Crescent completes drilling programme in Mubarak field
Crescent completes drilling programme in Mubarak field
Staff Report GULF NEWS Published: October 05, 2007, 00:21
Dubai: Crescent Petroleum, the region’s oldest private upstream company and the operator of the Mubarak field, has announced the successful conclusion of its recent drilling programme in the Mubarak field, offshore Sharjah, with completion of the K2 well.
The well was drilled to a depth of 13,528 feet in the Ilam reservoir.
After initial tests, the well is flowing at 742 barrels per day, similar to the initial flow rate of the first well, H2, in this two-well programme.
These wells were the first to be drilled by the company in the Ilam reservoir since 1997 and were appraising the remaining potential of the reservoir which has been in production since 1974.
The two wells successfully tested the potential for bypassed oil in both the northern and southern flanks of the reservoir and will therefore aid the company in selecting further drilling locations.
Crescent also set a regional operational record in completing the K2 well, with a highly challenging programme involving horizontal drilling combined with coiled tubing technology and a complex completion matrix at great depths.
With the drilling of previous wells in these deep reservoirs, Crescent established a number of world records including the deepest short radius horizontal section drilled, and the deepest slim hole to be cased by expandable casing.
As a result of these encouraging well results, further development potential for the Mubarak field will be evaluated by the company in 2008, with a particular focus on the Ilam-Mishrif oil reservoir and the deeper Thamama gas condensate reservoir.
Food for thought about exchange-rate controversies
Food for thought about exchange-rate controversies
Jul 5th 2007 From The Economist print edition
AMERICAN politicians bash China for its policy of keeping the yuan weak. France blames a strong euro for its sluggish economy. The Swiss are worried about a falling franc. New Zealanders fret that their currency has risen too far.
All these anxieties rest on a belief that exchange rates are out of whack. Is this justified? The Economist’s Big Mac Index, a light-hearted guide to how far currencies are from fair value, provides some answers. It is based on the theory of purchasing-power parity (PPP), which says that exchange rates should equalise the price of a basket of goods in any two countries. Our basket contains just a single representative purchase, but one that is available in 120 countries: a Big Mac hamburger. The implied PPP, our hamburger standard, is the exchange rate that makes the dollar price of a burger the same in each country.
Most currencies are trading a long way from that yardstick. China’s currency is the cheapest. A Big Mac in China costs 11 yuan, equivalent to just $1.45 at today’s exchange rate, which means China’s currency is undervalued by 58%. But before China’s critics start warming up for a fight, they should bear in mind that PPP points to where currencies ought to go in the long run. The price of a burger depends heavily on local inputs such as rent and wages, which are not easily arbitraged across borders and tend to be lower in poorer countries. For this reason PPP is a better guide to currency misalignments between countries at a similar stage of development.
The most overvalued currencies are found on the rich fringes of the European Union: in Iceland, Norway and Switzerland. Indeed, nearly all rich-world currencies are expensive compared with the dollar. The exception is the yen, undervalued by 33%. This anomaly seems to justify fears that speculative carry trades, where funds from low-interest countries such as Japan are used to buy high-yield currencies, have pushed the yen too low. But broader measures of PPP suggest the yen is close to fair value. A New Yorker visiting Tokyo would find that although Big Macs were cheap, other goods and services seemed pricey. A trip to Europe would certainly pinch the pocket of an American tourist: the euro is 22% above its fair value.
The Swiss franc, like the yen a source of low-yielding funds for foreign-exchange punters, is 53% overvalued. The franc’s recent fall is a rare example of carry traders moving a currency towards its burger standard. That is because it is borrowed and sold to buy high-yielding investments in rich countries such as New Zealand and Britain, whose currencies look dear against their burger benchmarks. Brazil and Turkey, two emerging economies favoured by speculators, have also been pushed around. Burgernomics hints that their currencies are a little overcooked.
Mkts still attractive for long-term FIIs: BNP Paribas
Mkts still attractive for long-term FIIs: BNP Paribas
2007-10-04 17:12:45 Source : Moneycontrol.com
Chin Loo, Currency Strategist of BNP Paribas said, the underlying sentiment was still quite bullish. She said the reverberation in the markets was more because of backup positions ahead of non-farm payrolls on Friday.
Speaking on volatility, she said it was symptomatic of markets having a split opinion. She added, “There is a fair amount of bulls as well as bears in the markets and interplay of these two leads to intraday volatility.”
She said the year-end target for the rupee was 38.50 and there was still some more downside left.
Excerpts from CNBC-TV18’s exclusive interview with Chin Loo:
Q: What’s the call on what is happening in the Hang Seng and the reverberation that we have had domestically?
A: Well it is still quite selective. The Hang Seng was quite bullish but now it’s under some pressure from profit taking, but underlying sentiment is very bullish. I think I will subscribe this more to scaling backup positions ahead of the non-farm payrolls tomorrow.
Q: How are you reading into the kind of volatility that we are seeing in Hang Seng particularly?
A: Volatility is a result of huge inflows that is coming in and therefore as an exit; there is some chipping off the table. You can expect the decline to be fairly quick as well. I think it’s symptomatic of markets having a split opinion at this stage. There is a fair amount of bulls as well as bears in the markets and interplay of these two leads to intraday volatility.
Q: How are you viewing India amidst this volatility?
A: We remain very positive on India as well as the Indian rupee. We have had calls for some time on the dollar-rupee falling below 40. So, this comes as no surprise to us. What is quite interesting is that the trend in the rupee in the very short-term has been quite separate from the dollar-Asian trends. I think it shows that Indian rupee is marching to its own drumbeat and the appreciation path in the rupee is very much dependent on intraday liquidity and how the RBI managed it.
Q: How much more appreciation do you see in the rupee because we are already at 39.50 right now?
A: Our year-end target is 38.50; I think there is more downside. What is interesting to watch obviously is other risks brewing in the US economy and for the US dollar. And as we head into the G-8 meeting, that should be a non-event because the G-7 leaders had warned for some time about global imbalances and the need for the US dollar to weaken. So, that should not come as a surprise therefore.
Q: A fair amount of liquidity has come our way this week, aside of the deep cut that we saw yesterday and today, the profit booking that we have seen. Would you say that equity markets were looking expensive?
A: I wouldn’t want to comment on equity markets, but in terms of the flows that we are seeing, certainly a lot of flows are still quite positively geared towards Asia because we feel that is a high growth story, and that in terms of drivers behind the growth remains very much intact even into next year.
So, the opportunities that present themselves are still very attractive to long-term foreign investors and that is one of the key drivers for the shift in the Indian rupee sentiment.
Q: How are you viewing the FII appetite across the region at this point in time?
A: It is good. I think the survey is that people have been very much positive across mostly all quarters coming from interest rates, credits as well as equities; most investors do have a positive reading for Asia next year. So if markets do trade the way that people think, then I think there are more advantages to be had for Asia as well as the rupee.
Momentum is good; Sensex may hit 20,000 soon: Forsyth
Momentum is good; Sensex may hit 20,000 soon: Forsyth
2007-10-04 17:12:45 Source : Moneycontrol.com
sees a shift from the US to emerging markets. Fed’s action has given a boost to global investors and they still love emrging markets.
Excerpts from CNBC-TV18’s exclusive interview with Jacqueline Aldhous:
Q: Could you put into perspective what we have seen globally and even in Asia and India over the last few days in light of liquidity and do you see some of this as sustainable?
A: I think it’s sustainable over a long-term. It has been a very fast rise and there are question being asked as to – is it totally justified on the back of 50 bps rate hike by the Fed?
I think the message that Fed gave is that it will take action and I think that has given a boost to global investors and they still love emerging markets.
When you look at the relative growth emerging, in places it is at most 7% to 10%, obviously China you are talking about even upto 12% and developed markets. I think they still love the story and just see that there is a shift in the pattern away from the US to emerging.
Q: How do you interpret the kind of volatility we have seen or even the steep decline we saw in the Hang Seng both yesterday and today? Much of it was mirrored in the Indian Sensex as well and we saw two days of fairly sharp falls coming in.
A: I think one has to bear in mind that there has to be profit taking. Obviously that was a warning today in China. China has been taking measures to try and get their domestic investor frenzy away from the A-share market by opening up Hong Kong a little bit.
So you have to be careful and there will be profit taking. I think that’s been a characteristic of India, particularly maybe even more than other emerging markets, that after strong rallies, you had profit taking. This has been vying with investors looking for an entry point into the market over the longer-term.
And what is healthy is that you still have a lot of skeptics, especially on India, thinking it’s expensive and they are realising that something is happening that they are missing.
It still means you still have marginal bias and there is a shift away from developed markets into emerging markets. There definitely will be a bigger part of institutional portfolios as we go forward. They were a minimal part 10 years ago, maybe 1% if you were lucky and now I see them going up closer to 15% and maybe higher.
Q: What are you expecting to see from interest rates from the ECB today and the BoJ in about 10 days and the Fed at the end of the month?
A: I don’t think, in the UK it is as interesting. We have really been quite squeezed here on rates and for all those people who don’t have fixed rate mortgages, the feeling is that they will hold and they are now actually talking about a cut and the same from the ECB. They have been talking quite firmly about raising rates, but I think the expectation is that they will hold them and we might not see a rise for some time to come. Although, we are more likely to see a rise in Europe than we are in the UK.
Already, house prices have fallen in September for the first time. Obviously, there is a great squeeze on mortgages here and lending is much harder to come by. There is also definitely a contraction in the housing market here.
Q: What are you expecting from the Fed at the end of this month?
A: Very hard to say, I think Bernanke really has to see how things settle. It really will depend on what the news flow is between now and then. Obviously, he doesn’t want to go too far and it is a very fine line. At this point it is very difficult to call.
Q: How are you looking at Indian markets one-year down the line, what kind of Sensex levels will you be looking at?
A: I think over 20,000 that would seem crazy long back, we were talking about 15K-16K, this was the level I was talking about 6 months ago and we have breached that. I think 20,000 is easy, I don’t see a problem with that. The healthy thing is that you still have a lot of skeptics and a lot of marginal bias and there is still a lot going on there, there is still a lot of momentum.
Especially with infrastructure and with jobs moving to India, which is generating a whole new generation of consumers, I think it still has momentum going the same way China has and some other emerging markets like Brazil and Russia where you have domestic consumption really kicking in.
Q: Would you like to take a shot at where you will see the rupee by December 31?
A: I was listening to someone the other day calling for 37. I think the feeling is that the dollar will decline from here partly, because you have a lot of foreign governments looking to move their assets out of dollars. Not just Asia, but some of the Middle East countries want to diversify into the euro. So I think with some of this big money supporting it over the past 8-10 years likely to flow out, it doesn’t bode very well for the dollar. Obviously growth is elsewhere.
I don’t know whether we will see 37 by the end of the year, but at some point it is possible, I believe.
No takers for dollar; Re hits high of 39.35
No takers for dollar; Re hits high of 39.35
2007-10-04 15:53:46 Source : Moneycontrol.com
The rupee hit a high of 39.35 to the dollar in intra-day trade, which is a significant appreciation in just one session. The domestic unit was bit on the front foot in early morning trade because yesterday in late trades it had surged suddenly, analysts said.
The rupee was expected to carry on with that in the morning. This carry on effect is usually there but there was a good bit of buying by oil companies, analysts said. Once that dried up, the dollar fell largely because there were no buyers, they added.
Treasury heads said it’s not that there are huge FII flows today, if any it doesn’t seem to be anything like it has been earlier this week, but the sheer absence of buying (read RBI) led to the dollar falling lower.
However, at 39.35 there seems to have been some concerted PSU bank buying, which has been given the name of RBI, treasury heads said. So, it looks like RBI is supporting the market at around 39.35.
Ashit Parekh of IndusInd Bank has a view that by the year-end rupee may touch 38.75.
Excerpts from the exclusive interview with Ashit Parekh:
Q: Re is at 39.35,what is the cause for this appreciation?
A: We saw strong recovery in stock markets, so that implied continuous inflows and hence we saw rupee appreciating to 39.35. From there a quick move to 39.48 happened because of some strong buying by PSU banks. But it is not sustainable at all as you can see we are back down to 39.42, which is 6 paise lower than the high.
Q: What would you advice an exporter at this juncture? Do you think there is a likelihood of any spike at all or do you think that they should use even at 39.48 to get rid of their dollars?
A: I am not too sure about 39.48 because this morning the high has been 39.62. Still all the spikes should be used to get out of long positions and it should be used to book some exporting.
Q: What kind of a range are you looking at for the dollar itself? Do you think you are going to see it at 39 before this month is out?
A: I am not too sure about the timing of that but yes, definitely 39 is vulnerable. We might see it dipping below 39.
Q: Any year-end levels?
A: 38.75 is possible, I am not saying it will go there. But 38.75 is possible.
Q: That’s December 31st?
A: Yes, before that.
Reliance plans facility to convert petroleum coke into synthetic fuel
Reliance plans facility to convert petroleum coke into synthetic fuel
Rahul Wadke Mumbai, Oct. 3
Reliance Industries Ltd is planning to convert petroleum coke, a low-value residual output of refining crude petroleum, into synthetic fuel such as diesel and naphtha.
Given the differential in prices between the two products, the acquisition of the relevant technology for conversion opens up a new revenue stream for the company.
Petroleum coke or petcoke is a residue produced while refining crude oil. Reliance annually produces 2.5 million tonnes of this residue.
Fuel plant
Sources familiar with the development said Reliance plans to set up a plant having a daily processing capacity of 4,000 tonnes of petcoke for producing the fuels. These sources also said that the company would soon be placing an order with Larsen & Toubro for six such units. The technology partner of Reliance for this venture is Lurgi AG of Germany, global major in coal conversion technologies.
Fertiliser Feedstock
Rashtriya Chemicals & Fertilizers Ltd reported that it is contemplating using gas from coal gasification as feedstock for its fertiliser plants. Sources in Tata Chemicals also indicated that Reliance had evinced interest in supplying synthetic gas as feedstock for its fertiliser units. However, it may be noted that the technology for converting coal into synthetic fuels has been around for last 80 years. In the post World War II period, due to major oil discoveries and cheap oil, synthetic fuels became economically unviable.
Today, with Brent crude prices prevailing in the $80 range per barrel, coal liquefaction and gasification has caught the attention of global oil companies as they see it as a cheaper alternative to crude oil.
Photo Speaks – Passing shots – One for the Road
I haven’t attended to the Photo Speaks session for quite some time and I will be doing injustice if I don’t update it today. So, here they are – “One for the Road” – is the title for these passing shots, as I call them always. A few scenes from UAE, Oman taken while driving around.
Abu Dhabi Road on a rainy day – I wish it rains here too.
Abu Dhabi city streets
Sheikh Zayed Road, Dubai
Abu Dhabi Corniche Road
Abu Dhabi Eastern Ring Road
Abu Dhabi – Maqta Bridge
Roads in Muscat
Parking area – Dubai
Parking area – Abu Dhabi
President His Highness Shaikh Khalifa Bin Zayed Al Nahyan grants Dh370m for endowment drive
Shaikh Abdullah honoured key sponsors, philanthropists and winning students in the endowment campaign for their support and contribution to the drive.
Khalifa grants Dh370m for endowment drive WAM Published: October 03, 2007, 23:52
Abu Dhabi: President His Highness Shaikh Khalifa Bin Zayed Al Nahyan granted Dh370 million for the endowment campaign organised by the General Authority for Islamic Affairs and Awqaf.
The grant was announced during a ceremony held on Tuesday under the patronage of General Shaikh Mohammad Bin Zayed Al Nahyan, Abu Dhabi Crown Prince and Deputy Supreme Commander of the UAE Armed Forces.
Shaikh Abdullah Bin Zayed Al Nahyan, Foreign Minister, honoured key sponsors and philanthropists and the winning students in the endowment campaign for their support and contribution to the success of the campaign. He presented mementos, cash prizes and certificates of appreciation.
The campaign, launched on the first day of Ramadan, aims at reviving the Sunna Waqf and helping alleviate the burden of the poor and the needy.
It sponsors orphans and needy students and poor people. It also provides healthcare, helps to build and renovate mosques.
Dr Hamdan Musallam Al Mazroui, chairman of the authority, said: It gives me great pleasure to honour the participants in the endowment campaign.
The sponsors of the campaign will help to fulfil its maximum potential, Al Mazroui said. The ceremony began with the national anthem presented by students of the Emirates School in Abu Dhabi, followed by recitation of some verses from the Quran in the presence of Islamic scholars and preachers invited by Shaikh Khalifa to give lectures during Ramadan.
Al Mazroui hailed Shaikh Khalifa, His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and Their Highnesses the Supreme Council Members and Rulers of the Emirates for their generous support to Islamic endowments.
The campaign, launched on the first day of Ramadan, aims at reviving the Sunna Waqf and helping alleviate the burden of the poor and the needy.
Upholding family values
Upholding family values
By Manal Alafrangi, Staff Writer GULF NEWS Published: October 03, 2007, 23:52
There is a certain universality when it comes to the term “family values” but because the concept itself is rooted in individual cultures, ideals and morals can come across as different. So then, what happens when people of different creeds and nationalities live in one society? Do they agree on what constitutes family values? Do they share the same ideals and principles?
According to our latest survey, there is a concern when it comes to cultural values being present in the UAE. That is, more than two thirds of our respondents feel family values are being eroded in the UAE. This opinion is particularly high amongst Arabs, excluding Emiratis (73 per cent). Moreover, 62 per cent of those surveyed feel people in the UAE are courteous and respectful to others but there is a difference of opinion amongst the various nationalities; 71 per cent of Emiratis compared to 39 per cent of Westerners.
Similarly, Arabs (excluding Emiratis) and Asians are also split on whether they think UAE residents have a community spirit. Emiratis and Westerners on the other hand are on opposite ends of the spectrum with the former saying they do and the latter saying they don’t.
That is one of the main conclusions from the latest Gulf News survey undertaken by YouGov-Siraj where by 1,191 people answered questions on family, growing old, and challenges to family time. (Of the total surveyed, 119 were Emiratis, 147 other Arabs, 168 Westerners, 669 Asians, and 88 others).
We asked our respondents who each of them considers to part of their own family. Across all nationalities, ‘parents’, ‘brothers and sisters’ and ‘spouse’ top the family member ladder. ‘Children’ and ‘grandparents’ are not far behind in the family members consideration set. Interestingly, despite no blood connection, 25 per cent believe friends are family and 16 per cent find employed household staff to also be part of family.
Who do they live with? More than half of our respondents say they currently live in the UAE with their spouse- this is clearly observed among Westerners and Asians (75 per cent and 63 per cent respectively) as compared to Arabs (42 per cent). Moreover, both Arabs and Asians seem to have more of their parents living with them in the UAE compared to Westerners. Arab scores are largely observed among Emiratis (6 in 10 Emiratis vs. nearly 3 in 10 other Arabs).
On the other hand, almost 1 in 10 lives alone in the UAE. This is primarily because their families live in different countries (numbers being highest amongst Western and Asian respondents). Some respondents simply say that they “prefer to live alone” (with 2 in 10 Emiratis saying so).
There is unanimity amongst our respondents when it comes to caring for their elderly parents. 95 percent said they would be supportive towards helping their parents as they grow older and become dependent upon others for help. What options would they seek in such a scenario? Nearly 6 out of 10 say they would nurse them at home themselves. But a closer look reveals that while 60 per cent of Arabs and 67 per cent of Asians feel this way, only 34 per cent of Westerners feel the same.
Instead, 40 per cent of Westerners say they would employ a nurse at home. Sending elderly parents to a nursing home proved the least popular option for our respondents.
Through this survey, we got an insight as to why respondents would consider helping their elderly parents. The overwhelming majority say they would do it out of love for their parents. 7 in 10 say it is because they feel a sense of gratitude to be repaid to parents and many feel it is expected of them to be with their family.
Our respondents are equally supportive of their spouse’s parents with 92 per cent saying they would care for them as the need arrives. Across all nationalities, Asians tend to be more supportive in assisting spouse’s elderly parents (95 per cent of Asians vs. 89 per cent for Arabs and 85 per cent for Westerners). Half of the respondents claimed they would be willing to nurse their spouse’s parents at home by themselves however, among Westerners, scores are directionally low.
As of now, over two thirds of our respondents prefer to live with their families than to live by themselves. This is especially the case with Asian respondents (82 per cent). What’s more, respondents aged 30-49 are more likely to want to live with family than younger respondents (aged below 30).
We asked UAE residents to peer into the future when they themselves become elderly; what then would they prefer their living arrangements to be? 48 per cent say they would like to with their own grown up children – assuming they had any. It should be noted that of the total, only 23 per cent of Westerners feel this way compared to 52 per cent of Arabs and 53 per cent of Asians..
Another option is to live in a nursing home or a retirement village. While it has proved unpopular amongst the Arab and Asian respondents, 27 per cent of Westerners choose it as their preferred option.
An extended family has its benefits. The majority of our respondents feel having them around is advantageous namely for emotional support. They also improve family bonding and help maintain a sense of belonging. But by the same token, having an extended family means a lack of privacy and lack of personal space for the majority of our respondents- irrelevant of their demographic profile.
Working life affecting private life
Our respondents are split on whether their or their partner’s working life has impacted their private life. 39 per cent said it has impacted their private life a lot, while 30 per cent say the impact has been small. A closer look at the survey shows that more females claim their partner’s working life has greatly impacted their private life. On the other hand, 16 per cent find there has been no impact whatsoever.
Fifty six per cent have at least 1 child in their household. They say that on average, they spend 3 hours and 50 minutes with their children on a typical work day. Emirati parents tend to spend fewer hours with their children as compared to other Arabs.
On average, it is likely that parents waste 5 hours and 4 minutes without being with their children due to work related issues outside of regular office hours or other commitments. Such work related issues include traffic congestion, which is by far, the most recalled factor that makes people stay away from being with their families (this is clearly observed among Asians). Shopping, socialising, and going to the gym are also reasons that feature lightly on the survey.
Importance of family values
UAE residents believe that family values are important in today’s world. Asians in particular have the highest scores when it comes to this conviction. We asked our respondents if they thought their family values are being eroded here in the UAE. Close to two thirds said yes. This opinion was particularly high amongst other Arabs (73 per cent). The three main reasons behind this are: lack of time for families to be together, economic pressure, and lack of parental guidance.
Other explanations including lack of proper role models and having too many temptations also feature prominently on the survey.
So then, how do our respondents generally feel about people in the UAE? Are they courteous and do they have a community spirit? Sixty-two per cent of those surveyed said yes but there is a difference of opinion amongst the various nationalities; 71 per cent of Emiratis compared to 39 per cent of Westerners.
Giving back to Society
Giving back to Society
By Robert Ditcham, Staff Reporter GULF NEWS Published: October 03, 2007, 23:52
Ask company employees about the importance of addressing global poverty, illiteracy, homelessness and environmental decay and most will say they care deeply.
Although they may do their bit, financial restraints and limited time may hinder their charitable efforts.
Their employer, on the other hand, has the financial muscle, brand status and human resources to tackle these issues head on. But is it actively engaging in corporate social responsibility (CSR) programmes?
In the UAE, the answer is more often than not a negative one. Brand analysts and companies say CSR in the UAE is in its infancy compared to North America, the Far East and Western Europe.
“Developed markets have been open for longer, commercial models and structures have been established, while consumers and pressure groups have grown in importance and in their ability to scrutinise and apply pressure to companies,” said Manal Shaheen, director, sales, marketing and customer service at real estate giant Nakheel.
However, she and many others say the UAE could be on the verge of embracing the global CSR phenomenon, with the recently-launched Dubai Cares campaign providing the much-needed catalyst.
At the time of going to press, nearly Dh700 million have been raised under the initiative, which will put one million children through primary education.
“Of course, there is still some way to go in this part of the world, but I believe that CSR will grow more rapidly than it did in those other regions because the momentum has built up, and lessons – both good and bad – have been learned,” Shaheen said.
As with any decision in the corporate world, there needs to be clear benefit to the firm itself. Why should companies invest in society at large when their primary concern should be their shareholders? After all, isn’t it the job of politicians to tackle society’s ills?
Obligation
According to CSR promoters, companies have a moral obligation to support society and the environment.
“We believe that CSR initiatives are a means for us to give something back to the society and the nation that has handed us everything to get us to where we are now,” said Princy Philip, manager for marketing and corporate communications at UAE property developer Memon Investments. “This fact makes it our moral responsibility to care for the unfortunate and provide for the unloved.”
Defining the business case for CSR is often more of a challenge. But, in a world where brand value and reputation are increasingly seen as a company’s most valuable assets, the pros are becoming more apparent to UAE chief executives.
According to an Ernst & Young survey in Europe, 94 per cent of company executives believe the development of a CSR strategy can deliver real business benefits.
“CSR is becoming more and more important in terms of building a strong corporate brand image, while companies are facing increasing pressure from their clients, customers and staff to be responsible corporate citizens,” said Hermann Behrens, the Dubai-based managing director of brand consultants Enterprise IG.
Behrens stressed that in the Gulf’s competitive job market, potential employees factor in a company’s CSR record when choosing their future job, selecting those that can make a positive impact on society.
According to the organisation CSR Europe, 78 per cent of employees would rather work for an ethical and reputable company than receive a higher salary.
CSR Europe argues that a “responsible attitude” towards society and the environment can make a business more competitive, more resilient to shocks, and more likely to attract and hold both consumers and the best employees.
Business sense
And in a world where socially responsible investment is growing, CSR can also attract investment and save businesses money in dealing with regulators, banks and insurers, the organisation adds. It says socially responsible investment accounts for nearly 13 per cent of the $16.3 trillion in investment assets under professional management in the US.
“The reason companies are taking the issue more seriously because it makes good business sense,” said Shaheen.
“Firstly, it has become clear recently that financial markets are factoring in some of the ‘sustainability’ issues into their valuations and decisions to invest or move their funds.
“Secondly, as customers get more savvy, it’s getting easier to compare the Good and the Bad. There is enormous value with your customers if they know you are one of the good guys and it’s no coincidence that people are prepared to pay a premium for this.”
But adopting CSR initiatives doesn’t always result in a rosy picture being painted of a company. Those that throw money at environmental causes and champion human rights, but also pollute the atmosphere and exploit their workers, will soon be found out, resulting in spectacular public relations disasters.
Behrens said good CSR is about a lot more than donating large sums to noble causes. A CSR campaign that engages the whole company in its ethos and gets its staff involved in charities or social work will have the best results, he said.
Shaheen said Nakheel is aware that CSR is much more than making “token gestures”.
“Although it’s quite normal for companies to make big statements, huge promises, or grand gestures, negative impressions can often be caused by what I’d call ‘tokenism’ – when companies obviously bolt-on campaigns or initiatives that are clearly superficial gestures and not integrated into the ethos of the company,” she said.
“I think that a lot of companies are on the journey from one to the other at the moment.”
The corporate sector’s swift response to the Dubai Cares campaign is among several examples of CSR being pursued in the UAE.
Memon Investments, a Dubai-based property developer and part of the international business conglomerate, the Memon Group of Companies, recently announced its participation in the ‘Safe & Sound’ campaign – BurJuman’s breast cancer awareness programme – as the official annual sponsor.
This will mark Memon Investments’ first CSR undertaking in the region.
Giant property developer Nakheel said it has established initiatives such as Bidaya, an educational and leadership programme aimed at discovering and nurturing the UAE’s next generation of leaders.
The programme offers university scholarships to outstanding male and female candidates from the country’s public high school system.
As one of its key CSR initiatives during 2007, Dubai Holding recently said it has pledged nearly Dh1.5 million to two organisations – the UAE Beit Al Khair and the Dubai Autism Centre.
Over the past two years, Dubai Holding has contributed more than Dh80 million in projects such as a facility for Zayed University and Dubai Education Council.
“Even as we rapidly drive our business to cross new milestones, we regard it as our duty to share the responsibility of the general welfare of the community,” said Mohammad Al Gergawi, executive chairman of Dubai Holding.
Meanwhile, a golf team from oil and gas major BP decided to use its $1,000 prize money won in a golf tournament recently to pay for a facility for autistic children at the Future Centre in Abu Dhabi.
Multinational corporation Halliburton has also made donations to The Future Centre, which provides schooling for children with special needs, through its Halliburton International Fund.
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