Author: Ben Debski

Renewables struggling to perform

Posted on by Ben Debski

Australia, the land of sun and wind, would seem a natural fit for renewable energy companies. Yet even in this land of richness, as far as eco-power is concerned, companies find it difficult to remain in the black. Biomass, hydropower and wind and solar only supply five percent of Australia’s energy needs, whereas the majority of Australia’s electricity is still created by burning coal. Part of the reason is that the infrastructure needs of coal are well established and renewable energy resources are often located far from the markets they serve, requiring higher transformation and transmission costs.

Since coming to a standstill after the Three Mile Island crisis in 1979, no new nuclear power plants have been built in the US, and some have actually been shuttered. The first new reactor in the US is scheduled for 2017, but the energy needs of the country simply aren’t waiting for new nuclear plants to come online. The average American household now has 26 plug-in devices, and with only 1-2 percent of the country’s energy needs coming from renewables at this time, a power shortage is a distinct possibility.

Europe’s three largest renewable energy companies said that the lack of sufficient government incentives and fall in energy prices has hit them hard. Slower demand from customers has also had an effect, as increasing prices for home solar panels has begun to have a trickle down effect. The future profits of companies such as Germany’s SolarWorld have been downgraded by many investment firms.

Additionally, renewable energy profits are being squeezed by economic factors. The prices of solar cells, for example, have dropped over 40 percent, but the cost to manufacture those same cells has not dropped by the same degree. The European debt crisis has affected almost every company, and renewable suppliers are not immune. The worldwide economic downturn has resulted in a softening of demand for renewable energy products, particularly in the residential market, as many home-owners view individual investment in renewable energy as a luxury item.

Stock prices have been hit because of all this uncertainty. The PowerShares Wilderhill Clean Energy Portfolio (PBW) fell by over 10 percent in February. The global economic downturn may have affected this, though, as some experts predict a doubling of renewable energy production in the US by 2035, even accounting for the expiration of tax credits and subsidies. The country’s Energy Information Agency (EIA) also predicts that coal burning will drop from 49 percent to 39 percent by 2035 as a means of power generation. Some of this will be in response to new environmental regulations, but much of it will be due to the availability of cleaner energy options at nearly the same price as “dirty” energy.

Governments may need to carry forward some subsidies and tax breaks longer than planned, but as more and more laws are passed regarding power generation and environmental damage, the long-term pay-off may well be worth it.

Mammoth bailouts across Europe

Posted on by Ben Debski

Ireland
The main problem behind Ireland’s debt problems stems from an overinflated property market and the lack of banking resources to meet bad debt resulting from this crisis. The Irish received a €67.5bn bailout fund from the EU, Denmark, Sweden, the UK, and the IMF in 2010. Approximately €34bn of these funds were directly pumped into Ireland’s banks in a bid to provide fiscal security. Meanwhile, unemployment is rising in the country though financial commentators believe that Ireland’s long-term outlook remains optimistic.

Portugal
Portugal received a €75bn bailout in a bid to stabilise its economy. These measures were put in place as a direct result of governmental overspending and an over bureaucratised civil service. To date, the Portuguese government has managed to implement measures to improve its situation and the country is seen to be moving on the right track. However, the country has an unemployment level of 14.8 percent, taxes have been increased, and pay has been frozen, on top of the government’s draconian spending cuts.

Spain
Spain is economically at risk and might have to raise funds in terms of a bailout. Spain’s public debt was $820bn in 2010. To date the country has succeeded in avoiding having to ask for external financial aid, but recent reports suggest that the country’s debt levels are still rising and that its borrowing costs are heading towards dangerously high levels. Some financial experts are concerned that the Spanish government is not implementing the necessary spending cuts. Spain has an unemployment level of 23 percent and currently appears to be heading for recession.

Italy
Political changes and a lack of belief in the Berlusconi government have led many observers to fear that Italy might be the next EU country to have to apply for a bailout.  New Italian president, Mario Monti, has declared that Italy is fiscally sound but the IMF remains unconvinced and predicts that Italy may soon have to join the eurozone bailout club. The Italian government recently held a bond sale, which underperformed by €4bn. The government has been able to implement certain austerity measure including a rise in the age of retirement to 67 by 2026.

Cyprus
The island of Cyprus, though partly inhabited by a large Greek population and affected by problems concerning the Greek banks, runs its economic affairs totally separately. The country has had to ask Russia for financial help, and in January received a €2.5bn loan. Cyprus was also recently downgraded by the international credit rating agencies and this has driven up the cost of borrowing. Cyprus currently holds a ‘junk status’ credit rating.

Where are the women in boardrooms?

Posted on by Ben Debski

Hilary Devey
In the UK, Hilary Devey is well known to viewers of the popular BBC programme, Dragon’s Den. Her no nonsense approach is famous and it is this level headedness that has helped her establish a net worth of £50m through her role as CEO of her Pall-Ex haulage firm which she founded in 1996.

Carol Bartz
Known as a firebrand and famous for her creative use of language, Carol Bartz is the former CEO of Yahoo. She was fired from her post in February 2012 despite increasing the company’s profits from $285m to a staggering $1,523m in just six years. Bartz started her career in computers at software giant Autodesk, and she was previously one of the world’s first women to rise to the boardroom during her 14 year tenure at the firm.

Oprah Winfrey
Winfrey is almost as famous for her acting and TV presenting roles as she is for being a leading US CEO. She is the chair of production company Harpo, and recently assumed the role of CEO for the Oprah Winfrey Network, OWN. Winfrey’s business acumen has recently led her to transform the top tier management of OWN, in a bid to achieve long-term success for the cable network and to improve the channel’s ratings.

Cher Wang
Cher Wang is something of a technological genius. She is currently the chair of HTC, the company behind the Android operating system for Google that led to further development of the smartphone. In 2011, HTC posted income of $9.6bn and this figure is set to rise following HTC’s investment in Beats Electric, the headset manufacturer, started by iconic DJ, Dr Dre.  Cher Wang initially founded HTC in Taiwan in the 1990s and the company has seen meteoric growth under her leadership.

Ellen Kullman
Ellen Kullman is the CEO of DuPont.  She has been described as one of the world’s most powerful women by Forbes. Kullman has been CEO at DuPont since 2009 and she was the first woman ever to hold that position in this company. Kullman started her life as an engineer, following a degree from the Tufts University, she and has worked for DuPont since 1988. She was promoted to the role of vice president and she has continued her meteoric rise ever since.

Irene Rosenfeld
Irene Rosenfeld is the world’s most powerful CEO according to research sttistics. She is CEO of food giant Kraft and has worked within the food industry. She is the driving force behind the recent Kraft mergers and takeovers, including the company’s acquisition of the UK’s Cadbury brand.

The Ponzi palaver: the top 5 schemes

Posted on by Ben Debski

Bernie Madoff
Madoff hit the headlines in 2008 when it was revealed that his massive international empire was built on fraud. Madoff has since been sent to prison because of his long running Ponzi in which he managed to amass over $65bn. Charities, Hollywood celebrities, and US football teams have all suffered as a result of believing that their investments in Madoff’s company were sound, whereas his back office trading accounts were pure fiction and each successive group of investors was funding another group therefore, no actual share trades and returns were involved.

Kautilya Nandan Pruthi
Recently, UK based criminal, Kautilya Nandan Pruthi was sent to prison for defrauding his victims of over £115m. While investors thought they were investing in a scheme that purported to give high yields, they were in fact only receiving their initial profits from other members of the scheme. Few of the funds taken by Pruthi have been recovered, he is reputed to have personally made £38m and maintained a very luxurious lifestyle. Approximately 800 people invested in the scheme – including cricket star Darren Gough – which ran for many years.

Michael Eugene Kelly
Kelly used the ‘timeshare’ model to deceive his investors and managed to defraud them of $428m in 2006.  Kelly targeted his operation at pensioners who wished to invest their savings in timeshare hotels in Cancun that would give them the opportunity to earn some extra money through leasing contracts. The whole scheme was a hoax and many pensioners lost their entire savings when the scheme collapsed and US fraud investigators revealed the Ponzi.

Reed Slatkin
US citizen, Reed Slatkin set up a Ponzi, whereby managing to con around 800 Hollywood celebrities and other famous people out of $593m. Slatkin used his garage as a base for his operations while posing as an experienced investment broker and analyst. He created false trading accounts and fictitious brokerage firms whereas in reality he used his Ponzi in order to fund the Church of Scientology, where he was a minister. The original investors were paid out of funds secured by a later tier of investors and the scheme only became known following an investigation by the SEC.

The Albanian government Ponzi
In 1997, just after the collapse of the state of Albania and during the rule of its first freely elected government, the country’s citizens were persuaded to invest in a variety of Ponzi schemes run by the government. The population had no way of knowing that these schemes were based on the pyramid or Ponzi model. Investments rose to around $1.2bn, but when the citizens failed to receive any return on their investment, riots broke out.

Africa becomes top commodity

Posted on by Ben Debski

The sale of land in Africa to international buyers is increasing at an alarming rate, in fact two thirds of the world’s land deals in the last decade involved territory in the continent.

Over recent years, the trend towards economic globalisation has facilitated the peddling of African territories on a massive scale. Sales have been fueled by the economic liberation of individual countries in Africa, widespread government corruption and the growing ambition of nations from other continents to expand their investment horizons.

African countries that have sold a significant proportion of their land include Liberia, Ethiopia, Ghana, Madagascar and South Sudan. Governments, rather than private landowners almost always sell land in Africa that is put on the international market. African governments that sell land are motivated by the obvious economic gains, along with the secondary desire to bring employment opportunities and infrastructural development to the regions in question.

Companies aggressively buying up African land include global agri-corporations, forestry-based concerns, such as UK timber importer Equatorial Teak and organisations with a vested interest in oil or bio fuel. Many international buyers are motivated by long-term security issues in their own countries in respect of food and fuel. The countries most intent on investing in African land are often characterised by their inability to be self-sustaining in terms of food and/or fuel production and accelerated economic growth, creating an increased demand for additional resources amongst the ‘nouveau riche’ of the emergent middle classes. The global food and fuel crises of 2007 have only exacerbated the situation.

Of even greater concern is the increasing trend amongst organisations to buy up land solely as a relatively secure investment in these times of economic uncertainty. Institutions such as top US universities, including Harvard and pension fund holders, along with numerous private billionaires, have scrabbled to take part in what has been dubbed the ‘hedge fund land grab’.

The bigger environmental picture is equally alarming, as large-scale acquisitions of land invariably involve environmentally sensitive regions, essential to long-term sustainability. To add insult to injury, clauses in sales contracts specifying land redevelopment are often reneged upon by purchasers, once the land has been secured.

The trend is the subject of widespread criticism amongst environmental bodies and members of the public alike, with people commonly viewing the treatment of the African nationals affected as smacking of a return to the days of colonialism. Environmental bodies are also outraged by the wider long-term implications for sustainability.

The International Institute for Environment and Development feels there is an urgent need for international public debate about the wider and long-term implications of African land acquisition, along with the need for such acquisition to be subject to tighter regulation. The body believes that African peoples directly affected by land purchase should be legally empowered to ‘fight their own corner’, by being better informed regarding how existing law can be used to protect their rights. It also believes that pressurising governments to make changes to existing legislation will provide increased protection for individuals and the small communities to which they belong.

New charity tackles inequality

Posted on by Ben Debski

Why did you create WildHearts?
I went on a climbing expedition in 2001 on K2 near the Kashmir region of Pakistan. The weather conditions were absolutely horrendous; I couldn’t feel my fingers or my toes. I was in a really bad state and thought I was going to die. Thankfully, I managed to reach a level of the mountain where plantlife could actually grow. A small Kashmiri girl saved me by welcoming me into her village where I was fed and given water. When I came back home to Scotland, I was a changed man.

In a few words, can you tell us what is WildHearts aim?
WildHearts is committed to launching companies that fight poverty in all its forms. Our first company, WildHearts Office Supplies, was created to give organisations the ability to fight economic injustice without having to “donate” a penny. All profits from WildHearts Office Supplies go straight to WildHearts projects. The company puts compassion at the heart of business and allows people to make a difference while they make a living. WildHearts’ aim is not to give a hand out but to give a hand up, which is hugely important nowadays.

What else does WildHearts do?
WildHearts proposes events aimed at promoting healthy and active lifestyles for the purpose of raising necessary funds. Activities include wolftreks, “weewalks” and Santa runs as well as Micro-Tyco and the sale of office supplies.

Why do microfinance in poor countries?
WildHearts provides banking to the unbanked, to the people who are excluded from the trading world. How can you set up a business when there isn’t a banking system in your country? This is why we offer the opportunity to set up a ‘WildHearts Trust Bank’, formed of 25-40 people, where they can guarantee each other’s loans. Reliability and trust are important to us and it allows us to give the unbanked a chance. Since we began, 98 percent of the recipients of microfinancing have repaid their loans, meaning the world’s poorest are some of the safest to lend to.

How many people have already benefited from the scheme?
Every year, more than 100,000 people benefit from WildHearts. We focus mainly on women (90 percent of our loans), as we believe that they will invest this money wisely and make their chosen business work. The approximate loan that they get is £150, which is enough for them to start setting up their own business.

What is Micro-Tyco?
Micro-Tyco is the exciting new enterprise challenge from WildHearts which brings together whole societies. Teams can ‘apply’ to WildHearts for ‘seed capital’; a micro-loan of £1. Once the clock starts they have one month to turn it into as much money as possible. On November 30 2012, the team with the most money wins.

Who can join? When? How?
Companies, universities, colleges and schools can enter as many teams of five as they wish. Micro-Tyco will run for four weeks every November.

Have you tried doing Micro-Tyco?
Of course, and on a regular basis. That’s just one of the challenges and thrills of being an entrepreneur. You start with nothing and little by little you start making money, building yourself a bit of a reputation. It takes time and a lot of effort.

What’s your biggest achievement so far?
I don’t think my biggest achievement has happened at this point in my career. I’m just getting started, and I’ve got big dreams. You never know what might happen in your life.

Why set up your own company?
When you are an entrepreneur you are the master of your destiny. No one can tell you what you have to do and how you have to do it. It’s a chance to experience something else, something that you’ve never tried before, but something that you’ve thought about for an extremely long time. It is a real challenge, but it’s worth a try.

Electric highway – zero emission mobility

Posted on by Ben Debski

In December 1898, the battery-powered Jeantaud Duc became the world’s fastest car with a speed of 63.15 km/h. Electric cars were seen as modern, safe and convenient. But within a couple of decades, oil companies had created an ecosystem of wells, refineries and pumps to take advantage of the energy density and abundance of petroleum. Carmakers shifted focus, concentrating overwhelmingly on the petrol-powered internal combustion engines that dominated the twentieth century.

However, no trend can last forever. In the past decade, political tensions among oil-producing and oil-consuming nations have exposed the danger of relying on one single, non-renewable fuel source. Air quality has eroded to dangerous levels in some cities. Noise pollution escalates. Irrefutable evidence of climate change accompanies rising C02 emissions. Socially and environmentally responsible citizens – particularly young people – are demanding clean alternatives to conventional cars.

Automakers have achieved admirable increases in fuel efficiency by improving internal combustion engines and by introducing hybrid cars that occasionally switch to batteries. But the only way to significantly reduce C02 emissions from the transportation sector is to build new vehicles that do not consume any petroleum whatsoever. Fortunately, advances in lithium-ion technology allow us to move into the era of zero-emission transportation – starting right now.

Green power
Unlike petrol-powered cars, electric vehicles consume nearly any form of energy – including abundant hydropower and the growing supply of renewable solar and wind power. As these renewable energy sources increase, CO2 emissions will shrink further.  Climate change, consumer preferences and advances in technology: These are some of the reasons the Renault-Nissan Alliance decided to mass-produce electric vehicles. In so doing, the Renault-Nissan Alliance became the first carmaker to make zero-emission cars affordable, convenient and fun.

At the end of 2010, after a decade developing the compact laminated lithium-ion battery pack, the group started selling the Nissan LEAF. More than 25,000 people on three continents have driven more than 35m miles in Nissan LEAFs, saving at least 800,000 gallons of petrol. That’s the equivalent of 7,300 tonnes of C02 that have not been emitted. And most people who buy the Nissan LEAF say that it has replaced their conventional car for daily use.

In 2011, Nissan sold more than 22,000 LEAFs, now the most popular zero-emission car of all time. Renault introduced two additional zero-emission models for Europe and Israel – the Renault Fluence Z.E. and the Renault Kangoo Z.E. van. The company also started trials of a light commercial vehicle, the e-NV200. In 2012, the group will be introducing Renault’s Twizy urban two-seater vehicle and Renault ZOE subcompact to the market. By 2016,the Renault-Nissan Alliance expects to sell cumulative 1.5m battery∞powered vehicles.

The long-term vision is to help create a sustainable society where zero-emission transportation is mainstream. This is our ethical imperative – and a calculated business move based on consumer preferences and tougher environmental mandates. By 2020, the EU wants C02 emissions cut by 20 percent compared to 1990 levels. By 2020, the US wants C02 emissions cut by 17 percent compared to 2005 levels. Given these trends, the status quo is no longer tenable: Zero-emission transportation will play a hugely important part in a sustainable planet.

Driving forward
The Renault-Nissan Alliance’s vision is larger than zero-emission cars themselves. The group is refining vehicle-to-grid technology, which allows an idle EV to return power to the grid at peak times and recharge with cheaper, off-peak electricity. The technology will help customers use their batteries to power their homes and eventually recycle their batteries. Coupled with this, the group is making even longer-range batteries more affordable. Thanks to a strategic cooperation with Daimler, the prospect of fuel-cell vehicles is closer to reality every year.

The Renault-Nissan Alliance works closely with governments, universities, utility companies and non-profit organisations. Many countries offer cash rebates for customers who buy zero-emission vehicles. Such subsidies help boost consumer awareness and acceptance of clean cars. Other incentives include free parking, the use of bus lanes, free electricity for EVs and EV-only zones in cities. In the short term, such benefits make zero-emission vehicles competitive with conventional vehicles, whose costs have been amortised for a century. As manufacturers ramp up production of new zero-emission vehicles, economies of scale will help to reduce the need for incentives.

Electricity is abundant. Communities are adding charge points in office complexes, parking structures, residential areas and along highways. Forward-thinking governments, universities, multinational corporations and entrepreneurs are building fast∞charging networks or even battery switch systems, so drivers can “charge and go” in about the same time it takes to fill up. Utility companies are adding renewable resources to the grid, making the carbon footprint of electric cars lower and lower.

We are extremely optimistic about the future. Despite economic turbulence since 2008, governments have not slashed incentives or eliminated investments in critical infrastructure upgrades.

Debt crises and unemployment will no doubt dominate discussion at the G8 summit in Chicago – but it will also come around to the political and economic benefits of sustainability: creation of “green tech” jobs, a reduction of oil imports, strategic diversification of the energy supply, and the deployment of renewable energy. The International Energy Agency forecasts a scenario that sees as many as 2.5m EVs on the world’s roads by 2020 and 50m by 2050. And for those of us working on solutions today, the zero-emission future has already begun.

About the author
Carlos Ghosn is chairman and CEO, Renault-Nissan Alliance

The closing web

Posted on by Ben Debski

Within the tech community, there is much angst about whether the web is about to be “closed.” Will it be controlled by companies like Apple, Facebook, and Google, or will it remain “open” to all? Will individuals be able to reach any content they choose? Will developers be able to serve users on any platform?

These questions are not new. Fifteen years ago, in the US at least, it was America Online (now AOL) that was closing the internet. Millions of people were relying on it for internet service and content. Today, AOL’s purported control of the internet looks like a joke, but it was considered a real threat at the time.

The threats nowadays come from both new companies and new models. Facebook is getting a lot of press, owing to its omnipresence and its pending stock offering. Increasingly, many people go online to use Facebook and little else, while Facebook encourages people to stay on Facebook to play games on Zynga, shop through Facebook commerce pages, and so on. Will Facebook control who gets to talk to us?

Likewise, Apple not only sells hardware; it controls, through its AppStore, what applications we can use on our iPads and iPhones. Amazon determines which books we read. Google, for its part, is filtering our search results – both by focusing our attention on what also interests our friends, and by excluding Twitter and Facebook results from what we see (mainly because Google and Facebook/Twitter cannot agree on whether Google should pay them or they should pay Google).

Blocking freedom
Beyond these big players, smaller startups are increasingly focusing on apps – applications that capture a user and keep him or her safe from the open web. These apps are typically cleared and registered by big players. For many people, Apple’s App Store is a benefit, because it ensures (for the most part) the quality and security of the apps. Various app stores perform the same function for Android phones, but with fewer restrictions and less security.

In short, you can choose from along a spectrum, with more security at one end and more freedom at the other. The web’s openness or closure is not a matter to be settled once and for all, but rather a fluctuating situation (even if the web takes on some other name). CompuServe and FTP (file transfer protocol) were not the end of internet history. The same is true of the world wide web. Nor will Google or Facebook and apps be the last word of the digital age.

The great thing about internet companies is that they, unlike governments, can be relatively easily deposed. They cannot outlaw competition, and, though they can engage in anti-competitive practices and filter content for their users, eventually consumers and startups fight back.

Consider the web site Pinterest – “Organise and share things you love” – which has recently gone from startup to 11m visitors a week. Even more recently, it has attracted negative attention for secretly profiting from its users’ behaviour and spamming their Facebook friends. Should we wait for users to notice, or should we call on some government to save them from their own blissful ignorance? How can we distinguish between paternalism and our duty to protect people from companies with incomprehensible privacy statements? If people are happy with Facebook, why should we disturb them?

In a world where Facebook can go from bedroom project to $100bn IPO in seven years, it may seem careless to suggest that we can just wait for a backlash to come if one is necessary. But I think we can. Of course, we can also be part of the backlash. In fact, paranoid bloggers and self-styled consumer advocates are all part of the workings of the broader market, which includes not just companies and activists, but also pundits and politicians, each with proposals to address perceived dangers.

Don’t get me wrong: collective action in the form of government interference will sometimes be necessary. The problem is that we are as likely to get bad measures – like the recently abandoned US attempt to enact anti-piracy laws that would have fostered wholesale website closures – as we are to get a freer Internet. In general, antitrust enforcement is the best approach to ensuring an open market in a world where technology changes even faster than election cycles, though it, too, can be driven more by sentiment and fashion than by economics.

To be or not to be
We are now moving slowly from open data to a closed online world of Facebook and apps. Use of the domain name system (the address bar) will likely diminish, owing not only to apps, but also to a tragedy of the commons in which new top-level domain names (.whatevers and .brands) confuse users and lead them to rely on the search box or links within apps instead.

At the same time, Facebook is responding (in its own way) to user and advertiser demands. Blogger Robert Scoble likes Facebook because it lets him manage and calculate his online popularity; I like it because I can limit comments (mostly) to people who are not totally crazy. And I can also write to reach (and hear from) a broader audience. None of this is all or nothing. Different individuals have different preferences; sometimes even the same individual has different preferences.

I don’t believe that we are actually facing a world of no choices; we have many, and it is up to us to select from them. I despise many people’s choices, but I prefer the world of the so-called long tail. By contrast, the short, fat front – where content is homogenised and individuals get either one central broadcast or something so tailored for them that they never learn anything new or encounter a disagreeable idea – is always more popular. But then, just when it seems no alternative is possible, some fearless entrepreneur comes along with something outrageous that, ten years later, dominates everything. tne

Esther Dyson, CEO of EDventure Holdings, is an active investor in a variety of start-ups around the world.

(c) Project Syndicate, 2012

Guiding promise: Saudi Arabian commerce

Posted on by Ben Debski

As founder of Dallah Albaraka, Sheikh Saleh Abdullah Kamel began his business career at an early age based on a series of strong beliefs and principles. By the late 1960s, he had laid the foundation for the development of Dallah Albaraka Group, by the early twenty first century which was to become one of Saudi Arabia’s largest and most diversified conglomerates, spanning worldwide across forty countries.

Preserving the culture and heritage of his people is paramount for Sheikh Saleh Kamel. With Dallah Albaraka’s expansion, the group has developed itself as a bedrock of Saudi culture.

It was during the first oil boom of the 1960s, that the Kingdom of Saudi Arabia witnessed an unprecedented economic growth. The government undertook major spending programmes to develop an infrastructure with enormous efforts to build the foundation for economic diversification with private-sector participation.

Sheikh Saleh Kamel took up the challenge of implementing major governmental plans and visions through Dallah Albaraka participating in major national infrastructure projects, such as the building of roads, hospitals, installation of pipelines and sewage networks, a central sports complex and numerous electric power stations.

Within these government projects and public works, the group was awarded concessions for the cleaning and maintenance of the two Holy Mosques in Makkah and Madinah and the respective pilgrimage sites. These large-scale projects allowed the group to employ over sixty thousand people while providing a platform for the group’s increasingly diversified investments. From their onset, the group’s interests have remained focused on three primary categories; business, media and finance.

During the mid-1970s, Dallah Albaraka’s business sector expanded its public works investments programme which includes Dallah Avco Trans Arabia Company. A company who specialises in the construction, operation, and maintenance of airports. The group was then awarded the contracts for a large number of airports and related concessions throughout the country, such as the contract to maintain and operate the country’s extensive air traffic control system.

Nurturing growth
Sheikh Saleh Kamel also founded a medical clinic in Jeddah in 1977. Originally created to provide healthcare services to the growing number of Albaraka employees, the clinic has grown into a fully fledged medical facility. The company’s involvement in healthcare has led it to expand its business into hospital ownership, with the 1987 opening of the Dallah hospital in Riyadh. The company also launched a comprehensive chain of medical and dental clinics throughout Saudi Arabia and into North Africa, leading to the development of a new subsidiary – Dallah Health Services Holding Company – which in addition to the operation of healthcare facilities, provides various medical and pharmaceutical support services to healthcare facilities throughout the Arab world.

The company’s interests have also turned towards the media. In 1977 Dallah Albaraka launched the Arab Media Company, one of Saudi Arabia’s first television, radio, and film production companies. The media operations later expanded into broadcasting, and the company became a founding member of the Middle East Broadcasting Centre in the 1980s.

Dallah Albaraka’s growing media empire includes ‘First Net’ – a subscription television service comprised of ART and a host of other channels – which was launched in 1996, with Iqra, an Islamic Arab satellite channel to follow in 1998. By then, ART had acquired some fifty percent of the entire Arab film catalogue as well as the Arab broadcasting rights to a number of important sporting events, such as the football World Cup.

In 1999, the company extended its media operations with Saudi Digital Distribution Company, which provided marketing and distribution services for ART’s own channels as well as some fifty other television channels in the area. Furthering Dallah Albaraka’s business in media operations, the company acquired stakes in three Saudi research and publishing companies, (Asharq Al-Awsat, a leading Arabic international newspaper, being one of those).

In 1983, the company expanded its business into real estate development, when Dallah Albaraka participated in the Tunis Lake project, a vast complex of commercial and residential developments covering some 13m square metres in Tunis, Tunisia.

Following Tunis Lake came the 1997 launch of Durrat Al-Arus, a tourist city on the Red Sea in Jeddah, and the first waterfront community in the Middle East. The completion of the project’s first phase spanned some 2.3m square metres, while the launch of the second phase just a few years later added another five million square metres.

In 2006, Durrat Al Riyadh was created. A project that spans over 10m square metres, offering a unique real estate opportunity, aiming to provide a state-of-the-art housing community located north of Riyadh City. Currently, Dallah Albaraka is developing the King Abdul Aziz Road Project that will lie within the Holy City of Makkah covering a total area of 1.173m metres. The road extends to the Holy Mosque beginning at Makkah’s Western Entrance. The project has numerous strategic, developmental, urban, environmental and investment values. Total development costs for the complete project are to be about SR 35bn.

Raising capital
In 1979 the firm’s business activities expanded into the Arabic financial markets with the launch of the Islamic Arab Insurance Company in Dubai. The company’s growth into the finance industry was due in large part to Sheikh Saleh’s belief in the development of theories for creating a new type of “Islamic bank.” That being; a bank that respects the Islamic Shari’a law, which is, in particular the rejection of western-style interest rates, that are considered as usury by Muslims. Islamic banking principles replace interest rates with various Islamic systems thus creating a partnership system in which the lender and borrower together share both the risk of loss and the possibility of corresponding profit on investment.

Sheikh Saleh Kamel is considered one of the original pioneers in developing the Islamic banking and finance industry, founding Albaraka Banking Group (ABG). Through ABG, Dallah Albaraka Group’s presence is felt globally. ABG’s mission is to be the leading Islamic banking group with worldwide presence, offering retail, commercial, investment banking and treasury services, all strictly in accordance with principles of Shari’a law. In 1982, Sheikh Saleh Kamel became one of the first individuals to launch an Islamic bank, incorporating his Albaraka Investment and Development Company (ABID) as a vehicle for the creation of said banks, insurance companies and investment firms based on Islamic Financial Theory.

The company’s first branches were opened in Saudi Arabia and they quickly extended their interests to other Arabic and Islamic markets. By 1984, Albaraka had opened a bank in Sudan, and by the end of the decade, Albaraka banks were established in Algeria, Jordan, Lebanon, Bahrain, Egypt, Malaysia, South Africa, England, and » Pakistan. These banks, while owned by Dallah Albaraka, remained for the most part independent entities.The development of the Albaraka Bank Network encouraged Sheikh Saleh Kamel to explore further aspects of Islamic Financial Ideology. In 1987 the company launched Al-Amin Company for Securities and Investment Funds, one of the first institutions to once again offer investment vehicles according to Islamic principles. The company later converted to bank status, giving it the ability to launch securities products that respected Islamic banking ideals. The bank also became one of the first to obtain authorisation to offer a dual-tier shareholder system, which creates management and partnership share classes.
Also that year, the company launched the Arab Leasing International Finance Company (ALIF), which made vehicle and equipment lease financing products available to the Arab world.

ABID continued to develop financial services for the Arabic and Islamic markets by launching a series of companies in the late 1980s and early 1990s. In Tunis, for example, the company opened BEST Re-Insurance, and in Dubai, ABID was behind the launch of the Islamic Arab Insurance Company. Similarly in Bahrain, the company opened Islamic Insurance & Re-Insurance, and in Jordan, ABID’s Jordan Islamic Bank opened the Islamic Mutual Insurance Company in 1994.

With his underlying commitment to the development of Islamic Banking, Sheikh Saleh Kamel has become chairman and General Council for Islamic Banks and other assorted financial institutions. Under the current economic climate, Sheikh Saleh Kamel chose not to withdraw or pull out of regions; but in fact he accelerated initiatives that he believed would assist the growth of Islamic finance, therefore contributing to the reshaping and transformation of the Islamic financial world.

With Sheikh Saleh Kamel increasing focus and responsibilities to Islamic banking, his son Mr. Abdullah Saleh Kamel has now taken over as president and CEO of Dallah Albaraka Group. Following the guidance of his father’s great expertise in the sector, Mr. Abdullah Saleh Kamel is prepared with the skills to lead the group onward to further success in the future. Mr. Abdullah Saleh Kamel agrees that the group’s confidence lies in the strong foundation of its beliefs and in the continued reflection of the past four decades, strengthening its strides towards future achievements.

Sustainable economic initiatives

Posted on by Ben Debski

Banks play a very important role in achieving sustainable development in nations and Mexican bank Banamex is fully aware of this growing trend and the responsibility it entails. The bank supports sustainable development in two main ways. First of all: the intergration of environmental and social criteria in designing products, policies and strategies. Secondly: the pursuit of environmental and socially responsible initiatives that go beyond the provision of financial services.

Banamex, the main subsidiary of Grupo Financiero Banamex, was founded in 1884. It was born, simultaneously, as a commercial bank and a financial agent of the Mexican government. Since then, its history has been closely linked to the evolution of Mexico, playing a key role in the growth and development of the Mexican financial system and the Mexican economy as a whole.

During these 128 years, Banamex has served a massively diverse clientele. The bank has been a pioneer and an innovator since its foundation. Among several of its “firsts”, the firm opened the first branch of a Mexican bank in the US, created the first Mexican savings account (1929), the first consumer credit for Mexicans (1952), the first credit card in Latin America (1968) and the first ATM in the region (1972). It was also a pioneer in establishing the “Universal Banking” model Mexico models itself on.

The group holds a pre∞eminent position in Mexican financial markets (enjoying around a third of the market share in most important segments) and provides consumers, corporations, governments and institutions with a broad range of financial products and services. These include; consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, wealth management, bank insurance and pension funds.
Banamex does business in over 500 locations throughout the country, and provides services to 20m customers. It has 1,700 branches, 4,600 correspondents and 560 other sale outlets; 6,030 ATMs and more than 68,272 point∞of∞sale terminals. The group employs nearly 43,500 people.

A good citizen
Banamex has been a “socially responsible company” or a “good corporate citizen” since it opened in 1884. The bank started to “institutionalise” its socially responsible activities in the 1970s, when the bank decided to create its first foundation, primarily focused in cultural matters. Later, by integrating sustainability into the bank’s business strategy and decision-making processes, Banamex expanded its traditional efforts in social responsibility, to support environmentally responsible projects, innovative technologies and sustainable enterprises.
Sustainable development has been a key block for many businesses for decades. Since the 1990s, Mexico has been at the forefront of world efforts in this field – since the 1992 Rio ‘Earth Summit’ – Banamex has been aware of the importance of such activities. The firm clearly realised the negative effects that the deterioration of the environment could bring, and brought this to the attention of the Mexican business community and economy as a whole.
Banamex believes that collaboration with authorities and other corporate clients is crucial for the success of environmentally responsible initiatives. This attitude was reinforced when Banamex integrated with Citi in 2001. The bank was well prepared to adopt policies like ‘Environmental and Social Risk Management’ (ESRM). Risk management has been one of the major strengths of the bank since its creation. Established in 2003 and updated periodically, the ESRM policy is built on the framework of managing risk first and foremost at the project’s ground∞level. The policy applies to a broad range of financial products in various sectors that meet certain financial thresholds and have a known use of proceeds tied to a specific physical project or asset.
The ESRM policy also gives guidance on additional assessment and mitigation requirements for transactions in “areas of high caution and special focus” that include critical habitat and areas of high conservation value, significant cultural and heritage value, indigenous peoples, and large scale resettlement. This ESRM policy prohibits the financing of transactions involving forced labour, harmful child labour and illegal logging.

Putting it into practice
A handful of recent initiatives show how sustainability is a core pillar at Banamex. A good example is financial inclusion, a top priority for the group. In many Latin American countries, Citi has long been a pioneer in raising awareness on the importance of financial culture and promoting different initiatives. Financial inclusion is a key element to ensuring that Mexico reaches the level of development which it seeks. In 2004, Banamex was the first bank to launch a ‘Financial Education Programme’ in Mexico. This programme has committed more than $10m to projects and is considered a leading example in Mexico.
Furthermore, the bank carried out a complete business alignment in order to achieve social goals. Thus, being a pioneer in the use of non-banking correspondents in underbanked communities and also established a strategic alliance with one of Mexico’s largest retailers to put financial services closer to the people. Today, its distribution network (branches, other sale outlets, correspondents, ATMs and point of sale terminals) gives the financial group presence in more municipalities than any other bank in Mexico.
Furthermore, in October last year, Citi, Banamex and America Movil – one of the largest providers of mobile telephony in Latin America – created Transfer, a company that will offer an opportunity to 236m people on the continent to access financial services through their mobile phones, thus opening the door for financial inclusion to segments of the population that do not have bank accounts at present. Transfer is scheduled to start operations in the first quarter of 2012. Banamex has fostered sustainable development through other initiatives as well. Fomento Ecológico Banamex, the bank’s ecological foundation, was opened in 2000 to support the reforestation of more than twelve thousand acres of rainforest through the planting of more than five million trees at the national parks surrounding Mexico City and in El Triunfo, a natural reserve in southern Chiapas State. The firm also supports the “azoteas verdes” (green roofs) project in Mexico City and projects of conservation of endangered species like marine turtles.
The bank earned the ‘Energy Star’ certification for three corporate buildings, while 164 banking branches are in process of potential certification. The bank has also seen a huge change in the way account statements are sent. More than 2.2m clients have changed from paper account statements to electronic ones and by doing so, besides saving a great amount of paper, they have financed the planting of 300,000 new trees.

Socially sound
Besides the initiatives described above, Banamex also complies with the highest standards of social responsibility through a programme the group calls: ‘social commitment with Mexico’. The bank has been clearly acknowledged as an originator and a leading financial services company in social responsibility within Mexico. A recent survey showed that Banamex’s social and cultural actions are the second most important characteristic that clients recognise.
Through 500 exhibitions, 130 books, 900 folk art masters supported, and 59 historical buildings restored: the ‘Cultural Foundation’ fosters Mexican culture, art and traditions. The ‘Social Foundation’ has contributed to improving the living conditions of the most deprived communities and groups encouraging economic and sustainable development. The natural disasters programme is focused on reconstruction within regions affected by floods, earthquakes and other similar natural events. The ‘Ecological Foundation’ promotes efficient use of scarce natural resources and protection of Mexican ecosystems, through projects encouraging communities participation. The ‘water factories’ programme is focused on reforestation in two major national parks near Mexico City. Financial Education has developed educational strategies that promote responsible financial culture and improvement of economic situations of families, communities, and institutions. More than five million people have been direct beneficiaries of this programme. Finally, the ‘Include-Me Foundation’ promotes an independent adult living system that encourages social inclusion, improving the quality of life and participation of those with mental disabilities.

A perfect solution – Skross travel adapters

Posted on by Ben Debski

It can be hugely frustrating to be unable to make the most of your surroundings due to a lack of energy to power devices. Many business travellers face this problem on a daily basis, as they require adequate access to power for their electronic equipment and devices everywhere and at any time – irrespective of local standards for plugs and sockets.

SKROSS, a Swiss company, has set itself the task to ensure this vision is realised simply, reliably and safely with multifunctional world adapters and USB chargers for worldwide use in more than 150 countries.

In 2000, Walter Ruffner, sports enthusiast and proprietor of a Swiss plastic injection moulding company, rewarded himself with a trip to the Australian summer Olympics. However, his stay was overshadowed by the fact that throughout Sydney he could not find a suitable travel adapter for his laptop. Ruffner could not understand that this problem could not be solved simply – a problem which all frequent travellers have encountered at least once. Back in Switzerland, he embarked on the development of a compact world adapter which could be used for travelling all over the world. Two years later, WorldConnect AG, a company co∞founded by Ruffner, introduced the very first adapter for international use to the market. Today, SKROSS products can be purchased worldwide in more than 100 countries.

Safe, compact, stylish
Since the creation of WorldConnect AG – smart, innovative and multifunctional Swiss∞quality travel adapters and USB chargers have been produced under the SKROSS brand name. Designed for travellers from all over the world, they ensure unlimited freedom for using all types of electronic equipment and devices around the globe. Thanks to their innovative all∞in∞one country slider system, SKROSS patented originals are uniquely compact and hugely practical. Nevertheless, they meet all relevant international safety regulations.

Christian Ernst, WorldConnect AG CEO, outlines the corporation’s philosophy: “From the very beginning, safety was our top priority. In the market, this clearly sets us apart from cheap products from the Far East. Our entire development and production process aims at providing not only a compact and versatile product, but also a product which, above all, complies with country-specific safety standards. This ensures user safety and proper functioning of all devices.”

Despite their extremely compact design, SKROSS travel adapters and USB chargers are uniquely designed to give off a striking appearance. As a result, SKROSS products are highly commended in terms of functionality, performance and innovation at numerous international design competitions. Among others, the World Adapter Pro+ received the renowned reddot ‘Design Award’.

All-in-one system
The world adapters and USB chargers which can be used all over the world are based on a clever, patented country slider system. Depending on the travel destination, the required plug is extended on the underside of the device. Six different plug systems meet the safety and power standards of more than 150 countries worldwide.

Developed for 2-pole devices, the World Adapter Classic and World Adapter Evo adaptors – as well as the World Adapter Pro+ for 2-pole and 3-pole devices – have an additional sophisticated top side. This allows devices from all over the world to be used, and it gives unlimited freedom to travellers. Whether you are a business traveller from London in Las Vegas or a Swiss traveller visiting the summer Olympics in Great Britain, SKROSS products are the best choice for a traveller’s portable energy needs.

New SKROSS innovations follow the latest trend for using devices which are operated or charged via a USB cable. All World Adapter products are therefore available as USB versions. With its World USB Charger, SKROSS even offers an independent USB charger for global use. Simple and limitless: charging devices abroad has never been easier.

Full of energy
SKROSS is convinced that it can offer the perfect solution for all kinds of travellers. No matter if it is for the globe-trotting road warrior or the holiday home owner in Tuscany. Anyone can potentially find the perfect adapter for her or his respective needs.

The SKROSS World Adapter Classic and World Adapter EVO are perfect for those who travel light and use small, non-earthed devices such as digital cameras, smartphones and MP3 players. Since most of these smaller devices offer the possibility to be charged via a USB cable, both the Classic and EVO are available with a interchangeable USB charger top which converts the world adapters to global USB chargers.

For those travelling with devices equipped with a earthed plug (hairdryers, hair straighteners, most laptops/netbooks) there is a unique solution available in the World Adapter Plus series of adapters. This line of adapters is the only one in the world that ensures a full earthed pass-through from device to wall socket. In other words: it’s the only adapter in the world that is capable to deal with earthed plugs respecting all relevant safety aspects. Furthermore, the adapters of the Pro series can be equipped with a specially designed USB charger top as well.

For those travelling with USB powered products only, there are smart and compact solutions for those situations. The very compact World USB Charger combines compactness, versatility and power output and is a “must have” companion for any serious globetrotter. Single-country USB chargers such as the EU USB Charger are the modular solution to work together perfectly with all adapters of the Pro series.

The SKROSS adapter range is completed with a wide selection of country adapters. These safe, certified and carefully designed single plug adapters are the most economic solution for point-to-point travellers. If you don’t feel the need for a global adapter, these country∞specific adapters are the safest and most cost-effective solution.

SKROSS products are widely available in many duty free stores around the world. Over 40 global airlines carry them onboard. And if you are not travelling at the moment then you can simply visit the online store at: www.skross.com.

Yemeni microfinance models

Posted on by Ben Debski

Yemen is one of the least-developed countries in the Arab world. The widespread lack of opportunities for young people and women is contributing to the country’s slow pace of development. Mohammed Saleh Al-Lai, chief executive of Al-Amal Microfinance Bank, says: “About 76 percent of young people are below the poverty line in Yemen. Frustration and lack of opportunity among youth creates a fertile ground for terrorism and social instability.”

Al-Amal Microfinance Bank (AMB) – the first and largest microfinance bank in Yemen and the Arab Region, and the most successful of AGFUND’s banks for the poor – was established to respond to the needs of marginalised poor, particularly Yemeni youth and women, many who are economically active but are totally excluded by the formal banking sector. The bank offers a full package of financial services (credit, savings, insurance and housing loans) which help both improve the social and economic conditions of low∞income households and contribute to new business growth and job creation.
Starting operations in early 2009, the bank delivers its services through 13 branches over six Yemeni governorates and is planning to expand rapidly in 2012-2013. Many international organisations have recognised the bank’s achievements in providing services tailored to the needs of the poor through delivery models which are market-driven and sustainable. Hence, the bank has won several global and regional awards, most recently the “Islamic Microfinance Challenge” Award 2010, and the “Global Microfinance Achievement” Award in the ‘Most Innovative Microfinance Product’ category organised by C5 Group.

The bank attained a 23 percent market share of the Yemeni microfinance sector by the end of 2011. The number of loans disbursed by the bank reached 35,929 with a total disbursed portfolio of $8.5m, of which women account for 60 percent of total disbursed loans. Although somewhat affected by the political crisis in 2011, the bank managed to increase its number of active borrowers to 15,945. The impact of these loans goes far beyond the individual borrower with an estimated average of five members per household benefiting from AMB products – a total of 179,645 beneficiaries. AMB loans have also allowed businesses to grow creating an estimated 18,174 new jobs.

Through proactive marketing and promotion AMB has also been successful in attracting savers and their capital, making the bank the largest MFI offering micro-savings in Yemen and one of the largest in MENA. Today AMB has over 33,000 active savers with total savings portfolio of over $700,000 which represents close to 30 percent of AMBs outstanding loan portfolio.

AMB’s selection by The New Economy as one of the top MFIs globally is based on several key factors:
• Adopting innovative models and mechanisms for service delivery to those in need.
• Developing financial products that suit the environment in which they operate. Coupled with the ability of the bank to positively contribute to national development which many public and private institutions failed to achieve.
•Focusing on all parts of Yemeni society as well as low income households by introducing an assortment of new models of Islamic microfinancing.

A new focus
In the MENA region, stereotyped perceptions still persist among many financial institutions about the viability of young people as clients, and many MFIs continue to favour older clients, with established businesses and longer credit histories over “risky” youth investments.

The flip side of this status quo, especially given the demographics in Yemen, where youth aged 18-30 represent more than 50 percent of the economically active population, is that for forward-thinking financial institutions this age cohort, appropriately targeted, could offer a significant untapped new market opportunity.

Recognising this opportunity, AMB entered into a strategic partnership with Silatech, a Qatari social enterprise founded in 2008 by Sheikha Mozah bint Nasser, wife of Qatar’s Emir, which fosters young entrepreneurship and employment in the Arab region. In late 2009 AMB and Silatech launched a co-funded and co-created Youth Loan Fund (YLF) targeting young micro-entrepreneurs aged 18-30. From its inception, the fund garnered strong interest from youthful Yemeni entrepreneurs for whom access to formal financing had been restricted. This demand has continued and to date the fund has supported more than 11,500 young businesses including over 1,000 start-up projects who have obtained formal financing for the first time. They now represent close to 40 percent of AMBs overall active client portfolio. This fund has disbursed $2.3m in loans to date and now has a pool of funding over $5m which will target 50,000 young entrepreneurs by 2014. Mr. Mohammed Al-Lai, the CEO of AMB, said: “the youth we have loaned to have proven to be excellent, reliable clients, something which has changed perceptions among our staff and the wider community about the responsibility and maturity of young people in Yemen.”

Future directions
Building on the success of youth lending AMB, and Silatech introduced a Youth Savings Scheme which has to date enabled more than 7,000 disadvantaged young people – aged 18-30 to open savings accounts, current accounts, fixed∞term deposits and child savings accounts for their children. Starting from zero percent, youth aged 18∞30 now make up 15 percent of the total savings portfolio of AMB. To date young people have deposited more than $95,000 with AMB, demonstrating that savings products are as equally in demand as loan products.

Evidence suggests that each young savings account is being actively used by an average of five family members showing the broader social impact of this initiative. “The concept of asset building as a means to lift youth out of poverty and increase their ability to access economic opportunities is increasingly recognised but is largely untested in the region.

The work of AMB and Silatech is providing evidence which will serve to influence practitioners and policymakers throughout MENA, driving further uptake”, says Justin Sykes, manager of Social Innovation at Silatech. Building on the pilot scheme, AMB has joined as a key partner from Yemen, to become part of a regional savings initiative promoted by Silatech, GIZ and Sanabel for the MENA region. In summary, Al Amal bank has been the leading microfinance bank in Yemen and the Arabic world based on its sustained innovation into the development of financial products and service delivery, as well as understanding the needs of Yemen’s target groups.