technology can only further this found in the Kuwaiti environment. skills, become better at building in other countries. What the GCC assisting young entrepreneurs. the internet and information are cause. businesses and using technology has achieved in the last fifty years much more readily available. As TC: WHAT ARE YOUR MAIN in their businesses – because this is amazing and Microsoft wants a result, products are shared quasi TC: WHAT ARE THE ADVANTAGES CHALLENGES IN KUWAIT? is our forte, helping them develop to help the region continue in this immediately and this benefits the OF THE GCC? CN: We believe that the challenges direction, making it an inspiration GCC region. There is an immense CN: This market clearly has a strong pose a unique opportunity for for other regions of the world. growth potential in the GCC countries, appetite for new technologies. Plus partnerships and see room for more as they continue to invest heavily it’s a market that, very fortunately, agile decision-making processes. For in innovation and technological has the means to acquire new example, we believe that there is room readiness. infrastructure projects technologies.We see governments to continue to accelerate technology across the region spur the need for and institutions for example making decision-making processes, so new technologies.According to IDC, the most of these resources in this technology can be utilized when it spending on IT projects will exceed region. Dubai is already a leading is still new and relevant. In practical USD 32bn across the GCC, Levant, global example in the way it is using terms, when a request comes in Iran, Iraq and Egypt. The region’s new technology. In future, we want for a new and specific product, we THE VOICE OF AMERICAN BUSINESS IN THE GCC CULTURE CULTURE 62 63 DAR AL-ATHAR AL-ISLAMIYYAH GIVES NEW LIFE TO HISTORIC AMERICAN MISSION HOSPITALS In November 2012, in the presence of His Highness the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, the Dar Al-Athar al-Islamiyyah (DAI) officially opened the Amricani Cultural Center. Located in the historic American Mission Hospital, on the Gulf Road near the National Assembly buildings, the cultural centre is a continuation of the DAI’s commitment to the promotion of art and culture in this country. Open to the public Monday - Saturday, the center features several exhibitions of objects from the world renowned Al-Sabah collection and continues to serve the community. by SUSAN DAY Photos by DAR AL ATHAR

“We are truly honored to be able to transform these Rev Lewis Scudder III (born in the The hospitals, commonly known as historic buildings into a cultural center. These walls American Mission Hospital and the the American Hospitals, are one saw the evolution of medicine in Kuwait and now son of one of the leading doctors of two remaining examples of Gulf witness the development of future art historians, working in the hospital). “First, it Mission style architecture in the curators, conservators, and, most important, artists was a relatively clean place . . .” world. At a time when buildings were and art aficionados. This will be a teaching and and second, it “was a commercial constructed from stone, wood and But, of course, there were more training facility, created to nurture the mind and hub with many routes of access into mud mortars, the buildings on the important areas of the hospitals spirit. So, while the functions within these walls have the interior deserts . . .” compound were made from steel than the verandas. Being modern changed, the ethos that inspired it has not. Amricani and concrete. facilities, the hospitals included will continue its original purpose: serving the people Sheikh Mubarak, ruler of Kuwait operating rooms, treatment rooms, of Kuwait,” said Sheikha Hussah Sabah Al-Salem from 1896 - 1915, initially kept the Characterized by the extensive use a maternity ward, pharmacies, eye Al-Sabah, director general of the DAI and co-founder mission out of Kuwait. However, of veranda for ventilation, aesthetics and pediatric care. of The Al-Sabah Collection. after his daughter was successfully and socialization, the hospitals were treated by the RCA physicians from designed to replicate the fabric of The Battle of Jahra in 1920 provided The seeds for the Amricani Cultural Center were the Basra hospital, he invited them family life in Kuwait. the tipping point for the relationship first sown in 1895, when Samuel Zwemer, one of to set up a visiting clinic in an annex between the Kuwaitis and the mission. the co-founders of the Reformed Church of America’s of his palace. That was in 1911, two Patients and their families enjoyed During the battle 135 men were (RCA) Arabian Mission, traveled through Kuwait on years later the mission was invited to the cooling breezes during the hot seriously wounded and, in 1920 his way from Bahrain to Basra. Zwemer received build a permanent hospital in Kuwait. months and they took advantage of Kuwait, typically 130 of these a warm welcome and was impressed with, by his The RCA bought a piece of land on the ventilation to prepare meals in wounded would have died from their definition, “the cleanest Arab town in the Gulf . . .” the seaside and Sheikh Mubarak the hospital rooms and hallways. In injuries or the resulting infections. donated an adjacent acre of land, the evenings, the verandas replaced To the credit of His Highness the According to “The Arabian Mission’s Story: In Search giving the RCA sufficient space to courtyards as gathering places for Amir Sheikh Salem Al-Mubarak, he of Abraham’s Other Son”, the RCA considered Kuwait build the first hospital, a women’s families and friends. insisted that all the wounded be a promising site for expansion. “It has two principle dispensary and a small residence treated at the American Hospital virtues,” wrote for nurses. and only four soldiers died.

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This is the first time in the Middle East and one of a very few times in the world, that owners (Sheikh Nasser Sabah Al-Ahmad Al-Sabah and Sheikha Hussah Sabah Al-Salem Al-Sabah) of an important collection have opened the doors to a bunch of children and said “come on in and help yourselves.”

“We have much to be proud of in Kuwait and I am pleased that we are able to share this remarkable new center with residents and visitors alike,” said Abdulkareen Al-Ghadban, National Council of Culture, Arts and Letters Assistant Undersecretary. On the ground floor, the history of the which includes objects excavated “The Amricani Cultural Centre resides American Mission Hospital is told in in Kuwait from the relevant periods. in a historic building, hosts exciting a stunning new multi-media exhibition The exhibition includes the third exhibitions, and, is alive with people called “Story of Amricani”. Beginning largest Dilmun Seal and extraordinary expanding their knowledge of the with the arrival of the first western sculptures of Greek kings and heroes. region’s art, history and culture. We doctors in Kuwait and concluding have much to be proud of.” Putting this in the context of the with a look at Kuwait’s contribution The last exhibition opened in October country in 1920, the 131 men who to the development of healthcare of this year and was curated by For details on opening times and survived touched virtually every family in under-developed countries, the children between the ages of 6 and programmes available at the center in Kuwait. Before the battle, a large exhibition presents the evolution 12. “Long Ago Zoo: Animals in The visit www.darmuseum.org.kw or portion of the population was reluctant of the medical sector in the country. al-Sabah Collection” includes more email [email protected]. to visit the hospital or interact with than 100 objects from the 8th century the doctors. This changed almost Upstairs, the Amricani currently through the 19th century CE. immediately – especially for female houses three exhibitions. “Splendors patients. The increase in the number of the Ancient East: Antiquities in The of women coming to the hospital (as Al-Sabah Collection” includes objects opposed to having the doctors come dating from the 4th millennium BCE to them at the house) necessitated to the 8th century CE. The exhibition the construction of a proper women’s is rich with “the biggest” (a 6,000 hospital. This was completed in 1939, year old sculpture of a man probably and is the building that currently in supplication three times bigger serves as the DAI administrative than the next known sculpture of the office and library. same type), “the only” (a beautiful population and the American Mission of this tradition, the DAI opted for Bronze Age gold cylinder seal that Construction on a new men’s hospital hospitals were closed. the colloquial “Amricani” instead of is the only one in world from this began in the 1940s, but the official “American”. period) and “the unexplainable” opening was delayed until the early The land occupied by the hospitals (a Bronze Age goat sculpture with 1950s due to World War II. The men’s was purchased by the government; Today the Amricani Cultural Center an iron speiss body made some hospital is currently serving as the the land occupied by the church includes both permanent and 1,000 – 1,200 years BEFORE the Amricani Cultural Centre. and staff residences remained visiting exhibition space, a 200-seat iron age) . . . and that’s in just the the property of the mission. It is theater, an education wing, and a first three galleries! The American Mission Hospital interesting to note that “Amricani” conservation lab. In addition to complex served patients until is not a typo. hosting art and art-related activities, The second exhibition was organized 1967. At that time, the government the center serves as a training facility in conjunction with “Splendors of the of Kuwait had built hospitals and The hospitals were referred to as for those interested in the museum Ancient East”, “Splendors Loaned clinics sufficient to serve the Kuwait “Amricani” by Kuwaitis. In recognition sciences, including conservation. by the Kuwait National Museum”,

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withholding on their US investments. FATCA also requires U.S. citizens ATB SHEDS LIGHT ON TAX who have foreign financial assets in excess of $50,000 (higher for bona fide residents overseas – $200,000 for single filers and $400,000 for REPORTING OBLIGATIONS joint filers) to report those assets every year on a new Form 8938 to be filed with the 1040 federal tax prosecution. Even a non-willful civil due over those five years up to the return. FBAR penalty may trigger a $10,000 date of renunciation. Depending on FOR AMERICAN CITIZENS fine. Willful FBAR violations can draw the individual’s annual income for SP: What are the procedures for the greater of $100,000 or 50% of each of those five years, it’s possible An insight about us forgeign account tax compliance act FATCA compliance and what is the the account for each violation–and they would only have to report their usual timeline for completion? each year is calculated separately. finances and not owe any tax but it by SAJEEV K. PETER ATB: The procedures are most easily is advised that they seek the help broken down into two parts: SP: How many clients in Kuwait of a Tax Professional in order to have approached ATB regarding determine if they have to pay taxes The newly implemented U.S. Foreign Account Tax FATCA (Form 8938) compliance – their tax obligations under FATCA? or just report. The renunciation fee Compliance Act (FATCA) has proved to be complex and New since 2011, certain U.S. persons, ATB: Out of the 2,500 clients that does apply regardless of whether challenging to U.S. citizens abroad, who were previously including U.S. expatriates, are currently use our services, more tax is owed or not. unaware of their tax reporting obligations, as well as to required to report details of holdings than half actually require FATCA foreign financial institutions (FFIs) that are affected by in Foreign Financial Assets as part assistance. Our Tax Professionals Also, an additional U.S. Exit Tax is this multifaceted law. As of April 29th this year, Kuwait of their federal tax return.If any tax is are fully trained and licensed to deal required of those who qualify as a has officially signed the tax compliance agreement due, payments should be made by with any forms related to FATCA as “covered expatriate” under one of (IGA) with the United States and it is expected for all no later than April 15th every year to well as provide consultation to those three tests. One, if the individual participating FFIs to comply with FATCA requirements prevent penalties and interest. The seeking more information for their has a net worth of $2 million USD in order to send U.S. citizens’ account information for second deadline applies to taxpayers own unique situation. Businesses or more at the time of renunciation. 2014 by next September. Due to recent developments, living outside the U.S. (must pass are also required to comply with Two, if the individual had an average many are still overwhelmed and confused by the one of two eligibility tests) which FATCA and we receive business annual net income tax liability of more complex nature of FATCA but it is vital that citizens automatically extends to June 15th consultation requests every week. than $157,000 USD in the five years take swift action to become tax compliant if they have every year. If you file an extension by ATB has clientele all around the ending before the date of expatriation. not yet done so. ATB was established to assist U.S. June 15 (for those given the automatic GCC, as well as the US and the UK. Or three, the individual failed to certify Citizens and Green Card holders with preparing and extension) it allows you an extra four that he or she had complied with filing their tax returns annually, including FATCA and months to file, pushing your deadline SP: What are the consequences if all U.S. Federal tax obligations for Foreign Bank Account Reporting (FBAR) obligations. to October 15th. Unfortunately, an people want to renounce their US the five years preceding the date Individuals can face serious consequences for not extension of time to file your returns citizenship? of expatriation. complying with FATCA and their other tax obligations. does not mean an extension to pay ATB: Every renouncing individual, Therefore, ATB shares insight about the most frequently your taxes. whether qualifying under the SP: Can the U.S. Embassy accept asked questions related to FATCA that are received exceptions or not, will always be the renunciation of U.S. citizenship from clients on a daily basis. For a private, confidential Foreign Bank Account Reporting subject to the Compliance Test. Form for Kuwaitis and other nationalities? consultation with a licensed tax professional, call ATB (FBAR) compliance – If you are a 8854 must be filed with a renounced ATB: Yes, the U.S. Embassy is the at +965 2226 6990 to schedule an appointment or for U.S. citizen with a bank account in individual’s final year return in order only place someone can renounce more information, visit www.americantaxbureau.com. a foreign country (also including to be considered fully renounced. On their U.S. nationality in Kuwait; signatory rights) with a balance at this form, the renouncing individual however, the process can take SAJEEV K. PETER: Under the FATCA law, what are any point during the year of $10,000 must affirm under penalties of perjury more time than expected due to DANIELLE HUSS, ATB GENERAL MANAGER the requirements for people with a US citizenship? or more, you are required to report that they are compliant with U.S. tax the frequently unknown prerequisites ATB: FATCA requires FFIs such as local banks, stock this balance annually to the U.S. filing obligations for the period of i.e. being five years tax compliant. brokers, hedge funds, insurance companies, trusts, Treasury Department by electronically five years preceding expatriation in Persons intending to renounce etc. to report accounts of U.S. persons directly to filing Form 114 with the IRS by June addition to a $2,350 renunciation fee, U.S. citizenship should be aware the United States, or to the government of the bank’s 30th. Failure to report an account more than four times what it used that, unless they already possess country for further transmission to the US through meeting these criteria can result to cost back in 2010. A person who a foreign nationality, they may be Intergovernmental Agreements (IGAs). The FFIs that in significant penalties, including renounced would still be required rendered stateless and lack the do not agree to comply with FATCA are subject to a 30% fines up to $500,000 and criminal to pay any outstanding amounts protection of any government. They

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SP: What steps can families with joint bank accounts and shared assets take if one member has U.S. citizenship? PROTECTING YOUR ATB: A joint account that has one US owner is treated as a US account and therefore the entire account is INTELLECTUAL subject to the FATCA legislation; same applies to assets.

SP: What are the common inquiries PROPERTY RIGHTS received from dual citizenship holders about FACTA? • Many think that if they were just by Aisha Y. Salem, I have had the opportunity to meet many of you in person since my arrival may also have difficulty traveling the IRS faces a 30% withholding tax born in the U.S. they don’t have Intellectual Property Attaché for last summer, and I am grateful for the opportunity to introduce myself to as they may not be entitled to a on U.S. source payments regardless to file their tax returns. However, the wider American Business Council community here in Kuwait. This is passport from any country. Even if of whether the recipient is a U.S. as mentioned, this is not at all the the Middle East & North Africa the first of what I hope to be a series of columns dedicated to intellectual not stateless, former U.S. citizens taxpayer. case. property (IP) issues American companies may face while doing business would still be required to obtain a • Thinking income is not taxable in the region. visa to travel to the United States, SP: What long-term effects will FATCA if it was earned in Kuwait or or show that they are eligible for have on FFIs in Kuwait? anywhere outside the U.S. – As the U.S. Patent & Trademark Office (USPTO) IP Attaché for the Middle admission pursuant to the terms of ATB: Banks and other FFIs in Kuwait incorrect although Americans East & North Africa (MENA), I am a member of the U.S. Department of the Visa Waiver Pilot Program (VWPP). must be in accordance with FATCA overseas do have the benefit Commerce Foreign Commercial Service at the U.S. Embassy in Kuwait City. “Renouncing U.S. citizenship is a provisions by this September, as of the Foreign Earned Income My countries of responsibility include Algeria, Bahrain, Egypt, Iraq, Israel/ voluntary act and not easily reversed. recently announced by the Ministry Exclusion (FEIE) which makes a Palestinian Territories, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Those seeking renunciation must of Finance (MoF). FFIs are required much higher amount earned not Qatar, Saudi Arabia, Tunisia, UAE, and Yemen. I have numerous counterparts schedule an appointment through to have needed documentation taxable i.e. for 2014, the exclusion throughout the world who all have different regional responsibilities. Much the U.S. Embassy for a renunciation prepared for transfer to the MoF, is up to $99,200. of our work is in helping U.S. companies to do business in the regions interview, which is followed by a time the official entity that will be directly • Having an income less than the we cover by advocating with host governments for improvements to IP of reflection, before the renunciation transmitting documentation to the threshold which is approximately systems. We also provide information to companies that will help them ceremony. The Embassy can also U.S. Internal Revenue Service (IRS), $99,200 (every year it rises due navigate local IP systems and if there are particular enforcement issues discuss with you the consequences in the coming few months. This will to inflation), they don’t need to file in any given country, we can help U.S. companies navigate those specific of any actions you may take upon require a complete reassessment and their returns. When actually, they issues. If those issues get to a high enough profile, we can raise them your U.S. citizenship.” For more restructuring of information collection, are not eligible for the FEIE unless with the local government. information on U.S. renunciation training a qualified workforce, they file their federal tax returns. in Kuwait, you can visit the U.S. designing and developing a number Another part of our work is international treaty compliance (either bilaterally or Embassy Kuwait website at http:// of organizational structures as well SP: Can an individual regularize multilaterally), including issues with World Intellectual Property Organization kuwait.usembassy.gov/renunciation. having the technical and legal means their status by filing their income (WIPO) and World Trade Organization (WTO) treaties. We want to make html or contact ATB to be guided to fully implement FATCA within their statement for the previous years? sure everyone is on the same page with IP legislation and the enforcement through the process step by step. organizations. The provisions of ATB: There are a few different of those laws. FATCA are complex and will act processes that enable an individual SP: What effect will the FATCA law so as to make it difficult for any FFI to become tax compliant even if they A third part of what we do is to help coordinate U.S. government efforts have on U.S. citizens who operate to operate unless it complies with have never filed before. These include in providing training and building technology transfer between countries. a business in Kuwait? the FATCA regime by registering the Streamlined Offshore Program These programs run the gamut – from training for patent and trademark ATB: To enforce compliance, FATCA with the IRS. and the Voluntary Offshore Disclosure examiners, to workshops for judges and prosecutors, to general outreach requires Foreign Financial Institutions Program. Also, Foreign Bank Account and awareness events on IP – so the USPTO IP Attachés act as a conduit (FFIs) to report directly to the IRS SP: Which nationalities are most Reporting (FBAR) might be necessary for all of these various activities. information about financial accounts affected by the FATCA laws? depending on the individual’s held by U.S. taxpayers (even if ATB: As long as the individual was situation. American Tax Bureau is Over the coming months, I plan to use this column to provide you with they hold only non-U.S. assets), or born in the U.S. or is a U.S. Passport specialized in these programs and practical tips and insights for protecting your company’s IP rights while held by foreign entities in which or Green Card Holder, the FATCA can help the individuals seeking to doing business in Kuwait, how to develop a sound IP strategy, and what U.S. taxpayers hold a substantial laws apply, therefore it is irrelevant become compliant with which ever to look out for as consumers. In the meantime, please do not hesitate to ownership interest. An FFI that what other nationality they might program is most suitable for their contact me at +965 2259 1455 or [email protected]. refuses to disclose information to possess. situation. THE VOICE OF AMERICAN BUSINESS IN THE GCC SOCIAL MEDIA SOCIAL MEDIA 70 71

following and supporting anonymous accounts as well, as the actions of employees reflect on the brand they HOW TO BE EFFECTIVE serve. Anonymous accounts are akin to tabloid “journalism”, which are also an embarrassment to society and dangerous for brands. It has always been smart for brands to associate WITH SOCIAL MEDIA with known, respectable people, and Social media is ideally suited for a culture and society such as Kuwait’s, which is so rich social media amplifies that. in heritage and culture. But to make full use of its potential, the Gulf state companies Building strategies versus outsourcing services need to care more about using social media for growing business rather than just for network. The dominance of Instagram is The cost of anonymity on society Building strategies can be outsourced so unique to Kuwait that even Instagram and business but Kuwait appears to be different validating their brands and achieving exposure. These companies need to invest in doesn’t fully understand it. Instagram, The use of - and most surprisingly, than some other markets in its lack and its parent Facebook, are pure the acceptance of - anonymous social of interest in understanding what the other emerging social networks that are better suited for social sharing and engagement. marketing channels. For personal use media accounts should raise red flags. strategy should accomplish, how it they are powerful and beloved visual The requirement, in its earliest days, will be implemented, and what are by JEFF ROACH, The Correspondent channels where we find the friends and by Facebook that people identify reasonable expectations to expect from family we love. But for business they themselves, personally, is the single it. Social media is not a coin-operated In every part of the world there are brands in Kuwait need to learn what are limited in their effectiveness over most important policy that shaped what sales/marketing channel. It is a brand businesses who understand and matters to their audience and give it the long term. In the near future due we now know as social media. If you community builder and a powerful tool maximize their use of social media to them to grow a brand community. to massive data overload, Instagram don’t know who are the people you’re to leverage other marketing activities. and there are the lagging masses of Even more important is the need for will either drastically filter a business’ talking to, the medium can hardly be It is hard to imagine a successful companies who still live in the 20th companies to care for their customer content like Facebook does (less considered social.Content on social strategy in which the company is not century, frustrated in their efforts to and to seek relationship with them as than 2% of your fans see your posts media is tightly linked to the people intimately involved in the preparation employ social media to perform a duty they build a brand community together unless you pay Facebook) or people who created and/or shared it and their and implementation of the strategy, it will never be suited for. Kuwait is no – a challenge for any company that will simply grow tired of seeing mostly reputations. If I don’t know who you even if an outside partner is hired to different but there are a few nuances has never cared in this way before ads on that “social channel”. Neither are, how can I trust your information, lead it. Our company likes to say that in the country’s digital landscape and that has never seen social media option is sustainable and neither one your judgement, and your values? there are four legs to the social media that make it unique. In a society in as the tool for this purpose. Social is very “social” for business. Therefore, These extremely important elements chair: strategy, training, content, and which influence and reputation are so media is not a popularity contest - if it is important that Kuwait companies that connect people and companies measurement. Some of this may be valued, it remains a struggle for most content isn’t shared, very few see it. start investing in other emerging social who have any affiliation with anonymous outsourced, some of it can be lead JEFF ROACH to understand the true opportunity Likes mean very little. networks that are better suited for social accounts may eventually take a strong by an expert, but a company that is that social media presents and how sharing and engagement. hit to their brand reputation, if Kuwait completely hands-off is going to be The author is on the cutting edge ideally suited it is for this centuries-old What makes Kuwait social frustrated with this new medium. of social media and is a social culture. media unique media educator. He is the founder Instagram is hugely popular in Kuwait. SOCIAL MEDIA IN Kuwait is evolving like every other of Sociallogical, a consulting Social media is an influence Kuwait businesses still seem very KUWAIT FOCUSES market and the good news is that the agency to help businesses machine focused on impressions and popularity. people who live here are as involved in determine the significant changes It is most powerful when it leverages In markets that are a few years ahead MORE ON WHAT digital communications as in any other in how businesses engage their of Kuwait, a business cares less about engaging media (images, video, AMOUNTS part of the world. To mature, social people, inside and outside the essay, presentation) into discussion what the general public thinks of them media in Kuwait needs to become more company, brought on by the and sharing. It couples the exposure and targets their market specifically, TO ADVERTISING social, more of a connecter for real emergence of social media. Jeff of the brand with personal validation focusing on sharing, leads, and sales people and a platform for companies to Roach advocates the growth of from someone I know who shared among their growing brand community. AND LESS ON listen, to help, to share, and to support businesses through their own it with me. But the common goal of Kuwait will get there too but companies INFLUENCE their customers in ways that fit their people when they get social simply exposing a brand to its audience here need to care more about using brand and build loyalty over the long online. He has coached leading using social media is a significant social media for growth and not just term. Companies who understand companies in understanding and lost opportunity and an exercise in for brand validation and exposure. matures like other markets have. the fundamental differences between using social media. corporate narcissism in this age of Again, social media is an influence tool. Likewise, brands should consider new media and old will dominate on connection. It won’t work long term and Instagram, in 2015, is Kuwait’s social their policies around their employees social media for many years to come.

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International Airport to Kuwait’s in economic reform. The latest from oil revenues accounts for over leading construction firm, Kharafi version of the plan aims to allow 92% of government income and National. This alone is worth USD the private sector to play a bigger hence the impact of these changes BETWEEN DREAMS AND REALITY 4.8 billion and it is by no means the role in development. As part of this, may be significant. largest contract on offer. joint public private partnerships (PPP) will be established as a means of To change is to improve merging significant state investment KUWAIT’S MEGA-PROJECTS The previous five-year plan failed to with expertise and experience. fully deliver on its strategic vision, with only fifty-seven percent of the Challenges allocated budget actually spent. While the future looks decidedly Attracting private investors proved brighter, the actual award and difficult due to stringent contract delivery of these projects will present conditions such as offset funding, challenges to potential companies income tax guarantees and rules and investors. Amongst these, the governing project execution. This fact that historically the lowest-priced was reflected in a World Bank 2014 offer generally wins will frustrate The Mega-Projects report that ranked Kuwait 152nd out companies seeking to promote quality The Middle East Economic Digest of 189 for ease of doing business. over price. Also, the increase in the assesses that Kuwait’s project market Under the latest plan, this commercial demand on raw material, competent is the fourth largest among the GCC inertia and lack of incentive for foreign manpower and supporting systems nations with a market value of USD companies is set to change. will severely test the existing supply 217 billion. The following list shows mechanisms – some investors may infrastructure and construction The plan has two clearly stated see this as an opportunity. projects worth over USD 1 billion either aims. Firstly it aims to realize the underway or planned, and gives a country’s strategic vision through Finally, recent changes to oil prices snapshot of five of the larger ones. the implementation of Mega-Projects. may potentially impact Kuwait’s fiscal Secondly, to address the imbalances returns. It is no secret that money There is a growing sense of optimism in the Gulf that some of the mega projects are to shake up the horizon. But what are they and what do they entail? In the first of a Project Contract Value USD Billion Sector Status Sabah Al Ahmed City Project 27.0 Construction Under Construction series, follow The Correspondent’s guide to the big five projects in Kuwait. Metro Rail System 20.0 Transport Expressions of Interest

National Rail Road System 10.0 Transport Design Stage by Chase Warne, The Correspondent Al Zour Refinery 14.0 Power Pre-qualification

Motorway Construction Projects 6.2 Transport Under construction There is a growing sense of optimism for grabs in 2015. The five-year plan, )Clean Fuels Project 2020 (MAA 4.8 Oil & Gas Awarded among those investors watching already approved by the Cabinet, Kuwait International Airport Expansion 4.8 Transport Awarded the construction sector in Kuwait. In also aims to change the roles in May 2014 Hind Al-Subaih, Kuwait’s which private sector companies Lower Fars Heavy Oil Development 4.2 Oil & Gas Awarded Minister of Social Affairs and Labor will be allowed to perform. The Heavy Oil Production Facilities 4.2 Oil & Gas Pre-qualification and Minister of State for Development plan has yet to be ratified by the Clean Fuels Project 2020 Package 1 3.8 Oil & Gas Awarded and Planning Affairs, announced State’s Parliament. However, some the reinvigoration on the Kuwait key projects which were included Clean Fuels Project 2020 Package 2 3.4 Oil & Gas Awarded Development Plan (KDP). in the previous iteration have already Subiya Causeway 2.5 Transport Awarded seen marked progress in the last For potential investors this 12 months. Armed Forces Hospital 1.7 Construction Design Stage announcement will spark serious Mubarak Al Kabeer Seaport 1.2 Transport Awarded interest as construction and For example, the award in November Jaber Ahmed Al Jaber Al Sabah Hospital 1.1 Construction Awarded infrastructure contracts worth in 2014 of the contract for the the region of USD 27 billion are up renovation and expansion of Kuwait Doha Link Bridge 1.0 Transport Awarded

THE VOICE OF AMERICAN BUSINESS IN THE GCC MEGA PROJECTS ABCK EVENT 74 75

SABAH AL AHMAD CITY PROJECT A huge urban development project situated at Khiran approximately 85 km south of US AMBASSADOR HOSTS THANKSGIVING Kuwait City. Designed as an ecologically rich watercity, the design includes over 80 km of inland waterways centerd on two vast saltwater creeks. Special attention has been given to protecting marine life bio-diversity during the construction. Some initial phases DINNER AT EMBASSY have been completed. Longer-term, the aim is to provide housing for 110,000 people in 11,000 units with supporting infrastructure that will include 45 schools, 70 mosques and 15 hospitals. Construction is being undertaken by La’ala Al Kuwait Real Estate This year American Business Council Kuwait members were honored to be Company under the Chairmanship of Fawaz Khalid Al Marzouq. The project has been welcomed at the annual Thanksgiving Dinner by His Excellency American the subject of a Discovery Channel program entitled ‘Sea City: Building the Impossible’. Ambassador to Kuwait, Mr. Douglas Silliman and his wife Catherine.

METRO RAIL SYSTEM In May 2014 the Ministry of Communications announced that the layout for Kuwait’s proposed Metro Rail System had been finalized. This ambitious urban Thanksgiving is one of the most popular annual events transport system for Kuwait City will comprise 61 stations on 3 interlinking for ABCK members and their guests and the 2014 lines. 65% of the 160 km of rail will be underground. Expressions of Interest venue at the U.S. Embassy in Kuwait proved a perfect have been invited and it is anticipated that construction will start in 2017 location for the traditional spread which included all and be completed by 2020. Notably, Japanese companies have assisted the festive flavors of ‘home’. ABCK Chairman, Scott Kuwait in drafting the Kuwait Development Plan. Advisers have placed Beverly thanked sponsors and supporters of the event emphasis on their experience in developing advanced metro networks. and remembered the important part played by the US Mrs. Hind Al-Subaih also visited the Tokyo Metro in October 2014. military community resident in Kuwait. In his welcome to the assembled group, Ambassador Silliman thanked NATIONAL RAIL ROAD SYSTEM the American Business Council of Kuwait, Chairman Scott This integrated rail network project is part of a GCC-wide rail system that should Beverly, the Board of Directors and acknowledged provide passenger and freight services across the region. The Kuwait sector will AIG, KGL, Marafie Kuwaitia, Equate, Louis Berger and comprise approximately 511 km of double track with links to Saudi Arabia to possibly United Airlines for their generous sponsorship of the Iraq. The contract is expected to be offered as a ‘Build-Operate-Transfer’ (BOT) Thanksgiving dinner. agreement with construction to be completed by 2018. In December 2014, the Kuwait City Municipal Council approved in principle the layout of the first stage of AMBASSADOR DOUGLAS SILLIMAN DELIVERING HIS He rightfully mentioned that Thanksgiving is the the railway and began plans for the relocation of real estate and farmland along THANKSGIVING DAY REMARKS TO THE BUSINESS quintessential American holiday where Americans the proposed route, including the payment of compensation for those affected. COMMUNITY AND THE US MILITARY PRESENT celebrate the abundance that America enjoys and quoted American writer Erma Bombeck who had once pointed AL ZOUR REFINERY out that “Thanksgiving dinners take eighteen hours to After a false start in 2008, this mega-project is off the blocks once again. Contracts prepare. They are consumed in twelve minutes. Half- previously awarded by the Kuwait National Petroleum Company (KNPC) to time take twelve minutes. This is not a coincidence”. companies from the US, Japan and South Korea were subsequently canceled The reference is of course, to American football, which by the Supreme Petroleum Council. With the aim of increasing Kuwait’s capacity is one of the traditions of Thanksgiving, His Excellency to 615,000 bpd , the Al Zour Refinery will be the largest in the Middle East. Three added, that this tradition is accompanied by others, mega-tenders are expected to be awarded in early 2015 for the main process namely “roast turkey, eating way too much stuffing and units, the secondary process units, and the utilities and offsite package. Under gravy, and the gathering of far-flung families”. current plans, operations are due to start in 2019. By then, the Shuaiba Refinery will close. Site preparation has begun and the closing date for tenders was Certainly this annual event serves to bring together January 2015 with the aim to award contracts by the following April. friends and ABCK members from many nations, not just America, and of course amongst these are many friends CLEAN FUELS PROJECT hailing from Kuwait. As the Ambassador rightly said at The KNPC Chairman, Mohammed Ghazi Al Mutairi, has outlined plans for KNPC the event, Kuwait is a country that is truly blessed. We to invest USD 35 billion on expanding oil and gas projects over the next five years. ROBERT “BOB” BRANDT OF EQUATE RECEIVES at ABCK recognize this too. A significant portion of this will be on the Clean Fuels Project (CFP) which primarily THANKS FOR THEIR SPONSORSHIP OF THE EVENING will upgrade and increase the capacity at the Mina Al-Ahmadi and Mina Abdullah FROM CHAIRMAN SCOTT BEVERLY ABCK looks forward to continued close cooperation refineries. On completion in 2017, the combined capacity for both refineries will with the American Embassy and looks forward to gathering have increased to 800,000 bpd. In April 2014 Japan’s JGC Corporation was this year at the 2015 Thanksgiving! awarded the contract for Mina Al-Ahmadi. The UK’s Petrofac and the US’s Fluor Corporation were awarded separate contracts for Mina Abdullah. THE VOICE OF AMERICAN BUSINESS IN THE GCC CONSULAR SERVICE CONSULAR SERVICE 76 77

Passports: Check your Pages and Expiration Date We provide a full range of services associated with the issuance of passports, including first time U.S. passport applications, CONSULAR AFFAIRS OFFICE additional pages, and passport renewals. Forms and fees are required for the execution of each service, all of which are explained on our website. Passport applications are received and adjudicated in Kuwait, but the passports themselves will be issued and printed by facilities in the United States. You will receive your passport approximately two to three weeks after we submit your application, so please plan ahead. Once your new passport is received at U.S. Embassy Kuwait, we will U.S. EMBASSY KUWAIT notify you via email to come pick it up. We also encourage you to check the expiration date and number of pages left on your passports. Some countries require a minimum of six months passport validity. Additionally, if you do have travel coming up, ensure you still have open pages for WHO WE ARE & WHAT WE DO immigration stamps. Some countries require one full open page in order to enter or depart. In certain instances, the U.S. Embassy may issue emergency passports to replace lost/stolen passports, or mutilated/dam- aged passports. Emergency passports are valid for use for return to the United States and entry into selected countries, The Consular Affairs office of the U.S. Embassy provides a wide but it is important to note that the Government of Kuwait does not recognize emergency passports issued at U.S. Embassies abroad as valid travel documents. If you have an emergency passport, you should have no problems leaving Kuwait but range of services to both American citizens and to those seeking you may not be allowed to enter Kuwait. visas to travel or live in the United States. Special Services: What We Can and Cannot Do The Consular section also provides Special Services to American citizens, including providing information for assistance with deaths, arrests, missing persons, children’s issues, and crisis preparedness. We will visit in the event of injury or arrest, with your permission contact family on your behalf, provide information on security threats and concerns, perform welfare Our mission is to provide consular services that most efficiently and effectively protect U.S. citizens in country, ensure U.S. and whereabouts visits to abducted children, and refer victims of crimes to resources here and in the United States. Our security, facilitate the entry of legitimate travelers, and help foster economic growth. The Consular section is staffed by U.S. website http://kuwait.usembassy.gov has a number of useful links and resources, including lawyer and medical provider Consular Officers who, among other things, adjudicate visas, issue U.S. birth certificates and passports, and provide security lists. However, the U.S. Embassy cannot provide personal bodyguards or protection, arrest people, investigate crimes, information to American citizens visiting or residing in Kuwait. waive Government of Kuwait travel bans or fines, pay bail in event of arrest, provide tax, financial, or legal advice, pay for attorneys, resolve legal proceedings such as civil, criminal or immigration cases, or offer loans for outstanding debts. Contact Information: The Embassy is located in Bayan (Block 6) near the intersection of route 206 (Khaled bid Abdul Aziz Street) and 302 (Masjed Visa Services – for Legitimate Travel Al-Aqsa Street). Hours of operation are from 8:00 AM to 4:30 PM, and follow the Kuwaiti work week from Sunday to Thursday. Adjudication of non-immigrant and immigrant visas is one of the core functions of the Consular Section, and provides a critical opportunity for Kuwaitis and others to discover America. Services offered are by appointment only. Individuals seeking an appointment may visit the Embassy’s website at http://kuwait.usembassy.gov The United States welcomes millions of foreign visitors and immigrants each year. Before traveling to the United States, a citizen of a foreign country must generally obtain a non-immigrant visa for a temporary stay or an immigrant visa for permanent residence. With questions on any of our services, you will receive the fastest response by emailing us: The type of visa needed is based on the purpose of travel. More information on requirements and types of visas is available For American Citizen Services : [email protected] on our website at http://kuwait.usembassy.gov. Visa appointments must be made through www.ustraveldocs.com. For Visa Services Non-Immigrant Visas : [email protected] Apply Early! – Especially Students Student Inquiries : [email protected] Summer travel season is just around the corner, and we are proud that the United States will again be a popular vacation Immigrant Visas : [email protected] destination. For those without a visa who wish to travel, now is the time to schedule an appointment! Applying early not only saves a stop at the Embassy during the hot summer months, but ensures that travel plans proceed without delay. Wait American Citizen Services – Our Priority is to Help American Citizens times for visa appointments are also lower now, as compared to the busy season from May to August.

Smart Traveler: Registering with Embassy Kuwait Applying early is also encouraged for those intending to study in the United States. Although the U.S. Embassy cannot put a As an American citizen living, working, or traveling to Kuwait, we ask that you take advantage of our Smart Traveler Enrollment student visa in a passport more than 120 days prior to a student’s program start date, students can still apply for their Program (STEP). STEP is a free service provided by the U.S. Government to U.S. citizens traveling to foreign countries that interview as soon as they have received their I-20 form and acceptance letter from their school of choice in the United allows you to enter information about your trip. Once enrolled, you will receive important information from the Embassy about States. So don’t wait, apply now! You can interview now, then have the visa printed closer to the time of departure and safety conditions in your destination country, helping you make informed decisions about your travel plans. Enrollment also ensure that you get to class on time! helps the U.S. Embassy contact you in an emergency, whether natural disaster, civil unrest, or family emergency, and allows us to help family and friends get in touch with you in an emergency. Frequently Asked Questions You can enroll in the STEP program by creating a user ID and password at https://step.state.gov. I have a non-immigrant visa that will expire soon and would like to renew it. Do I need to go through the whole visa application process again? Citizenship Services for American Citizens Yes, you must go through the whole visa process each time you want to apply for a visa, even if your visa is still valid. We provide a full range of citizenship services to Americans overseas, including processing passport applications, taking There are few rare situations when visa applicants may not need to be interviewed when renewing their visa. See our applications for consular reports of birth abroad, providing information to those few individuals who wish to elect to renounce website http://kuwait.usembassy.gov for more information. U.S. citizenship, and performing notarial services. My old passport has already expired. My visa to travel to the United States is still valid but in my expired passport. Do I Services available to American citizens at the Embassy require an appointment which can be made online after reviewing the need to apply for a new visa with my new passport? information on our website at http://kuwait.usembassy.gov. For all appointments, please bring your passport and a second No. If your visa is still valid you can travel to the United States with your two passports, as long as the visa is still valid, form of identification (written in English) to be given to the security guards in exchange for an access badge to the Embassy. not damaged, and is the appropriate type of visa required for your principal purpose of travel. Both passports (the valid and the expired one with the visa) should be from the same country and be of the same type. For more information, visit usvisas.state.gov.

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ABCK BOARD OF DIRECTORS

Chairman Vice Chairman Board Member Scott Beverly Sudqi Amad Dr. Juliet Dinkha Company Company Company KGL Holding Louis Berger Kaizen Center Branch 2 Telephone Telephone Telephone 1 888 700 Ext. 219 2291 6014 2571 6707 Email Email Email [email protected] [email protected] [email protected] TERM: May 2017 TERM: May 2015 TERM: May 2016

Secretary Treasurer Board Member Ali Al Matrouk Alok Chugh Oswaldo Rueda Company Company Company Makers Inc. Ernst & Young, Kuwait Fluor Kuwait Telephone Telephone Telephone 2246 5925 2243 3297 9720 3425 Email Email Email [email protected] [email protected] Oswaldo.rueda@fluor.com TERM: May 2016 TERM: May 2015 TERM: May 2017

Board Member Board Member Board Member Gregory J. Stevens Yousef Dashti George Bou Mitri Company Company Company GJS Consulting, LLC KGL Transportation Honeywell Kuwait KSC Telephone Telephone Telephone 2563 4051 - 2220 2577 188700 Ext. 128 22421327 - 22243740 Email Email Email [email protected] [email protected] [email protected] TERM: May 2017 TERM: May 2016 TERM: May 2017

Board Member Board Member Honorary Board Member Luis Suarez Joseph Bejjani Ernest Alexander Company Company Company KAPICO Group Holding Co. American International Group (AIG) Al Otaibi & Partners Telephone Telephone Telephone 2563 4051 2247 4260 2240 1252 Email Email Email [email protected] [email protected] [email protected] TERM: May 2015 TERM: May 2015 TERM: May 2015

Board Member Board Member Board Member Fred Shuaibi Lionel Gittens Nawaf Al Khubaizi Company Company Company NDR International American General Trading & United Telephone Contracting W.L.L. (AGT) Telephone 2242 6037 Telephone 2295 8909 Email 2563 4051 Email [email protected] Email [email protected] TERM: May 2015 TERM: May 2015 [email protected] Term: May 2015

Board Member Ex-officio Board Member Charles Nahas Dao M. Le Company Company Microsoft US Embassy Commercial Affairs Telephone Telephone 2243 0248 Ext. 222 2259 1354 Email Email [email protected] [email protected] TERM: May 2017