The National speaks to entrepreneurs in three sectors about trade and the future of Kurdistan.
Paul Bailey, 31 Managing director, Definitus
Paul Bailey knows a thing or two about getting in early. He moved to Erbil in 2007 from Abu Dhabi, looking to capitalise on the passing of Iraqi Kurdistan's first oil and gas law as an advisor to international oil companies.
It was not long before Mr Bailey realised that there was plenty of options outside of oil and gas. As Erbil grew and Iraqi Kurdistan became more stable, opportunities emerged in a diverse range of sectors all faced with the same problem: a lack of funding.
“Definitus was set up to practice that which I had been preaching to others,” says Mr Bailey sitting outside the Munch Café on Gulan Street, on a warm evening in Erbil, the capital of the Kurdistan autonomous region in Iraq.
“One of the greatest challenges that we see in our work here is a lack of access to capital, whether that be reasonably priced debt finance or equity investors willing to buy into the market,” he says.
Definitus often invests its own capital into development projects and start-up companies, but also helps businesses raise capital or divest interests prior to sale – across agriculture, construction, food and beverage and the oil and gas sectors.
As an Iraq old hand – Mr Bailey has worked in Baghdad and Basra as well as the north –his firm is often asked to help new entrants make some sense of the market.
“If you arrive in Erbil expecting it to be like the UAE then you will be disappointed,” he says.
“As a frontier market there are a number of things that at first appear more difficult than they need to be – but that is part of working in new and developing places.”
First among these is bureaucracy, admits Mr Bailey but there is also the language barrier – unlike much of the wider Arabian Gulf, international business tends to be conducted in Kurdish, Turkish or Arabic rather than English.
Then there is security, with the bombings that stuck Erbil in September a stark reminder that behind the boom-town moniker, it remains a city just a stone’s throw away from war-torn Syria and instability in the rest of Iraq. But Mr Bailey remains bullish.
“New York, London, Madrid and Mumbai have all suffered terrorist incidents within recent memory. Each incident is a tragic waste of life but each city remains an international business hub,” he says.
As for those looking to follow his lead, Mr Bailey has some advice: “You have to commit. Business success will come here over time and over copious cups of tea. A full-time presence, or the appearance of a full-time presence, will be necessary,” he says.
“And if you decide to commit, commit early and be part of the growth engine, rather than waiting on the sidelines, deciding to enter the market only when it has become saturated.”
John Downe, 39 Managing director, Azure
As a veteran of Egypt, Oman, Bahrain and the UAE, John Downe’s wife always says her husband learned the art of negotiation in the souk.
Now based in Erbil, Mr Downe will this month open Iraqi Kurdistan’s first serviced offices, providing a base for both entrepreneurs and international companies in a city that is seriously lacking quality commercial space.
“Erbil is one of the last major cities in an oil-rich region of the Middle East without serviced offices and it has huge growth potential,” he says.
“International oil companies are piling in, as are every aspect of services that support them – lawyers, construction companies, oilfield services.”
Traditionally in Erbil a company would rent a villa in the city, with employees working downstairs and living upstairs, but demand is increasing for proper office facilities. Not only do villas often mean a year’s rent upfront, but also, Mr Downe says, they are perceived as “less professional” than genuine commercial space.
However, finding such space is a challenge. A recent report by the Erbil property consultancy IKG found more than 80 per cent of both existing and future commercial stock in the city is grade B or C, and – with a few exceptions – far below international standards. Mr Downe’s company, Azure, seeks to fill that gap.
“There is huge opportunity if you can offer something fresh, transparent, cool and different, so that’s what we’ve tried to do – both with things like all inclusive pricing but also the little extras: daily croissants and towels in the showers,” he says.
Mr Downe moved first moved to Bahrain after completing his Arabic degree and MBA, joining the corporate finance team of Ernst and Young and later forming a venture capital and mergers and acquisition advisory. In many ways, he says, Erbil – where he moved this year – reminds him of the early days of the Gulf.
“In some aspects, it’s like being in Dubai many years ago. There is huge unmet demand and being a very networked place, you can find out what is happening fairly easily, if you are plugged in. I hope what we and other entrepreneurs are doing here now will be looked back upon as real pioneering spirit,” he says.
Hemin Osman, 23 Broker
It goes without saying that as a Damascus-born but London-bred broker, Hemin Osman, 23, had to cope with a very different landscape when he moved to Erbil 18 months ago.
Moving from a job in the City of London – where the internet has made face-to-face contact almost redundant – he found himself driving three hours to Dohuk or Sulaymaniyah simply to make run-of-the-mill changes to contracts.
“The key difference with business here is that most of my deals and transactions are done either in person or on the phone. This is a complete contrast to working in the City, where most things are done over the internet and by emails,” he says. “Clients here feel more secure the more personal their interaction is with you.”
Although not a new industry, the financial services sector has traditionally been totally unregulated in Iraqi Kurdistan, with only a handful of companies regulated by the financial conduct authority (FCA) in the United Kingdom.
Brokerage services, however, are relatively new, having started in 2008. As a result, clients in Iraqi Kurdistan tend to have issues with trust – and not unfairly, given the history of over four decades of Saddam Hussein.
“In Kurdistan and the rest of Iraq there is a general lack of trust in the financial sector, which stemmed from the Saddam era, where many people’s assets were frozen by the central government. As a result, people preferred to keep their cash at home in a safe rather than a bank,” he says.
Mr Osman says clients are beginning to warm to the idea of brokerage services, however, especially when they learn their funds are held in the UK and insured and protected by the FCA. That said, preferences tend to remain conservative – commodities and currency dominate.
“It is a commodity driven economy, so many people are interested in trading what they know – oil, gold, silver – but there is also high demand for currency. We offer them two main types of service either they can execute their own positions or we can have leading hedge funds in the UK manage their accounts,” he says.
As a returnee – one of thousands to move back from Europe to the region since the downfall of Saddam – Mr Osman feels a personal desire to see things in Iraqi Kurdistan improve. He hopes as time passes, investors in Iraqi Kurdistan will get over their trust issues, but also that the regional government will take further steps to reduce bureaucracy and other hurdles to individuals and companies.
“I have big dreams and aspirations for Kurdistan but to make doing business here more pleasant the government need to reduce red tape and make governmental procedures easier,” he says.
“That will encourage more businesses to invest in the region.”
business@thenational.ae
UAE currency: the story behind the money in your pockets
Company%20profile
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Company%20Profile
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UEFA CHAMPIONS LEAGUE FIXTURES
All kick-off times 10.45pm UAE ( 4 GMT) unless stated
Tuesday
Sevilla v Maribor
Spartak Moscow v Liverpool
Manchester City v Shakhtar Donetsk
Napoli v Feyenoord
Besiktas v RB Leipzig
Monaco v Porto
Apoel Nicosia v Tottenham Hotspur
Borussia Dortmund v Real Madrid
Wednesday
Basel v Benfica
CSKA Moscow Manchester United
Paris Saint-Germain v Bayern Munich
Anderlecht v Celtic
Qarabag v Roma (8pm)
Atletico Madrid v Chelsea
Juventus v Olympiakos
Sporting Lisbon v Barcelona
Full Party in the Park line-up
2pm – Andreah
3pm – Supernovas
4.30pm – The Boxtones
5.30pm – Lighthouse Family
7pm – Step On DJs
8pm – Richard Ashcroft
9.30pm – Chris Wright
10pm – Fatboy Slim
11pm – Hollaphonic
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
COMPANY%20PROFILE
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The specs
Engine: 8.0-litre, quad-turbo 16-cylinder
Transmission: 7-speed auto
0-100kmh 2.3 seconds
0-200kmh 5.5 seconds
0-300kmh 11.6 seconds
Power: 1500hp
Torque: 1600Nm
Price: Dh13,400,000
On sale: now
MATCH INFO
England 2
Cahill (3'), Kane (39')
Nigeria 1
Iwobi (47')
Ahmed Raza
UAE cricket captain
Age: 31
Born: Sharjah
Role: Left-arm spinner
One-day internationals: 31 matches, 35 wickets, average 31.4, economy rate 3.95
T20 internationals: 41 matches, 29 wickets, average 30.3, economy rate 6.28
Arsenal's pre-season fixtures
Thursday Beat Sydney 2-0 in Sydney
Saturday v Western Sydney Wanderers in Sydney
Wednesday v Bayern Munich in Shanghai
July 22 v Chelsea in Beijing
July 29 v Benfica in London
July 30 v Sevilla in London
COMPANY%20PROFILE
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The biog
Favourite colour: Brown
Favourite Movie: Resident Evil
Hobbies: Painting, Cooking, Imitating Voices
Favourite food: Pizza
Trivia: Was the voice of three characters in the Emirati animation, Shaabiyat Al Cartoon
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
ABU DHABI ORDER OF PLAY
Starting at 10am:
Daria Kasatkina v Qiang Wang
Veronika Kudermetova v Annet Kontaveit (10)
Maria Sakkari (9) v Anastasia Potapova
Anastasia Pavlyuchenkova v Ons Jabeur (15)
Donna Vekic (16) v Bernarda Pera
Ekaterina Alexandrova v Zarina Diyas
Empty Words
By Mario Levrero
(Coffee House Press)
UAE v IRELAND
All matches start at 10am, and will be played in Abu Dhabi
1st ODI, Friday, January 8
2nd ODI, Sunday, January 10
3rd ODI, Tuesday, January 12
4th ODI, Thursday, January 14
Company%20Profile
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Points classification after Stage 4
1. Arnaud Demare (France / FDJ) 124
2. Marcel Kittel (Germany / Quick-Step) 81
3. Michael Matthews (Australia / Sunweb) 66
4. Andre Greipel (Germany / Lotto) 63
5. Alexander Kristoff (Norway / Katusha) 43
Overview
What: The Arab Women’s Sports Tournament is a biennial multisport event exclusively for Arab women athletes.
When: From Sunday, February 2, to Wednesday, February 12.
Where: At 13 different centres across Sharjah.
Disciplines: Athletics, archery, basketball, fencing, Karate, table tennis, shooting (rifle and pistol), show jumping and volleyball.
Participating countries: Algeria, Bahrain, Comoros, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Saudi Arabia, Sudan, Syria, Tunisia, Qatar and UAE.
Pakistan Super League
Previous winners
2016 Islamabad United
2017 Peshawar Zalmi
2018 Islamabad United
2019 Quetta Gladiators
Most runs Kamran Akmal – 1,286
Most wickets Wahab Riaz –65
Abu Dhabi card
5pm: Handicap (TB) Dh100,000 2,400m
5.30pm: Wathba Stallions Cup Handicap (PA) Dh 70,000 2,200m
6pm: Abu Dhabi Fillies Classic Prestige (PA) Dh110,000 1,400m
6.30pm: Abu Dhabi Colts Classic Prestige (PA) Dh110,000 1,400m
7pm: Handicap (PA) Dh85,000 1,600m
7.30pm: Maiden (PA) Dh80,000 1,600m
The National selections:
5pm: Valcartier
5.30pm: AF Taraha
6pm: Dhafra
6.30pm: Maqam
7pm: AF Mekhbat
7.30pm: Ezz Al Rawasi
Tips for newlyweds to better manage finances
All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.
Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.
Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.
Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.
Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.
Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.
ENGLAND SQUAD
Joe Root (captain), Dom Sibley, Rory Burns, Dan Lawrence, Ben Stokes, Ollie Pope, Ben Foakes (wicketkeeper), Moeen Ali, Olly Stone, Chris Woakes, Jack Leach, Stuart Broad
Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
MATCH INFO
Karnatake Tuskers 114-1 (10 ovs)
Charles 57, Amla 47
Bangla Tigers 117-5 (8.5 ovs)
Fletcher 40, Moores 28 no, Lamichhane 2-9
Bangla Tiger win by five wickets
About Okadoc
Date started: Okadoc, 2018
Founder/CEO: Fodhil Benturquia
Based: Dubai, UAE
Sector: Healthcare
Size: (employees/revenue) 40 staff; undisclosed revenues recording “double-digit” monthly growth
Funding stage: Series B fundraising round to conclude in February
Investors: Undisclosed
GREATEST ROYAL RUMBLE CARD
The line-up as it stands for the Greatest Royal Rumble in Saudi Arabia on April 27
50-man Royal Rumble
Universal Championship
Brock Lesnar (champion) v Roman Reigns
Casket match
The Undertaker v Rusev
Intercontinental Championship
Seth Rollins (champion) v The Miz v Finn Balor v Samoa Joe
SmackDown Tag Team Championship
The Bludgeon Brothers v The Usos
Raw Tag Team Championship
Sheamus and Cesaro v Bray Wyatt and Matt Hardy
United States Championship
Jeff Hardy (champion) v Jinder Mahal
Singles match
Triple H v John Cena
To be confirmed
AJ Styles will defend his WWE World Heavyweight title and Cedric Alexander his Cruiserweight Championship, but matches have yet to be announced
West Indies v India - Third ODI
India 251-4 (50 overs)
Dhoni (78*), Rahane (72), Jadhav (40)
Cummins (2-56), Bishoo (1-38)
West Indies 158 (38.1 overs)
Mohammed (40), Powell (30), Hope (24)
Ashwin (3-28), Yadav (3-41), Pandya (2-32)
India won by 93 runs
Who are the Soroptimists?
The first Soroptimists club was founded in Oakland, California in 1921. The name comes from the Latin word soror which means sister, combined with optima, meaning the best.
The organisation said its name is best interpreted as ‘the best for women’.
Since then the group has grown exponentially around the world and is officially affiliated with the United Nations. The organisation also counts Queen Mathilde of Belgium among its ranks.
Bridgerton%20season%20three%20-%20part%20one
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The years Ramadan fell in May
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
Company%20Profile
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PAKISTAN v SRI LANKA
Twenty20 International series
Thu Oct 26, 1st T20I, Abu Dhabi
Fri Oct 27, 2nd T20I, Abu Dhabi
Sun Oct 29, 3rd T20I, Lahore
Tickets are available at www.q-tickets.com