Business

GulfNews Business

Still a gender imbalance in UAE corporates and in need of some quick fixes

Analysis|: Women in the UAE have never been empowered, enabled, and emboldened... as they are today. From taking the reins of corporate and government leadership to pursuit of higher education, it almost seems like that the glass ceiling has been shattered. What is even more impressive is the leaps and bounds that women in this country have taken in the technology field. This accomplishment is – literally – universal with women playing key roles to ensure that the pride of the UAE space programme, the Hope Mars Mission, succeeds. At the Mohammed bin Rashid Space Center, 42 per cent of the workforce are women. See More China's rich seek bodyguards schooled in digital dark arts Race to rescue animals as Brazilian wetlands burn Photos: Pre-hispanic dancers perform energy cleansing rituals Photos: Palestinian female travel bloggers promote local tourism Moreover, 70 per cent who work on the UAE’s Astronaut Programme are women, as is over one-third of the Hope Mars Mission team. And yet under-represented While we’ve taken to the skies and succeeded, we do have yet another challenge to overcome closer to the ground: gender parity in boards of directors. Simply put, women’s representation at the board level is still far from adequate. The numbers speak for themselves: women account for only 1.5 per cent of members of UAE company boards of directors. Regionally, this number sits at 3.7 per cent - a far cry from Northern Europe’s 37.6 per cent, as per a 2020 Corporate Women Directors International survey, an advocacy group. This is not to say that this issue is not being addressed as the UAE’s leadership have taken notice. In 2012, His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice-President and Prime Minister and Ruler of Dubai, announced a momentous cabinet decision that makes it compulsory for corporations and government agencies to include women on their Board of Directors. The decision was a major achievement for women, as at that time, only Norway had passed similar legislation. The outcome was extraordinary. Four years later, 111 Emirate women ran for board positions at 111 companies listed in the stock exchanges, according to the UAE Gender Balance Council. And occupy 15 per cent of the positions at boards of chambers of commerce and industry. Token presence But the question must be posed: why are we then only at 1.5 per cent representation? While the law requires that women be represented at the board level, no quotas were set. In addition, the regulations did not extend to the private sector – only to government-owned entities. This issue, yet again, has not gone unnoticed by the leadership. Earlier this year, Sheikha Shamma bint Sultan bin Khalifa Al Nahyan launched ’20 for 2020’, aimed at driving gender balance at the board level by providing 20 women the opportunity to take part in a year-long professional development course while they gain board-level experience. Pull their weight While the leadership does provide the wisdom and guidance, the onus lies on companies themselves to deliver on diversifying their boards. The benefits are substantial: female participation offers fresh perspective, a new type of leadership, and just as importantly, opportunities for healthy conversations at the board level that contributes to more effective decision-making. Women board members can also champion workplace diversity, setting an example for the next generation of female leadership, and encouraging and mentoring women who are starting their careers. And as it is twice more likely that women will have a technology background over their male peers, organizational digital transformation – a key imperative in today’s world – becomes much more likely to be adopted. The advantages of having more women on boards of directors are clear-cut, and organizations should take it upon themselves to increase female representation. There are two steps that they may take to increase female participation in the coming years: mandating a diversity policy and setting measurable and achievable targets. By doing the former, diversity is cemented into the company ethos; by doing the latter, the company reinforces its commitment to gender parity, not only at the board level, but also throughout the organization. The UAE, and not without effort or guidance from our leadership, has taken the helm of the gender parity agenda in the Middle East. As a nation and as a people, we have learned to set no bounds to what we can do. As Emiratis, we’ve looked to the stars and challenged ourselves to leave our mark beyond the reaches of space. We have set our sights on a planet almost 72 million kilometres away and triumphed. So let us not overlook a target that is closer to home and even more obtainable. The one target that is just above our heads - more female representation at the board level. - Hanan Ahmad is acting Head of Corporate Affairs and Assurance at EITC.

GulfNews Business

It's mistaken to assume more liquidity will create a job rush

Analysis|Analysis|: Central banks are undershooting their inflation targets. Why? Historically, monetary theory in economics has worked this way. The central bank in a country prints more money, figuratively, to increase the money supply in the economy and with it, hopefully, money circulation. To do that, the central bank would lower interest rates, which will increase money supply as banks start lending more money. See More China's rich seek bodyguards schooled in digital dark arts Photos: Pre-hispanic dancers perform energy cleansing rituals From the editors: Global Village to boost consumer confidence Photos: Palestinian female travel bloggers promote local tourism Alternatively, central banks could lower reserve ratio requirements, i.e. the money required to be kept by banks for whatever that they lend out. Recently, increasing money supply has been done by bonds’ purchases, which is also intended to put more cash in the hands of whomsoever is holding those bonds. For corporate holders, bonds are supposed to provide companies with leeway and cash to hire. After all, the relationship between lower unemployment levels and inflation has always been a classical one, identified and explained by the ‘Phillips Curve’. Namely, higher economic activity elevates inflation and lowers unemployment, which in turn raises inflation further, and so on. Problem is that bonds’ purchases are not real economic growth that creates jobs, lowers unemployment, and raises inflation. This is simply cash received by companies that could be spent on anything but hiring. Lately, such money has been increasingly spent on share buybacks. A spur for spending For other holders, bonds are expected to increase spending in the economy, subject to consumer and market sentiment that nourishes such spending. For instance, COVID-19 would be a deterrent to that, as individuals would rather hold on to their cash and bank savings until there is more certainty in the economy. Before COVID-19, and despite employment levels going up, inflation continued to lag behind. This can be partly blamed on the financial and economic scars left from the 2008 financial crisis and then the downturn caused by the virus. That is, the psychological impact makes individuals refrain from spending. Today, according to analysts, the relationship between currencies and exports can take part of the blame too. When money supply is increased, whether by lowering interest rates, the reserve ratio, or by purchasing bonds back from the market, a country’s currency gets devalued. When that happens, international trade theory suggests that a cheaper currency will encourage exports. A large enough effect could see exporters create jobs, and this takes us to the same classical connection where lower unemployment levels should lead to a higher inflation rate. Yet again, that does not seem to be the case. Why? Because international trade is not conducted in domestic currencies, and exports are not quoted in them. In other words, products and services in a country are usually quoted in the domestic currency. As the currency depreciates in value, average domestic prices go up, and thus inflation. Neutralising inflation However, the loss in the domestic currency’s value does two things. One, it lowers the domestic purchasing power in the economy as income is generated in the devalued domestic currency. Two, it promotes exports as long as the drop in the currency’s value is matched by an increase in the importers’ currency’s value. The effects from each offset one another, and inflation does not go up. Added to the above mix is the fact that many exports are quoted in internationally accepted currencies, such as the dollar. If so, then it does not matter how significant the drop in a currency’s value is as it may not necessarily increase exports. In such a case, what should have been a driver of inflation becomes another drag on it. As a result, the increase in money supply leads to nowhere and inflation targets remain out of reach. To conclude, the idea behind increasing money supply in an economy is to fuel economic activity, hence spending, which will increase inflation. This is the logic behind the Phillips Curve. Nevertheless, market sentiment can prevent that from happening as companies decide to not hire during uncertain times. Similarly, a negative market sentiment would discourage individuals from spending in an economy, whether they have always had jobs or they have just been hired because of the increase in money supply. Additionally, inflation targets are missed because of value variations between domestic and international currencies. That is, such variations dilute domestic purchasing power in an economy, whilst benefiting exporters in the same economy. Finally, quoting exports in international currencies can create another drag on inflation. The last thought that I want to leave you with: How can central banks meet their inflation targets? - Abdulnasser Alshaali is a UAE based economist.

GulfNews Business

Days after Accord, UAE businesses are already pushing ahead with Project Israel

Business|: Dubai: Roll out the big names – just days into the signing of the Abraham Accord with Israel, the UAE’s investment push into that new market is already taking shape. First, there was the announcement by DP World – one of the UAE’s most global of enterprises – confirming that its new joint venture will make a bid for Israel’s strategically vital Haifa Port privatization. It was earlier in the year that the Israel Government gave the go-ahead for the privatization, a process that could be completed within the next two years. See More Dubai’s five-year Retirement Visa: It just got easier to apply IPL 2020 in UAE : Where and how to watch the cricketing action UAE Labour Law: How can I terminate a limited contract? The easiest way to book a COVID-19 test in the UAE Leading UAE banks have also found partners in Israel. Then, there was Abu Dhabi Investment Office’s decision to open a base in that country, and Dubai Diamond Exchange confirming an alliance with its counterpart – one by one, the UAE’s public sector entities are setting the agenda in doing business with the new market that has opened up for them. But they are not the only ones. Private sector gets into the act The Al Habtoor Group is working towards multiple “collaborations” with potential Israeli partners, including one with Israir Airlines to launch direct commercial flights to the UAE. “The possibilities are endless for both sides in our diversified fields and new ones - and we want to be present to grasp them,” said Khalaf Al Habtoor in a statement. Exploring the art of the deal... Khalaf Al Habtoor, Chairman of Al Habtoor Group, will hope to gain first mover advantage in Israel. The Group is considering multiple options, including in aviation. Image Credit: Al Habtoor Group But it need not be all about UAE investments flowing into that newly opened market. “Contrary to common opinion, I believe we’ll see as much investment coming from Israel into the UAE,” said Tasawar Ulhaq, CEO of KIKLABB Licensing and Workspace, owned by Dubai’s Port, Customs and Free Zone Corporation. (And the entity that offers companies registered with it access to office space on board the Queen Elizabeth II.) “We’ve already started to receive enquiries from Israeli companies interested in setting up in Dubai. Israel has advanced venture capital and tech sectors, so it’s no surprise that most of the interest we’ve received are from these two sectors. “In addition, we offer the right trade licenses with relevant business activities - and Israel has already been added to our systems.” Israeli businesses too will start making a move into the UAE... and the Queen Elizabeth II is all set to welcome them. KIKLABB Licensing and Workspace offers spaces on board the vessel for its licensed entities. Image Credit: Gulf News Archive But let’s not rush things Ulhaq says time – and space – must be given for businesses to firm up their plans. “After all, there are entry visa requirements, regular flight schedules, and other aspects that need to be implemented – but this will be beneficial for both countries,” he added. For UAE businesses that already have links with Jordan or the markets in North Africa, extending their reach into Israel would be relatively easy. And if DP World gets to win Haifa Port, a lot of things would slot into place. Tax breaks? Rizwan Sajan, Chairman of the building materials supplier Danube, is one who definitely would be interested… provided he gets some clarity on the tax structure there. “I believe the tax structure is high – but we still need to explore more on it,” he added. “Our focus is mainly on the Gulf markets because of the ease of doing business plus the one-time customs duty. There is a tax element in Muscat and Doha, but negligible.” A move into Israel will depend on the ease of doing business - that's where the UAE and Gulf markets score Rizwan Sajan of Danube Preferential treatment According to market sources in Israel, those questions related to tax on business activity can be surmounted. “The cost of operations in Israel is much cheaper,” said Ofir Bar-Noy of the recently created Emirates Israel Investment Group. “There are almost no license fees, and the joint registration of VAT and corporate tax has made starting a business in Israel much easier. In terms of taxes, Israel has also reduced the corporate income tax rate, making it cheaper.” The country has also made trading across borders easier by eliminating the ‘certificate of origin’ requirement. What about taxes? Israel’s tax structure is higher than in the UAE. The Corporate Income Tax is at 23 per cent. There are, however, preferential rates that can reduce the CIT to 16 per cent, 12 per cent and even 7.5 per cent. The VAT is at 17 per cent. Double taxation deal? At some point, Israel sources say, a double taxation treaty could be part of the governments’ agenda. “Good tax planning can help [UAE businesses] accrue most of the profit to the UAE and at low tax when doing business with Israel,” said Bar-Noy. “There is a huge potential for economic co-operation and investment, and we hope this will help transform growth in the region.” According to Matan Bar-Noy, CEO of Emirates Israel Investment Group, “Tech-led sectors would definitely see a lot of interest in investments, but beyond that, we also think Israel’s energy sector and banking would also see a boost by this agreement. With regional names already in conversations for tie-ups, we can see good opportunities even for the traditional sectors.” “There are no restrictions on foreign businesses. Foreigners can hold 100 per cent of Israeli companies.” Setting sail If DP World and its Israeli partner do win the Haifa Port contract, that would be the cue for more investment flows. Surender Singh Kandhari, Chairman of Al Dobowi Group, the tyre company, certainly sees it that way. “We contract-manufacture our own tyres in some of the largest tyre plants in Asia, using our own equipment and R&D,” he said. “We are one of the largest battery manufacturers in the region and we provide both automotive and industrial solutions. “[If] the DP World deal is finalised, we will begin our business operations. We are eagerly looking forward to do business in Israel.” It is too early to tell if there will be any material economic benefits. However, we expect these countries [UAE and Bahrain] will begin direct commercial flights with Israel and significantly increase cooperation in the areas of tourism, security, telecommunications, technology, health, education, financial services, and agriculture Latest update from Standard & Poor's on the post-Abraham Accord scenario

GulfNews Business

Burj Al Arab launches ‘Sal’ a new pool and dining experience

A new lifestyle experience called Sal launches at Burj Al Arabcwhere that’s all about ‘barefoot luxury’. The contemporary mirrored pop-up is located at the terrace of the Burj. The new pop up restaurant overlooks the 100-metre infinity pool. Headed up and launched by Chef Roberto Rispoli, Sal will offer Spanish and Portuguese cuisine. With a menu of sea-inspired dishes designed for sharing. The word Sal, which means ‘salt’ in Spanish and Portuguese, pays homage to the sea and one of the most ubiquitous ingredients in the world, not only in its name but also through the restaurant’s catch of the day – grilled or baked in sea salt to concentrate the natural flavours. The menu features special dishes like Prawns in Roasted Tomato Sauce or wild crab and moves onto signature mains including Homemade Trenette Pasta & King Crab, Seabream Isolana, and Sea Salt Crusted Seabass, all available at a great value. To end, guests can choose from a variety of sweets from the Dessert Trolley. The restaurant offers views to the Burj Al Arab's infinity pool The best thing about this new spot is that guests who want to spend the day at the Burj Al Arab will have access to Sal as part of their F&B dining credit. These packages include access to two swimming pools or soak up their surroundings in style at one of the Terrace sunbeds at their beach area. Guests need to take a buggy from the front entrance of Burj Al Arab. Key info: Location: Burj Al Arab, Jumeriah Beach Gallery Cost: Dh450 per person with Dh300 Sal dining credit, Dh800 for couples and Dh600 F&B credit, Dh110 for a two-course meal at Sal without pool and beach access Timings: Beach Club from 10am to 7pm, Restaurant from 12.30pm to 11pm

GulfNews Business

Carmakers cry foul as EU's climate plan takes aim at industry

Automakers balked at the European Union's plan to set stricter emissions limits for the next decade, saying they lack the government support needed to achieve the targets. The industry is among the sectors most under fire in the 2030 Climate Target Plan, which calls for the bloc to reduce carbon-dioxide emissions by 55% from 1990 levels rather than the previously planned 40%. To achieve this, the European Commission sees carmakers needing to gradually phase out combustion engines and roughly halve CO2 emissions from 2021 targets. A dense, EU-wide network of charging stations must be built and governments will have to offer bigger incentives to make zero-emission vehicles affordable, the European Automobile Manufacturers Association said. Germany's car lobbying group warned the targets would be a burden on already-struggling suppliers and hurt employment and economic growth. The European Commission's policy paper, which Bloomberg News reported on in draft form earlier this week, was made public as Europe's automakers released disappointing monthly sales results that dashed hopes the industry was starting to recover from the pandemic. Registrations are on track for at least a 20% drop this year. "Policy makers need to put in place not only targets but also the required supportive policies for all vehicle types, without which these targets will simply not be achievable," Eric-Mark Huitema, the head of the ACEA, said in a statement. The world's top auto manufacturers have been lapped by Tesla Inc. from a market-value perspective as the electric-car maker led by Elon Musk has built its own charging network to support its growth. While the Model 3 maker is a small player in Europe, it's aiming to start production at a plant under construction near Berlin next year. BMW AG is open to dialogue with the EU commission and member states, though it said this is short notice for further tightening of 2030 targets. The existing plan to reduce CO2 car-fleet emissions by 37.5% over the next decade was adopted after a multi-year process in 2019. Labour Unrest The rise of electric vehicles will hinder demand for the many components needed for internal-combustion engines and take less labor to build, stoking dread among auto workers around the globe. Germany's VDA was warning before the coronavirus pandemic that the technology shift could lead to the loss of 70,000 jobs over the next decade. Supplier Continental AG announced plans earlier this month to dismiss or transfer as many as 30,000 workers. The emissions-cutting plan puts Europe's ability to compete on the global stage at risk, Hildegard Mueller, the head of the VDA, said in a statement. "Given the backdrop of the coronavirus, it'll lead to serious financial burdens and endanger Europe's competitiveness," he said. Chancellor Angela Merkel's ruling coalition is divided over the need for more state aid for the auto industry, with some favoring support for combustion cars and others seeking incentives for EVs. Germany already introduced purchase subsidies of as much as 9,000 euros ($10,600) per electric vehicle to stimulate demand after virus-related lockdowns were lifted. Testing Patience Carmakers are testing the patience of authorities with continued diesel-emissions issues five years after regulators exposed Volkswagen AG's cheating scandal. The U.S. Justice Department said earlier this week that Daimler AG installed devices in Mercedes-Benz vans that circumvented emissions tests for years. Fiat Chrysler Automobiles NV also recently disclosed it started discussions with the Justice Department's criminal division to resolve a similar investigation. As the companies look to put those issues behind them, they're pressing policy makers to help put zero-emission vehicles on equal footing with those that run on combustion engines. "The customer who drives CO2-free must not be punished," Martin Daum, the chief executive officer of Daimler's truck unit, said this week at the unveiling of a concept big rig that runs on hydrogen. "The fuel cell didn't prevail 10 years ago because it was uneconomical for the customers. That will be the same in 10 years' time if the framework doesn't change."