DinarStandard Editors

Al Islami's Halal Brand, Missing Venture Capital, IDB's Impact, Kids Education Portal

May/June 2010 Edition:

Below are the articles from the latest Edition of DinarStandard publication:

Islamic Development Bank (IDB) -
A Financial Institution with Meaningful Impact

With almost $60 billion of net financing thus far - the Islamic Development Bank (IDB) has had a significant impact across various developing and less developed member markets.  We review IDB's accomplishments and its road ahead.

Al Islami taking Halal to new Heights

UAE based, Al Islami Food, is raising the standards of branding of Halal food products and reaping its benefits. As an emerging regional brand, Al Islami is helping lead the way in broadening the current application of 'Halal' to encompass all aspects of its business operations and building its value proposition around the new philosophy.

Missing Link in Islamic Finance Hubs: Islamic Venture Capital

 Expert contributor, Mr. Rushdi Siddiqui, discusses the key role of venture capital in economic development and the need for the Islamic Finance Industry to step-up and drive entrepreneurship.

Islamic Education takes the Multimedia Highway

 Three entrepreneurs from Kuala Lumpur have launched a children education website with Islamic content that unlike many such efforts is also maintaining high-quality of creativity, animation, and engaging characters and stories that children love.

Algeria: An Attractive Forum For Foreign Investment

Expert Contributor - Omar T. Mohammedi, Esq. discusses recent regulations impact on Algeria's investment attractiveness.

As always we look forward to your feedback.

    

US Presidential Summit on Entrepreneurship focuses on the Muslim World

DinarStandard has been highlighting and covering entrepreneurship and innovation trends across the Muslim markets for the past many years.  We have hardly come across any event that has effectively discussed entrepreneurship for this market in the manner that President Obama’s Summit on Entrepreneurship did earlier this year, April 26-27th in Washington DC. 

This event put into action the promise President Obama made during his speech to the Muslim world in Cairo on June 4th, 2009.  I was invited to cover the event and here are some of my observations regarding the diverse mix of delegates, key messages, interesting quotes, and some tough questions asked.

First, the sheer diversity of entrepreneurs that were present was impressive.   There were Muslim entrepreneurs representing emerging, exciting ventures from Ghana, Nigeria, Bangladesh, Morocco and elsewhere.  One delegate I met, Mr. Shaffi Mather from Cochin India, runs one of the largest private Ambulance service there.  Another delegate Mr. Mohammed El-Fatatry (whom we have profiled before) from Finland, owns one of the largest online Muslim lifestyle networks – Muxlim.com

Indeed the big boys were there too.  Mr. Mian Mohammad Manshah, recognized as one of richest businessman in Pakistan by Forbes magazine, was in attendance mingling amongst the delegates.  Dr. Mo Ibrahim, Chairman of Celtel and famous for his philanthropic activities in Africa was an active participant during panel Q&A’s.  Mr. Naguib Sawiris, CEO of Orascom (the giant Telecom player) from Egypt and Mr. Ferit Sahenk, of Dogus Holding, Turkey were also on the invite list. 

Some of the star panelists of the event for me were:

• Mr. Fadi Ghandour, CEO of Aramex, an absolute rock-star with his passion and vision of entrepreneurship for the region.
• Nobel Laureate, Dr. Muhammad Yunus, sharing the success story of his now global brand – Grameen, and its taboo-breaking, women focused social impact.
• Dr. Naif Al Mutawa, CEO of The99 - a comic book series with Muslim values and a global message.  President Obama even enthusiastically acknowledged The 99 comic series in his speech at the event.
• Ms. Tri Mumpuni (in picture), from Indonesia.  Her community based off-grid power system supply's power to the national grid while generating revenue for the host communities.   She was passionate about entrepreneurs making a difference and spoke of the struggles in balancing her family life while leading as a trailblazing entrepreneur.
• Mr. Sandiaga Uno, Chariman, Saratoga Capital, Indonesia.   Profiled the struggles of being laid-off and starting a first-ever Private Equity firm taking it from 4 employees to today 15,000.  One of richest Indonesians today, Mr. Uno is a big proponent and driver of fostering entrepreneurship in Indonesia.
  

Key actionable messages from the panel discussions were:

• The critical need of Venture Capital (early stage and even angel investing) in the region to support entrepreneurship.   From investor’s side, however, more transparency and exit opportunities were identified as needs.  Also, other capital raising models discussed included Sharia financing and Micro-finance.
• Need for increasing awareness and education about entrepreneurship – especially for celebrating success stories (e.g. sale of Maktoob.com to Yahoo.com).   Interestingly, the word entrepreneurship doesn’t exist in common vocabulary of many major markets.  What is Entrepreneurship in Arabic? Mr. Ghandour suggested “Reyada.”  How about in Urdu?
• In today’s, connected, technology driven world, Entrepreneurship can thrive despite governments being slow.   Mr. Ghandour gave an example of how Maktoob bought a small internet company in Yemen where the owner did not have a passport or even bank account.  However, government’s critical role in helping to scale entrepreneurs was emphasized.

Some of my favorite quotes from the event:

• Mr. Mohammad Yunus: “Every Muslim should follow the Prophet PBUH and marry an entrepreneur.  If you can’t find one come to us we have hundreds and thousands for you to choose from.”
• Mr. Fadi Ghandour on definition of entrepreneurs:  “Builders that have long-term impact.”
• Ms. Tri Mumpuni  - “Life is meaningful if you are useful to others."
• Arif Naqvi, CEO of Abraaj Capital (largest MENA Private Equity firm) - "What is social entrepreneurship?  I don’t understand.  Every business should be socially geared." (Note:  Abraaj has launched an SME Fund recently, Riyada Enterprise Development )

Some tough Questions/ Observations:

• One Muslim delegate asked a panel the question:  "Is there such a thing as Muslim Entrepreneurship or relevance of Islam to entrepreneurship?"  The response from the panel was mixed.  Mr. Sandiaga Uno and Ms. Tri Mumpuni from Indonesia acknowledged the positive role Prophet Mohammad’s (pbuh) life lessons and religious values played in inspiring them.  Meanwhile Ms. Douja Mahmoud Gharbi from Tunisia viewed entrepreneurship as a standard set of skills world over.
• Another emotional Q&A discussion happened when a Muslim delegate from Philippines asked, “My dear Arab brothers where are you?  Why don't you look at investing in the less developed Muslim communities?”  To which Dr. Tarik Yousef, Dean of Dubai Gov. School, humbly acknowledged, “yes, we should and we have not been engaged as much as we can.”
• It was interesting to see that the only people comfortable referring to the collective “Muslim Majority Countries” were the US administration panelists.  Most Muslim majority country delegates I spoke to didn’t seem comfortable with the concept of the “Muslim world” as a whole.  Their focus was very much national in nature.
• Interestingly also, no Islamic Finance institution was represented - either as delegate or panelist.  Was that a political statement or simply that there isn’t much of an entrepreneurial drive amongst Islamic Financial institutions?
• Prominent countries with entrepreneurs showcased as panelists were:  Jordan, Indonesia, Egypt, UAE, and Bangladesh.  Whereas, countries I thought were relatively less visible on panels: Malaysia, Turkey, Pakistan, and Saudi Arabia.  Would that be any indication of a political US slant or again a function of lack of entrepreneurial success stories from amongst these markets?

Was the event a success?

The Summit did not address or bring Government agencies from Muslim markets to address various structural issues raised.  So the impact from that point will be minimal.  Obviously, no aspect of the role of Islam as a means of strength was touched upon.   Also, the critical question of Venture Capital for entrepreneurs was listened to by select PE players at the event but, the absence of Islamic Financial Institutions and their possible prominent role was not tapped into.

Regardless of these and possibly other short-comings, this Summit was a big success and a great contribution to fostering entrepreneurship spirit across the Muslim markets.  It has certainly helped amplify the many voices emerging in support of entrepreneurship from across the Muslim markets.  The next one is going to be hosted in Turkey and President Obama has announced a number of additional initiatives to sustain this beginning of a new partnership. 

    

Indonesia Top 100 Innovations, Maktoob CEO, IT in Islamic Finance, US Muslim market, Ummah Leadership

Oct 2009 Edition:   After a long break, we are back with a series of inspiring features that reflect the growing sophistication and diversification of economies in OIC (Organization of Islamic Conference) countries.

We lead off with an overview of leading business innovations from the largest Islamic country - Indonesia.  The innovations are compiled by the Business Innovation Center (BIC)at Indonesia covering products from food, energy, health & medicine, ICT, defense, transportation and other sectors.  Amidst the global economic slowdown, Indonesia is expected to have the fastest recovery in 2010 from amongst the OIC countries.  With a stabilizing and developing democracy led by its charismatic and popular President Susilo Bambang Yudhoyono, Indonesia is certainly a key market to follow in the OIC.

The other big story from the OIC markets has been acquisition by Yahoo of Arab world's largest online portal - Maktoob.com.  The transaction has been reported to be valued at $100 million.  This is a significant moment in the history for Arab based online ventures and is sure to draw much attention to this sector of the future.  We present an interview with Maktoob.com's CEO Mr. Samih Toukan.

Keeping with the technology theme, Expert contributor Ezzeddine Jaadi looks at the growing sub-sector of IT service providers uniquely catering the Islamic Finance industry.  Islamic Finance continues to grow globally riding on the growing sentiment and demands of Muslim consumers.  One major Muslim consumer market is the approximately 6 million strong American Muslim market.  However, given its size and affluence the market is still being severely undeserved.  We look at this untapped American Muslim market and profile an upcoming conference (American Muslim Consumer Conference (AMCC), October 31st, 2009 in New Brunswick, NJ, USA) addressing this growing market segment in the US.

Covering the overall challenges and opportunities across the OIC markets, Expert contributor Mr Arif Zaman discusses leadership development challenges for the Ummah - OIC countries as well as the Muslim diaspora.  However, there are indeed various OIC countries showing strong leadership in various Industries.  We look at the growing Pharmaceuticals industry in Bangladesh by profiling Beximco Pharma which is leading Bangladeshi pharmaceutical exports.  Another key OIC country - Saudi Arabia has been making strong progressive economic strides.  It has recently jumped up in the rankings of the Global Competitiveness Report by the World Economic Forum moving up to 24th rank.  Also, its launch of the impressive science and technology research driven University KAUST has been an encouraging development.  As many businesses explore opportunities in Saudi Arabia, we review a book that focuses on the business environment in Saudi Arabia - Business and Management Environment in Saudi Arabia by Author Abbas J. Ali.

We hope you enjoy this edition.  We look forward to your feedback.

    

Top 100 Companies of the Muslim World, Dubai 2.0, Turkey looks East, Pakistan's UAV's

Feb/March 2009 Edition: This Edition covers our 5th Annual DS100 ranking of the Top 100 Companies of the Muslim world that continues to benchmark the corporate environment of the 57 OIC (Organization of Islamic Conference) member countries.

This year’s ranking, which covered financials amidst early stages of the current global recession (end-of-year 2007 data), showed an expected decrease in growth of the construction, energy, and diversified sector companies.  However, areas of opportunities were also highlighted as basic materials manufacturing, and agriculture/food companies grew faster than the year before.

From the DS100 companies, we present an analysis of the Telecom sector companies, as well as a look at Malaysian UMW's recent Re-branding and Indonesian Astra Internationals strategy to respond to the global economic downturn.  Turkey has the biggest represented companies on the DS100, and we look at Turkey's increasing economic shift towards East.

Expert Contributor, Dr. Athar Osama gives his perspective on Dubai 2.0 - Towards an Innovation Economy in Challenging Times.

Meanwhile expert contributor, Mr. Riaz Haq, looks at the advances made my the Defence private sector
of Pakistan.

As always we look forward to your feedback.

    

Islamic Finance’s Real Economy Leadership Agenda

 (A recent article I had submitted to the DowJones Islamic Market Indexes Quarterly Newsletter.  Download full newsletter here)

The global financial crisis has presented an unprecedented opportunity for Islamic Finance to establish itself as a truly global leader thereby realizing its full, unique potential.  A potential that is nothing short of re-shaping the global finance industry much as Starbucks has done for Coffee or Cirque du Soleil had done for the structurally unattractive circus industry.  A potential that best-selling business book authors W. Chan Kim and Renée Mauborgne would qualify as the ‘Blue Ocean’ of the finance industry.

However, in marketing terms, a large gap exists between the vision and potential of the Islamic Finance brand and the reality of its current brand attributes.  

If the vision of Islamic finance is a financial system that seeks profits while ensuring religious considerations of sharing risk and returns and supporting an ethical society with a potential to serve a global audience, then the reality of today’s industry value proposition is only partially hitting the mark.

I propose here a strategic agenda for the industry that could fill this gap - God willing - by complementing its current identity with one that makes it a major driver behind select human development related ‘real economy’ sectors.   These sectors would include Food, Renewable Energy, Healthcare, Education and Sustainable Technology.   Being key backers of these sectors will proactively support solving global human developmental issues while providing strong profitability potential.

Un-Conventional Approach to Un-conventional Financing

Industry professionals familiar with conventional finance may never consider the need for a whole industry to create an identity around certain sectors since its mandate of profit maximization doesn’t require it to.  So it’s hard for them to imagine Islamic Finance taking such a strategic stance.  However, 1) Islamic Finance is un-conventional so such an approach should only be considered a means to further its own unique identity, and 2) such a strategy would not limit itself from other permissible sectors, but to put a more coordinated effort around select sectors in support of its vision, identity, and greater success.

Islamic Finance Backed Real Economy Sectors

The strategy would be applied by investment and corporate financing arms of Islamic Finance driven by Islamic Private equity, other Investment funds including public equity funds, and corporate financing operations.   By building a major emphasis on a select group of industry ‘clusters’, Islamic Finance would also benefit in its competitive positioning in these sectors due to better operational expertise developed in time, better penetration to source leads and transact within these sectors and their sub-sectors.  

What’s encouraging is that the sectors being proposed are identified as major global growth areas.  Let’s review them briefly:

Agriculture:

There is a known global crisis around high food prices driven by rising demand and lagging supplies.  In a recent DinarStandard analysis, many of the poorer countries – Egypt, Bangladesh, Pakistan, Sudan, Nigeria - are some of the most agriculturally endowed in the world however with dismally low productivity due to under-investment.  

A Sharia compliant investing example in this area is the recently announced US$1.3bn Sharia-compliant fund by UK-based investment company cru Investment Management, which will focus on commercial agriculture in Africa. These investments by cru expect not only strong returns for investors, but also some much-needed investments into agriculture in Sub-Saharan Africa

Renewable Energy:

The International Energy Agency predicts energy needs through the year 2030 will increase by 50 percent to which developing countries, led by China and India, will account for two thirds of the growth.  Given the devastating environmental impact such a growth would drive, there are growing global initiatives towards Clean-tech energy sources (production of energy from net non-polluting sources.)

In a recent DinarStandard analysis by Athar Mian, Solar systems, both in photovoltaic and thermal formats, and wind power were determined to be the most viable clean-tech models for GCC and surrounding countries.  

Healthcare:

According to PwC, healthcare organizations face a growing imbalance of supply and demand. On the demand side is a large population of aging patients in deteriorating health who demand more services, pharmaceuticals, and medical breakthroughs. The supply side, however, is hampered by a shrinking pool of investment capital, a shortage of willing caregivers, and aging physical plants straining under the current volume of patients.

At the recent GE Healthcare Middle East Media Summit held in Dubai, Dr. Loan Cleaton Jones, a Senior Health Specialist of the International Finance Corporation (IFC), highlighted that in the GCC itself, healthcare demand is expected to rise 240 per cent in over the next 20 years, with health risk factors, ageing, population growth and medical inflation contributing to the rise in spending. Consultants McKinsey and Company recently estimated total healthcare spending in the Gulf Co-operation Council (GCC) countries will reach $60 billion by 2025.

Education Sector:

Similar to growing demand in food and energy, the education sector is another area that provides tremendous opportunities.  Within the Arab world, it’s been well established that its demographic is highly young requiring growing need for education services.

Some examples of investments in this area include the launch of a $10 billion education foundation by HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.  Also last year, Abraaj Capital acquired a “significant” stake in Dubai-based Global Education Management Systems (GEMS), which owns and manages a number of primary and secondary schools across the Middle East.

Sustainable Technology:

With Sustainable Technologies, I imply technology initiatives that support services to comply with the principles of economic, social, and ecological sustainability.  

An example is the booming cellular phone services and its impact on society.  As highlighted in a recent DinarStandard report is Vodafone’s M-Pesa mobile-banking program in Kenya. M-Pesa is an innovative system for sending both minutes and money via SMS that is benefiting the farmers in the rural areas of Kenya. One year later, M-Pesa has 1.6 million subscribers, and Vodafone is now set to open mobile-banking enterprises in a number of other countries, including Tanzania and India.

Industry, Institution or Government led

There are many ways such a strategy can be realized.  When you think of German ‘automobile precision engineering’ you realize the reputation is driven by a few of its keys institutions – Mercedes Benz, BMW, Porsche, and Audi.  Given this proven model, a few of the major Islamic Finance institutions could take the lead in establishing global leadership within the real economy sectors identified.   Obviously such institutions and overall reputation are not built overnight.

Conversely, an industry wide initiative is also a viable solution. For example, in the United States, the milk industry, through a collective Milk Industry Association initiative, drives the well known ‘Got Milk?’ campaign to increase awareness and adoption of milk that benefits all milk processors and dairy farmers.  Similarly an Islamic Finance industry wide initiative through the formation of major industry contributed funds or institutions with a coordinated communication campaign could drive this agenda as well.      

Finally, given the important role of governments in infrastructure dependent sectors that have been identified, their participation in such a strategic initiative would be critical for effective implementation.

In the end, the objective would be to create global success stories – regardless of them being industry driven or individual leading institution driven.  Just as Grameen Bank, ;ed by Dr. Mohammad Yunus, is now considered a pioneer and leader of the Micro-Finance industry globally, imagine if Islamic Finance institutions are credited in a similar fashion within renewable energy, food, healthcare, and education sectors.

Challenges

Islamic Finance is all-in-all doing quite well.  However, as I propose, by resting on its current laurels, the industry risks losing a tremendous opportunity to truly establish a leadership role in the global financial landscape or to even realize its full potential within its primary Muslim markets.  

Taking a leadership role in key real economy sectors certainly poses tremendous challenges – however none I feel is greater then a lack of conviction or direction.  Many who have taken leadership roles within Islamic Finance Institutions come from conventional banking systems.  Leaders need to embrace the unconventional, spirituality driven purpose of Islamic Institutions and let that be a key driving force that produces financial results while maximizing returns to a higher calling.

Besides, by taking this proactive approach to ‘ethical’ investing, the conversation about Islamic Finance moves from a system that just avoids un-ethical to one that consciously backs ethical initiatives.  Such is the approach that defines leaders.

    

Global Food & Energy Opportunities, Fulla Doll, Blue Ocean Strategy, Dr. Shamshad Akhtar, Egypt's SEKEM Group, and more.

Oct/Nov Edition: While developed countries are directing their attention to the turmoil in the financial sector--far less attention is being paid to the global food price crisis.  We lead our Nov. Edition with an analysis of how this crisis presents the agriculturally endowed Muslim countries with unique opportunities.  The analysis makes a case for investments within the largest agriculture economies of the Muslim world especially given their low productivity. Ironically, some of these largest agriculture based economies--Bangladesh, Sudan, Nigeria, Pakistan and Indonesia--are also suffering the most in terms of poverty.  Complimenting the story is our look at Egypt based SEKEM Group which has built a profitable organic products business based on a social developmental model.

Keeping with the theme of responsible business – our guest author Mr. Athar Mian reviews opportunities in Clean Energy for emerging Muslim world markets.  He evaluates various sources of clean energy – solar, wind, bio-mass, hydro-electric and others, and presents what makes sense for Muslim world economies.  

Much of such investments require big thinking and ability for investors and business leaders to step out of their comfort zones.  For this we review a best selling business book—Blue Ocean Strategy--that presents an approach to creating new markets rather than competing in existing ones.

In Islamic Finance, guest author Nurul Islam, looks at the European Islamic Finance market.  Also related to banking, we profile Dr. Shamshad Akhtar, Governor State Bank of Pakistan, in our Women in Management Series.  She was recently awarded Central Banker of the Year/ Asia 2008 by the industry recognized The Banker magazine.

Also, showcasing best practices and innovation in the Muslim Lifestyle Market, we present the success of ‘Fulla Doll’ an alternative for Muslim girls.  Finally, we present practical strategies relating to the growing practice of Search Engine optimization (getting listed higher on web Search Engine results) which is fast becoming a major marketing priority.

As always, we look forward to your feedback.

    

Muslim World Consumer Brands, Mobile Tech & Islamic Finance, Hikma Pharma's R&D...

July Edition: In our July edition we are presenting the leading Consumer facing brands of the Top 100 Companies of the Muslim World.  Given the ever more importance of branding in helping companies differentiate and command premium (Interbrand values - Coca Cola's brand value to be $65 bill), we are presenting this updated benchmark.  Consumer brands from Turkey dominate this list, eg Arcelik, Vestel, Beko (Electronics) and Ulker (Confectionery). 

The reason for our focus on this?  To date none of the indigenous brands from Muslim majority countries have every made it to the Top 100 Global brand list (published by Interbrand) We hope this benchmark plays a small part in changing this fact.  There's already much positive momentum as the last two years seven of the DS100 companies have completely re-branded themselves.  We will soon also be covering some of the emerging brands in addition to the one's from the Top 100 Companies.

In our Innovation channel, Guest contributor Athar Mian, provides tremendous expert insights on Mobile technology innovation opportunities and the role of Islamic Finance.  Its specific focus on opportunities within Muslim world provides much direction for entrepreneurs in this pace to consider.  We are also proud to highlight this issue the exceptional achievement of Jordan originated Hikma Pharmaceutical, that through quality global R&D is becoming a global player.

In our continuing focus on the Muslim Lifestyle space we look at one of the most prominent global Muslim children's book publisher - India based, Goodword Books.

Finally, in Finance, given the growing focus on the agriculture sector globally, we look at how Agri-businessess in Malaysia are exploring creative financing.   From Malaysia we also present a profile of Ms. Tengku Rozidar, CEO of '1901 Hotdog' outlets on success in franchising. 

We hope you will find this issue valuable.  Look forward to your feedback.

    

Intra-OIC Trade Up, Abdul Latif Jameel & CSR, The 99 Comic, Harvard Islamic Finance, Borusan Six Sigma...

May/ June Edition: In this edition we present an update of the 2005 Research Brief titled "Is Intra-OIC Trade on the Rise?" (OIC = Organization of Islamic Conference.)  With many of the Muslim world economies growing in global prominence, one question often asked is how much of the trade is being done between these economies. 

Our latest research brief looks at the current Intra-OIC trade trends by evaluating the four leading Muslim majority country economies of Malaysia, Turkey, Saudi Arabia and Indonesia and their trade with the rest of the 57 OIC member countries compared to the rest of the world.  Even as the Islamic Development Bank Annual Report (2006-07) revealed that OIC member countries’ overall share of trade with other OIC member countries was a mere 14%, our Brief certainly shows a strong rise in Intra-OIC trade between the years 2003-07.

One story we are proud to have finally covered is the exemplary corporate social services program of the Saudi Arabia based conglomerate Abdul Latif Jameel Group.  We have also included a photo journal showcasing ALJ's impressive array of community programs.   

For our Muslim Lifestyle Market section we have an inspiring entrepreneurship story of Kuwait based Dr. Naif Al-Mutawa's The 99 comic series gaining regional prominence including licensing deals such as a newly announced 99 Village theme park being initiated in the GCC.

Finally, guest contributor Dr Athar Osama provides an outsiders perspective on the recent Harvard Islamic Finance Forum while Ms. Nawal Ouzren, herself a former six-sigma black belt for General Electric (GE), looks at a large successful six-sigma implementation in Turkey (at a major conglomerate Borusan Holding.)

I look forward to your comments on this update.  Also, we would like your recommendations on innovative and inspiring products, companies and business leaders from the Muslim world for us to consider profiling.

    

Naseeb.com, Gulf Venture Capital, AlWaleed, Masdar City, ARAMCO, and more

April Edition: Innovation and entrepreneurship have been the corner stone of all developed economies.  In the past few years, we have been withnessing an encouraging level of focus within the Muslim world emerging economies on such efforts. 

DinarStandard's April 2008 issue looks at some recent nuggets of this blooming innovative, entrepreneurial business environment. 

Our lead feature is on Naseeb.com, a Pakistan based Muslim social networking venture tapping into the growing online Muslim population and has secured funding from prominent Silicon Valley VC's (also included is a list of top Muslim social//matrimonial websites).  Given the termendous potential of the global Muslim market - we are introducing a dedicated section - the Muslim Lifestyle Market (SM)  - to provide you with regular trends analysis/ stories on various products and services targeting the muslim lifestyle.

Given the potential role of cash rich Oil producing Gulf countries in supporting new venture and entrepreneurship, we summarize key insights from this years Gulf Venture Capital Association meeting in Riyadh.  What stands out is given a boom in Private Equity investments, the risk appetite for investors funding startups is still limited.  According to the GVCA, of the $4.8 billion private equity raised in 2006, only 9% went to venture capital.

However, many impressive world leading innovation initiatives are being undertaken in the region.  Guest controbutor, Mr. Bilal Zuberi, PhD writes about Abu Dhabi's ambitious Masdar City project which aims to be the World's First Zero-Carbon, Zero-Waste, Car-Free City. 

In profiling personalities, we review international journalist Riz Khan's biography of one of the most successful international investors today - Prince Alwaleed bin Talal. We have also introduced a new series on Women in Management.  Keeping with the entrepreneuship theme, we profile Iman Kouvalis, President and Owner of Optimize It. and Na'ima B. Roberts, Managing Director and Editor of SISTERS Magazine.

In the issue, we also look at how Saudi Aramco and ADNOC fared in a recent global benchmarking Sustainable Oil Companies report.  Finally, key strategic aspects of one of the most prominent Indonesian conglomerate Astra International are also reviewed.

This is Alhamdulillah our largest edition thus far.  We hope this Issue has given you some new insights and ideas on innovating and being entrepreneurial in your own business environments. 

    

Malaysia's Private Sector Faces Uncertainty Amidst Political Changes

Malaysia's governing party's poor performance in the recent General Elections held on March 8, 2008, introduces unchartered waters to the private sector with the national coalition losing 5 key states (instead of the usual one) to the keen opposition, Barisan Rakyat.

Barisan Nasional, the governing party, has been criticised to have continuously bred business interest in many different industries in the economy, including the automotive industry, oil & gas, construction and property sectors.

Petroliam Nasional Berhad (Petronas) is seen to have caused distress amongst Malaysians due to the continuous price-hikes over the past 4 years, twinned with a continuous boosts in profit figures. As a company fully owned by the government, the opposition coalition has stated in their election manifesto that they would request for transparent financial statements relating to Petronas' financial activities to be sucritinised in Parliament. There has been an irksome worry pertaining the transparency of Petronas' expenditure / allocation of funds. Petronas ranks at number 121 under Fortune Global 500.

Other companies have experienced project delays due to the changes in state governments. The construction sector, in particular, relies on government based projects and due to changes in government personnel and glitches in the handing-over of contracts and related documents, some projects have had to be put on hold.

Norma Kassim, a Business Development Manager for a specialist civil construction company, says her company is still "looking forward to their Letter of Approval [of a project] amidst the changes in state governmental fronts." Her company's project is affected by the change in Kedah's state government; with the main contractor belonging to the state's administrative body.

"Economic activity has slowed down for the time being," she adds, relaying the sensitivity of the current political changes. "I hope it will pick up by the end of the month."

Her concerns are justified. The Australian Business reported a market plunge in Bursa Malaysia due to panic selling and stock-dumping, which led to a temporarily closure of the Bourse on March 10. Prices continued to fall when trading resumed. The index closed at a 9.5% drop. To-date, the market remains bearish over concerns of the political adjustments.

Malaysia's 12th General Elections caused a stir in its political realm as nearly half of the votes favoured the coallition opposition party, denying the government their benchmark two-thirds majority for the first time in Malaysian history. In addition to losing 5 key states to the opposition front, Barisan Nasional suffered a 28% drop in Parliamentary seats and displacement of long-term members of the governing cabinet.

--- Views by Staff Writer Maria Zain