SCF Journal Entry – McKinsey & Diana Farrell

Recently, Diana Farrell was placed on Obama’s Economic policy team.  Here is an article about her…and following it, you will find my extensive research about McKinsey and its relation to Shariah Compliant Finance!  Grab a cup of coffee, once you start down this road, you will need snacks.  I apologize for formatting problems, but the research was compiled about two months ago.  My research of McKinsey, started with the sponsor list of the MENA businesses on Harvard’s websites.   CNN just ran a story on McKinsey on Lou Dobbs’ show.  I guess it is time to move forward with the connection.  My Takaful report regarding Ernst and Young’s 2008 report was actually the end of the road on this research.  I will work on formatting soon, I put out this document as an immediate response to those who will say that Farrell will represent America’s interests.  The 1993 article following this bio of Farrell is lengthy, but it is a necessary read if you seek to understand the McKinsey Culture.

Obama’s economic policy will be to fully back Shariah Compliant Finance if McKinsey’s focus is any indication of Farrell’s loyalty.

- Gary H. Johnson, Jr. (2/10/09)

http://www.mckinsey.com/mgi/perspective/biography/index.asp

In January 2009 Diana Farrell joined U.S. President Obama’s administration as deputy director of the National Economic Council and deputy economic advisor to the President.

Prior to joining the NEC, Ms. Farrell served as director of the McKinsey Global Institute (MGI), McKinsey & Company’s economics research arm, since 2002. MGI’s independent investigations combine McKinsey’s microeconomic understanding of companies and industries with the rigor of leading macroeconomic thinking to derive perspectives and publish reports on important global economic issues.

Under her leadership, MGI continued to build on its in-depth, sector-based productivity studies of economies around the world, but also spanned additional, related topics, including capital markets, global economic integration and foreign direct investment, the ascendance of China and India, labor markets and offshoring, the economic impact of demographic changes, health care, and global energy demand.

Ms. Farrell’s work has appeared in academic journals, books, and on the op-ed pages of leading international publications. She is the editor of an anthology series based on MGI research, published by Harvard Business School Press, 2007. Together with Lowell Bryan, she is the co-author of Market Unbound, published by Wiley & Sons, 1996.

Ms. Farrell was previously a McKinsey consultant in the Washington, D.C. office and a leader of McKinsey’s Global Financial Institutions and Global Strategy practices. She has served clients around the world in a variety of capacities. Prior to joining McKinsey, she worked for Goldman Sachs & Company in New York.

Ms. Farrell is a member of the Council on Foreign Relations, the Bretton Woods Committee, and the Pacific Council on International Policy.

Ms. Farrell has a B.A. from Wesleyan University in economics and in the College of Social Studies. She also holds an M.B.A. from Harvard Business School.  

November 1993

http://money.cnn.com/magazines/fortune/fortune_archive/1993/11/01/78550/index.htm

HOW MCKINSEY DOES IT The world’s most powerful consulting firm commands unrivaled respect — and prices — but is being buffeted by a host of new challenges. Here’s the inside story.

By John Huey REPORTER ASSOCIATES Joyce E. Davis and Jane Furth

November 1, 1993

(FORTUNE Magazine) – FOR ALL THAT has been said over the years about McKinsey & Co. — the most well-known, most secretive, most high-priced, most prestigious, most consistently successful, most envied, most trusted, most disliked management consulting firm on earth — perhaps the only statement that would spark immediate agreement from all camps, friend or foe, is this: These fellows from McKinsey sincerely do believe they are better than everybody else. Like several less purposeful organizations — Mensa, Bohemian Grove, Skull and Bones, the Banquet of the Golden Plate — McKinsey is elitist by design. So much so that on occasion, when in the presence of a young McKinsey partner, ^ one gets the distinct impression that if plied with a cocktail or two, he might well lean across the table and suggest something awkward, like comparing SAT scores. To say that ”testing well” is the sine qua non for membership in this outfit — filled as it is with Baker Scholars from the Harvard business school, Rhodes scholars, White House Fellows, nuclear physicists, and Ph.D.s in the hard sciences — is to understate the premium placed within the McKinsey culture on analytic ability, or as its denizens say, on being ”bright.” There is no denying it: These men from McKinsey — and they are mostly men, and mostly white — are indeed bright. Even so, several more prosaic questions still bear asking: Do they have a lick of sense? Are they any better than the competition? Can you trust them? Can they really help your company? And finally, are they worth what they charge? Like most questions about such institutions, the answers lie somewhere between McKinsey’s self-image and what its detractors want to believe. McKinsey, though damned good at what it does, is not as good as it thinks. (Could any collection of mortals be?) Brain for brain, its consultants aren’t any brighter than those at some close rivals, and much of the work it performs can be done quite competently by a number of less pricey, less haughty consulting firms. At the same time, McKinsey’s explosive growth — it has doubled in the past five years to become a firm with $1.2 billion in annual revenue and 58 offices worldwide — hasn’t eroded its formidable culture nearly as much as competitors fantasize. It is that culture, unique to McKinsey and eccentric, which sets the firm apart from virtually any other business organization and which often mystifies even those who engage the services of ”The Firm,” as its members have long called it. ”They’re not a very open organization,” says Edwin Lupberger, chairman and CEO of Entergy Corp., one of the nation’s largest utility holding companies and a constant and highly satisfied McKinsey client since 1986. ”Even from the client side, you just get to see the tip of the iceberg.” Understanding McKinsey’s enigmatic culture is the only way to answer the larger, more intriguing questions about The Firm, which are: How does McKinsey do what it does — and can it keep on doing it? In a business whose only constants seem to be upheaval, transience, faddism, and customer suspicion of snake oil, how does McKinsey inspire such high-level trust? In a world seemingly overpopulated with consultants, can McKinsey endure as the ultimate worldwide brand name — the Rolls-Royce of its industry? Extraordinarily tight-lipped, McKinsey shuns publicity. But lately it has found itself in an unwelcome spotlight, mostly because of the celebrity of such firm alumni as Lou Gerstner, Harvey Golub, and Michael Jordan, former consultants who have assumed hot-seat CEO posts at IBM, American Express, and Westinghouse. TCI boss John Malone, the so-called King of Cable, is also a former McKinsey consultant. Throughout this recent flood of press attention, The Firm has said nothing. Until now. As with most cabals, the real answers are best found on the inside. And that is where FORTUNE has been reporting for several months, wandering the halls of McKinsey & Co., poking into the nooks and crannies. What follows, then, is a report from behind the rarely lifted veil of one of the world’s best-known, least understood organizations. To fully appreciate the inside view, it helps first to see how McKinsey looks in the cross hairs of those who compete against it in an increasingly fragmented, competitive marketplace. Founded in the 1930s, McKinsey isn’t the oldest consulting firm; Arthur D. Little dates to the 1880s. Nor is it the biggest; Andersen Consulting’s annual revenues of $2.7 billion are more than double McKinsey’s, though Andersen specializes mostly in integrating information systems (FORTUNE, October 4). Among its general management consulting peers, however, McKinsey is far and away the largest, with revenues almost double those of No. 2, Booz Allen & Hamilton. What’s more, McKinsey’s 3,100 consultants and analysts haul in far more annual revenue — $387,000 each — than any competitor’s (the 780 professionals at the Boston Consulting Group are second, at $359,000 a head), according to Consultants News, a trade publication. Most of McKinsey’s rivals insist that in recent years it has become much more vulnerable to their inroads. Says Fred Steingraber, chairman and CEO of A.T. Kearney, a fast-rising Chicago firm that was long ago part of McKinsey: ”Last year we competed against them head to head in 35 situations and won every time.” While McKinsey has consulted for many of the current era’s great successes — Hewlett-Packard, Johnson & Johnson, PepsiCo, BritishAir, AT&T, GE — it has also been a fixture at many of the big losers: American Express, GM, IBM, Eastman Kodak, Digital Equipment, Sears, and the late Pan Am. Critics argue that McKinsey is starting to suffer from some of the same ailments that eventually brought these dinosaurs low. Claims a senior partner at Bain & Co., a resurgent competitor: ”McKinsey sells consulting the way IBM used to sell computers — from the top down. Which makes you wonder: ‘Are they the IBM of the consulting business?’ I think they have a bunch of the same cancers and ten years from now won’t be as strong as they are today.” Of such chop-licking competitors, Fred Gluck, 58, McKinsey’s managing director, says simply, ”All I know is that every consulting firm anybody talks to always says they’re second to McKinsey.” He’s right. ”The hardest thing about competing with them,” admits that same Bain partner, ”is that they have these deep relationships with senior management that lead companies to return to McKinsey, unquestioned, time and time again.” Even Kearney’s Steingraber grudgingly agrees: ”They are definitely the model many other consulting firms would like to emulate. It is difficult for a CEO who hires McKinsey to be challenged either by his board or by the rank and file. They have established themselves with a ‘holy water’ very much like the blue-chip investment banking firms.” You can find McKinsey consultants sprinkling that holy water around on a regular basis at half the companies in the FORTUNE Global 500. And after more than 30 years of aggressive overseas expansion, McKinsey today is itself truly a global firm, with a non-American majority controlling its shareholder committee and the real possibility of electing a non-American as managing director in the near future. The Firm derives 60% of its revenue — and probably even more of its profit — from outside the U.S. and expects future growth to be fueled by such fledgling markets as Russia, Eastern Europe, China, and India. Partly because of that global growth, McKinsey is now caught up in a passionate internal debate over where it should go from here. The Firm, most partners admit, has reached one of the watersheds in its history. ”We grew too fast in the Eighties,” says New York office manager Don Waite, a leading candidate to take the helm next year. ”It strained the fabric of the place.” As Michael Patsalos-Fox, a new-generation 40-year-old director in London, puts it, ”There are some very sophisticated things that keep McKinsey together, and they will be strained in the coming years.” To Peter Foy, 53, a member of the old guard in the same office, the big challenge is ”how to evolve without losing our values in spite of the scale and complexity of the organization.” Such debate always heats up around election time, which is now approaching. Next spring, as they do every three years, McKinsey’s 151 senior partners — known as directors — will cast an open-ballot vote to decide who among them will become managing director, succeeding Gluck. He has overseen six years of spectacular growth, but firm bylaws prohibit him from standing for reelection because he would turn 60 during his next term. McKinsey partners really don’t know which of seven or eight potential directors will be leading them into the 21st century. Whoever wins, governance is ”the key issue” this time round, says Ron Daniel, who was managing director for 12 years and once described the job as ”like trying to herd cats.” Adds Daniel: ”We don’t need a caretaker, and we don’t need somebody on a power trip.” In fact, governance frequently comes up as an issue at McKinsey. Depending on which partner you talk to, The Firm is either the exemplar organization of the future — a nonhierarchical, decentralized group of knowledge workers connected by shared values and a multitude of informational axes — or it’s a once intimate partnership grown way too large and diffuse with no real chain of command. Peter Foy openly advocates change. ”I think we now have to evolve into a more professionally managed institution,” he says, ”with a more directive management approach than the laissez-faire freedom of an entrepreneurial partnership. It’s a price we’re going to have to pay.” But in Zurich, Lukas Muhlemann, who at 43 is mentioned by some directors as a potential top guy, fears too much command and control. ”I wouldn’t like to have some real bossy managing director,” he says. The Firm’s culture has always accommodated this kind of broad diversity of opinions, as well as a number of apparent paradoxes. McKinsey earns much of its money showing other companies how to become more efficient yet in its own affairs scorns efficiency, choosing to run itself through a seemingly endless chain of committees. The Firm attracts high-performing achievers with egos large enough to block the sun, then requires those egos to subordinate themselves to the collective. The Firm places itself above discussing money as a motivation, yet senior partners often earn as much, or more, than the CEOs they advise. Partners talk about one another with a sense of personal affection and admiration usually heard only at Hollywood roasts — ”a bunch of guys committed to making a difference and having a hell of a time,” says Gluck. Yet The Firm’s Darwinian up-and-out system culls partners from its ranks with the ruthlessness of a three-star chef culling asparagus spears at a farmers’ market. The resulting personality of a McKinsey consultant, therefore, is an unusual blend of studied arrogance overlaying deep-seated insecurity. As Firm lore has it: ”McKinsey is a very kind place. McKinsey is a very cruel place.” From a client’s perspective, McKinsey is basically a problem-solving place. Some of its work — a repositioning strategy for a client in the telecommunications industry or the retooling of a technology company’s new product development process, for example — can be highly sophisticated. But much of the time The Firm merely reorganizes sales forces or designs by-the- numbers downsizing to reduce overhead. Either way, corporate chaos and market mayhem are great for business, which goes a long way toward explaining McKinsey’s recent hothouse growth. Say you’re the management of Delta Air Lines — in fact, a new client — and you’re losing buckets of money on your recently acquired European operations. You’re feeling shareholder heat. So you announce to Wall Street: ”We have hired McKinsey.” Such an announcement sends out several messages: ”We know we have a problem. We’re doing something about it. We hired the most expensive help we could find. Give us some time, okay?” More typically, though, McKinsey enjoys a long-term — but not continuously billable — relationship with top management at a client company. (It has one, for example, with Time Inc., the Time Warner unit that publishes FORTUNE.) The Firm will already have worked for the client on various projects, perhaps identifying potential market segments and then figuring out the cost structure required to beat the competition. Now the CEO, or his COO, or even a division head at a very large company, may have decided, say, that he can’t move on effectively with the organizational structure he has in place. Who better to talk it over with — for free — than his old friends from McKinsey? Frequently, the partner who serves as your primary contact is a generalist, linked to your company because your headquarters are in his office’s territory. If, however, he isn’t well versed in the problem currently weighing on you, your old friend will invite one or more new friends — specialist colleagues — in to talk things over with you. They will likely come from one of the two dimensions that complement McKinsey’s geographic structure: functional expertise (disciplines such as market research, corporate finance, and au courant stuff like core-process redesign) or industry expertise (aerospace, automotive, banking, whatever). At this point it’s all very casual and cordial, no meter running. Once the chatting ends and you hire The Firm, things formalize quickly. The local partner assembles an engagement team of four to six people. At least nominally, the expert he brought in to chat with you may be part of it. To coordinate the effort, he assigns an ”engagement manager” — not a partner but an associate with three or four years’ McKinsey experience. This is typically someone who has survived the sweatshop conditions endured by rookies and proved he can travel constantly, sleep little, perform brilliantly, and inspire the immediate confidence of much older clients who might otherwise wonder why they’re paying so much money to wind up with a 29-year-old greenhorn MBA in their face — but who is also still busting his hump because he has only two or three years left to make partner. The other team members usually include two or three junior associates: a ”quant jock,” who may do calculus in his head; a ”business analyst,” possibly a 3.9 engineering graduate from Duke who knows computers and is willing to work 18 hours a day; and probably someone with knowledge of either your industry or your company. Most of these folks physically move onto your premises, where you provide them with an office, a phone, a secretary, and some lockable files. When it gets down to work, the team avoids touchy-feely stuff and tries to limit its analysis to ”the proof or disproof of things that matter,” says Jim Balloun, a senior director in Atlanta. The entire process, he adds, is ”hypothesis-driven.” A hypothesis could be, for example, ”Our Japanese competitors are dumping their office machine product. They can’t possibly be selling it at a profit.” Or ”People who sell big orders make more money for the company.” Your engagement team will test such hypotheses before it moves on to recommending solutions. The team may interview suppliers all over the world and discover that, in fact, the Japanese are buying the power supply for their machine from your own supplier for $60 less because you are employing outdated , purchasing procedures. Or it may discover that, in fact, some of your largest sales orders are your least profitable. The secret, says Balloun, ”is in the rigor. These things are proved and disproved with facts, not opinions.” All the while, of course, the clock is running, usually at a rate of between $200,000 and $300,000 a month plus all expenses. At project’s end, the team — after preparing senior management ahead of time to avoid undue embarrassment — will present its findings in a standard dog-and-pony overhead-projector show, then leave behind its recommendations, usually in a bound blue book of 100 pages or so. ”They don’t dance around. They’re very direct and outspoken,” says Vic Pelson, an executive VP at AT&T. Pelson, who has used all the major-consulting firms, maintains that ”none has been more helpful than McKinsey.” If that sounds like the flow of holy water, it is. AT&T and Pelson fit the profile of a satisfied McKinsey client — a big blue-chip company, a long-term relationship, and all sorts of intersecting social and philanthropic connections that help solidify the good feeling. The successful McKinsey consultant must strive to be very much a part of the elite corporate world inhabited by his client. Every McKinsey partner of any weight is expected to involve himself heavily in pro bono activities that put him in constant contact with the top leadership of his community. Consider Ron Daniel’s outside-the-firm resume. He is a member of the Harvard Corp. and treasurer of the university. He is on the board of the Brookings Institution, and he has been an adviser to Yale, Duke, and Stanford, as well as Harvard. Gluck is on New York Hospital’s board of governors. In Amsterdam, office manager and director Mickey Huibregtsen is chairman of the Netherlands Olympic Committee. In Britain, Peter Foy is engaged in an effort to convert the old Oxford jail into a new college at Oxford University. In Atlanta, Jim Balloun will soon become chairman of the Woodruff Arts Center. In Stockholm, office manager Christian Caspar is a member of the Royal Swedish Academy of Engineering Sciences. In Tokyo, director Kenichi Ohmae, while not busy reforming Japanese politics, plays clarinet. These activities are openly part of McKinsey’s relationship-driven approach to marketing — an activity that partners claim, with an absolutely straight face, The Firm never engages in. In fact, while McKinsey may shun direct solicitation of clients or cold calls as tacky and ineffective, it is a marketing juggernaut — albeit a low-key, tasteful juggernaut. Example: McKinsey for years philosophically avoided touting its partners’ specific expertise, taking the high-ground stance that its only specialty was problem solving. As the world changed, though, clients began to balk at paying consultants to educate themselves on their particular industries. So about 15 years ago, McKinsey decided to incorporate what it calls systematic knowledge building into its institutional portfolio. And today McKinsey positions itself as the repository of all business information and theory worth knowing. A favorite line repeated within The Firm is that ”we do more research on business issues than the business schools at Harvard, Stanford, and Wharton combined.” Gluck estimates that McKinsey’s annual expenditures on knowledge building top $50 million, much of it spent on conferences, research projects, and intrafirm communication. McKinsey also runs what amounts to its own business press, churning out, in addition to its widely followed McKinsey Quarterly, hundreds of pamphlets, magazines, papers, and articles a year. Partners last year individually published a dozen books, many of the authors no doubt hoping to duplicate the publishing careers launched in the Eighties by two famous now-ex-McKinseyites from the San Francisco office: Tom Peters and Robert Waterman, co-authors of the astronomically successful In Search of Excellence. Though Peters and Waterman left McKinsey — in a dispute partly over whether profits from their book should have gone to them individually or into the McKinsey pot — The Firm’s culture does make room for a few media superstars such as Tokyo’s Ken Ohmae, whose identity is closely linked to McKinsey’s image in the important Japanese market. The postscript to one of Ohmae’s recent books, The Borderless World, shows just how highly The Firm can regard itself. Ohmae, a nuclear engineer by training, closes his book with a manifesto calling for a new world economic order based on something called an interlinked economy. The statement is signed by himself, Gluck, and Herbert Henzler, the major-domo of McKinsey’s German practice, and carries an earnest footnote, delivered without a hint of self-consciousness: ”This statement, the product of many dinner conversations and debates, is one we each embrace and believe to be the best possible course for all countries and governments to follow.” Well, world, what are we waiting for? Let’s get right on it. ”I think The Firm takes itself a little too seriously,” says Waterman, who spent 21 years as a McKinsey consultant. ”For what it does, it’s probably the best in the world. But in the grand scheme of things, maybe what McKinsey does just isn’t as important as it thinks.” After leaving, Waterman says he realized some things about his years at The Firm. ”McKinsey thinks it sells grand strategies and big ideas,” he says, ”when really its role is to keep management from doing a lot of dumb things. They do great analysis, but it won’t get your company to the top.” The genesis of In Search of Excellence, he says, came from his and Peters’s frustrating realization that, as McKinsey consultants, they weren’t working with a lot of the truly great, innovative organizations. ”We had gotten bored working for big, okay companies that would pay big money, accept our recommendations, and then do a half-assed job of implementing them.” But doesn’t the McKinsey culture encourage consultants to speak up to clients? ”Yes,” says Waterman, ”but they don’t pay you to lose clients.” Which raises another question: If McKinsey is so great, why have so many of its long-term, mainstream clients gone down the shooter? Specifically, McKinsey has taken a lot of heat for its heavy involvement with the disastrous restructuring of General Motors in the early Eighties. In her book Rude Awakening: The Rise, Fall and Struggle for Recovery of General Motors, Wall Street analyst Maryann Keller asserts that many GM employees believed McKinsey was a ”fly in the ointment of the reorganization, rather than an enabler.” Officially, McKinsey has nothing to say about GM. The two subjects it categorically refused to discuss for this article were anything relating to specific clients, and anything about how it charges for its services (for more on that, see box). But privately, several senior directors shared some thoughts on McKinsey’s role at the auto giant. They claim the situation was so hopeless — and GM’s management so unresponsive — that senior consultants recommended more than once that McKinsey withdraw from the engagement. But for whatever reasons, The Firm stayed the course. ”We told them like it was. We weren’t passive at all. We told them to take their medicine,” says one senior director. ”It’s like being a doctor. You do the best you can, but if the patient won’t quit smoking, he still dies. This is a problem the world over. Corporate executives are not risk takers. They don’t see trouble clearly until they’re going down the drain.” As North America chairman of The Firm’s client impact committee, Pete Walker, a New York director, oversees the constant evaluation of how much difference McKinsey’s work actually makes. It’s a definite black mark for a consultant to bring in a lot of revenue but be unable to demonstrate a big financial benefit for clients. Says Walker, with typical McKinsey humility: ”It’s almost never that we fail because we come up with the wrong answer. We fail because we don’t properly bring along management. And if a company just doesn’t have the horses, there are limits to what we can do.” Satisfied clients appreciate McKinsey’s concern for impact. ”They are very strong on adding more value to the bottom line than they cost,” says Entergy’s Lupberger. ”If they get behind on that, you can sense they really feel pressure from home.” In truth, a McKinsey consultant feels pressure from home on everything. This particular issue — whether you’re adding value to the bottom line — would come before Walker’s committee, which then passes its findings along to the committees that select new partners and new directors, as well as to those that rank existing partners to determine their compensation. A senior partner on one of these personnel committees may devote as much as six weeks a year to flying around the world evaluating other partners. The criteria for evaluation are essentially firm impact, personal impact, and client impact. ”It’s a rigorous, constant microscope that we have everybody under,” says New York manager Waite. ”It’s impossible to feel secure here.” Which committee one sits on, or more important, chairs, is a not-so-subtle indication of where one stands in The Firm. It would be highly unlikely for someone to be elected managing director who isn’t already a powerful committee chairman or major office manager. And all committee chairmen are chosen by the managing director, who, in turn, serves at the pleasure of the directors. Other than the governing shareholders committee, the various personnel committees are traditionally the most prestigious since they, in effect, preside over The Firm’s up-or-out policy, which accounts for an attrition rate of about 17% a year. One of five consultants who join The Firm goes on to become a partner; one of ten makes it to director. Some leave because they don’t like it; others go because they’re asked. ”We have a process designed to produce a certain kind of person,” says Gluck. ”To do that, we hire ten times the number we need.” Beyond the obvious sin of losing valuable business — which McKinsey barely admits to as a criterion — numerous so-called value transgressions can bring down the ax, including a persistent lack of helpfulness to other partners or a self-promotion seen as too relentless. ”They may get arrogant,” says Gluck, ”or they may just not be good enough. But the main cause is obsolescence. They don’t spend enough time renewing themselves.” Or they may make mistakes. Says Waite: ”Everybody makes mistakes, and we know that. But if you string a bunch together, that’s no road to success.” Or they may just get tired. The consensus inside The Firm is that a McKinsey consultant peaks somewhere around age 45, he gives up weighty committee responsibilities by his early 50s, and he must sell back his shares and settle into a reduced role by 60. When a partner’s time comes, says Gluck, ”we say: We love you. We want to be your friend. We’ll help you any way we can, but your partners don’t think you’re cutting it anymore.” Gluck also admits that in recent years five partners have been dismissed for violating The Firm’s strict code of ethics involving such issues as conflict of interest in investments — the best evidence of all, he says, that you can trust McKinsey. Not all is peace and love within The Firm’s family. Five years ago, 16 consultants left McKinsey’s then 60-person Milan office, mostly in solidarity with a partner who had been forced out. ”We had a bad egg, and we took too long to get rid of him,” says Gluck, who complains that even after the partner left ”the factionalism lingered.” So much so that this year, when The Firm decided to rehire an ex-partner in Milan, some 15 more people left. Gluck has also learned the hard way that McKinsey’s culture doesn’t mix well with outside cultures. In 1989 he attempted a wholesale acquisition of talent in the information technology field by buying a small New York company, Information Consulting Group. ”It was really a nonevent,” says Gluck of the $10 million acquisition. ”But you never saw such an uproar in The Firm. The organism tried to reject the transplant.” Many of the ICG people have since left, though some have become partners, and Gluck argues that the attrition rate from the acquisition wasn’t much higher than that of McKinsey overall. One theory as to why the McKinsey culture normally functions so well comes from a man who has worked for several other major consulting outfits as well as The Firm. ”McKinsey preconditions its culture to work through its hiring practices,” he says. ”Basically they hire the same people over and over. At other consulting firms there’s a lot more diversity.” In fact, the vast majority of those who run the firm are men who graduated near the top of their class from one of seven major business schools — Chicago, Harvard, Stanford, MIT’s Sloan, Northwestern’s Kellogg, Pennsylvania’s Wharton, and Insead in France. Out of 465 partners, only 21 are women and just two are black; out of 151 directors, three are women. To which Ron Daniel, the former managing director who has done as much as anyone to shape the modern McKinsey, replies, in effect, so what? ”The real competition out there isn’t for clients, it’s for people,” he says. ”And we look to hire people who are, first, very smart; second, insecure and thus driven by their insecurity; and third, competitive. Put together 3,000 of these egocentric, task-oriented, achievement-oriented people, and it produces an atmosphere of something less than humility. Yes, it’s elitist. But don’t you think there has to be room somewhere in this politically correct world for something like this?” (A point of view even more revealing when you consider that Daniel is one of the few senior McKinsey directors who is actually a visible Democrat residing on the Upper West Side of Manhattan.) Nowadays, the younger directors at The Firm — men like 37-year-old Larry Kanarek, who manages the Washington, D.C., office — aren’t shy about saying they want McKinsey to commit more seriously to diversity. Says he: ”We have to accelerate our drive to make this place more attractive for women and minorities, not only because it’s the right thing to do but out of self- interest. What are we doing to our competitive advantage if we preclude ourselves from 50% of the talent out there?” Recently, according to one partner, The Firm approached presidential first pal Vernon Jordan for help in formulating a strategy for expansion into South Africa. He was friendly enough until he asked the inevitable question: ”How many black partners do you have?” After hearing the paltry answer, he is said to have replied, ”I’ll try to help you, but for God’s sake, man, if you want to do business in Africa get yourself some black partners.” Along with questions of gender and racial diversity, some high-profile Firm directors are outspoken in their belief that, given the increasing demand for help in revolutionizing corporate cultures, McKinsey continues to overemphasize the ”quantitative” in its hiring. In other words, ”Do you know how many service stations there are in Chicago?” — a traditional question somehow designed to demonstrate a candidate’s problem-solving abilities — may no longer be the most suitable query for potential hires. ”At McKinsey, hard guys are better,” says longtime director Jon Katzenbach. ”Issues like organization and leadership are thought of as soft. Unfortunately, that’s where client demand is increasing. We have major corporations asking us to help them change their culture; we need to make major changes in our own culture.” McKinsey’s dilemma, says Katzenbach, ”is that we’re really good at tapping into intellectual smarts, as measured in quantitative and conceptual ways. But in our search for bright guys, we throw out a lot of creative ones. We’ve got to be less cookie-cutter in our hiring.” A related dilemma: Traditionally, McKinsey has called itself a top- management consultant, steering away from what is dubbed ”implementation,” the actual putting into place of a consultant’s recommendations. This sort of work was viewed within The Firm as the proper venue for more ”proletarian” consultants such as Arthur Andersen or A.T. Kearney. No longer. Says director Chuck Farr: ”Our value added today has to be that we make things happen.”

SENSIBLE ENOUGH, but a drastic departure for McKinsey. Says Steingraber of A.T. Kearney: ”All of a sudden we see evidence McKinsey is holding itself out as willing to work on implementation. But if you visit their clients, and go down a level or two below the CEO, you’ll find they get black marks in this area. They’re not good at achieving buy-in from the ranks. That arrogance they carry stirs up a lot of resentment.” The men from McKinsey may be arrogant, but they’ve been badly whipped once before — in the early Seventies — and the senior directors haven’t forgotten the experience. In those days the upstart Boston Consulting Group began boldly marketing corporate strategy ”products” with scintillating names such as the growth-share matrix and the experience curve. McKinsey, which philosophically eschews ”flavor-of-the-month” consulting ideas, stuck to its position of ^ merely marketing its allegedly superior intelligence. The Firm wound up watching BCG eat not only its lunch but its breakfast and dinner as well. All the partners still around from those days admit to feeling seriously threatened by the loss of business. ”We didn’t renew our intellectual capital, we came to market with a dated product, and we got our ass handed to us,” is an accurate quote synthesized from the collective comments of every single survivor from that era. ”Our young directors have never experienced anything humbling like that. We hope they won’t have to.” Some within McKinsey, like Katzenbach, believe that to avoid such a fate it may be necessary to start marketing ”product” and try to sell the next big idea. ”My client is interested in a new flavor-of-the-month concept on high- performance teams,” he says. ”I can sell him. The issue is: How do I sell my partners — the classic skeptics?” Mickey Huibregtsen of the Amsterdam office defends McKinsey’s bias against such concepts: ”A lot of us feel that if the only tool you have is a hammer, everything starts looking like a nail. We are committed to knowledge building, but we reject the standard idea.” For some time to come — both before and after next spring’s election — the halls of McKinsey will be reverberating worldwide with debate on such issues. And as choices are made, and the McKinsey of the next century begins to unfold, no one will be paying closer attention than the man who set it all in motion more than half a century ago: Marvin Bower. Normally, the history of a hoary institution like McKinsey resides in a body of mythology passed down by several generations, carefully sculpted to invoke the spirit of some legendary founder. But in McKinsey’s case, a quick trip to a retirement community in sunny Boca Raton, Florida, miraculously positions you face to face with the firm’s fountainhead. At age 90 — and still very clear-minded — firm patriarch Marvin Bower is the living, primary history of McKinsey & Co. And much of what McKinsey is today harks back to the early 1930s, when Bower — armed with both a law degree and an MBA from Harvard — signed on with a hard-selling lawyer/ CPA/University of Chicago management professor named James Oscar McKinsey. On their office door, ”Mac” McKinsey and his five partners — one of whom was A.T. ”Tom” Kearney — called themselves ”consultants and engineers,” but Bower remembers that in those days the firm mostly audited its clients’ books. Mac McKinsey, however, was keen on the emerging science of management, and — only a few years after he hired Bower and adopted him as his protege — McKinsey left the firm to accept a temporary position running and restructuring Marshall Field & Co. Marvin Bower stayed on and ran the New York office of the promising little consultancy until 1937, when McKinsey surprised everyone by dying of pneumonia at 48. In the aftermath, Bower and A.T. Kearney disagreed over how to run the firm. In 1939 the two finally split up, with Kearney keeping the Chicago office and eventually naming it for himself — A.T. Kearney & Co. — and Bower naming the New York firm for his departed mentor — McKinsey & Co. Like everything that Bower does, the tribute also had a practical purpose. ”I had seen the problems that having your name on the door caused Mac,” Bower says. ”A client would come in and say, ‘We assume Mr. McKinsey will be working on this study personally.’ I didn’t want anybody dictating to me how I was going to spend my time. So I had no interest in calling it Bower & Co., or even McKinsey-Bower. I wanted my freedom.” Bower’s ”big idea” — like most notions that create or transform entire industries — was simple, one he still articulates in a short sentence: ”My vision was to provide advice on managing to top executives and to do it with the professional standards of a leading law firm.” At a time when the image of management consulting was just barely above that of a racket, Bower, inspired by a brief stint at what is now the law firm of Jones Day Reavis & Pogue in his hometown of Cleveland, believed McKinsey could elevate it. Not unlike other great business culture builders — IBM founder Tom Watson or Wal-Mart’s Sam Walton, to name two — Bower laid down a short set of principles, which, when recited to outsiders, sound a bit like the Boy Scout Oath. But also like those other two titans, Bower pounded his principles home so hard, so often, so repetitively, that they actually did finally define the institution. It is from them that the holy water flows. In short, the rules are these: A McKinsey consultant is supposed to put the interests of his client ahead of increasing The Firm’s revenues; he should keep his mouth shut about his client’s affairs; he should tell the truth and not be afraid to challenge a client’s opinion; and he should only agree to perform work that he feels is both necessary and something McKinsey can do well. Along with the professional code, Bower insisted on professional, as opposed to business, language, which is why McKinsey is always The Firm, never the company; jobs are ”engagements”; and The Firm has a ”practice,” not a business. Just as IBM’s Watson had a thing for white shirts, Bower had one for hats, insisting that every McKinsey consultant wear one — except in San Francisco, where executives didn’t wear them. He also mandated that everyone wear long socks because he thought it inappropriate to show ”raw flesh” in business settings. ”Everyone kidded me about it,” he says, ”but they did it.” Incredibly, the hat rule lived until the mid-1960s, when the men from McKinsey made a nod toward flower power and declared a permanent state of hatlessness. They still wear long socks. Another fascinating Bowerism that has stuck at McKinsey is the cultural attitude toward the public discussion of money. It simply isn’t done. Even though those who knew him when describe Bower as among ”the most client- hungry consultants who ever lived,” he vigorously maintained — and still does today — that ”if we do the right work for the client, we’ll make more money if we don’t think about it.”

WHILE SOME maintain that supersalesman Bower’s anti-greed aphorisms always contained a certain amount of hypocrisy, he did perform one act in the history of The Firm that permanently set him — and McKinsey — apart from its competitors. In an era when other consultants were taking themselves public, or selling out to larger companies, McKinsey was basically Bower’s to sell, which he could easily have done at some huge multiple of earnings. Instead, around the time he turned 60, in 1963, Bower sold his shares back to The Firm for book value, setting an example for his partners to follow. It was a defining moment in The Firm’s culture. Bower still has strong opinions on several major issues facing today’s McKinsey. He agrees with those who say The Firm overrates the analytical and underrates the intuitive in its hiring. And he comes down squarely on the side of those who believe McKinsey must remain a self-governing partnership, going so far as to add: ”Business should move in our direction. Command and control is out of date because it doesn’t involve people, and you can’t run a business today unless all the people are involved in thinking about serving the customer.” Surprisingly, when asked to look back and describe which period in McKinsey’s history has worried him most, Bower replies, ”Now.” It is greed that he has on his mind. ”Have we grown too fast?” he asks. ”Have we begun to think too much about money because we’ve got so much coming in?” The danger, according to Bower, is this: ”People who make a lot of money get to thinking about having four homes to keep up, or maybe they want to buy a yacht. If an individual consultant has to make a professional decision on the spot and he has too many obligations, I worry that he is likely to make a decision to attract a client who shouldn’t be attracted.” Greed has had other consequences, according to some former McKinsey partners who left The Firm disenchanted. The seeds of internal discontent were sown in the early Eighties when, they say, McKinsey decided to make a big distinction between partners and directors. ”The message came in the early 1980s, when the directors all went off and partied with their wives, and the partners were sent stag to the Dutch coast for an all-training meeting,” says one former partner. ”They obviously decided that to keep that generation of directors around, they had to pay them more to keep up with Wall Street and corporate America. Those were the guys who built the firm that’s there today, and they’ve done a great job. But when they moved the carrot of director ahead a few years, a whole generation of younger partners left. And the younger partners who stayed weren’t necessarily the best.” These issues are exacerbated, ex-McKinseyites say, because the ratio of the highest paid to the lowest paid has risen from 20 to 1 in the past to 50 to 1 today. The top job — Gluck’s — is believed by most in the industry to pay around $3.5 million, with senior directors earning between $2 million to $2.5 million. A junior director earns in the neighborhood of $800,000 a year, and a junior partner around a quarter of a million. So far, McKinsey’s very lucrative economic engine has been driven by rapid growth. But competitors say The Firm has already realized that, with a revenue base now in excess of a billion dollars, it can hardly expect to keep tripling in size every decade. Its only choice, goes the argument they use when recruiting against McKinsey at the top B-schools, is to promote fewer partners and directors, thus making The Firm less attractive for up-and-coming young consultants.

Such talk makes Gluck furious. ”Even if our economics stay exactly the ; same, with no growth,” he says, ”the economic opportunity for any young partner entering The Firm today is better than it’s ever been before.” Jim Balloun, who is scheduled to make a speech at the upcoming directors’ conference on the future of The Firm, thinks the answer lies in hiring fewer associates to begin with. ”We already know our clients would like more contact with the partners. They’ve told us that,” he says. ”So why not reduce the ratio of associates to partner to 3 to 1 from 6 to 1?” Says another observer, who worked at McKinsey and two other consulting firms: ”I think the culture there is pretty fragile today. The question is whether the money is the mortar that holds the culture together, or vice versa.”

BY ALL appearances, McKinsey’s dilemma is just another classic management challenge, one that calls for rigorous analysis and has high stakes riding on the outcome. Rest assured of this: If the men from McKinsey can’t solve it, it won’t be because they can’t afford it, or because they haven’t had enough experience, or because they aren’t smart enough. It will be, more likely, because of what Marvin Bower has feared ever since he got into the consulting racket: because greed rears its ugly head.

 

KEY 2009 RANKINGS OF CONSULTING COMPANIES

http://www.vault.com/nr/consulting_rankings/consulting_rankings.jsp?consulting2009=2&ch_id=252

#1 – McKinsey

#2 – Boston Consulting Group

#3 – Bain & Company

#4 – Booz & Company

#5 – Monitor Group

#11 – Ernst & Young

#12 – AT Kearney

#15 – The Parthenon Group

June 2008

http://www.ameinfo.com/160055.html

UK Treasury Minister and Gulf keynote speakers to address international delegates at London conference

The 1st Annual World Islamic Banking Conference: European Summit (Euro WIBC 2008), which will be held at The Park Lane Sheraton in London on the 8th of July 2008.

Bahrain: Wednesday, June 11 – 2008 at 16:18

Kitty Ussher, Economic Secretary to HM Treasury, HE Rasheed M. Al Maraj, Governor of the Central Bank of Bahrain, Shaikh Mohammed bin Isa Al Khalifa, Chief Executive Officer of the Bahrain Economic Development Board, and Andrew Cahn, Chief Executive Officer of UK Trade & Investment, have been confirmed as Keynote Speakers to lead the Opening Plenary Session.

With all signs now indicating exciting growth potential for Islamic finance in Europe, Euro WIBC could not come at a more opportune time as the industry stands on the threshold of significant expansion.

UK Economic Secretary and City Minister Kitty Ussher MP, has just announced the Government’s response to the consultation on a sterling Sukuk issuance saying the government favored a ‘bill-like’ Sukuk programme which could be fully integrated with the conventional Treasury bill programme.

Speaking after chairing a meeting of the UK’s Islamic Finance Experts Group, Kitty Ussher emphasised the importance of the Islamic Finance sector to the city and the government’s commitment to its growth: ‘The Government is determined to maintain its momentum on work on Islamic finance and to make clear to stakeholders its commitment to this industry. As such, we want to reiterate our aim to publish a paper detailing the UK strategy on Islamic finance by the end of 2008. This paper would clarify the role of the Government in the development of this sector and importantly, the steps that industry will need to take to ensure that Islamic finance becomes one of the UK’s success stories.’

Britain has already licensed 5 Islamic banks, with Gatehouse Bank being the most recent; while other key European financial centers continue to develop opportunities for Islamic finance, including exciting initiatives in Germany, France, Italy and Belgium.

One of the speakers at the conference Baron Junaid Abbas Bhatti, an expert in Islamic Finance and head of Ballencrieff House, noted that mainstream acceptance of Islamic finance will increase as consumer desire for ethical product options increases: ‘Within five years time I can foresee Islamic Finance within Europe being marketed almost exclusively on its ethical merits. Holding an event of the magnitude of Euro WIBC in London clearly demonstrates that Europe is the most exciting growth market for Islamic financial services right now.’

Baron Bhatti will lead a discussion on the country focus session which will explore specific opportunities in key European Financial markets.

The participation of HE Rasheed M. Al Maraj and Shaikh Mohammed bin Isa Al Khalifa as Keynote speakers will also provide an opportunity to harness Bahrain’s expertise as a global hub for the Islamic banking and finance industry and there is much that can be learned from its world-class regulatory framework.

The event has the support of major industry players including Bahrain Economic Development Board, UK Trade & Investment, Ernst & Young, InfrasoftTech, CALYX, Al Rajhi Financial Services Co, ITS, Trowers & Hamlins, Moody’s Investors Services, UPS, Global Securities House, Locate in Birmingham, DDCAP, Bank of London and the Middle East, Path Solutions, Standard & Poor’s, International Financial Services, Securities & Investment Institute, and Advantage West Midland.

More than 400 international delegates are expected to attend the inaugural Euro WIBC in London on the 8th of July 2008.

July 2008

http://www.ameinfo.com/162260.html

Kuwait Finance House-Bahrain announced as Platinum partner of Euro WIBC

A major international conference, to be held in London on the 8th of July 2008, is bringing together the leading international players in this rapidly growing market under the theme of ‘Islamic Finance in Europe: Seizing the Growth Opportunity’.

Bahrain: Wednesday, July 02 – 2008 at 10:07

Significant developments in the UK and Europe augur well for the continued international expansion of Shari’ah-compliant finance.

The UK’s Treasury Minister, Kitty Ussher, one of the Keynote speakers at the forthcoming European Summit of the World Islamic Banking Conference (Euro WIBC), has recently outlined the UK Government’s response to the consultation on a Sterling Sukuk issuance saying the government favoured a ‘bill-like’ Sukuk programme, which could be fully integrated with the conventional Treasury bill programme. Industry observers have pinpointed this issue as a potential catalyst for the dynamic growth of Islamic finance in the UK and throughout Europe as a whole.

Attracting key decision-makers representing the international industry, Euro WIBC 2008 is delighted to announce Kuwait Finance House-Bahrain as the Platinum Strategic Partner. Established in October 2002 as the first fully-owned subsidiary of Kuwait Finance House, KFH-Bahrain brings to the market a compelling concept in Islamic Banking combining both Islamic investment banking and Islamic commercial banking facilities.

According to Abdulhakeem Alkhayyat, Managing Director and C.E.O.: ‘Islamic banking assets are currently estimated at $750bn in value and will top the $1 trillion mark by 2010. This continuous expansion is being driven by a global demand in Shari’ah compliant financial products, and services in which we continue to pioneer.’

Euro WIBC 2008 builds on the 15 years of success of the flagship World Islamic Banking Conference in Bahrain, and brings to London a high-profile speaker line to stimulate new insights into the drivers of Islamic finance in the European markets.

Associate Attorney Abdi Shayesteh from New York law firm, King & Spalding, notes that holding an event of this magnitude in the UK is of great significance as the global competition for Shari’ah-based capital reaches new heights. ‘Its presence in the UK capital signals a major shift in the West in the perception of Islamic Finance and Banking. I am delighted to be a part of this inaugural conference and I look forward to sharing my expertise in areas of corporate finance and bank regulatory matters relating to Islamic finance, emerging growth industries and international business transactions.’

Euro WIBC 2008 features a powerful opening keynote session which includes Kitty Ussher, Economic Secretary to HM Treasury, Shaikh Mohammed bin Isa Al Khalifa, Chief Executive Officer of the Bahrain Economic Development Board, HE Rasheed M. Al Maraj, Governor of the Central Bank of Bahrain, and Andrew Cahn, Chief Executive Officer of UK Trade & Investment.

More than 400 international delegates are expected to attend the inaugural Euro WIBC in London on the 8th of July 2008.

 

November 2008

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20081110_DonaldGipsLBN.jsp

Don Gips Named to Obama’s Transition Team Advisory Board

RER Wireless News

Monday, November 10, 2008

Don Gips (DCO, NYO 88-88, 89-93) has been appointed to U.S. President-Elect Barack Obama’s transition team advisory board.

Gips was previously Chief Domestic Policy Advisor to former Vice President Al Gore, and specialized in domestic and international technology and telecom issues. He is currently group VP for corporate strategy and development at Level 3 Communications. The company, headquartered in Colorado, operates one of the largest communications and Internet backbones in the world.

Gips also previously served as chief of the FCC’s International Bureau and was a consultant at McKinsey & Company.

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20081113_RogerFergusonLBN.jsp

Roger Ferguson Appointed to Obama’s Transition Economic Advisory Board

New York Times

Thursday, November 13, 2008

Roger Ferguson (FIR, NYO 84-97) has been appointed to U.S. President-Elect Barack Obama’s Transition Economic Advisory Board.

Obama has set up the board to advise him on the economic crisis.

Ferguson is the former Federal Reserve vice chairman (appointed to the board by Clinton, then Bush), and is currently President and CEO of TIAA-CREF.

Before joining TIAA-CREF, he was Chairman of Swiss Re America Holding Corporation.

Before joining Swiss Re, Ferguson served as vice chairman of the Board of Governors of the U.S. Federal Reserve System. He joined the Federal Reserve in 1997, and became Vice Chairman in 1999. He was a voting member of the Federal Open Market Committee, served as chairman of the Financial Stability Forum, and chaired Federal Reserve Board committees on banking supervision and regulation, payment system policy and reserve bank oversight. In 2001, Ferguson led the Federal Reserve’s immediate response to the terrorist attack on September 11.

Prior to joining the Federal Reserve Board, he was an Associate and Partner at McKinsey & Company from 1984 to 1997. From 1981 to 1984, he was an attorney at the New York City office of Davis Polk & Wardwell, where he worked on syndicated loans, public offerings, mergers and acquisitions, and new product development.

Other members of Obama’s Transition Economic Advisory Board include former Treasury secretaries Robert Rubin and Larry Summers, former Federal Reserve Chief Paul Volcker, Berkshire Hathaway’s Warren Buffet, Google’s Eric Schmidt, Time Warner’s Dick Parsons, Xerox’s Anne Mulcahy, former Securities and Exchange Commission chair William Donaldson and former SEC Commissioner Roel Campos.

________________________

Ferguson published an opinion piece in the November 13 Wall Street Journal about ways to approach retirement saving in America. IT IS A MUST READ

http://online.wsj.com/article/SB122654066818523161.html?mod=rss_opinion_main

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20081114_MichaelWarrenLBN.jsp

Michael Warren Named to Obama’s Treasury Department Transition Team

The Associated Press

Thursday, November 13, 2008

Michael Warren (DCO, FIR 97-99), a former Clinton White House official, has been named to U.S. President-Elect Barack Obama’s Treasury Department transition team.

Obama has put the team in place to oversee the new administration’s takeover of the Treasury Department as it manages the still-evolving $700 billion financial rescue plan.

Warren will lead the team along with Joshua Gotbaum, who worked in the Clinton administration as an assistant secretary of defense, an assistant secretary of Treasury and controller of the Office of Management and Budget.

Warren is a Rhodes Scholar, and is currently Chief Operating Officer and Managing Director of Stonebridge International LLC. He currently is on “partial leave” from the business, according to the Obama campaign.

Based in Washington, the company does a global business. Warren is responsible for the firm’s overall management, client service and business development.

He joined Stonebridge from Horne Engineering Services and was president of Appfluent Technologies, a software company. He also serves as chairman of the board of Ironbridge Systems, another technology company. Previously, Warren was with McKinsey & Company.

Warren has also previously served as executive director of the White House National Economic Council, created under former President Clinton to advise the president on global economic policy.

 

Susan Rice biography

By The Associated Press

Posted: 11/30/2008 07:34:35 PM PST

NAME—Susan Elizabeth Rice

BIRTH YEAR—1964

EXPERIENCE—Senior foreign policy adviser, Barack Obama presidential campaign, 2008; senior fellow in foreign policy, Brookings Institution, 2002-present; senior adviser for national security affairs, John F. Kerry presidential campaign, 2004; assistant secretary of state for African affairs, 1997-2001; special assistant to the president and senior director for African affairs, National Security Council, 1995-1997; director for international organizations and peacekeeping, National Security Council, 1993-1995; management consultant, McKinsey and Co., 1991-93.

EDUCATION—B.A., history, Stanford University, 1986; M.Phil., international relations, Oxford University, 1988; D.Phil., Oxford University, 1990.

FAMILY—Husband, Ian Cameron.

HELLO 15th Annual WIBC

http://www.ameinfo.com/176763.html

WIBC McKinsey Competitiveness Report 2008/09 to be launched at WIBC 2008

The 2008/09 WIBC McKinsey Competitiveness Report will be launched at the 15th Annual World Islamic Banking Conference (WIBC), which will be held from the 23rd – 25th November 2008 at the Gulf Hotel in Bahrain.

Bahrain: Monday, November 24 – 2008 at 10:22

Produced by McKinsey & Company, the Competitiveness Report highlights recent developments in Islamic finance, including growth and performance, provides analysis of key business segments such as Islamic Retail Banking, Sukuk (bonds), Takaful (Insurance) and Islamic Wealth Management, and offers a perspective on the challenges and opportunities facing the industry in the context of the current economic climate.

Some of the Islamic banking sector’s key structural advantages, such as less reliance on leverage, have ensured that the sector in 2008 has not been affected as adversely as its conventional banking counterpart in the financial crisis.

Nevertheless, there are some potential challenges facing Islamic banks in the short-term, including the lack of liquidity in global markets and some significant exposure in the industry to real estate and construction assets.

The report recommends that Islamic banks act to ensure sound liquidity and risk management; re-assess their growth strategies keeping in mind the diversification of revenues and the need for increasing focus on operational excellence and profitability; and re-think the core positioning of the industry and its contribution to the global financial ecosystem, translating this into further product innovation and differentiation.

The report has five chapters: 1) Recent Developments in the Islamic Financial Landscape, providing an overview, and then four chapters devoted to key business segments; 2) Islamic Retail Banking; 3) Sukuk; 4) Takaful and 5) Islamic Wealth Management.

http://www.ameinfo.com/176736.html

WIBC Competitiveness Report launched at 15th Annual WIBC briefing

The 2008/09 WIBC Competitiveness Report was launched today at the 15th Annual World Islamic Banking Conference (WIBC) Executive Briefing which was led by McKinsey partners from key international centres.

Bahrain: Sunday, November 23 – 2008 at 16:39

PRESS RELEASE

 

 

Mr. Ozgur Tanrikulu, Partner (Principal), McKinsey & Company.

The workshop, which took the form of a dynamic and interactive discussion of the strategic challenges facing the leadership of Islamic financial institutions, was led by Ozgur Tanrikulu, Partner, McKinsey & Company.

The report findings indicated that growth in the Islamic Banking seemed set on the path to strong growth and profitability, outperforming conventional banks in most of its core markets.

Other findings indicated that, contrary to the commonly held perception, Islamic banks have to some extent been affected by the global financial crisis, especially due to the inherent risks of Islamic finance such as a higher maturity mismatch than conventional banks and many players having significant exposure to real estate sector.

The impact of the financial crisis has, however, been lower in comparison to conventional banks. Islamic banks are less debt reliant and more dependent on customer deposits for liquidity, thus limiting their exposure to credit markets.

The Report highlighted three fronts that Islamic banks need to act upon: sound risk management, a rethinking of their positioning and value propositions, and more stringent management of growth of their top and bottom lines.

Results from the Competitiveness Report also showed that GCC retail banks are between the emerging and consolidated phases of development and are expected to grow and contribute 50% of GCC banking revenue by 2011.

The Report also indicated that Sukuk issuance has grown phenomenally across all markets, though this has recently ground to a halt across various countries, primarily as a result of the current financial crisis.

On Islamic wealth management, the report indicated that revenue margins in private wealth and asset management are higher in the GCC than in other regions.

The Report also stated that the world Takaful premium is still relatively small at $ 7.2bn in 2007 driven partly by under penetration in main Islamic finance markets in the P & C segment, as well as in the life segment.

Takaful operators are also generally less profitable and have demonstrated slower growth compared to their peers offering conventional insurance.

The Competitiveness Report will be further discussed during the Plenary Session of the 15th Annual World Islamic Banking Conference where more than 1000 industry leaders are expected to attend on the 24th November 2008 at the Gulf Hotel in Bahrain.

http://www.ameinfo.com/176925.html

15th WIBC jointly inaugurated by Central Bank of Bahrain and Monetary Authority of Singapore governors

H.E. Rasheed M. Al Maraj, Governor of The Central Bank of Bahrain, and H.E. Heng Swee Keat, Governor of the Monetary Authority of Singapore, jointly inaugurated the 15th Annual World Islamic Banking Conference (WIBC) at an impressive ceremony attended by more than 1000 international delegates from over 45 countries.

Bahrain: Tuesday, November 25 – 2008 at 11:16

PRESS RELEASE

 

 

H.E. Rasheed M. Al Maraj, Governor of The Central Bank of Bahrain, delivering a speech at the opening of the 15th Annual World Islamic Banking Conference (WIBC).

The conference enjoyed the support of regional and international government bodies including the Central Bank of Bahrain, Singapore Monetary Authority, UK Trade & Investment and the Bahrain Economic Development Board. In their opening addresses, the two Governors highlighted the significance of several key issues in maintaining stability in the Islamic finance industry of business diversity, liquidity management and sound corporate governance.

The 15th Annual WIBC started yesterday with workshops focusing on the WIBC McKinsey Competitiveness Report 2008, which examined the structural advantages and challenges being faced by Islamic banks in the current financial climate. Today’s inaugural Plenary Session’s discussion focused on International Perspectives on Creating an Effective Regulatory Framework. The session highlighted the importance of more proactive regulation to enable sustainable industry growth, as well as the regional and international initiatives being implemented at Government level to promote ongoing industry success.

The keynote plenary session focused on Tailoring Strategies for a Challenging Global Economic Environment, and featured prominent financial figures David Pace, Chief Financial Officer of Unicorn Investment Bank, Sohail Masood, Head of Islamic Banking, Samba Financial Group, and Eric Pittomvils, Director, European Business Development, Allianz Global Investors Europe GmbH.

A Crisis of Confidence was the topic of a parallel roundtable session by UKTI led by Jamie Bowden, British Ambassador to Bahrain; which focused on UK perspectives on the impact to the Islamic Financial Services sector. Speakers were Darko Hajdukovic, International Product Manager, London Stock Exchange, Khalifa Al Harmasi Al Hajeri, Head of Islamic Finance, HSBC Amanah Bahrain, Neil D. Miller, Global Head Islamic Finance, Norton Rose, Humphrey Percy, CEO, Bank of London and the Middle East (BLME) and Darshan Bijur, Director Islamic Finance Advisory, KPMG.

Other sessions at the first day of the conference were focused on Creating the Next Generation of Islamic Finance Solutions and Achieving Harmonistation of Shari’ah Rulings.

The first day of the conference ended on a high note with a closed-door strategy session where CEOs representing leading global Islamic financial institutions debated the WIBC McKinsey Competitiveness Report 2008 research findings, led by Ozgur Tanrikulu, Partner (Principal), McKinsey & Company.

Details of Conference Sessions and Speakers

Sameer Abdi, Partner-Head of Islamic Financial Services, Ernst & Young Bahrain chaired the session centered around creating the next generation of Islamic Finance solutions and product innovation as a key driver of industry growth: Speakers and panelists during this session were Yousif Khalaf, Chief Executive Officer, Ajman Bank, David Testa, Chief Executive Officer, Gatehouse Bank, Dr. Jamil A.K. El Jaroudi, Chief Executive Officer, Elaf Bank, Mohamed Hedi Mejai, Executive Director Direct Investment & Business Development, International Investment Bank (IIB),Nader Al-Khalili, Chief Investment Officer, Tharawat Investment House and Samir Safa, Business Development Manager-Islamic Banking, Misys.

The Shari’ah & Business Open Forum session on Achieving Harmonisation of Shari’ah Rulings was chaired by Abradat Kamalpour, Partner, Ashurst LLP. Panelist were Dr. Mohamed Elgari, Shari’ah Advisor & Professor of Islamic Economics, King Abdulaziz University ,Amar Meher, Senior Associate Allen & Overy LLP, Nadim Khan, Partner & Head of Islamic Finance ,Herbert Smith LLP, Dr. Aznan Hasan, Shari’ah Advisor & Assistant Professor, International Islamic University Malaysia and Dr. Mohammed Burhan Arbouna, Head of the Shari’ah Compliance Department, Seera Investment Bank.

http://www.ameinfo.com/176298.html

WIBC to highlight strategic challenges facing Islamic finance industry

This year’s WIBC McKinsey Competitiveness Report will also examine the structural advantages and potential challenges being faced by Islamic banks in the context of the global economic crisis.

Bahrain: Wednesday, November 19 – 2008 at 15:46

 

 

A groundbreaking original research project, conducted annually by McKinsey & Company, the report generates powerful new research insights into the Islamic banking industry and has over the past five years become an indispensable reference resource for industry decision-makers.

Ozgur Tanrikulu, Partner (Principal) at McKinsey & Company notes that the Competitiveness Report will highlight the recent developments in Islamic finance, including growth and performance, understanding the challenges and opportunities facing the industry in the context of the current global economic climate, and their implications on business models.

Speaking ahead of the 15th Anniversary of the World Islamic Banking Conference (WIBC 2008), Mr. Tanrikulu commented:

‘It has been another year of strong growth and performance for Islamic finance; yet, the question on everyone’s mind is whether the industry will be able to maintain its growth trend and be shielded from the financial turmoil that the world has been experiencing. No doubt that this year’s conference will witness a unique exchange of ideas on the prospects of the industry and the impact of the global events.’

 

He pointed out, ‘The Competitiveness Report will highlight as usual the recent developments in Islamic Finance, including growth and performance; it will also focus on understanding the challenges and opportunities facing the industry in the current context, and their implications on business models. In addition, we have conducted a deep dive into key business segments, including Sukuk, Takaful Islamic wealth management and asset management as well as GCC retail banking, where we discuss the trends, growth drivers as well as the characteristics of winning business models and offering.’

‘Most importantly what is unique this year is that we have met with a number of leaders of major financial institutions, both in GCC and Asia, and we will be sharing their perspectives on the industry in the Competitiveness Report,’ he concluded.

The launch of the 2008/09 Competitiveness Report at the WIBC Executive Briefing will be led by McKinsey partners from key international centres, and takes the form of a dynamic and interactive discussion of the strategic challenges facing the executive leadership of Islamic financial institutions.

More than 1,000 delegates from over 45 countries are expected to attend the 15th Anniversary WIBC, the world’s largest gathering of Islamic finance leaders.

http://www.ameinfo.com/177238.html

Islamic Banking Award winners recognised at 15th WIBC

The winners of the prestigious Islamic Banking Awards were recognised last evening at an impressive gala dinner ceremony as part of the 15th Annual World Islamic Banking Conference (WIBC 2008) held at the Gulf International Convention Centre, Kingdom of Bahrain.

Bahrain: Tuesday, November 25 – 2008 at 15:46

 

 

WIBC Award winners with Abdulrahman Al Baker Executive Director Financial Institution Supervision, CBB.

Six awards – based on select criteria assessed by the WIBC Awards Committee – were presented: two individual awards to Khalid Abdulla Janahi and Sheikh Saleh Kamel, and four corporate awards to Ernst &Young, Samba Financial Group, International Turnkey Systems Group and Kuwait Finance House – Bahrain.

Convened under the Patronage of HH The Prime Minister of the Kingdom of Bahrain and presented by Abdulrahman Al Baker Executive Director Financial Institution Supervision, of the Central Bank of Bahrain, the WIBC Awards are considered among the most prestigious in the world.

Islamic Banker of the Year went to Khalid Abdulla Janahi, CEO, Ithmaar Banking. The recipient of this prestigious award is selected by his industy peers, and the results are audited by Ernst & Young.

Industry Leadership Award was awarded to Sheikh Saleh Kamel, Chairman, Albaraka Banking Group, a key individual and industry pioneer who has demonstrated strong leadership qualities within the group and exerted a long-term and strategic impact on the Islamic banking and finance during decades of service.

Mr. Adnan Yousif, President & Chief Executive, Albaraka Banking Group accepted on behalf of Sheikh Saleh Kamel who sent his appreciation and said: ‘As one of the contributors to the growth of Islamic banking, I have seen the industry achieve significant success and develop from its early beginnings, and this recognition of my role in that growth is much appreciated. I was delighted to be keynote speaker at the very first World Islamic Banking Conference way back in 1994 and it is confirmation of the value of WIBC that today, 15 years later, the conference has grown to such stature as a global gathering of the industry’s leaders.’

The Leading Islamic Financial Services Provider Award went to Ernst & Young – Bahrain in recognition of their role as an advisory firm that has excelled in the key performance criteria, including excellence in leadership and overall strategic direction of their Islamic banking & finance business.

Sameer Abdi, the Ernst & Young’s Lead Partner for Islamic Advisory, headquartered in Bahrain, said: ‘Ernst & Young was the first of the ‘Big 4′ professional services firms to recognise Islamic finance, setting up a dedicated advisory group and contributing in so many ways to the growth of the industry. We have worked with regulators, wholesale banks, retail banks and other financial Islamic financial institutions in established, developing and nascent Islamic marketplaces. This award is a fitting tribute to the work of our dedicated group of Islamic finance professionals across the globe.’

The Institutional Excellence Award went to Samba Financial Group in recognition of excellence in key performance criteria, including leadership and overall strategic direction of their Islamic banking business. This award was accepted on behalf of Samba Group by Mr. Sohail Masood, Head of Islamic Banking.

Best Technology Solutions Provider, Islamic Banking Award went to International Turnkey Systems Group (ITS) for outstanding services as an IT firm that has excelled in leadership and overall strategic direction of their Islamic banking & finance business.

Khaled Faraj Alsaid, Managing Director & General Manager, ITS, said: ‘It is an honour to win this prestigious award, and we are proud of the Islamic Banking solutions that we develop which help our customers grow and access new markets. Rooted in our Islamic tradition and culture, we build solutions that for the first time allow financial organizations to define their Islamic instruments, products, workflow, documentations, approval cycle, based on their Sharia board’s concepts and approvals. We look forward to maintaining our leadership position in this field.’

Islamic Banking Retail Brand Award, given in collaboration with MTI Consulting, went to Kuwait Finance House – Bahrain for demonstrating the best performance in terms of growing retail banking, product development, branding, service and channel initiatives.

The ceremony was facilitated by Hisham Al Ayass, Senior Financial Markets Analyst & Presenter, CNBC Arabia News Channel and attracted international and regional industry leaders. More than 1,000 delegates from over 45 countries attended the 15th Anniversary WIBC, the world’s largest gathering of Islamic finance leaders.

http://www.ameinfo.com/175950.html

Industry expert argues for new generation financial system

Speaking ahead of the 15th Annual World Islamic Banking Conference (WIBC 2008), Toby Birch – the investment guru who predicted the global financial crisis, and who is a keynote speaker at the forthcoming conference – says there are opportunities for systemic change within the midst of the current global economic crisis.

Bahrain: Monday, November 17 – 2008 at 12:25

Mr. Birch argues that:

‘It will be the dawn of a new and better structure for the global financial markets if we all join together against a common enemy – a decaying old system that has become increasingly impractical in these current times.’

 

Drawing from historical experiences, according to Mr. Birch, will be a good place to start if the global financial system is to regain its feet, drawing on best practices from the several models:

‘We need an economic model that re-emphasises the positive elements of capitalism and a banking system that is symbiotic and not self-seeking. Fairness, balance and altruism in finance may sound Utopian or old-fashioned but we are in desperate need of some ancient acumen. The current global financial landscape needs not just an overhaul of the mechanisms but a thorough rethinking and a fundamental new generation remedy.’

 

On the issue of Islamic finance as an alternative, Mr. Birch agrees that:

‘Islamic mortgage holders pay rent rather than interest and banks match loans with deposits, charging fees rather than interest margin to pay for their services. The method may sound like semantics but there is a crucial difference: it avoids the creation of credit which is inflationary for the economy and ultimately self-destructive for the bank. In this form of finance there are no guarantees or deposit protection schemes but lending is far more responsible. Islamic banks are by default small, well capitalised and conservative. For many, a safe bank paying no interest may well be better than a bust one which offered 7%. To receive a return, savers may pool their money and participate in low risk schemes investing in communal projects.’

 

He added: ‘Though certain aspects of Islamic Finance, e.g. property funds, have also been affected by the crisis, albeit in a smaller scale, joint ventures and private equity (without enormous leverage) also appeal with their partnership approach which shares risk and reward’.

Toby Birch will address more than 1,000 delegates from over 45 countries attending the special edition 15th Anniversary of WIBC, the world’s largest gathering of Islamic finance leaders.

The conference will be held from the 23 to 25 November 2008 in Bahrain and promises vigorous debate amongst the assembled leaders of the industry on navigating through the rough waters of the current economic situation.

http://www.ameinfo.com/168851.html

15th anniversary WIBC brings UK Government delegation to the region

Recognising the trend towards globalisation of the burgeoning Islamic finance sector, a delegation from the British Government – representing key UK banks and institutions – will showcase their capabilities at the 15th Anniversary World Islamic Banking Conference (WIBC), to be held in Bahrain.

Bahrain: Tuesday, September 16 – 2008 at 13:24

The Islamic banking industry has increased in profile internationally since the inaugural hosting of the UK Pavilion at last year’s WIBC, seen with the hugely successful launch of the WIBC brand in London at the 1st Annual World Islamic Banking Conference (European Summit) in July of this year,

Hosted by UK Trade and Investment (UKTI), the trade and investment arm of the British government, the UK Pavilion will be a dynamic and interactive space where delegates can meet the leaders who are currently forging the UK’s role in Islamic banking.

Recognising the tremendous opportunities Islamic Financial Services have to offer, Andrew Cahn, the Chief Executive Officer of UKTI, said:

‘with an annual growth estimated at 15% over the next few years, Islamic finance’s role in the global market is becoming increasingly important. The World Islamic Banking Conference in Bahrain provides an excellent opportunity for UK and Islamic finance representatives to continue building strong partnerships that will create genuine, global opportunities for the long term development of this growing and increasingly important sector. Our ultimate goal is to make Islamic finance in Britain a global success.’

 

Comments from leading members of the UK delegation further build on the exciting prospects for Islamic finance on the international stage:

Stella Cox, Managing Director, DDCAP: ‘The UK Pavilion offers British firms engaged in Islamic financial services a unique platform to promote their products at an event that encompasses the widest audience of any Islamic financial services gathering globally.’

Sultan Choudhury, Commercial Director, Islamic Bank of Britain (IBB): ‘IBB is seen as the flagship of Islamic finance in Britain. We are delighted to be part of the UKTI pavilion at WIBC, proudly showcasing the excellence that the UK has achieved in Islamic Finance. We remain committed to creating further opportunities for both IBB and the UK through this event.’

Muneer Khan, Head of Islamic Finance, Simmons and Simmons: ‘Being involved with the UKTI at the WIBC conference provides Simmons & Simmons with the opportunity to showcase our unique Islamic finance team whilst promoting UK interests internationally. The UKTI is leading the way in the UK’s Islamic finance strategy and Simmons & Simmons are pleased to be playing a prominent role in implementing this strategy.’

Yacer Qureshi, Head of Islamic Financial Services, Braxxon: ‘The UK Pavilion at the WIBC is the perfect way for us to showcase our Islamic Financial Services at the pre-eminent annual global gathering of Islamic finance experts.’

The 15th Anniversary of the WIBC has already secured five powerhouse Platinum Strategic Partners: Samba Financial, Unicorn Investment Bank, Kuwait Finance House Bahrain, Allianz Global Investors, and Abu Dhabi Islamic Bank. The conference also enjoys the support of the Central Bank of Bahrain, and the Bahrain Economic Development Board. Additionally, a record-breaking number of partners, sponsors, and exhibitors from Islamic and non-Islamic financial institutions, legal firms, IT companies, and major global rating agencies have already confirmed their participation in the special 15th Anniversary of the conference.

This year’s conference will feature a host of new and value-added highlights that will set it apart from all other conferences – and also include the launch of the 5th edition of the WIBC McKinsey Competitiveness Report, the world’s only original research into the performance and key trends of Islamic banking worldwide.

More than 1,000 international delegates from 45 countries are expected to attend the special 15th Anniversary edition of the World Islamic Banking Conference in Bahrain from the 23rd to the 25th November 2008.

http://www.ameinfo.com/171465.html

GCC and Asian regulators join forces to address WIBC 2008 on managing risk in today’s turbulent markets

With the global financial markets continuing to experience significant turmoil, the 15th Annual World Islamic Banking Conference (WIBC) will offer a keen insight from industry insiders in order to give business leaders a better handle on effectively managing the crisis.

United Arab Emirates: Wednesday, October 15 – 2008 at 14:53

While many experts remain confident that the Islamic finance industry will continue to be a comparatively safe haven in this increasingly global storm, there is nevertheless a need to re-map priorities and key trends in the industry on an international basis.

H.E. Rasheed M. Al Maraj, Governor of the Central Bank of Bahrain and H.E. Heng Swee Keat, Governor of the Monetary Authority of Singapore will concentrate on these issues during their Keynote Addresses during the opening plenary session of the WIBC, which will be held from the 23rd – 25th November 2008 in Bahrain.

This session focuses on Perspectives on Creating an Effective Regulatory Framework in the Islamic Finance Industry, and will address managing the impact of the risks inherent in today’s turbulent markets, as well as regulatory frameworks that will enable sustainable industry growth.

In addition, Toby Birch, the author of ‘The Final Crash’, will deliver a Keynote Address on the 25th November. His book, which recently caused a major stir due to its foreshadowing of the current economic crisis, takes a strong line on the international financial markets. Toby has spent his career in the exclusive world of private banking and WIBC 2008 provides an opportunity to hear the unique opinions of this renowned author, not only into why the Islamic banking industry is seemingly exempt from the effects of the crisis which are impacting other global financial institutions, but also to explore innovative new lending structures.

Speaking ahead of the conference Abdulhakeem Alkhayyat, CEO & MD of Kuwait Finance House – Bahrain, said: ‘As a Platinum Partner of the 15th Annual World Islamic Banking Conference, Kuwait Finance House-Bahrain expresses its continued commitment by supporting such important occasions. WIBC aims to develop and strengthen the Islamic finance industry by making it competitive and a preferable choice for clients worldwide. The significance of WIBC is bolstered by the participation of more than 1,000 delegates representing decision-makers of the world’s leading Islamic financial institutions.’

The increasingly global footprint of Islamic finance is another critical focus of the 15th Annual World Islamic Banking Conference. The World comes to WIBC initiative will emphasise and exploring new and emerging geographies for Islamic banking; with insights into key developments in exciting markets including France, Singapore, Italy, Japan and the UK.

Singapore@WIBC, will feature a high-powered delegation of business and government leaders led by H.E. Heng Swee Keat, Governor of the Monetary Authority of Singapore, and the UK will in evidence at the UK pavilion, hosted by UKTI, the trade and investment arm of the British government.

Speaking about the Pavilion and the role of the UK government in the global growth of Islamic Banking, Humphrey Percy, CEO, Bank of London and The Middle East plc noted that: ‘The UK Government’s continued support, in combination with the City’s strength as the world leader in the financial services industry, demonstrates the growth of London as a major centre for Islamic Finance. The UKTI pavilion provides an opportunity for the City of London as well as the individual institutions to showcase their capabilities and expertise.’

More than 1,000 international delegates from 45 countries will attend the special 15th Anniversary edition of the World Islamic Banking Conference in Bahrain from the 23rd to the 25th of November 2008 make WIBC the world’s most important meeting place for the Islamic finance industry.

October 2000

http://www.menareport.com/en/business/111710/&searchWords=Injazat

First virtual Islamic bank takes shape in the Gulf Posted: 11-10-2000 , 02:00 GMT

The first virtual bank run on Islamic principles is being set up by a group of investors in the Gulf Arab states, the Gulf Finance House (GFH) announced Wednesday.

The web bank with paid up capital of 32.5 million dollars will be registered in Bahrain, pending approval from the archipelago’s central bank, the Bahrain Monetary Agency.

Esam Janahi, chief executive of BFH, a Bahrain-based investment bank, said the launch would be made before the end of the year.

“We are very clear about the concept and what we have to offer. We are not just another portal or dotcom site,” he said.

Among other investors are Qatar-based Sovereign International Co Ltd, the Injazat Technology Fund run from Jeddah, and the Shamil Bank of Bahrain.

According to experts, Islamic financial institutions have a total of 140 billion dollars invested in more than 40 countries. Those investments are growing annually by 15 to 20 percent.

Interest is banned under the Islamic banking system, as the religion forbids usury.

“Murabaha” is a classic practice of Islamic banking, under which a borrower has to pay an extra amount agreed in advance. This amount is regarded as a “reward” for the risk taken by the bank.

Islamic banks also take part in joint investments, sharing in the profits or the losses of a business venture. – (AFP)

© Agence France Presse 2000

© 2000 Mena Report (www.menareport.com)

January 2002

http://www.menareport.com/en/business/144770/&searchWords=Injazat

Injazat Technology Fund appoints CDC financial advisors Posted: 14-01-2002 , 02:00 GMT

The Dubai-based Communications Development Corporation (CDC) has been appointed as the financial advisor to the recently launched Injazat Technology Fund, according to a company press release. CDC’s role as financial and technical advisor is to provide due diligence on investments that are considered by the fund.

Specifically, CDC is required to review the business and financial models of companies considered for an investment by the fund, as well as determine a valuation of the target company.

Injazat is a $50 million technology venture capital fund, initiated by the Islamic Corporation for the Development of the Private Sector (ICD) and Gulf Finance House (GFH) in order to invest in compliance with Shari’a principles in IT, telecommunications and technology companies in the Middle East and North Africa (MENA) region. This is the first Islamic-structured fund in the technology sector in the region.

CDC is the Middle Eastern ownership related affiliate of Communications Equity Associates (CEA), which is a US-based investment and merchant bank, exclusively focused on the media, technology, telecommunications (TMT) and IT sectors. In its investment banking business, CEA operates through 14 global offices and has over the last 30 years served over 700 clients in 55 countries and has transacted businesses in excess of $23 billion.

In its merchant banking business, CEA manages nine private equity funds that are capitalized in excess of $800 million. CDC has since its inception in 1997 provided investment banking and corporate advisory services to its clients in the TMT sector in the MENA region and has been associated with several regional projects, including but not limited to the setting up of a pre-paid calling card company in Saudi Arabia, several investment evaluations in the IT and technology sectors, corporate advisory services for the establishment of a regional home shopping television channel and a pan Arab Arabic language satellite TV channel.

CDC has also provided strategic consulting services to a range of Middle Eastern based clients including Arabsat, who CDC advised on its migration from C band to Ku band. CDC also manages various private equity investments in the TMT sector on behalf of its Middle Eastern clients through its offshore fund management company CDC Capital Management. — (menareport.com)

© 2002 Mena Report (www.menareport.com)

 

June 2003

http://www.menareport.com/en/business/165025/&searchWords=Injazat

Injazat Technology Fund launches new strategy to target Middle East venture capital needs Posted: 22-06-2003 , 02:00 GMT

Injazat Technology Fund, one of the first and Islamic venture capital companies in the world, has launched assertive new strategies to target the venture capital requirements of the Middle East and North Africa region through financing deals that bring concrete benefits for the region that stretches from Morocco to Iran.

Motivated by its slogan ‘From the Region, For the Region,’ Injazat is targeting select professionally managed companies that have the potential to grow and expand either within and/or outside the region. This is expected to boost regional development of new technologies and solutions, generate high-level employment opportunities for local people and create solutions customized for the region. Injazat’s target industry sectors for investment include information technology, communications and entertainment.

Injazat Technology Fund is a $50 million venture capital fund that was initiated by the Islamic Corporation for the Development Sector, an affiliate of the Islamic Development Bank (IDB) and Gulf Finance House, in partnership with Dubai Islamic Bank, Saudi Economic Development Company and Iran Foreign Investment Corporation.

The IT companies open to financing from Injazat include those involved in software and hardware development, complex platform integrators, industry-specific solution providers and e-Commerce solution providers. In the field of media, Injazat targets companies specializing in content provision, production and media delivery. The communication companies being targeted are those focused on last mile solutions, basic services in emerging markets and complex network solution provider. — (menareport.com)

© 2003 Mena Report (www.menareport.com)

August 2003

http://www.menareport.com/en/business/166635/&searchWords=McKinsey

Corporate governance key to boosting investment climate in the Arab World Posted: 17-08-2003 , 02:00 GMT

The lack of corporate governance in businesses in the Arab World is one of the factors dampening the investor climate in the region, slowing the conversion of businesses into corporates and impeding access to foreign investments. This state of affairs is reflected in the Fortune 500 list, which features just one or two Arab companies, compared to several from the Asian and neighboring non-Arab countries.

Corporate governance has become a prime requisite for attracting foreign investors. According to the 2002 Global Investor Opinion Survey recently released by McKinsey and Company, nearly 63 percent of investors cited corporate governance as a major factor that would spur investment decisions. These investors were prepared to pay a premium on investment in companies demonstrating high governance standards.

Chief Executive Officer at Injazat Technology Fund Hussein Rifai said, “Arab family businesses need to be converted to business institutions, supported by high corporate governance standards, if Arab businesses are to find acceptance in the global investor community and capital markets.”

“Today’s corporate scenario demands a complete paradigm change in the attitude and mindset of business houses of the Arab World. It is only by applying globally accepted corporate governance standard in areas like separation of Board and management, elimination of conflict of interest, arms length business and transparency, can the Arab countries boost the investment climate in the region. For example, there should be a clear delineation between any company’s management and its board of directors. The board should confine itself to providing direction, contributing to business strategy and monitoring performance though proper guidelines and steer clear from getting involved in the company’s day-to-day management,” said Rifai.

Corporate governance provides the tools for migrating traditionally run businesses into professionally managed market-driven enterprises, enhancing competitiveness in the global market.

Corporate governance is a key barometer of a mature or maturing economy. It will enhance a company’s performance. The performance, boosted by increased investor confidence and triggered by the presence of competent professionals at the helm will facilitate the attraction of capital and ensure that the company command higher value. Accordingly, creditors will reduce the costs of capital, as the business risks will have diminished.

Injazat Technology Fund is a $50 million venture capital fund that was established by the Islamic Corporation for the Development of the Private Sector, an affiliate of the Islamic Development Bank (IDB) and Gulf Finance House, in partnership with Dubai Islamic Bank, Saudi Economic and Development Company and Iran Foreign Investment Corporation. — (menareport.com)

© 2003 Mena Report (www.menareport.com)

October 2003

http://www.menareport.com/en/business/168133/&searchWords=McKinsey

Lack of Venture Capitalists in MENA region may impede growth for IT sector Posted: 09-10-2003 , 02:00 GMT

The Middle East and North African (MENA) economy may be growing but the lack of Venture Capitalists (VC) dedicated to boosting the region’s local business community, especially in the emerging IT sector, is alarming, claim industry experts.

Venture Capitalists, the backbone of trade and commerce in most developed economies are conspicuous by their absence in the MENA region, leading experts to believe that this will impede growth in the IT sector.

Injazat Technology Fund intends to fill this gap through an aggressive campaign to partner local business houses, in their growth and expansion plans.

“The venture capital market is still in its infancy in the MENA region. In contrast with western economies, where established companies have a wide choice of VCs to fund their growth plans, the MENA region is severely lacking in VC infrastructure,” said leading financial expert and Chief Executive Officer at Injazat Technology Fund, Hussein Rifai.

“Local IT companies find themselves relying on banking institutions to back their ventures, which are regulated by severe conditions and guarantees, and complex decision-making processes, which may not suit the dynamic nature of the digital industry,” added Rifai.

“This problem is compounded by local business themselves, who are reluctant to adapt from the family-owned system to an external professionally managed system. For companies looking at entry or expansion in the international markets, this could spell doom. According to the 2002 Global Investor Opinion Survey recently released by McKinsey and Company, nearly 63 percent of investors have cited corporate governance as a key factor while making investment decisions. Thus, the negligible presence of VCs in the region will work against the government’s drive to attract international investors”, said Rifai.

Injazat Technology Fund is currently working with leading local entrepreneurs to create examples of how VCs can enhance a company’s operations and profitability. By building a convergence between venture capital and Islamic finance, that is, getting a return on the money invested by taking a stake in the business, Injazat intends to leverage the MENA region’s growth plans. Injazat is one of the few VCs to provide a financing model based on Islamic principles, which blend profit motive with social responsibility and commitment to regional development.

Injazat Technology Fund has recently announced an open invitation to entrepreneurs in the region to present their business plans for consultation and funding of selected candidates. Selected applicants will be asked to deliver a twenty-minute presentation, on October 18, 2003, during Gitex Dubai 2003, at the Fairmont Hotel. — (menareport.com)

© 2003 Mena Report (www.menareport.com)

December 2003

http://www.menareport.com/en/business/170145/&searchWords=Injazat

Injazat Fund invests $5 million in Omnix International Posted: 18-12-2003 , 02:00 GMT

Middle East venture capital firm Injazat Technology Fund has invested five million dollars against 31 percent shareholding in Omnix International to further strengthen its new digital media solutions venture, Omnix Media Networks (OMN).

OMN’s projected return on investment exceeds $40 million in the first year of operations. The company will focus on providing turnkey Information Technology and Audiovisual solutions for hospitality, government and enterprise businesses in the Middle East. It will have its headquarters in Dubai Media City, United Arab Emirates (UAE), and affiliate offices in Canada and across the Middle East.

Omnix International is active in the design, integration and maintenance of integrated technology systems, providing solutions and services. The company provides its customers specialized turnkey solutions in document management, professional audio-visual, financial amd performance management, content management and process automation, geographic information systems (GIS), Internet-based application, virtual reality and visualization.

Injazat Technology Fund is a $50 million Venture Capital Fund operating in compliance with Shari’a principles and targeting technology companies within the Middle East and North African (MENA) region. The Fund was initiated by the Islamic Corporation for the Development of the Private Sector (ICD), an affiliate of the Islamic Development Bank (IDB), by Gulf Finance House (GFH), in partnership with Dubai Islamic Bank, Saudi Economic and Development Company (SEDCO) and Iran Foreign Investment Corporation (IFIC). — (menareport.com)

© 2003 Mena Report (www.menareport.com)

2004 – Competitiveness Report…WIBC & McKinsey Unite – 11th annual WIBC

 

http://www.megaevents.net/wibcold/2004/executive_summary.htm

The WIBC Competitiveness Report

In collaboration with

McKinsey & Company

Quantitative and Qualitative Research & Analysis focusing on the key indicators of competitive performance excellence in Islamic Financial Institutions in collaboration with the leading global advisory firm McKinsey & Company:

Section A: A comparative quantitative analysis of the financial Key Performance Indicators of the world’s leading Islamic Financial Institutions: Profitability & Asset Quality; Liquidity; Capital Adequacy

Section B: A qualitative study of the strategies employed by the Chairmen, CEOs and executive leadership of the world’s leading Islamic Financial Institutions

Section C: A comparative assessment of the correlation between performance and strategy.

Companies to be Analyzed:

Al Rajhi Banking Corporation

Kuwait Finance House

Dubai Islamic Bank

Shamil Bank

Qatar Islamic Bank

Al Amin Bank

Jordan Islamic Bank

Abu Dhabi Islamic Bank

Bank Islam-Malaysia

This report will be made available during the conference to Strategic Partners and all registered conference participants only.

Conference Highlights

Pre-Conference Workshops

Executive Briefing on the WIBC Competitiveness Report

Key Issues Workshop: Takaful

The above two workshops will be held concurrently on 11 Dec 2004

Conference Sessions

Inauguration & Official Opening

The Governors’ Table

6 Plenary Sessions – Please view programme page for details

The WIBC McKinsey CEO Strategy Session

The WIBC 2004 PowerTable

Networking Functions

Gala Dinner & International Industry Awards Ceremony on the evening of 12 Dec 2004

Coffee Breaks & Conference Luncheons on all days of the event ; 11, 12 & 13 Dec 2004

The World Islamic Banking Exhibition:

Also featuring IT for Improved Efficiency in Islamic Banking & Finance Pavilion.

On both days of the conference ; 12 & 13 Dec 2004. Open exclusively to WIBC participants.

Speakers

The distinguished faculty of speakers and panelists features Governors of central banks, Leaders of international and regional institutions and Visionaries from the banking & finance industry, including:

HE Shaikh Ahmed Bin Mohammed Al Khalifa, Governor, Bahrain Monetary Agency

HE Abdul Hassan Saif, Minister of Finance & National Economy, Kingdom of Bahrain

HE Abdullah bin Khalid Al Attiyah, Governor, Qatar Central Bank

Dr. Sinan Al Shabibi, Governor, Central Bank of Iraq

John Palmer, Deputy Managing Director: Prudential Supervision, The Monetary Authority of Singapore

Dr. Ahmad Mohamed Ali, President, Islamic Development Bank

Alistair Clark, Advisor To The Governor, Bank Of England

Durmus Yilmaz, Board Member, Central Bank Of The Republic Of Turkey

Mohamad Toufic Kanafani, Chief Executive Officer, Noriba

Abdulrazak. Elkhraijy, Head of Islamic banking Division, National Commercial Bank

Dr. Fuad Al Omar, Chairman, Gulf Finance House

Dr. James Zogby, Founder And President, Arab American Institute

Esam Janahi, Chief Executive Officer, Gulf Finance House And Chairman of Bahrain Financial Harbour

Tirad Mahmoud, Head Of Corporate and Investment Banking, Samba Financial Group

Leo Puri, Principal, McKinsey & Company

Ebrahim H. Ebrahim, General Manager, Gulf Finance House

Ismail Dadabhoy, Head Of Institutional Banking, Noriba

Ahmed Al Sabbagh, General Manager, Islamic Insurance Jordan

Dr. Said Sa’ad Al-Martan, Chief Executive, Shamil Bank

Khalid Janahi, Group Chief Executive, Dar Al-Maal Al-Islami, & Chairman, First Leasing Bank

Sameer Al Wazzan, General Manager: Takaful & ReTakaful, Solidarity

Nasr-Eddine Benaissa, Associate Principal, McKinsey & Company

Dr. Taha Eltyaeb Ahmed, Head Of Islamic Finance, Bahrain Institute Of Banking And Finance

Ahmed Adil, Partner, Islamic Financial Services Group, Ernst & Young, Bahrain

Robert King, General Manager: Assurance / Family Takaful, Solidarity

Ahmad Tayara, Head Of Investment Banking, Shamil Bank

Anwar Al Saadah, Head Of Insurance Sector, Bahrain Monetary Agency

Sheikh Nizam Yaquby, Sharia Scholar

Dr. Omar Murwan Kamal, Islamic Financial Services Group, Ernst & Young

Mohammed Paracha, Norton Rose

Jihad Al Khazen, Director, Al Hayat

Salman Khalid Butt, Investment Banking Head, Samba Financial Group

Eric Meyer, President and CEO, Shariah Funds Inc.

Hossam Y. Radwan, Executive Director, Investment Management Division, Goldman Sachs International

Diego Parilla, Executive Director: Fixed Income, Currencies and Commodities, Goldman Sachs International

Muneer Faisal Khan, Associate, Norton Rose

Sheikh Abdul Mohsen Al Asfoor, Member of the Shariah Board, Takaful International

Anthony Travis, Senior Partner, Pricewaterhouse Coopers

Paul Dodd, Senior Manager: Core Retail Solutions, Misys Retail Banking

Ms Elizabeth Roberts, Director, Financial Stability Institute, BIS

Dr. Michael Wiegand, Associate, McKinsey & Company

Stephanie Hauser, Associate, McKinsey & Company

About Bahrain

Frequently called the ‘Pearl of the Arabian Gulf ‘, Bahrain has a history of more than 5,000 years of civilisation, from the mists of time to a vibrant present, under a stable and prosperous government.

In terms of size, Bahrain plays host to nearly 200 financial institutions and more than 100 insurance companies. The financial sector represents a unique blend of local, regional and international names, and offers a diversity of financial services, products and activities.

The strength of the financial sector in Bahrain is drawn from the competency of the Bahrain Monetary Agency (BMA). The BMA is responsible for the licensing, supervision and regulation of banks and financial institutions.

Bahrain has also reaffirmed itself as the hub of Islamic Banking and Finance with the establishment of the General Council for Islamic Banks and Financial Institutions (GCIBFI), the International Islamic Financial Market (IIFM), the Liquidity Management Center (LMC), the Accounting & Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the Islamic Credit Rating Agency (ICRA).

 

January 2004

http://www.menareport.com/en/business/171071/&searchWords=Injazat

Injazat Technology Fund invests in Jordan’s Specialized Technical Services Posted: 19-01-2004 , 02:00 GMT

Injazat Technology Fund, a venture capital firm in the Middle East North Africa Region (MENA) region, has invested in Jordan’s Specialized Technical Services (STS).

STS is a provider of enterprise level hardware, software services and solutions for the MENA region. Established in 1989, the company has forged partnerships with industry leading companies like Microsoft, Dell, Sun, IBM, Cisco and Hypercom.

Injazat Technology Fund is a $50 million Venture Capital Fund operating in compliance with Shari’a. The Fund was initiated by the Islamic Corporation for the Development of the Private Sector (ICD) and affiliate of the Islamic Development Bank (IDB) and Gulf Finance House (GFH), in partnership with Dubai Islamic Bank, Saudi Economic and Development Company (SEDCO) and Iran Foreign Investment Corporation (IFIC). — (menareport.com)

February 2004

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20040202_Richard_Ashley.jsp

Abbott Laboratories Names Richard Ashley (72-03 CHI) Executive Vice President, Corporate Development

PR Newswire

Monday, February 02, 2004

ya kiyaRichard Ashley (72-03 CHI), a former Director with McKinsey & Company’s Chicago office, has been named the new Executive Vice President of Corporate Development for Abbott Laboratories. Ashley will be responsible for many aspects of corporate strategic planning and business development.

While at McKinsey, Ashley was the Managing Partner of the Chicago office and also served as head of the Firm’s Global Leadership and Organization Practice. He served clients on issues surrounding corporate strategy, organization, and governance. He received both his bachelor’s degree and master’s degree in business administration from Northwestern University and also has a J.D. degree from the University of Wisconsin Law School.

Abbott Laboratories is a global health care company which develops, manufactures and markets pharmaceutical, medical and nutritional products. The company is based outside of Chicago in Abbott Park, IL.

 

 

March 2004

http://www.menareport.com/en/business/173009/&searchWords=Injazat

Injazat Technology Fund invests $5 million in Egypt’s Raya Holding Posted: 30-03-2004 , 02:00 GMT

Injazat Technology Fund, a venture capital firm in the Middle East North Africa (MENA) region, has announced its investment of five million dollars in Raya Holding, the largest IT holding company in Egypt.

Raya was chosen due to the outstanding achievements in the Egyptian and Regional market and the significant growth of its revenue from 88 million Egyptian pounds ($14 million) in 1998 to EP 757 million by end of 2003, as a result of winning numerous national and regional projects, in addition to call center outsourcing

Injazat Technology Fund is a $50 million venture capital company that was established with one major objective: to identify and invest in companies which have contributed significantly to the growth and development of the IT and technology sector in the region. The Fund has therefore announced its commitment to investing in Egypt, where it feels there has been tangible progress in the economic condition, and where governmental initiatives

have been steadfast on attracting foreign investors. — (menareport.com)

© 2004 Mena Report (www.menareport.com)

September 2004

http://business.maktoob.com/News-20040920163123-McKinsey_to_research_performance_of_leading_Islamic_Financial_Institutions.aspx

McKinsey to research performance of leading Islamic Financial Institutions

Mon, 20 Sep 2004 04:22 PM

This year Bahrain will see the launch of the world’s first research-led programme that quantitatively assesses the performance of key Islamic banks and provides a comparative analysis of the correlation between strategy and actual performance.

A collaboration between the leading international strategy consultancy, McKinsey & Company and the World Islamic Banking Conference, The WIBC McKinsey Competitiveness Report will be launched at this year’s conference in Bahrain and will be a groundbreaking initiative designed to not only identify but also to raise the bar of financial performance and strategic excellence in the industry.

“The norm is that Islamic banks are held as profitable and rapidly growing with excess liquidity and low cost of funds, idle capital and are more risky than conventional banks – but there is little research evidence to substantiate these claims,” explained David McLean, Executive Director of the World Islamic Banking Conference. “We wanted to find out how true these statements actually were, and hence our partnership with McKinsey.”

The World Islamic Banking Conference enters its second decade this year and the competitiveness report is a new feature of the event that is being held in the Kingdom of Bahrain on December 11–13, 2004.

Unlike conventional banking, currently there is not much original research available to make meaningful assertions regarding the competitive performance of Islamic financial institutions. To address this, the WIBC McKinsey Competitiveness Report will focus on analysing key performance indicators such as profitability, liquidity and asset quality and link this quantitative analysis to the strategies employed by the leading institutions in the sector.

Nasr-Eddine Benaissa, Associate Principal at McKinsey & Company notes that: “The WIBC McKinsey Competitiveness Report will provide valuable insight into the performance of the world’s leading Islamic financial institutions and the Report’s objective is to help improve performance in an increasingly competitive market.”

An executive briefing on the WIBC Competitiveness report will be held as part of a pre WIBC conference workshop on December 11 at the Gulf International Convention & Exhibition Centre. In addition, a special by-invitation-only session titled CEO Strategy Table facilitated by Mckinsey & Company will be conducted on December 12 where CEOs representing leading Islamic financial institutions in the world will debate the findings of the report.

 

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20040906_Helal_Al_Marri.jsp

Helal Al Marri (00-04 DBI) Named Director General of Dubai World Trade Center

Organisation of Asia-Pacific News

Monday, September 06, 2004

Helal Saeed Khalfan Al Marri (00-04 DBI) has been appointed the director general of the Dubai World Trade Center. Al Marri was previously a consultant with McKinsey & Company. He earned his M.B.A. from the London Business School

December 2004

http://www.bma.gov.bh/cmsrule/index.jsp?print=true&action=article&ID=1325

International Islamic Conference Tackles Global Growth Issues 12-12-2004

The World Islamic Banking Conference, a premier gathering of leading figures from the Islamic finance industry, opened today. Delegates and speakers from as far afield as Europe, Africa, Malaysia and the Middle East came together to consider and debate crucial issues under the umbrella theme for this year’s conference – “Improving Performance & Ensuring Sustainable Growth in an Increasingly Competitive Global Market”.

HE Shaikh Ahmed Bin Mohammed Al Khalifa, Governor, Bahrain Monetary Agency welcomed more than 500 participants at a grand opening ceremony today at the Gulf International Convention and Exhibition Centre in Bahrain.

HE Shaikh Ahmed Bin Mohammed Al Khalifa, Governor, Bahrain Monetary Agency said “Held under the patronage of HH Shaikh Khalifa Bin Salman Al Khalifa, the Prime Minister, the 11th Annual World Islamic Banking Conference has been the most successful yet. It has raised the bar on the level of debate in the industry, with key decision-makers from major international institutions actively engaging on the issues that matter.

“Against a backdrop of dynamic change and exciting new developments, delegates addressed how current growth rates can be sustained and how the challenges of global competition can be managed. The Bahrain Monetary Agency is delighted that such high-level debate is contributing to creating a framework for Islamic banking and finance to thrive. I’d like to thank HH the Prime Minister for his patronage of this event and for his support in this important initiative,” he added.

HE Shaikh Ahmed Bin Mohammed Al Khalifa led the discussions at the inaugural Governor’s Table session entitled “Regulation, Supervision & Innovation: Creating a Framework for Islamic Banking & Finance to Thrive.” The other panelists were Alistair Clark, Advisor to the Governor, Bank of England; John Palmer, Deputy Managing Director, The Monetary Authority of Singapore and Durmus Yilmaz, Board Member, Central Bank of the Republic of Turkey. Tim Sebastian, presenter of BBC HARDtalk, moderated the session.

The much anticipated WIBC Competitiveness Report was launched at pre conference workshops on Saturday and was well received by participants. The report is the world’s first research-led programme that quantitatively assesses the performance of key Islamic banks and provides a comparative analysis of the correlation between strategy and actual performance.

It was produced in collaboration with the leading international strategy consultancy, McKinsey & Company. Currently there is not much original research available to make meaningful assertions regarding the competitive performance of Islamic financial institutions. The WIBC McKinsey Competitiveness Report addresses this gap and analyses key performance indicators such as profitability, liquidity and asset quality and link this quantitative analysis to the strategies employed by the leading institutions in the sector.

The report also goes beyond the financial ratios to investigate the underlying drivers of performance and the challenges Islamic banks will face.

A second pre-conference workshop also concluded on Saturday and addressed the dynamics of General Takaful, Re-Takaful, and Family Takaful markets.

Speakers and panellists are attending from Pricewaterhouse Coopers, McKinsey & Company, Goldman Sachs International, Bahrain Monetary Agency, Dar Al-Maal Al-Islami, Shariah Funds Inc, Takaful International, First Leasing Bank, Noriba Bank, National Commercial Bank, Bahrain Financial Harbour,

SAMBA Financial Group, Shamil Bank, Ernst & Young, Misys Retail Banking and Norton Rose to address the delegates during the conference.

The conference features seven other interesting sessions on the subject of Improving Performance & Ensuring Sustainable Growth for Islamic Banks & Financial Institutions in an Increasingly Competitive Global Market, The Islamic Financing of Complex Transactions, Innovations in the Islamic Financial Industry: Assessing Growth Opportunities in New Products & Markets, International Media Perceptions of the Islamic Banking & Finance Industry, Assessing the Latest Developments in Islamic Capital Markets: Emerging Trends in Sukuk & Key Financial Instruments, Global Risk Management & Governance: Tackling the Unique Risks Facing Islamic Banks and State of the Industry: Performance, Growth & the Way Forward.

Four awards are presented during the conference. The first – one of the most prized awards in the industry – the Islamic Banker of the Year is announced during the gala dinner and awards ceremony. The other three Awards presented during the two day conference are Outstanding Contribution to Islamic Banking & Finance Award and The WIBC Recognition Award and the Institutional Excellence Award.

Day two proceedings will start with the session on “International Media Perceptions of the Islamic Banking & Finance Industry” when Dr. James Zogby from the Arab American Institute and Khaled Almaeena from Arab News will address the participants on this interesting topic.

The conference concludes with the popular Power Table session, an interactive round table discussion group.

The Strategic Partners & Associates of the conference include Multilateral Partner Islamic Development Bank; Platinum Strategic Partners Noriba, Bahrain Financial Harbour and National Commercial bank; Capital Markets Partner Samba; PowerTable HostGulf Finance House; Gold Strategic Partners Ernst & Young, Solidarity and Kuwait Finance House; Gala Dinner Host & Awards Sponsor Shamil Bank; Silver Strategic Partners Misys and Al Amin Bank; Networking Sponsor Oasis ;Lanyard Sponsors Maybank and Networking Associate Guidance Financial group .

The World Islamic Banking exhibition, running alongside the conference also opened today. Exhibitors include Khaleej Finance, Norton Rose, Plutus Systems, Path Soultions, Future Applied Computer Technology, International Turnkey Systems, ILM, Bahrain World Trade Centre, Bahrain Institute of Banking & Finance and General Council for Islamic Banks and Financial Institutions.

The conference has attracted media support from across the globe. The media partners for the event are the Financial Times and Banker Middle East, while the online information partner is ABQ Zawya. The broadcast Media Associate is CNBC Arabiya and media associates of the event include Arab Banker, Arab Banking & Finance, Arabies Trends, Economist Intelligence Unit, Khaleej Times, MEES, Middle East Monitor, Moneyworks, Saneoualhadath, Investors magazine, Islamic Banking & Finance magazine, Middle East in London and IFIS (Islamic Finance Information Service).

 

March 2005

http://www.menareport.com/en/business/181581/&searchWords=McKinsey

Middle East exports of plastics to cross 40 million tons Posted: 20-03-2005 , 14:24 GMT

The Middle East is set to emerge as the world’s largest producer and exporter of petrochemicals and plastics in 2005 – a striking trend that will be confirmed at the forthcoming ArabPlast 2005 – the Middle East’s premier trade show for rubber plastics and plastic packaging, set to commence on March 20 and will go on until March 23, 2005, at the Dubai International Exhibition Centre (DIEC).

The production of plastics in the Middle East is estimated to be growing faster than any other region in the world, with exports expected to cross 40 million tonnes by the end of 2005. The seventh edition of ArabPlast 2005 will discuss opportunities and challenges and focus on strategies for this dynamic and growing market.

Highlighting the significance of ArabPlast 2005 to the global plastic industry, Mr. Satish Khanna, General Manager, Al Fajer Information & Services, organisers of the show, said: “The petrochemical and downstream plastics industry in the Middle East has grown substantially over the past few years, encouraged by its close proximity to competitive feedstock, which gives it an edge over other regions. The abundance of natural gas as feedstock in the Middle East, combined with its world-class export infrastructure and logistics, makes it the best choice for investments in the sector.”

“The region holds tremendous growth potential and is thus gaining considerable global interest. Technological advances and new trends are constantly altering the dynamics of this market. ArabPlast 2005 aims to address these issues and delve further into the prospects of this market,” he said at a press conference on the eve of the show.

The plastics industry in the Middle East is constantly evolving, given new initiatives and expansions of projects by regional governments, aimed at diversifying economies. The region, today, is the world’s largest exporter, offloading almost 80 per cent of its output to international markets. Additionally, huge volumes of imports are re-exported and distributed, Mr Khanna added.

Industry experts converging at ArabPlast 2005 will assess the demand for plastics, the consumption of which is rising due to increased usage by the consumer durable, engineering, construction and pharmaceutical industries. The plastics industry is claiming a major chunk of investments in the Middle East’s manufacturing sector, given its phenomenal growth in the region.

The show will see experts, analysts and top executives of leading global petrochemical giants converging at DIEC. As a prelude to the show, a summit will be held at the DIEC and the summit will also be addressed by top officials of McKinsey, ExxonMobil Chemical Middle East, Africa and South Asia, among others.

Al Fajer has tied up with Germany’s leading exhibition organiser Messe Dusseldorf GmbH for ArabPlast 2005. The partnership has elevated the profile of the show in the global markets, particularly in Europe & North America.

Mr. Khanna said he expected the 2005 edition to post a healthy growth in business deals as compared to the previous show. The last edition of ArabPlast in 2003 had closed with deals worth US$271 million.

The exhibition will see the participation of leading manufacturers of raw materials including ExxonMobil, Qatar Petrochemicals, Astra Polymers, Clariant, Borougue, EnerPlastics, Reliance Petrochemicals and Iran Petrochemicals. Other big players include Reifenhauser, Krauss Mafeii, Battenfeld Injection and Kampf of Germany, Piovani, Beilloni and Borghi of Italy and Cincinnati, Technoplast, Starlinger and Theyson of Austria.

Interestingly, the show, this year, feature China among its three new entrants, the other two being Spain and Malaysia. Around 450 companies are expected to take part from 40 countries, the leading groups include Germany, Italy, India, China, Korea, Turkey, Malaysia and Taiwan. The exhibition will comprise of 15 pavilions, covering a total of nearly 14,000 square metres. The country pavilions will include those of Germany, Austria, Italy, Spain, India, Korea, Malaysia and Turkey, Cheque Republic and Taiwan.

Participants from the Middle East include SPT Middle East, Emirates National Plastics, Precision Dies, Unipack, Modern Plastics, United Motors and Oman Polypropylene amongst several others.

ArabPlast 2005 will showcase products and technologies of new entrants who wish to penetrate regional markets. It will also display the latest technology in injection moulding, blow moulding and plastic processing. Raw materials for plastics such as masterbatches, additives and polymers.

The display will cover a wide spectrum of plastic machinery, plastic/rubber processing technology, pre and post-processing systems, plastic packaging technology, injection moulding, blow moulding, wrapping technology, extrusions, chemicals and additives, semi finished goods, engineering plastics, plastic products and many more.

Country and industry associations such as the VDMA (Germany, Austria Economic Chamber (Austria), ANAIP (Spain), Assocomoplast (Italy), KPPMIC (Korea) and AIPMA (India) have extended their full cooperation to ArabPlast 2005.

© 2005 Mena Report (www.menareport.com)

 

April 2005

http://www.menareport.com/en/business/182312/&searchWords=McKinsey

Arab Plast 2005 records business deals worth US$396 million

 

 

Posted: 10-04-2005 , 09:50 GMT

 

Arab Plast 2005 – the Middle East’s premier trade show for rubber, plastics and plastic processing, which concluded recently at the Dubai International Exhibition Centre (DIEC), recorded business deals worth US$396 million, up 46 per cent compared to US$271 million in the last edition in 2003.

Announcing the robust results, Al Fajer Information & Services, organisers of the show, said the record success of the seventh edition of ArabPlast this year is a strong and direct indication of the rising potential of the Middle East’s rubber and plastics industry and the increasing contribution of this sector to regional economies.

Commenting on the overwhelming response to the show, Mr. Satish Khanna, General Manager, Al Fajer Information & Services, said, “The Middle East is witnessing an expansion in both production capacities as well as consumption levels. Besides, it is the world’s largest exporter, offloading 80 per cent of its output to international markets. Arab Plast 2005 showcased the latest technologies and traced market trends of this burgeoning industry. The spectacular response to the 2005 edition was a clear indication of growing international interest in the Middle East’s plastics industry.”

He said ArabPlast 2005 held from March 20-23, was attended by 9,657 industry professionals from 58 countries as compared to 6,542 visitors from 18 countries in its 2003 edition.

Exhibitors showcasing their latest technology in plastic manufacturing at the fair said the Middle East held tremendous potential for industrial machinery given the rapid expansion of, and huge investments in, its manufacturing sector.

The largest group of exhibitors was from Austria, China, Germany, Italy, India, Korea Taiwan and UAE. The official German group, whose participation was the largest in ArabPlast, was led by the German Ministry (AUMA).

Besides the vibrant market potential, the strong European presence at Arabplast was also due to the fact that, Messe Dusseldorf, – organisers of the world number 1 plastics fair, K — amassed their expertise in bringing such an impressive display of European exhibitors. Both Al Fajer of Dubai & Messe Dusseldorf of Germany are having joint partnership cooperation for promoting the ArabPlast edition of exhibitions.

“The show provided an ideal platform to interact and build new alliances for new entrants who wished to penetrate regional markets,” Mr. Khanna said. The large participation from various countries is an acknowledgement of the region’s leading position in global petrochemical markets, Mr. Khanna added.

Leading manufacturers/suppliers participating in the show included Reinfenhauser, Krauss Mafeii, DME, Starlinger, Bielloni, Borouge, ExxonMobil, Qatar Petrochemicals, Astra Polymers, Clariant, EnerPlastics, Reliance Industries Iran Petrochemicals, Intergulf, Chen Hsong, Akdeniz, Qaroh Products, Oman Polypropelene, Modern Plastics, Ferromatik-milacron, Plastiblends, Kabra Extrusion, Kai Mei Plastics, Chern Hrong, and so on.

The exhibition was held alongside the Arab Plast summit which projected crucial trends and the changing dynamics of global petrochemical industry. The summit, addressed by industry experts and heads of leading companies, discussed challenges and opportunities faced by the changing Middle Eastern market.

A report released by McKinsey at the Arab Plast summit cited a shift in the petrochemical business from the West to the East, backed by the region’s advantages of low-cost feedstock, cheap labour, rising demand and new technologies. The Middle East is expected to account for 40 per cent of the new ethylene capacity by 2010, while its polyethylene trade to East Asia is expected to grow by 119 per cent by 2010.

On display at Arab Plast 2005 exhibition were new products and technologies in injection moulding, blow moulding, wrapping & packaging, pre and post plastic processing techniques as well as raw materials such as masterbatches, additives and polymers.

It covered a wide spectrum of plastic machinery, plastic/rubber processing technology, pre and post-processing systems, plastic packaging technology, injection moulding, blow moulding, wrapping technology, extrusions, chemicals and additives, semi finished goods, engineering plastics, plastic products and many more.

The next edition of ArabPlast, which will be bigger than the current one, is scheduled to be held from January 13-16, 2007, at Dubai International Exhibition Centre.

© 2005 Mena Report (www.menareport.com)

 

http://www.menareport.com/en/business/182917/&searchWords=McKinsey

Citigroup Private Bank hosted its Asia Pacific clients in Dubai Posted: 28-04-2005 , 13:00 GMT

About 40 of the wealthiest individuals and families from the Asia Pacific region had their first taste of the attractions of Dubai and the Gulf region recently, not just from a tourism perspective but also in terms of opportunities for business investment.

The Citigroup Private Bank hosted its Asia Pacific clients to a Forum earlier this year, featuring prominent business and government leaders of the Gulf region, who showcased the region’s economic and business environment in terms of opportunities as well as challenges.

“The discussions were aimed at drawing attention to the depth and diversity of the Gulf economies, and their continued expansion,” said Mr Deepak Sharma, Chief Executive Officer of Citigroup Global Wealth Management, Asia Pacific and Middle East.

“The oil and gas sector, being the mainstay of the Gulf economies, featured prominently in the discussions. But the Forum also explored many other areas offering investment potential such as petrochemicals, financial services, telecommunications, utilities, technology, education, healthcare and retail” he added.

According to a recent wealth management survey, many of Asia’s richest individuals – spurred on by their own entrepreneurial backgrounds – are constantly seeking ways to invest in new business opportunities.

Conducted by The Citigroup Private Bank with support from management consultancy McKinsey & Company, the survey covered 120 super-affluent individuals and families with a minimum net worth of USD 25 million.

Mr. Sharma added: “The Forum was an eye-opener for many of our clients. We tend to under-estimate the Middle East region’s enormous potential and are deterred by negative perceptions of its geopolitical issues. The discussions helped to bring to our Asian clients a deeper and more balanced understanding of the region’s economic and business climate.”

“Likewise, the Middle East clients learned more about the culture and characteristics of Asian business and its investment climate through our Asian clients. It was a win-win outcome for everyone” he said.

The six GCC (Gulf Cooperation Council) countries represent a population of 35 million and a combined GDP of about USD 450 billion. By way of comparison, ASEAN, with a population of approximately 550 million, has a GDP of around USD 2.3 trillion. In other words, the size of the GCC countries’ population is 6% of ASEAN’s, but its GDP is equivalent to 20% of ASEAN’s GDP.

© 2005 Mena Report (www.menareport.com)

May 2005

http://www.menareport.com/en/business/183132/&searchWords=McKinsey

Construction costs in Bahrain to rise Posted: 04-05-2005 , 05:09 GMT

Construction costs in Bahrain are set to rise by 20 or 30 per cent after the implementation of the McKinsey labour reforms, a research said Tuesday. The study was presented at the workshop on the construction sector in the Kingdom organised by the Economic Development Board (EDB) in co-operation with the Bahrain Chamber of Commerce and Industry (BCCI).

According to Bahrain Tribune, the workshop was attended by more than 50 participants from the BCCI and private sector companies related to the construction and building sectors.

© 2005 Mena Report (www.menareport.com)

September 2005

http://www.menareport.com/en/business/189369/&searchWords=McKinsey

Emaar Malls announced Posted: 22-09-2005 , 05:57 GMT

Emaar Properties PJSC has announced plans to aggressively expand the retail sector with investments of over AED 15 billion to develop about 100 malls in the mega emerging markets of the Middle East, North Africa (MENA) and the Indian subcontinent.

The Company has decided to incorporate a fully owned subsidiary, Emaar Malls, which will develop world class shopping malls in the UAE, Saudi Arabia, Jordan, Syria, Lebanon, Algeria, Morocco, India and Pakistan. The Company is already fast developing the world’s largest shopping destination – the 12 million square feet Dubai Mall – in the Burj Dubai Development in the heart of Downtown Dubai.

General Sheikh Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Minister of Defence said: “The Dubai Mall is shaping up to be an example of what can be achieved in this region and is an iconic symbol of what we could share and replicate here and elsewhere, starting first with the Gulf and South Asian regions.”

To successfully penetrate into these markets and accelerate the entry process, Emaar Malls will leverage the strategic international operations that Emaar Properties already has in Saudi Arabia, Morocco, Egypt, India and Pakistan, besides its home base in the UAE.

Emaar Malls would tap into Emaar Properties’ established reputation and depth of experience as a developer and manager for commercial, residential and retail properties in the UAE and internationally.

Speaking at a press conference, Emaar Chairman Mohamed Ali Alabbar said: “The malls would benefit the Group in two ways: revenue would come from both real estate development and later on from managing these malls as assets to the Group. Our strategy would be to procure land at competitive prices and then unlock their potential by developing them into retail properties of good real estate value.

“The Middle East and the Indian subcontinent have a combined customer base exceeding two billion, of which half are young people who are increasingly enjoying higher disposable income levels and aspire for a better lifestyle. This will form significantly lucrative catchments for the customer base for Emaar Malls. In addition to good quality housing, people are increasingly looking for a fantastic shopping experience, rivaling that of developed countries. We aim to create this for them.

“The GDP of the countries in the catchments are in excess of $1.7 trillion and the retail sector will be one of the key drivers of growth and development in this region. International studies by renowned consultants such as McKinsey have clearly demonstrated that the retail industry is one of the largest worldwide and growing at a rate of 15 per cent annually. Over 45 per cent of the GDP of any economy is driven by the retail sector,” Mr. Alabbar said.

In addition, retail space per capita in the USA is 17 square feet, while in Asia it is 7 square feet and in the MENA region is less than 2 square feet. The Indian subcontinent is a fraction of one square feet. The market thus is ripe for expansion and additional retail space will be a boon for mall developers, retailers and consumers.

“Besides affording the surrounding community with convenience, comfort and leisure enjoyment, shopping malls have the ripple effect of boosting the real estate value of both commercial and residential properties around them. From our experience too, we observe building new retail properties often give economies a shot in the arm by invigorating different industries including construction, property and tourism as well as helping to create new jobs,” Mr. Alabbar concluded.

Emaar Malls will fund its retail properties with part of the capital raised from Emaar Properties’ recent rights issue. The company is not ruling out other forms of financing besides using its own cash reserves.

 

October 2005

http://www.mckinseyquarterly.com/A_growth_model_for_Islamic_banking_1694

A growth model for Islamic banking

As competition grows, incumbents must work harder to remain distinctive.

OCTOBER 2005 • Nasr-Eddine Benaissa, Mayank P. Parekh, and Michael Wiegand

In This Article

Exhibit 1: Global Muslim population

Exhibit 2: Principles of Sharia

Exhibit 3: Most Islamic banks grow faster than their home markets

Exhibit 4: Offering a Sharia-compliant credit card

About the authors

Letters to the editor

A cursory glance at the Islamic banking industry shows that it is robust and profitable. In most countries with significant Islamic communities (Exhibit 1), financial institutions that cater to this segment are growing much faster than conventional banks, because of the strong demand among consumers for products and services that comply with Sharia, the Islamic legal code. The banks’ financial ratios, such as return on assets, can be as high as those of the best-performing conventional banks. But these successes are built largely on regulatory advantages and on a unique value proposition. Both are being eroded by the market entry of players that combine Islamic products with superior marketing and customer service skills. For incumbents to survive, they must not only bring their fundamental banking skills up to competitive levels but also overcome a handful of challenges specific to Islamic banks.

Back to top

In general, Islamic banks are governed by Sharia, which, among other aspects, prohibits the use of interest or speculation (Exhibit 2). There are about 270 Islamic banks around the world (including subsidiaries of conventional banks), and together they hold assets estimated at more than $265 billion. Their holdings are growing by 15 percent a year,1 and although this amount represents just a small portion of the assets held by banks of any stripe, the potential for growth and for access to the Middle East and other desirable markets has attracted such banking giants as HSBC and UBS to Islamic finance. In addition, countries from Bahrain to Malaysia are racing to create Islamic banking hubs to serve the 1.2 billion Muslims around the world.

Back to top

The door is opening

Most Islamic banks enjoy protected markets and other regulatory advantages, such as higher lending limits than conventional banks offer. In many countries, only pure-play Islamic banks are permitted to produce or sell most Sharia-compliant products, leaving hybrids, which combine an Islamic unit and a conventional banking parent, out of the market. Furthermore, regulators in the past have limited the number of pure plays in a market to one or two, giving incumbents a national monopoly or duopoly. Such advantages have not only paved the way for above-average profits but also enabled these banks to reap the full benefit of the increased demand for Islamic banking products (Exhibit 3).

Back to top

But the picture is mixed when you look at the average annual return on assets from 2000 to 2004 for 25 Islamic and conventional banks in seven countries with large Muslim populations.2 Al Rajhi Banking and Investment, a Saudi Islamic bank, was the best, with an average return on assets of more than 3 percent, while the worst were Islamic banks delivering 1 percent or less. In some countries Islamic banks do better than their local conventional rivals, but in others they perform much worse. Three factors in particular have an impact on the performance of Islamic institutions.

Market profile. Customer characteristics, including average wealth and the demand for specific products (savings accounts and loans, for instance), as well as labor costs and competition all affect general profitability. In Qatar, for example, the high demand for and limited supply of loans for corporations and infrastructure projects have led to high corporate-lending margins, benefiting Islamic and conventional banks alike.

Business model. As with conventional institutions, Islamic banks that focus on retail customers perform better, on average, than those that target only corporate banking. Al Rajhi and the Kuwait Finance House concentrate mainly on retail and small-business customers, which partly accounts for their above-average return on assets.

Demand for Islamic banking. Consumers in different markets vary in their demand for Islamic banking products and the preferred source (pure play or hybrid), as does their tolerance for higher prices, lower performance, or poorer service as trade-offs for products that adhere to Sharia. In Saudi Arabia, for example, about three-fourths of consumer deposits and half of all bank deposits are in noninterest-bearing accounts, giving Saudi banks a cost advantage over their counterparts in other countries. By contrast, in the United Arab Emirates noninterest-bearing accounts do not exceed 25 percent of total deposits.

But conditions are changing quickly as governments relax their rules in order to build their domestic markets and to aid in the industry’s development. These moves have opened the door for hybrid banks offering Islamic and conventional products as well as for more pure-play Islamic banks. Institutions are entering these markets using a variety of strategies. HSBC and UBS have created separate brands for their Islamic offerings (Amanah and Noriba, respectively), while others, such as Maybank in Malaysia and Samba Financial in Saudi Arabia, have opened special branches that sell only Islamic banking products. In countries such as the United Arab Emirates, which maintains severe restrictions on hybrid models, banks have established discrete Islamic businesses with separate legal identities, management and governance, brands, and distribution channels. New banks are appearing, and incumbents are exploring expansion opportunities outside their home markets.

The pace of most of these developments has accelerated in the past year or so, and consumers now have many more options. In general, the service levels and product variety are superior in conventional banks, which traditionally faced more competition. As these banks bring their skills to the Islamic banking market, consumers will no longer face a stark choice between products that comply with Sharia and higher-quality service and product offerings.

To compete in this new environment, incumbent Islamic banks will have to follow the path taken by many conventional institutions. Vital steps include identifying and targeting the most valuable customer segments with differentiated and higher-quality offerings, increasing operational efficiency, and improving risk management. These measures are the bread and butter of good banking, but Islamic banks face challenges unfamiliar to their conventional counterparts.

Beyond Banking 101

Islamic banks that emerge from protected markets can borrow much from the traditional improvement programs of financial institutions. But as they seek to boost performance and profitability in a much more competitive environment, they must still comply with Sharia. The need to follow Islamic law, both as an underlying principle and as a key differentiating factor in the market, complicates a bank’s organization and governance, branding, operations, and efforts to innovate. In addition, Islamic banks may have to band together to tackle structural problems that handicap the industry (see sidebar, “The industry’s structural hurdles”).

Organization and governance

Innovative products and services at Islamic banks must be approved by a Sharia committee, an independent panel of scholars appointed by the bank that issues fatwas3 on whether an offering abides by Islamic law. The Sharia committee exercises tremendous power by underpinning—or undermining—an institution’s credibility with the Islamic community.

But the need to secure approval from the Sharia committee adds an obstacle unlike any at conventional banks. Without a uniform interpretation of Islamic law, it is often difficult for banks to know whether their Sharia committee will approve a new product. In fact, nothing prevents a committee from reversing a previous decision and declaring that an offering is not compliant after it has been launched. Many Islamic banks struggle with committees that are overburdened, slow, and unpredictable.

Sharia committees should consist of Islamic scholars who are both respected in the religious community and knowledgeable enough about modern finance to evaluate new products and to communicate their opinions effectively. Scholars with both qualifications are rare, and the best—often serving on several committees—are overburdened.

Islamic banks should work to lessen this burden. Broadly speaking, a Sharia committee’s role can be divided into two areas: compliance and advisory. Since the committee’s central role is to judge a bank’s compliance with Islamic law, the task (which includes reviewing new products and services, issuing fatwas, and assessing a bank’s operation to ensure that it mirrors the design approved by fatwas) cannot be outsourced effectively.

The advisory function includes assisting managers with product development, working with customers to create deal structures that follow Sharia, handling external relations, and consulting on matters of general policy and strategy. Many of these duties could instead be assigned to in-house Sharia experts, allowing the committee to focus more on compliance issues. These in-house scholars should be experts in Islamic law and banking without necessarily having the religious credentials or public standing to qualify for the Sharia committee.

In addition to helping with product development, these internal experts would explain to the Sharia committee the merits and Islamic structures behind new products and interpret the fatwas for managers, who are then in a better position to address the committee’s concerns. They would also monitor the latest developments in Islamic banking around the world and tailor new ideas to meet the specific needs of the bank and its customers.

Branding

Too many Islamic banks take their brand position and credibility for granted, assuming that adhering to the tenets of Sharia will be sufficient. But as they face more competition from a variety of institutions that offer similar products, building a clear brand identity solely around Sharia compliance will become more difficult. Islamic banks need to understand and manage their brand image actively, thereby creating the perception of an “Islamic credibility advantage” over their competitors.

The first step is to understand the main factors that contribute to credibility in a given Islamic market, including whether a bank is a pure play or a hybrid, its history and pedigree, and the composition of its Sharia committee. Tangible attributes, such as the number of Islamic banking branches, leadership in product innovation, or the segregation of Islamic funds from conventional activities, also come into play.

From this analysis, a bank should choose a specific brand position—conservative, innovative, or community advocate, for instance—and chart a course to reach and maintain that position. This effort, supported by strict Sharia compliance, audits, and reviews of all marketing communications, must be clearly understood and adhered to by all bank managers.

Maintaining a dialogue with the community to promote and defend a bank’s Islamic credibility is also important. A bank’s internal experts, or even members of its Sharia committee, could participate in conferences and other scholarly discussions, for example, or publish articles commenting on current Islamic issues. Newspapers in many Islamic countries have sections that discuss religious topics, so a bank can use this channel to explain how new financial products comply with Sharia.

Operational complexity

Products from Islamic banks are often more complex than those from conventional institutions. In the latter, a cash loan is simple: a customer borrows money at a fixed interest rate and with a prescribed set of installments and, if payments are overdue, faces accumulated interest and perhaps a late fee. The most popular Islamic alternative to the cash loan uses a tawarruq (literally, “monetization”) mechanism, in which a bank sells its customer a commodity (such as palladium) at a marked-up price to be paid over a predetermined time period. The customer then resells it for cash at the market’s current spot price. The bank’s profit comes from the difference between the purchase price of the commodity and the price agreed to by its customer, rather than from interest. Unlike a bank that makes a conventional cash loan, the bank can’t charge above the original amount if the customer makes late payments, because the additional fee would be considered interest.4

The added complexity arises from the breadth of the transaction. The Islamic bank must maintain relationships with commodity brokers, take title of the goods temporarily, and shepherd each purchase and sale. The formal documentation is longer and more complex than it is for a conventional cash loan, and frontline employees and the bank’s advertising must explain exactly how the product works and show that it meets Sharia law. And finally, managing credit risk is more complex because the bank needs to estimate not only the expected losses from defaults on the loans but also the real cost to the bank of delayed payments, for which conventional, off-the-shelf risk-management tools aren’t useful. Complexities arise in a wide range of Islamic products, from savings accounts (which use a profit-sharing formula, rather than a fixed interest rate, to pay depositors) to takaful (meaning “mutual support”), a product (similar to life insurance) that works on a strict shared-risk system across policyholders.

Customers increasingly expect these products to perform as well as those from conventional banks and will not accept added complexity as an excuse for much higher costs or lower performance. To mitigate this additional complexity, Islamic banks need to pay greater attention to the three pillars of successful operations: cost containment, fast processing times, and low error rates. Islamic banks must manage these basics and understand customer needs in order to compete against conventional institutions.

Product innovation

In general, a product developed by a conventional bank can be copied by other conventional banks anywhere in the world. It’s not so easy for Islamic banks, however.

First, most conventional products employ some form of interest and so cannot be directly replicated by an Islamic bank; at a minimum, they require some level of reengineering. Further, the Sharia committee of one bank may reject an innovative product offered by another Islamic bank. In addition, with so few Islamic financial institutions in the world, only a relatively small number of people are developing new products that comply with Sharia.

Next, although innovation offers customers greater choice, a bank’s credibility within the Islamic community could be put at risk if its products and services were to draw criticism from Islamic scholars. Many banks prefer to avoid potentially controversial products, instead sticking to a basic portfolio and trying to appeal to the most conservative Islamic customers. Others try to adapt the product portfolio of conventional banks to Islamic structures.

But the more successful banks develop products that address customer needs. Saudi Arabia’s National Commercial Bank (NCB), the country’s largest, unveiled the first Islamic credit card, based on tawarruq, in 2003. The product fulfills the primary functions of a credit card—easy purchases and delayed payments—by using a series of commodity transactions. But many Islamic scholars disagree with tawarruq lending, especially in this context. So while NCB has strengthened its reputation as a leading innovator, it risked a backlash from some Islamic scholars who might consider this approach too close to traditional interest products. In the nearly two years since NCB launched its credit card, other Islamic banks have used a variety of approaches to offer their own Sharia-compliant versions (Exhibit 4). Rather than viewing the differences between a conventional credit card and its Islamic alternative as a weakness, some banks are highlighting the distinction to customers as an example of improved fairness and transparency.

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Islamic banks that decide to innovate must also craft a program to ensure clear communications with customers. To guide consumers through the required voluminous documentation, for instance, frontline staff should receive training to understand fully how the product functions as well as its implications.

Many Islamic banks have enjoyed strong financial performance in recent years. The growing demand for banking solutions that adhere to Sharia law presents an opportunity, but increasing competition raises new challenges: most Islamic banks must not only play catch-up with conventional rivals in product breadth and service quality but also overcome specific challenges linked to the Islamic code. If Islamic banks act now, they can maintain and strengthen their credibility within the community while closing the gap in conventional skills, thus benefiting from—as well as contributing to—the growth in demand for these products and services.

The industry’s structural hurdles

Islamic banks face many unique challenges, and most can be overcome by individual institutions. But the industry’s very nature poses two structural disadvantages that will be more difficult for banks working alone to address and may require outside support.

The lack of scale…

Scale is vital to driving down cost-income ratios, but by international standards—indeed, even by local standards in most cases—Islamic banks are well below optimal scale. In some countries, the total demand for Islamic banking may never be large enough to create a single bank with efficient scale, so national consolidation of existing Islamic banks is unlikely to be an answer. Merging with a conventional bank, even if the brands and infrastructure are kept separate, could jeopardize the credibility of the Islamic bank.

Cross-border expansion (including mergers and acquisitions) and the outsourcing of back-office functions are the remaining options. Even the most experienced conventional banks have struggled with the former, and most Islamic banks have very little skill or experience in such a risky undertaking. Third-party service providers for Islamic banks have yet to emerge, in part because of the language barrier and the complexity of Islamic products.

The differences in the structure of products across countries—or even from one bank to the next—add to the difficulties of cross-border expansion and back-office outsourcing.

…and liquidity

A second structural challenge for Islamic banks involves treasury. A liquid secondary market for Islamic fixed-income instruments doesn’t exist. Banks are forced to focus on shorter-term tools to ensure sufficient liquidity, a requirement that puts them at a disadvantage to conventional banks, both in exposure to market risk and in long-term returns on a bank’s investment portfolio. No bank has completely overcome this disadvantage, although some governments, in an effort to help Islamic financial institutions, have tried to create liquidity by issuing Sharia-compliant government bonds.1 Potentially, a third-party entity—perhaps developed and owned by a confederation of Islamic banks—could help solve both the scale and treasury challenges. Such an organization could be modeled after Bankers’ Bank (in the United States) or the Sparkasse (in Germany) which offer back-office and treasury services to all member institutions. The task would not be easy, and one of the primary challenges would be to build cooperative relationships between banks that are current or potential rivals in the Islamic market. But given the mounting competition from conventional institutions, Islamic banks may choose to stand together rather than suffer separately.

Return to reference

Notes

1Alberto Alvarez, Hugo A. Baquerizo, and Joydeep Sengupta, “Treasury management in emerging-market banks,” The McKinsey Quarterly, Web exclusive, November 2004.

About the Authors

Nasr-Eddine Benaissa is a principal and Michael Wiegand is an alumnus of McKinsey’s Dubai office; Mayank Parekh is a principal in the Singapore office.

This article is based on research conducted in partnership with the World Islamic Banking Conference. The authors would like to thank Stephanie Hauser, Laurent Nordin, Klaas Reineke, Jason Rosenblatt, Hans-Martin Stockmeier, Raman Thiagarajan, and Fenton Whelan for their contributions to this article and its underlying research.

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Notes

1According to the International Islamic Finance Forum.

2Our research focused on banks in Bahrain, Jordan, Kuwait, Malaysia, Qatar, Saudi Arabia, and the United Arab Emirates.

3Any ruling by a recognized authority on Islamic law.

4Although banks are sometimes permitted to fine a customer for late payment, the proceeds must be donated to charity.

November 2005

http://www.menareport.com/en/business/191668/&searchWords=McKinsey

Al Rajhi Banking & Investment Corporation to host retail banking summit at WIBC

 

 

Posted: 22-11-2005 , 13:19 GMT

 

For the first time the World Islamic Banking Conference will feature a Retail Banking Summit and a Corporate & Investment Banking Summit as a part of its proceedings.

The WIBC international audience will have the option to participate in either of the two summits as both will run concurrently on 11 Dec 2005 in the Kingdom of Bahrain.

The Retail Banking Summit will be hosted by Al Rajhi Banking & Investment Corporation, Saudi Arabia’s largest quoted bank, and will focus on exploring the latest trends and new product opportunities in the consumer banking environment.

Saeed Mohammed Al Ghamdi, General Manager – Retail Banking, Al Rajhi Banking & Investment Corporation will commence the summit with his presentation titled Retail transformation through a CRM program. “Al Rajhi Bank owns the largest branch and ATM networks distributed throughout the KSA. It is the leading bank in Consumer Loans, Current Account, Charge Cards and Money Transfers while it has a strong presence in Credit Cards, Brokerage and Mutual Funds. Technologically advanced, the Bank has developed its CRM system and offers the full spectrum of its products/services through alternative channels with a 89% migration ratio,” he commented.

Nasr-Eddine Benaissa, Partner, McKinsey & Company will also speak at the Retail Banking Summit and discuss why Islamic banks will need to make their Retail offering competitive to both Islamic and conventional banks and how service quality will be a key factor in guaranteeing the capture of new Retail business. Paul McNamara, Managing Editor & Associate Publisher, CPI Financial, will moderate the session.

The Corporate & Investment Banking Summit will be hosted by CIMB Islamic and will focus on exploring the latest trends in corporate & investment banking markets, assessing the latest developments in Islamic Capital Markets and emerging opportunities in sovereign & corporate Sukuk.

“CIMB Islamic is delighted to be associated with the WIBC as the Corporate Banking Partner. As a leading player in the Islamic bond market, events such as the WIBC provide a sound platform for us to share knowledge and gain new insights into the market,” said Badlisyah Abdul Ghani, Head of Islamic Banking Division, CIMB Banking Group.

CIMB Islamic is an independent business division of Commerce International Merchant Bankers Berhad (CIMB), the largest investment bank in South East Asia. CIMB Islamic has been the top lead manager for Islamic bonds in Malaysia since 1990 with an average market share of 20% and it commands a 27% market share of the Sukuk market globally.

Shamsun A. Hussain, Head Investment & Corporate Banking – Islamic Banking Division, CIMB Banking Group, will commence the discussion. Joining him will be Ismail Dadabhoy, Head of Institutional Banking, Noriba; Arul Kandasamy, Head of Islamic Banking, Calyon Corporate & Investment Bank; and Hossam Y. Radwan, Executive Director: Investment Management, Goldman Sachs International. Nima Abu-Wardeh, Presenter, BBC Middle East Business Report, will moderate the session.

© 2005 Al Bawaba (www.albawaba.com)

 

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20051123_KenichiOhmae.jsp

Kenichi Ohmae: On the Move

McKinsey News

Wednesday, November 23, 2005

Kenichi Ohmae (TOK, 72-94), described as a world-class management guru by The Economist and London’s Financial Times, is as outspoken and creative as when he was a McKinsey director and Japan Office manager in the 1980s and ’90s.

One of the first proponents of the idea of globalization, Ken began talking and writing about the irrelevance of borders in the mid 1980s, long before the rest of the world understood the profound changes coming to the business and political landscapes.

“Twenty years ago,” Ken says, “globalization was a theoretical concept. Now it is a reality. Capital, communications, corporations, and consumers all criss-cross borders almost at will.”

Ohmae-san after McKinseyReaching audiences at about half a dozen speaking venues a year outside of Japan, Ken recently spoke at the Leaders in Dubai Conference, focusing on issues such as globalization, corporate social responsibility, and leadership.

Other speakers included Bill Clinton of the U.S., F.W. de Klerk of South Africa, Dr. Mahathir bin Mohamed of Malaysia, former U.S. Secretary of State Madeleine Albright, and Arie de Geus, who led Royal Dutch Shell for four decades. With an attendance of as many as 2,000 business delegates from the Middle East, the conference was broadcast simultaneously in English and Arabic.

Ken, who founded and runs several companies in Japan and China, is president of a management consulting group, Ohmae & Associates. An interactive satellite television program he set up seven years ago, Business Breakthrough (BBT), which broadcasts 24 hours/365 days a year, will be listed on the Tokyo Stock Exchange in December. In 1992 he founded “Reform of Heisei,” a citizen’s socio-political movement to promote fundamental reform of Japan’s political and administrative systems.

As when he was a McKinsey director, Ken still writes books. “Luckily,” he says, “my audience hasn’t gone away. My themes are the same: the fiber economy and the 21st century economic environment.”

His booklist includes more than 140 titles. His latest book in Japanese, “The Professionals,” defines the term “professional” for the 21st century; published in October, the book sold 150,000 copies in its first month. “The Next Global Stage,” published in the U.S. last spring, is selling well not only in English but in its Japanese, German, Spanish, Italian, Chinese, and Turkish translations.

But Ken’s priority is teaching. Dean of the Kenichi Ohmae Graduate School of Business of BBT University, Japan’s first all-cyber MBA program, Ken says, “We have no campus except over the internet. I call it Air Campus. Our courses are fully accredited, and we have students all over the world.” Another of his schools, Attacker’s Business School, named for Dick Foster’s “The Attacker’s Advantage,” has graduated 4,000 student entrepreneurs who have gone on to form 600 companies in Japan. He serves on the boards of universities in Korea and Australia, and has taught at UCLA and Stanford in California and Ewha Womans College in Korea.

“I travel, I consult, I have other businesses,” he says, “but I’m happiest teaching.”

Region states, the next stage of globalizationKen’s latest book in English, “The Next Global Stage,” presents a readable and clear-eyed view of emerging globalization trends, focusing on the dynamics of what Ken calls “region states.”

It was the emergence of these states in China and India that helped Ken understand that the globalization he described in the 1980s and ’90s is really here, and will not be going away. Ken points out that in globalization’s latest era, it’s not the countries as a whole that are thriving but regions within them. Regions are interacting with the rest of the world and becoming phenomenally successful.

For instance, Ken says, “If China was still controlled from Beijing nobody would go there, but China decomposed its one-country, one-system monolith. The communism that remains at the center more closely resembles a religion. Phenomenally successful Dalian, Shanghai, and Guangzhou are regional states with entrepreneurial, independent mayors, and they are decentralizing China’s economy, making it more akin to the United States than centrally-controlled Japan.”

India’s emergence, he says, is similar. “As a whole, India is still very poor, but with prosperous regions like Andhra Pradesh and Maharashtra and recently West Bengal and Kolkata.” The rest of the world, says Ken, “brings the technology, the management know-how, the capital, and the information, while these regions provide the infrastructure, people and hospitality and exports whatever the rest of the world needs. As a result, local consuming power goes up and these markets become increasingly attractive.

Ken also intuits a reason for Turkey’s growing success. “What Germany used to be to Turkey, Turkey now is to many central European and CIS countries. Less-developed countries send their people to Turkey to work. Two million Turkish people were raised in Germany. Their parents went there as workers, but the children attended German schools and are now college graduates. They’ve returned to Turkey and as a result Turkish management is far superior other countries at the same development stage. Turkey is the brightest spot in what might be a future Eastern European Union.”

Dubai and the Middle EastWhile Ken views much of the Middle East as unprepared to participate in the global economy, he sees Dubai, with its supply of oil nearing its end, as “already thinking about a post-petroleum era. Dubai is creating an engine more suited to the region and the 21st century.”

What contributes to Ken’s thinking are lists as mundane as flight schedules. “From Dubai international airport there are many flights to and from Europe and only one from Japan, but fifteen every day from different cities in India. Dubai is utilizing not only the capital of the world but the human capital as well. They are getting a very attractive supply of talented people from India as well as tourist and financial companies coming into the country from Europe.”

Ken and McKinseyKen, who retired from the Firm in 1994, says, “I can’t separate myself from McKinsey. It is in every one of my chromosomes.” As the Firm is one Firm, Ken says, he and McKinsey have become an inseparable “one thing.”

Ken credits Ron Daniel for shaping McKinsey into one of the world’s first truly global firms. “When I joined McKinsey in the early ’70s, all office managers were American. The Firm itself needed to globalize [and diversify]. Ron Daniel was the one who pulled me up to this global stage.”

Ron appointed Ken office manager in Tokyo in 1979, and within another few years had followed Ken with Gerard Thulliez in France, Peter Foy in the U.K., Herb Henzler in Germany, Paco Moreno in Spain, Christian Caspar in Denmark, and Rolando Polli in Italy.

“We give Marvin Bower enormous credit for the building the foundations of the Firm,” says Ken, “but the role Ron Daniel played cannot be overemphasized. Daniel was at the center of globalizing the Firm, setting the values by appointing people from outside America to become leaders. He let the younger generation do the job, and therefore the institution grew.”

Ken’s spare time?Somehow, as busy as he is at age 62, Ken seems to have time to play. “I’m back on motor bikes after breaking my leg a couple years ago. Our sons are grown and beginning their own lives, and Jeannie and I have a vacation home in British Columbia where we all ski and ride snowmobiles. In Japan’s winter, we all go to the Gold Coast of Australia, a paradise on earth without changing time zones from Tokyo. Almost every weekend I’m on my boat or on my bikes.”

He still plays the clarinet. And he plays golf “a couple times a year. When I reach age 75, I might switch completely to golf.” Might, he says, but not likely.

March 2006

http://www.menareport.com/en/business/204035/&searchWords=McKinsey

World Islamic Banking Conference 2006 to focus on driving growth & delivering on market expectations

 

 

Posted: 03-10-2006 , 15:57 GMT

 

The 13th Annual World Islamic Banking Conference will be held under the official patronage of Shaikh Khalifa Bin Salman Al Khalifa, Prime Minister of the Kingdom of Bahrain, at the Gulf International Convention Centre on 9 – 11 December 2006. Saudi Arabia’s National Commercial Bank, Bahrain’s Kuwait Finance House, Unicorn Investment Bank, and Kuwait’s Adeem Investment Company are Platinum Partners of the prestigious industry event, which this year is being held under the theme of ‘Driving Growth & Delivering on Market Expectations through Product Innovation & Service Quality’.

Now in its 13th year, The World Islamic Banking Conference (WIBC) has firmly established itself as the largest and the most significant gathering of Islamic banking & finance industry leaders anywhere in the world. For more than a decade WIBC has tracked the developments & shaped the trends in the global industry, providing the highest profile platform for senior executives to engage the key issues & to action strategies that capitalise on emerging opportunities.

This year’s conference is supported by the Central Bank of Bahrain and features a host of exciting and value-added highlights that set it apart from all other conferences. These include the Leaders & Winning Strategies Session featuring international strategy guru Tom Peters, regional leaders and CEOs to address cross-industry perspectives; the original research insights of the WIBC Competitiveness Report conducted in collaboration with McKinsey & Company; the Shari’ah Open Forum with a panel of Shari’ah experts; and the Breakout Summits focusing on the Retail, and the Corporate & Investment Banking segments.

Sheikh Abdulla Bahamadan, NCB Chairman stated that the bank’s Platinum Partnership with WIBC is based on two important concerns which were first, the bank’s expansion in Islamic banking considering it is one of the main strategic goals of NCB. The second is that the Islamic banking sector is one of the fastest growing sectors in the banking industry. In addition, Abdulkareem Abu AlNasr, CEO of NCB said that “NCB encourages and supports important economic events and that WIBC occupies a special place in the international and regional markets for Islamic banking & finance.”

The National Commercial Bank (NCB), headquartered in Jeddah, has established its current financial strength and leadership in the Saudi and Middle East markets. NCB is committed to delivering better service to its customers by leveraging the advancements provided by technology.

WIBC delegates will engage in a stimulating debate on major issues with a distinguished faculty of speakers and panelists, including leaders of international and regional institutions through highly interactive conference sessions moderated by Dina Salem, Program Editor & Presenter of Al Arabiya News Channel.

Abdulhakeem Alkhayyat, General Manager, Kuwait Finance House, Bahrain, said: “KFH-Bahrain is proud to be a Platinum Partner of the 13th Annual World Islamic Banking Conference, which creates a unique forum bringing together innovators and leaders from across the Islamic banking and finance industry. Year after year, this event helps to underscore the significant advancements and progress that continue to shape the industry as well as the vast opportunities that lie ahead as leading industry players continue to conceptualise, develop and introduce new and innovative ways to meet strong demand for Islamic financial products, services and methods of financing.”

Kuwait Finance House, Bahrain is a leading provider of Islamic commercial and investment banking services.

© 2006 Mena Report (www.menareport.com)

June 2006

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20060602_MADFeature.jsp

McKinsey Alumni Interested in International Development

McKinsey News

Friday, June 02, 2006

To join the MAD Community, click here.

What is the purpose of MAD?MAD is a global community of former McKinsey consultants working in collaboration to use their business skills and experience to contribute to the sustainable economic and social development of the populations of emerging markets.

Who are the members?More than 1,500 people, almost 10% of all McKinsey alumni, are already part of this community. MAD members represent 66 countries and participate in many sectors of the economy including for-profits and non-profits, start-ups and large organizations. Less than half of these members are currently employed in international development jobs; many are exploring different roles as advisors and volunteers or are looking for their niche in international development.

How can I participate in MAD?1. If you enjoy problem-solving discussions with international development leaders, you can attend chapter meetings. Topics have ranged from private equity in emerging markets to McKinsey’s post-tsunami work in Banda Aceh, education start-ups in Africa, and more. For example, in June, two former McKinsey Directors are discussing their emerging markets work with the MAD New York group:

• Ashok Alexander (DEL, NYO 86-03) on fighting HIV/AIDS in India – June 1st

• Forrest Wallace (CHI, LAN 48-64) on private sector agribusiness ventures worldwide – June 7th

MAD members congregate regularly in eight cities: Boston, Chicago, Geneva, Johannesburg, New York, San Francisco Bay Area, and Washington DC. We are always happy to help you start a group in your area. To get invitations for events in your area, “subscribe” to MAD. To subscribe, click here. To view upcoming and recent events, click here.

2. If you seek involvement in international development as a career or volunteer, MAD can help you find a match. You can post or look for full-time, project and volunteer opportunities. To go to the MAD job postings page, click here.

Several excellent international development organizations led by McKinsey alums are interested in matching individual McKinsey alums worldwide with business people in emerging markets, including:

• Gates Foundation in India;

• Ashoka in Brazil & South Africa;

• Agribusiness ventures in the Middle East;

• Various businesses in Afghanistan;

• TechnoServe in Ghana.

3. If you are involved in international development, you can network with colleagues in related fields and promote your employment or volunteer needs. To help you find alums with relevant expertise, a MAD “first alert” page is posted on the MAD community web site. To go to the MAD “first alert” page, click here.

4. Join our second Global MAD Summit in Washington, D.C. on October 21-22, 2006 to learn more about MAD, meet MAD members, and find out how you might participate.

What is McKinsey & Company’s role?McKinsey & Company encourages its alumni to benefit from their affiliation with each other and the Firm. In addition to alumni programming organized around office events, McKinsey has launched alumni communities to bring together individuals who share common interests. In addition to MAD, new Nonprofit alumni communities have been launched in Washington, D.C. and New York. To go to the “My Communities” page, click here.

Please join us or contact Amy at mad_global@yahoo.com to learn more!

The Global MAD Leadership Team

Amy Brakeman, MAD Program Manager (NYO, SFO, BOS 86-88, 90-01) (mad_global@yahoo.com )

Marie Ford, Director, McKinsey Alumni Relations (marie_ford@mckinsey.com )

Sanjay Gandhi, Global Program Manager, Growing Sustainable Business initiative, UNDP (NYO 98-02)

David Meen, Director Emeritus (ECX, IST, NYO, STO, TOR 73-03)

Les Silverman, Director Emeritus (DCO 82-05)

Pierre Van Hoeylandt, Managing Director, Acap Partners (LON 99-03)

Simon Winter, Regional Director, Africa, TechnoServe (JOH 98-03)

 

November 2006

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20061120_PeterSandsLBN.jsp

Peter Sands Becomes CEO of Standard Chartered Bank

Reuters News

Monday, November 20, 2006

It was annouced today that Peter Sands (LLL, LON 88-02) will become the new CEO of Standard Chartered Bank, effective immediately.

Sands has been with the bank since 2002, and was most recently serving as Group Finance Director. Previously, he was a Director at McKinsey & Company.

Standard Chartered plc is a British bank headquartered in London, with operations in many countries, especially Asia, Africa and the Middle East.

 

December 2006

http://thebankwatch.com/2006/12/01/mckinsey-interview-with-his-royal-highness-prince-alawleed-bin-talal-abdulaziz-alsaud/

McKinsey | Interview with His Royal Highness Prince Alawleed Bin Talal Abdulaziz Alsaud

Friday, 1 December 2006 · 1 Comment

This is a fascinating interview with His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud —or Alwaleed, as he’s known in the Middle East. Alwaleed is a nephew of the King of Saudi Arabia.

This interview with McKinsey is incredibly illuminating, and remarkable to the extent that we all in some way see, touch or interact with something owned by this man. His views on Islam, the west, and current events are pragmatic, and rational.

He first came to prominence in the West in 1991, after paying $590 million for a 14.9 percent stake in then-struggling Citicorp (now Citigroup). His investment quickly became worth billions of dollars when the US financial giant pulled itself back from the brink of bankruptcy and resumed its profitable growth. Most recently, he has attracted headlines by teaming up with Bill Gates to back a $3.7 billion management buyout of the Four Seasons Hotels and Resorts.

Source: The McKinsey Quarterly: The Online Journal of McKinsey & Co.

The Quarterly: How do you feel about the pace of economic reform in Saudi Arabia? Could the oil bonanza be an excuse to slow things down?

Alwaleed: Although some observers assume that the brakes will be put on political reform because of the new oil wealth, I honestly don’t believe this to be the case. For sure, I would like some things to be quicker. First, bureaucracy needs to be cut. When the law establishing the Saudi Arabian General Investment Authority [SAGIA] was enacted, the idea was that it would encourage one-stop shopping for international investors, but I am not certain we are seeing that happen. There is also a need for more competitive tax laws. We have to compare ourselves not only with the rest of the region but with Eastern Europe, Latin America, and Africa. It is a very tough climate for inward investment, and we have to go further than lowering the capital gains tax to 20 percent, from 40 percent. Finally, there are the labor laws, which—although less important than the first two issues—are still not clear enough.

The Quarterly: From the outside, Saudi Arabia sometimes seems to struggle to turn reform ideas into action because, unlike, say, in Bahrain or Dubai, no one person or institution appears to be driving the agenda. Is that fair?

Alwaleed: In the years when he was crown prince and since he became king, a year ago, King Abdullah has initiated major political, social, and economic reforms. In general, Saudi Arabia is now looked at favorably by international investors. We see that in the many companies locating there. King Abdullah would like to move faster, but for him it’s like moving a big yacht—it takes time to turn it round.

The comparison between Saudi Arabia and the Gulf countries, whether it be Dubai, Abu Dhabi, or Bahrain, is not right. These are all city or emirate states, whereas Saudi Arabia is a giant country with a lot of different constituencies: the Islamic constituency, the political constituency, the royal family, the conservatives, and the Bedouin. On top of that we are at the vanguard of Islam, and we have the wider Muslim population of the world—1.3 billion people—looking to us for leadership. To move in Saudi Arabia, with all these entrenched interests, is very difficult.

That’s not to say I’m a defender of the status quo. Far from it. I’m frustrated that women can’t drive—we’re the only country in the world where they can’t—and that while it’s legal to buy a videotape and see it on the small screen, we don’t have any cinemas. These may be cosmetic issues, but they’re important.

The Quarterly: Are you worried that some of your neighbors in the Gulf are moving ahead more quickly?

Alwaleed: Saudi Arabia is the anchor of the region, just as Germany, France, Italy, and the United Kingdom matter economically much more than Slovakia, Poland, or Greece in Europe. I don’t agree that we will be left behind, but we have to take lessons from what is happening now in, say, Dubai and Abu Dhabi. It is quite possible to be politically conservative and at the same time to encourage reform. In Saudi Arabia we have to unlink political conservatism from economic liberalism. There are still some hiccups in this respect.

The Quarterly: Is the balance changing between conservatives and modernizers?

Alwaleed: There is certainly a tension, but the king and the government are very much proreform, and they are moving ahead. I’m not saying they are not conservative too—they are. I am conservative, I am a Muslim, I pray five times a day, but I’m economically and socially very liberal. I don’t see that as a conflict. In my judgment the conservative role is shrinking, or at least not getting stronger, and the king is taking a strong stance against this group. What the US government is doing in Lebanon, in Palestine, and Iraq, though, is not advancing the liberal cause.

The Quarterly: Are events in those territories a cause of instability in the Gulf region? What are the main risks for businesses as you see them?

Alwaleed: I think the Gulf region has learned by now to deal on the economic front with the hot spots around us. While a big benefit comes from the price of oil, the investment boom at the moment is very real. Clearly, terrorism is a risk, but the risk is diminishing. In Saudi Arabia we were not geared up for antiterrorism at the time of 9/11—we were never a police state—so we have been on a learning curve on how to combat terrorism. I am not saying terrorists have been eradicated, but I would say to Western people that the matter is under control and we are weeding them out before acts are committed. The political situation in the region, meanwhile, is very stable.

The Quarterly: Turning to investment matters, do you think the pattern of global capital flows is changing? As an international investor, where do you see the most attractive opportunities in the next few years?

Alwaleed: There’s no doubt that after 9/11 and after the Dubai Ports [DP World] debacle, many investors from our region, including the government of Saudi Arabia and other governments in the Gulf, have been thinking of putting more of their money into Europe, India, China, and the Far East in general. At the end of the day, politics is mirrored in economics and finance; US attitudes toward the Arab and Islamic worlds and toward the Dubai Ports deal have had a negative effect, though not on me.

I can’t put numbers on any of this, but I have seen the trend for some time in the communications I have with other investors. When the Bank of China asked Kingdom Holding to be the Saudi investor in their bank, we received subscriptions for the first $2 billion within three days. Actually, we were oversubscribed.

At the same time, a lot of capital is being invested in the local economies of the Gulf. In the past several months, I have met five or six chairmen of US banks and investment banks that are lining up to come to Saudi Arabia, to open branches and serve the corporate sector and high-net-worth individuals. Studies say that in excess of $1 trillion could flow into the budgets of the Gulf economies in the next two years, even with oil at around $60 a barrel, and if there were to be a slowdown in the world economy the transfers would be huge.

The Quarterly: Apart from oil and property, what other industries do you see emerging in Saudi Arabia over the next five to ten years?

Alwaleed: At the end of the day, any country has to invest where it has an economic edge. During the first boom, Saudi Arabia announced that it was going to be self-sufficient in wheat. Yet we had none of the components that make agriculture feasible in a country—an abundance of water, cheap labor, or soil. We were importing labor, and we were digging wells to find water before exhausting them. That policy was a blunder. As a derivative of the oil industry, petrochemicals is one sector that is likely to be very important. Banking and financial services too. We are planning to build an international financial center in Riyadh to compete with the rest of the Gulf region, though it remains to be seen if it will be successful. Islamic tourism is another potential area for expansion, though I don’t think we’re talking about tourism in the international sense.

The Quarterly: What changes have you been making—or do you intend to make—in the asset allocation of your own global portfolio?

Alwaleed: After 9/11 my investments in the United States actually grew, not just tactically, but strategically. Because of Kingdom’s restructuring ahead of our IPO, we have not really invested a lot recently in the Middle East region. But we intend to invest tens of millions of rials in Saudi Arabia in various sectors, including airlines, real estate in Jeddah and Riyadh, and banking. Elsewhere in the Gulf, we are opening Four Seasons properties in Bahrain and Abu Dhabi and will end up with ten hotels in the region in the next two to three years. But we will not expand in other areas for the sake of expanding—we want to consolidate what we have now.

The Quarterly: Can you tell us about your extensive media interests? Besides the investment angle, is this a way for you to change perceptions of Islam in the West and, indeed, of the West in the Middle East?

Alwaleed: That is a good question. My media investments are worth about $5 billion to $6 billion and are divided into Middle East assets, which are grouped around the Rotana brand and include six television channels and the Islamic channel Alresalah, magazines, radio stations, and a stake in LBC Satellite (LBCSAT); and international interests, which include Time Warner, Walt Disney, and News Corporation, in which we are the third-largest shareholder. In the second phase of going public, we may have another IPO for our media entities.

I must say adamantly that we do not try to influence the political direction of our international media interests. However, given our alliance and strong relationship with the owners of certain entities, like Mr. Murdoch’s Fox News, we try to build bridges and discuss things with them in a logical and pragmatic way. We only ask for the chance to be heard. We are not asking them to be pro-Iraq, pro-Palestine, or pro-Islam, but we are asking them to be neutral.

Most media outlets in the Arab world—at least the print and TV ones—reflect the wishes and the dreams of their governments. So we are not so worried about that.

The Quarterly: What else can be done to bridge the gap between Muslims and the West?

Alwaleed: Through Kingdom Foundation we have established a $20 million Islamic studies program at Harvard University and a $20 million Center for Muslim-Christian Understanding at Georgetown University, in addition to our funding at Exeter University in England. We have set up the only two American centers in the Middle East, at the American University of Beirut and the American University in Cairo, donating $5 million and $10 million, respectively. At the request of President Chirac we have supported the Islamic wing of the Louvre, in Paris, and I am discussing with universities in the United Kingdom the opening of new Islamic-Christian-Jewish centers.

We put our money—more than $100 million—where our mouth is, but it’s going to take a long time to have any effect.

The Quarterly: What can be done to change hard-line attitudes in the Middle East? Do you share the view that education reform has a key part to play in the next few years?

Alwaleed: Our curriculum in Saudi Arabia is old and obsolete—I say that openly—and we need to do more. In schools we need more science, more English at the elementary level, more mathematics, and more emphasis on the Internet, reflecting the world we live in now. Things are moving a bit in universities, but it’s still the same story. On the religious side, the Ministry of Islamic Affairs has issued a circular that promotes moderate preaching in mosques and takes out anything related to the so-called enhancing of terrorist acts against Judaism and Christianity.

The Quarterly: What misunderstandings between Saudi Arabia and the West most frustrate you?

Alwaleed: In the West, and specifically in the United States, any act of terrorism by a Muslim is blamed on the entire Muslim community. In response to a recent attempted terrorist plot in the United Kingdom, for instance, the president of the United States talked of Islamic fascism. One or 2 people, or 20 people, or 100, or even 1,000 may fall into that category, but you can’t make a general statement about 1.3 billion people. I acknowledge that we have problems inside our Islamic community, but putting all Muslims into one pot and implying Islam is a terrorist religion adds fuel to the fire. This polarization between Islam and Christianity is very dangerous. There is very little difference between Islam, Christianity, and Judaism—they all believe in one God, one day of judgment, and a scripture that teaches about heaven. OK, one says the Bible is the word of God, the other that the Koran is the word of God. There are differences, but we are so close.

The Quarterly: A prominent Middle East editor said recently, “Not all Muslims are terrorists, but all terrorists are Muslim.” Is there a debate within Islam about the way things are going?

Alwaleed: I know that. Not all Muslims are terrorists; unfortunately, most terrorists in Russia, Thailand, the United Kingdom, and Spain are Muslim. I acknowledge that, but we have an issue with that internally in the Muslim community, and this is very dangerous talk for many people. In my view we need a major reform movement in the Arab and Islamic world to change perceptions. We are where the Catholic Church was when it controlled Europe, in the Middle Ages, and the political agenda succumbed to the religious agenda. But who is going to do it? I worry that things may have to get worse before we go in that direction, just as they got really nasty in Europe in the Middle Ages. That’s why I’m doing my best, with others, to bridge the gap, to think about the curriculum, and to take initiatives in the academic arena.

The Quarterly: Have you thought about doing something for Muslims in the region, equivalent to the Harvard and Georgetown foundations?

Alwaleed: It is very delicate to have something within the Islamic community. Right now we only have the Arab Thought Foundation, and while we are thinking of an opportunity ourselves, something new would have to be done by the government. We are seeing some indications, such as the recent conference in Mecca, that the debate is beginning, and it is important that the West should understand this. But we are living in history now. There is a beautiful Koranic verse that says God does not change people unless they change what they have inside them. In 100 years we will see what is happening—5 to 10 years is not enough. Look how long it took for Martin Luther to bring about change in Europe. It is not going to happen in the Middle East unless we have a strong reformer to take the lead.

The Quarterly: Kingdom Holding has been a pioneer in promoting women. Tell us about that, and what is happening generally in the country at the moment?

Alwaleed: I am Islamically conservative—I will do anything to help people, especially in the Islamic community—but I believe in the women’s cause, not just for their sake, but for the sake of the economy and for Saudi Arabia. You cannot have a population that is 50 percent female and have it account for only 4 or 5 percent of productivity. In my company I am trying to set an example. And what I do gets monitored because I have a relatively high profile. I have, for example, hired the first lady pilot, the first lady flight attendant, and the first lady jockey. And I use my media outlets to promote that. The jockey went to the Emirates, and all they talked about was her, even though she didn’t win. On television the pilot pointed out that she was not permitted to drive on the roads, but she could fly a plane and look down on everyone from the air.

Not many others are following at the moment, and a lot of Saudi women are frustrated as a result. But things are changing and will have to change more.

About the Author

Kito de Boer is a director in McKinsey’s Dubai office.

 

January 2007

http://www.mckinseyquarterly.com/Meeting_Bahrains_challenges_An_interview_with_Crown_Prince_Salman_bin_Hamad_Al-Khalifa_1907

Meeting Bahrain’s challenges: An interview with Crown Prince Salman bin Hamad Al-Khalifa

Sheikh Salman discusses the current economic and political reforms in Bahrain as the country moves toward a future beyond oil.

JANUARY 2007 • Kito de Boer and Jaap B. Kalkman

In This Article

Exhibit: Biography of Crown Prince Salman bin Hamad Al-Khalifa

Exhibit 1: The past five years have seen significant political and economic reforms in Bahrain.

About the authors

Letters to the editor

His Highness Sheikh Salman bin Hamad Al-Khalifa has been a leading political figure in Bahrain since being named crown prince in 1999. Yet Sheikh Salman is arguably best known internationally as chairman of the country’s Economic Development Board, the government agency responsible for formulating and overseeing economic strategy and attracting inward investment.

During the past six years the Western-educated Prince Salman has been at the heart of an ambitious program of economic and political reform—a series of initiatives that has helped spur diversification and growth, eased communal tensions, and enabled the island nation to respond to growing competition from its resource-rich neighbors. Whereas Bahrain was the first state on the Arab side of the Gulf to exploit its hydrocarbon resources, in the early 1930s, its fast-dwindling reserves now mean it will be the first member of the Gulf Cooperation Council (GCC)—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE)—to run out of oil.

Landmarks of economic liberalization thus far have included the deregulation of the telecommunications industry, fundamental reform of the labor market, the privatization of key industries, and the negotiation of bilateral and multilateral trade agreements with nations in the Middle East and beyond. Employment growth remains the most urgent objective: one in eight Bahrainis is out of work, and the labor pool is expected to increase 60 percent as more Bahrainis enter the job market during the next decade. Currently, two out of every three new jobs are going to expatriates (mostly from the Asian subcontinent).

Bahrain’s longer-term aspirations are to regain its status as the preferred location for investment in the region, double or even triple its per capita income by 2015, and achieve a more equitable distribution of wealth. At the very least, the current pace of activity suggests that progress toward these targets will be carefully watched elsewhere in the Gulf.

In this conversation with Kito de Boer, a director in McKinsey’s Dubai office, and Jaap Kalkman, a principal in the Bahrain office, Sheikh Salman discusses the challenges of the reform process; recent changes in labor, education, and health; and the growing sense of a national identity.

The Quarterly: The chairman of Bahrain’s National Competitiveness Council recently called for a plan, or “vision,” of the country’s economic future. What is your personal vision?

Sheikh Salman: Bahrain is in the midst of a transition from an oil-based economy to a country in which future growth will be driven by increasing its productivity. My vision is to guide Bahrain to accelerate the pace of reform and to ensure that all the levers and institutions are in place so that the transition occurs in a sustainable manner. We aim to make the private sector the engine of growth for the future. We want to join the wider global economic community, and we want to do so on our own terms and in a transparent way.

In a nutshell we want to replace unearned income with earned income. Our biggest challenge is the demographic one—a rapidly rising population—and our overdependence on oil. We must confront these and become more prosperous in the post-oil age.

Back to top

The Quarterly: Can you tell us about the main pillars of the reform process?

Sheikh Salman: When we launched the political-liberalization program, under the leadership of His Majesty King Hamad, the national charter led to a new constitution and the setting up of a bicameral house [parliament]. Other projects included municipal councils, the abolition of the state security laws, new press freedoms, the creation of political societies, and the enfranchisement of women. Despite our relatively small size, we now have the second-largest electorate in the Gulf.

Along with the political program we started a series of economic reforms to deliver a more sustainable future for the people of Bahrain. The economic reforms are focused around three main pillars. The first is about enabling the private sector to become the engine of growth for the economy. We work at this in two ways: first, we have a series of initiatives to remove obstacles that private enterprise may face when doing business in Bahrain. These initiatives include providing access to capital for SMEs,1 simplifying business start-up procedures, and also planning and zoning all of Bahrain—what we call “access to land”—to give investors the confidence they need. The availability of this information increases transparency and cuts red tape. Another aspect of this pillar is to stimulate business toward higher-value investments in those sectors where Bahrain has a competitive advantage.

The second pillar is about government and how we move it from being the main driver of the economy to playing a supporting role for the private sector. The efforts in this field include focusing government work on the development of policy and regulation and privatizing the “machinery” of the economy. We have already undertaken a significant amount of work, but there is more to do.

The final and most important pillar is about investing in the people of Bahrain. I often ask, “Whom should development serve?” The answer first and foremost is that it must serve the people of Bahrain. We are investing heavily in training and education to empower our people with the skills they need to become more productive members of society.

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The Quarterly: The labor reforms seem to have been the most difficult change so far. Why is that?

Sheikh Salman: Yes, this will be a significant change, and change is always a challenge. For the private sector to be the main engine of growth we had to do something about it. In the late 1960s we created a sponsorship system, whereby foreign workers were tied to an individual employer and had very few rights. The result, particularly in SMEs, was to suppress wages, create working conditions that were in many cases abominable, and make foreign workers much more competitive than Bahraini nationals. Sixty percent of private-sector jobs are now held by guest workers.

Governments in the region, including Bahrain’s, have introduced nationalization programs that require employers to hire a certain percentage of nationals. But of course this does nothing for productivity or wage growth—the systems are abused, and locals end up just making up the numbers.

So what we have done is eliminate the sponsorship system: we have gotten rid of government control over the supply of labor and instituted a levy on every foreign-worker permit issued by the state. That levy will be flexible over time: the greater the number of people coming into the country the more we will be able to increase the levy, though if the economy is stagnating I imagine we could reduce it to stimulate growth. The second aspect is that there will be a unified labor market, with rights for those who did not have them before. Third, and probably most important, the money from the levy will be put into a labor fund where it will be used as an investment in the people of Bahrain—for example, to improve the skills of Bahraini workers and the productivity of companies in the private sector, ensuring access to both capital and technology. It is a very exciting initiative, and my prediction is that this model will be followed by the rest of the Gulf.

The Quarterly: There has been some vocal criticism from local companies. Aren’t foreign investors going to see this as an additional tax burden too?

Sheikh Salman: Not really. We did a survey of foreign investors recently, and on the list of their priorities labor costs came out as number 14—a very low priority. The top concern was access to land and utilities. Many told us that the levy was something they were prepared to trade for a more functional society. Foreign investors are much more concerned that the skills they require will be available in the market, without additional impediments from the state.

The Quarterly: That brings us to education, where your plans are also ambitious, aren’t they?

Sheikh Salman: As I mentioned, investing in people is very important to the future of Bahrain. So we have started a series of initiatives that aims to raise the output of the educational system to better meet the demands of the economy. The initiatives include the establishment of a proper teacher-training college that emphasizes the practical as well as the theoretical, better compensation for teachers, more flexibility between the private- and public-education sectors, and class sizes that match the best student-teacher ratios elsewhere in the world. We want to make teaching a more noble profession that will attract the best and brightest. Another initiative is the establishment of a quality assurance agency that will raise accreditation standards and inspections for the education system as a whole and will rank the performance of the system through regular national exams. These are only a few of the initiatives we are working on.

We also need to provide for students who want to learn vocational skills, such as an apprenticeship, rather than an academic qualification—so that, say, 50 percent of their time can be spent working with local businesses. The whole point of educating somebody, after all, is that once they finish their education they have a future in the economy. Getting rid of our polytechnic college was, in my view, a mistake. Not only should we take care of the students who we know will go on to higher education, we also need to create an educational stream around the development of practical skills.

The Quarterly: To complete the reform picture, can you say something about what’s going on in health care?

‘Democracy is an evolutionary process that we firmly believe in; at times debate prolongs the process, but it ensures the inclusion of everyone in society’

Sheikh Salman: We think private health care has a lot of potential for growth here in Bahrain and will create high-value jobs. We have focused so far on making sure our state-run system can become more efficient—demographics suggest we need more capacity—and we are establishing an independent monitoring agency to ensure that both public and private hospitals adhere to certain standards and rules, based on international best practices. We are seeing a lot of investment, with several clinics and fully fledged hospitals having opened in the past five years. The goal is to supply the international market, but I’m not going to claim that this is happening yet.

The Quarterly: Reform in Bahrain has at times involved a difficult debate within its society. What wider lessons would you draw from this?

Sheikh Salman: Democracy is an evolutionary process that we firmly believe in. At times debate prolongs the process, but it ensures the inclusion of everyone in society. Gone are the days when you simply decree something and then expect it to happen. What we have to do is reach out to the community, argue the merits of certain policy ideas, accept the challenges that come back at us, and respond in a manner that brings more people on board.

The feedback we got from the public [on labor reform] was constructive because it made us think of things we had not thought of in the initial design. It also helped us refocus on where the money [from the levy] should go. Looking back, if we did it again we would probably bring in a wider cross-section of the population from the beginning.

We have had to compromise, work hard, and lobby. And we had to hold our breath a couple of times as the measure was going through parliament. Change is not easy and usually takes longer than you expect. But you should never be discouraged, as it is worthwhile in the long run.

The Quarterly: A lot of companies in Bahrain are still controlled by the government. How and when will that change?

Sheikh Salman: Privatization will be gradual, but over this decade I would see the state retaining less and less control. So far we have turned the previously state-owned telecommunications company into a corporate entity as part of a liberalization process that has encouraged competition from private-sector businesses. Another landmark was the privatization of electricity generation: the largest government-owned power plant was sold to an external investor, and our first privately owned greenfield power plant will come on line in late 2006, while our port is now operated by Maersk. We have privatized a lot of public health care services and are looking to privatize or sell off part of the government’s stake in the aluminum smelter. The list goes on. Privatization is all about execution and creating value at the end of the day; you can have good ones like British Airways and bad ones like the railways in Britain. Privatization for privatization’s sake is not wise. In turn, the government in Bahrain will focus much more on its role as a regulator to create a favorable business environment.

The Quarterly: Moving to the flagship financial sector, how do you feel about competition from the likes of Dubai and Qatar?

Sheikh Salman: Competition is healthy and should make us better. I welcome it. We have a very good track record that we can be proud of, and we are now moving into more specialized areas of the financial world. Offshore banking, for example—a 1980s model—is dead. We aim to build a strong financial center based on private banking, Islamic banking, capital markets expertise, and all the things that are important to the secure functioning of a financial system. But the main thing we need to do is to invest in our people, so that they continue to be the best bankers, and to improve the field they play on.

The Quarterly: Do you see each financial center in the Gulf specializing in different areas?

Sheikh Salman: I see the Gulf moving from a single-hub model to a multihub model. We shouldn’t be afraid of that. There are legitimate reasons for banks to have representative offices in all the countries of the Gulf. The question nevertheless becomes, “Where does the work get done? Where is the intellectual hub?” It is our goal to make sure it stays in Bahrain. I see great opportunities in real estate, tourism, health care, and manufacturing, but the flagship financial sector is the one that is really growing.

The Quarterly: Bahrain is the first GCC country to have a Free Trade Agreement with the United States. What has its impact been?

Sheikh Salman: The agreement only came into force in August 2006, and it is still being implemented. But there has been a tremendous amount of interest from local businesses anxious to explore the opportunities. And the US embassy phones have apparently been buzzing. From the US side it guarantees access to manufactured goods and services. I think the agreement is seen by the United States as a module in a larger plan to generate more free-trade relationships with other countries in the region. We will slot into those. Hopefully, we will also benefit from increased trade with countries that already have an FTA—for example, Jordan, or perhaps the UAE and Oman in the future. I am encouraged because the volume of trade in Jordan went from tens of millions to hundreds of millions of dollars in the three to four years after that country signed its FTA. We are hoping to replicate that kind of economic stimulus.

The Quarterly: With a single currency planned for 2010, how do you think the GCC countries will develop as an economic unit?

Sheikh Salman: Although there is political will for this to happen, I have my doubts that the 2010 target will be met because of a number of technical issues that need negotiation before the launch of a single currency. Among these issues are agreeing to the convergence criteria for inflation, public debt, and the setting of interest rates, for example. A single currency requires governments in the region to start moving toward greater transparency in the government budgetary process. Moreover, much of the potential success will depend on establishing a strong and independent central bank to determine monetary policy.

The Quarterly: How do you assess the impact of the new political freedoms? How is the relationship with the new parliament?

Sheikh Salman: I think it’s working very well. His Majesty the King knew that a population that had a stake in the system would be a much more productive one, and we have seen the impact on the economy immediately. There are problems, as in the creation of any new system, but they are not insurmountable ones. I think people feel empowered by the new process, but it will be a constant process of evolution.

The Quarterly: Are you concerned that there are still too many parties outside the formal political system? Should the Shia be better represented?

‘From personal experience I would say that economic growth is a natural prerequisite for political reform; it makes the latter much easier and more stable’

Sheikh Salman: With democracy there are freedoms, and there will always be those who disagree. People all over the world can be dissatisfied with any system, and if I watch CNN or Sky News, for example, there is much more criticism of their own governments than external ones. Thank God there is a mechanism here for people to put those ideas into practice if they have a majority view, and at the very least express them peacefully. On the Shia, I beg to differ. Even with the boycott in the last elections, we still had a very significant turnout, with 54 percent of the total electorate—people forget that. And with the participation of all parties this time [November 2006], the turnout will be more representative. You get out what you put in.

What we need to focus on is the building of a national identity. We need to move away from the Sunni-Shia divide. It was not there in the past and has been exacerbated by the political situation of our neighbors. The age-old power struggle between Persia and the Arab world is reaching a frenzy, as you can see in Iraq. It’s a situation that is not helping us, but it is something I will continue to fight. We are all Bahrainis here; we are all citizens and should not differentiate between Sunnis and Shia. I don’t think we should allow this to dominate our political discourse. We should focus on policy, not on religion.

The Quarterly: And as for policy, which is more important—economic reform or political reform?

Sheikh Salman: I certainly think that economic reform and growth ensure the success of political reform. I’ve heard people talk about delaying political reform because economic reform is not yet sufficiently in place. It’s a fine balance, but if I was forced to choose, from personal experience I would say that economic growth is a natural prerequisite for political reform. It makes the latter much easier and more stable. But if you are willing to work hard, then starting with political reform will yield the same results.

The Quarterly: What are the major challenges over the next five to ten years?

Sheikh Salman: The great challenge we will have in the future is defining the role of the state in this region—whether it will remain a welfare state or a state more similar to that of a modern economy. I think this will color a lot of the public debate, namely how much influence, control, and patronage the state will have versus how much independence, empowerment, and influence the private sector should have. When civil society, the free market, or the capitalist system clashes with the oil state, you will see tensions. A high price of oil exacerbates those tensions. The minute the price of oil drops, however, the choice no longer exists. We are proud that even in an era of high oil prices, we have been able to drive through significant reforms in Bahrain.

There is a new generation of leaders here and elsewhere in the region who want to see the prosperity they have enjoyed continue into future generations.

About the Authors

Kito de Boer is a director in McKinsey’s Dubai office, and Jaap Kalkman is a principal in the Bahrain office.

February 2007

http://www.menareport.com/en/business/209366/&searchWords=Injazat

Mubadala awards contract to Siemens to build and operate the first Molecular Imaging Center in the Gulf region Posted: 07-02-2007 , 16:37 GMT

Mubadala Development, an investment and development corporation wholly owned by the Government of Abu Dhabi (United Arab Emirates), has signed a contract with Siemens Medical Solutions to build and operate a specialist Molecular Imaging Center (MIC) in Abu Dhabi to include the Siemens PET CT (Positron Emission Tomography – Computed Tomography) diagnostic system and the Cyclotron radioisotope delivery system.

The contract was signed by Waleed Al Mokarrab Al Muhairi, Chief Operating Officer, for Mubadala and Peter Fuchs, Chief Executive Officer, Siemens LLC. Also attending the signing ceremony was Angela Merkel, the German Chancellor and Her Highness Sheikha Lubna Al Qassimi, UAE’s Minister for Economy.

The USD 21.7 million three-phased contract entails designing, building, and operation and maintenance of the MIC. Scheduled to open during the second half of 2008, the facility will be the first of its kind in the region.

The first phase already began in 2006 and saw Siemens setting up a team of experts who have been working closely with Mubadala to design what will be a unique facility with the very latest and innovative molecular imaging diagnostic technology. The contract signing marks the move into the second phase of the project, when the building of the MIC will commence. A five-year facility management and operation contract is expected to be signed following completion of the facility construction.

The MIC will also be the first in this region to feature a Cyclotron, Siemens’ particle accelerator that produces high yields of reliable radioisotope biomarkers. These are essential for accurate PET diagnosis. In addition to supplying Mubadala’s Molecular Imaging Center, the plan is to enable other diagnostic facilities in the vicinity to also have access to this important technology.

As well as the clinical provisions, the company’s standard operating system and user interface Syngo will allow seamless data sharing across all parts of the MIC and with other clinics worldwide.

The center will be fully equipped with state-of-the-art medical diagnostic equipment for anatomic and functional diagnosis.

“We are excited to begin this cooperation with Siemens, a widely respected brand name in the global healthcare solutions marketplace. Together, we will provide the healthcare sector in the region with sophisticated and unparalleled molecular imaging and diagnostic services, leveraging on the world-class facilities offered by the center, “said Waleed Al Mokarrab Al Muhairi of Mubadala Development.

PET CT is a nuclear medicine procedure that produces pictures of the body’s metabolic functions. Its capability in early detection of cancer, cardio-vascular and neurological diseases can save time and healthcare costs, therefore improving the patient experience and increasing chances of survival.

The PET CT images help physicians select more effective therapies and improve patient care, while ultimately helping to save lives. The scan allows physicians to view metabolic activity and pinpoint where abnormal lesions are located so that they may target the diseases. The molecular imaging centre will mainly provide diagnostic services for oncology, cardiology and neurology.

PET Molecular Imaging, is one of the fastest growing areas of imaging for both research and clinical applications. The Siemens PET CT diagnostic system is the first solution to combine true volumetric CT with true volumetric PET. Together, they allow the tiniest lesions to be detected at what is currently the industry’s highest spatial resolution.

Images from the PET CT scanner can be acquired twice as fast as with a traditional PET CT scan with no loss in the quality of the image. More importantly, the patients will experience increased comfort as diagnosis can be made with half the usual CT dosage.

Surpassing bids from competitors, Peter Fuchs, CEO of Siemens LLC, believes the reason Siemens was selected for the project is due to the company’s extensive portfolio: “With a comprehensive facility such as the MIC, a diverse range of solutions are required. Siemens demonstrated an attractive proposition because as a key healthcare infrastructure provider, we presented a holistic approach to cater for multiple aspects of Mubadala’s project seamlessly,” he said.

“Siemens is a pioneer in the development of new imaging techniques and applications,” explained Fuchs. “Our portfolio of solutions includes the most sophisticated clinical imaging, as well as preclinical and biomarker solutions that will affect every stage of patient care; from prevention to diagnosis, therapy and follow-up.

“We have already developed similar facilities in the US, UK, Germany and Hungary. So we’ll be bringing in our expertise and experience of building such facilities to the MIC here. The new imaging center in Abu Dhabi will mean that this cutting-edge diagnostic technology is now available to patients in this region.”

The MIC in Abu Dhabi will be equipped with these latest technologies.

Mubadala Development is a Public Joint Stock company established and wholly owned by the Government of the Emirate of Abu Dhabi. Its mission is to invest in commercially-viable, strategic, industrial and commercial partnerships.

The company manages a diversified portfolio of local, regional, and international investments. International investments include the Dutch fleet management giant LeasePlan Corporation (25% stake), and a stake in nine oil exploration blocks in Libya. Stakes are also held in the Swiss aircraft and engine services provider SR Technics (40%), the Italian luxury car manufacturer Ferrari (5%), and Piaggio Aero Industries (35%).

In the United Arab Emirates and wider Gulf region, Mubadala Development has invested in, and developed, a number of leading projects including the first GCC cross-border natural gas project, Dolphin Energy (51% majority stake), Aldar Properties, National Central Cooling Company, Abu Dhabi Ship Building, Imperial College London Diabetes Center in Abu Dhabi, Injazat Data Systems, and the Mukhaizna Oil Field developments in Oman.

June 2007

http://www.menareport.com/en/business/214151/&searchWords=McKinsey

Healthcare costs in GCC to be US$60 billion by 2025 Posted: 19-06-2007 , 06:37 GMT The direct healthcare costs in the GCC region are expected to increase fivefold by 2025 to US$60 billion from US$12 billion now, with health risk factors, ageing, population growth and medical inflation contributing to the cost escalation. The GCC Healthcare 2025 report by McKinsey & Co Inc on Healthcare in the GCC – Challenges and Opportunities, presented by Dr Viktor Hediger at the GE Healthcare Middle East Media Summit, also cited the cost burden on cardiology will rise from US$1.5 billion now to US$15 billion by 2025.

Dr Hediger said that by 2025 cardiology will make for 24 per cent of the healthcare costs followed by infectious diseases, maternal and perinatal conditions, digestive diseases, genitourinal disorders, cancer and other diseases.

Addressing the Media Summit’s discussion on Healthcare Economics – the Cost of Early Health, he said the number of outpatient and inpatient visits is expected to grow 350 per cent in the UAE, Saudi Arabia and Kuwait; 260 per cent in Bahrain; and 310 per cent in Oman.

However, the GCC region has a shortage of nursing staff with only 4.2 nurses per 1,000 population in the UAE; 3 per 1,000 in Saudi Arabia; 4.3 in Bahrain; and 3.5 in Oman. The GCC average of 4 nurses per 1,000 people is nearly half of that in OECD countries, which have an average of 9.4. Dr Hediger said that of the nursing staff, only 3 per cent are nationals in the UAE while the figures are higher in Bahrain (60 per cent) and Oman (56 per cent).

Governments in the region are making concerted efforts to address the challenges and implement a holistic healthcare system according to McKinsey & Co. The Ministries of Health are increasingly focusing on policy making. The private sector will also have an increasing role in healthcare delivery, said Dr Hediger.

He asserted the need for having neutral healthcare regulators for both the public and private sector to set standards and implement checks.

Over 50 delegates comprising leading medical experts, patient associations and media representatives joined GE Healthcare to also discuss the evolving practice of medicine and patient care from treating symptomatic ‘late-stage’ disease to a focus on earlier pre-symptomatic disease detection and earlier, potentially more effective treatment options.

GE Healthcare International President and CEO Reinaldo Garcia delivered the keynote address focusing on the company’s vision for the future of healthcare delivery. The summit also highlighted advances in prevention, treatment and diagnosis of cardiovascular disease, cancer and fetal defects. Other sessions covered healthcare economics and how molecular imaging is transforming the way chronic diseases are being diagnosed.

Healthcare experts participating at the summit included: Dr Mousa Akbar, Head of Cardiology Department, Al Sabah Hospital, Kuwait; Dr Zeynep Albayrak, Founding Partner, Neoson Ltd., Turkey; Dr Maha Barakat, Medical & Research Director, Imperial College London Diabetes Centre, Abu Dhabi, UAE; and Dr Mohamed Momtaz, Director of Fetal Medicine Unit, Kasr Al Aini Faculty of Medicine, Egypt.

© 2007 Mena Report (www.menareport.com)

http://www.docstoc.com/docs/1670988/Arab-World-Competitiveness-Report-2007-Part-511

2007 – WIBC Competitiveness Report – focus on Healthcare…by McKinsey

authored by

Mona Mourshed

Victor Hediger

Tony Lambert

October 2007

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20071024_Bobby_JindalLBN.jsp

Republican Bobby Jindal Elected Governor of Louisiana

Indo-Asian News Service

Wednesday, October 24, 2007

Republican Bobby Jindal (DCO 94-96) has been elected the Louisiana governor. Jindal is the first politician of South Asian origin and the country’s youngest to become the governor of any American state.

The Oxford-educated politician will be America’s youngest governor when he takes charge in January 2008. No one has won a governor primary outright until now in Louisiana.

Jindal’s parents came to this country in pursuit of the American dream. They found that dream to be alive and well in Louisiana. The victory also led to celebrations in his parents’ ancestral village in faraway Punjab.

Jindal, elected to the US House of Representatives in November 2004 from Louisiana, is also only the second Indian-American Congressman. The first was Dilip Singh Saund (1957-1963).

The victory is significant because Louisiana is not home to a large Indian-American population unlike some other major states. And yet Jindal won, banking on his reputation as one who fixed up the state’s healthcare system and as a fighter against corruption. He was always the frontrunner in the race to be the governor.

A graduate from Brown University, Rhode Island, Jindal was appointed secretary of Louisiana department of health and hospitals when he was just 24 years of age. He used the post to fix the health care system in the state.

From 1998 to 1999, he was executive director of the national bipartisan commission on the future of medical care.

President George W. Bush appointed him the assistant secretary for planning and evaluation in the US Department of Health and Human Services in 2001.

November 2007

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20071112_MikeSolimaniLBN.jsp

Mike Solimani Named Head of Al-Shaheen at Emirates Bank

Emirates Bank Group Press Release

Monday, November 12, 2007

Mike Solimani (DBI 05-06) has been appointed the new head of Al-Shaheen, Emirates Bank Priority Banking Service.

Solimani joins Al-Shaheen from the Group Strategy department where, as a senior manager, he successfully led and managed many projects in the Retail and Wealth Management units.

Jamal Bin Ghalaita, Emirates NBD General Manager of Consumer Banking & Wealth Management, said, “Mike brings to Al-Shaheen his rich and extensive wealth management experience. This, coupled with his broad understanding of the Middle East market, will undoubtedly help him in formulating the vision and leadership for the continued growth of the Al-Shaheen Club.”

Before joining Emirates Bank, Solimani was a consultant with McKinsey & Company in Dubai, where he served a variety of financial institution clients in the region. Prior to that he was at the Credit Suisse Group.

Emirates Bank is the flagship of the Emirates Bank Group and is one of the foremost financial institutions in the region. It was formed in 1977.

 

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20071129_Helmut_Panke_Named_to_Adv.jsp

Helmut Panke Named to Advisory Board of GSEF

Middle East Company News

Thursday, November 29, 2007

Helmut Panke (DUS 78-82) has been named to the advisory board of the $2 billion Global Strategic Equities Fund (GSEF), which was founded and is sponsored by Dubai International Capital LLC (DIC), the international investment arm of Dubai Holding.

Panke was Chief Executive and Chairman of the Management Board of BMW AG until 2006. He spent nearly 25 years at BMW, rising through the ranks of the German automaker which today has a market value of $40 billion, sales of $67 billion, and 106,000 employees. He began his business career as a consultant at McKinsey & Company. Panke currently serves as an independent director on the boards of Microsoft Corp., UBS AG, and Bayer AG.

Dubai International Capital invests in publicly listed equities through its US $2 billion Global Strategic Equities Fund (‘GSEF’), which aims to make structured investments in global Fortune 500 companies and seeks to become a leading shareholder in pre-eminent large global capitalisation stocks. GSEF’s investments to date include substantial stakes in Sony and HSBC, in addition to a 3.12% stake in EADS, the parent company of Airbus.

GSEF is a US-dollar-denominated private fund established in the Dubai International Financial Centre (DIFC) as a limited partnership, and NewDawn Global Strategic Equities Asset Management Limited, the General Partner for GSEF, is a DIFC incorporated and Dubai Financial Services Authority regulated entity.

February 2008

http://www.mckinseyquarterly.com/Governance/Leadership/A_political_education_for_business_An_interview_with_the_head_of_the_Council_on_Foreign_Relations_21?gp=1

A political education for business: An interview with the head of the Council on Foreign Relations

Richard Haass says that businesses have much to learn from government as they compete in an increasingly complex global landscape.

FEBRUARY 2008 • Andrew Erdmann, Roger C. Kline, and Lenny T. Mendonca

In This Article

Exhibit: Biography of Richard Haass, president of the Council on Foreign Relations

About the authors

Letters to the editor

Government, many executives are quick to assert, would benefit if it were run more like a business. But can business learn anything from the way government manages a wide variety of stakeholders in a globalizing world? A great deal, thinks Richard Haass, the president of the Council on Foreign Relations. Today, as global companies joust on the international playing field, Haass sees increasing similarities between the management challenges facing business and government.

Business now constantly finds itself addressing new social and political demands. Social activists and nongovernmental organizations (NGOs) are taking a place, alongside governments, as de facto regulators of business. The savviest executives, says Haass, are those who understand the nuances of government and how to balance the concerns of broad, highly varied political and social constituencies.

A veteran foreign-policy expert, Haass, 56, is no stranger to the business world—he wrote a book on management, The Bureaucratic Entrepreneur: How to Be Effective in Any Unruly Organization.1 After teaching management at Harvard University’s John F. Kennedy School of Government, he served as special assistant to President George H. W. Bush and as senior director for Near East and South Asian affairs on the National Security Council. Haass also worked at the Department of Defense during the Carter administration and at the State Department during the presidencies of both Ronald Reagan and George W. Bush. He is currently writing a book about the Gulf and Iraq wars.

At the nonpartisan Council on Foreign Relations, the preeminent gathering place for the US foreign-policy elite, Haass has been building a brand around the mantra that ideas matter. Through the council’s think tank and the journal Foreign Affairs, he aims to position the group as the leading integrator of thinking about US foreign policy and international relations. To discuss some of the global issues and ideas Haass considers “ripe,” he recently met in the council’s New York headquarters with Drew Erdmann, a consultant in McKinsey’s Chicago office; Roger Kline, a director in New York; and Lenny Mendonca, a director in San Francisco.

 

RICHARD HAASS

Vital statistics

Born July 28, 1951, in Brooklyn, New York

Married, with 2 children

Education

Graduated in 1973 with BA in Middle Eastern Studies from Oberlin College, Ohio

Graduated in 1975 with MA and in 1982 with D.Phil. in international relations from Oxford University, where he was a Rhodes Scholar

Career highlights

Council on Foreign Relations (2003–present)

President

US Department of State (2001–03)

Director of policy planning with personal rank of ambassador

National Security Council (1989–93)

Senior director for Near East and South Asian Affairs; special assistant to the president

Fast facts

Won Presidential Citizens Medal (1991) for helping to develop and articulate US policy during Operation Desert Shield and Operation Desert Storm

Received the Distinguished Honor Award (2003) from the US Department of State for efforts to promote peace, reconciliation, and a new path for people in Northern Ireland

Wrote or edited ten books on US foreign policy, including The Opportunity: America’s Moment to Alter History’s Course; author of The Bureaucratic Entrepreneur: How to Be Effective in Any Unruly Organization

Member of board of directors of Fortress Investment (2007–present)

The Quarterly: What are the major global trends that businesses should be thinking about?

Richard Haass: First, we no longer have to worry about major-power conflict, which characterized most of the 20th century. That is a fundamental piece of good news. I don’t see the likelihood of that kind of conflict returning, because there are structural forces, such as globalization, that work against it.

Globalization is the second big reality, in which business plays an integral part. Businesses are not only operating in a world of globalization; they themselves contribute to globalization, which is essentially flows of dollars, goods and services, people, and ideas across borders, at tremendous velocity and volume—often without the knowledge, much less the control, of governments. Businesses are among the many largely independent agents in the environment of globalization.

A third major trend is the emergence of multiple players. The 21st-century world has far more players on the chessboard. I see not only major and medium-sized countries but also subsovereign entities that have tremendous importance. Examples that come to mind include the state of California, which can have its own environmental policy or trade policy; or a manufacturing company such as Toyota; or NGOs like Amnesty International, as well as news organizations, such as CNN—and even Al-Qaeda.

The Quarterly: How do you see these different players and forces interacting?

Richard Haass: At any one moment in history—and this is no exception—there are forces of order and disorder, integration and disintegration, society and anarchy. At any one moment, forces and actors are trying to bring the world together by creating rules, orderly interactions, institutions, or arrangements. And there are forces and agents doing just the opposite, either consciously, as a goal, or simply because of who or what they are.

One way to think of history is to weigh the relationship between these forces of integration and disintegration. Do the positives outweigh the negatives? How do you see the trends? It has been roughly two decades since the Berlin Wall came down, and we still don’t have a great handle on this era’s character. It is hard to predict exactly how these forces will play out over the next decade or two.

The Quarterly: How are those forces playing out today?

Richard Haass: I am concerned that disorderly forces are gaining ground, partly because of the loss of position and power of the United States. On the one hand, that loss of power is the result of structural forces from the rise of other actors and of systemic forces of globalization, both of which will reduce the power of any country. But to a certain extent, we are seeing the consequences of US policy, both what we have and haven’t done. In the former category would be things like Iraq, and in the latter category I’d include a failure to address entitlement programs, energy, and primary and secondary education.

The Quarterly: Do you envision further consequences of reduced US power?

Richard Haass: Other forces will be in a position to possess and exert greater power and wield greater influence. Integrating all of these forces is going to become a larger challenge, and my concern is that centrifugal forces, all things being equal, will gain relative to forces that are pulling things together. International relations could become messier. It’s not inevitable—statecraft, diplomacy, and foreign policy can make a difference. And, again, there are powerful integrating forces, particularly in the economic realm.

The Quarterly: As this landscape evolves, what are the implications for business?

Richard Haass: Certainly a more complex, crowded, and uncertain environment to operate in, simply because you’re going to have more actors with the capacity to make consequential decisions. Businesses need a degree of predictability, particularly if they’re making long-term investments. They need to know about not only the political stability in a country but also the likely range of commodity pricing. They need to know about demand for certain products and services, and, more generally, about the international environment. There are a lot of uncertainties to identify, contemplate, and assess. The greatest difficulty is integrating those conclusions into a strategy.

The Quarterly: How can businesses assess the risk?

Richard Haass: Traditional political risk assessment looks at a given country’s stability and openness to foreign business. For example, businesses might ask if Egypt is likely to be a stable, pro-Western, “good-to-do-business-in” environment in 5, 10, and 15 years. Analysts might look at questions of succession in Egypt and the strength of the Muslim Brotherhood and raise questions about whether higher economic-growth rates are likely to create a more resilient political environment.

But in order to do intelligent analysis about Egypt, you need something complementary to traditional, “inside-out” analysis. You also need “outside-in” analysis, because Egypt isn’t operating as an island. You should look at what is likely to happen in the Islamic world. What about Iran’s bid for regional influence? What are the repercussions of Iraq? What about energy prices? What is likely to be the debate within the Arab and Islamic worlds about modernization, about democratization, and so forth? Risk control requires a richer analysis. In a way, this is another consequence of globalization. Companies operate in a global environment, but so does each particular place or actor they evaluate. Trying to put individual countries or situations in an isolated petri dish not only has become much more difficult but, in many instances, distorting.

The Quarterly: Are there new social and philanthropic responsibilities and standards for global businesses?

Richard Haass: It comes down to a balance between opportunity and obligation. For large businesses, there’s not only a tremendous opportunity but also an obligation to make a difference.

Take climate change. This is one of the few areas where many businesses are actually in the vanguard. They’re discovering that sound environmental decisions are often financially beneficial. Rather than there being a price to pay, they often turn out to be good for the bottom line.

Another such issue is corporate social responsibility. I don’t like that wording, because it is marginalizing. The phrase sounds like a set of philanthropic activities somehow divorced from the corporation’s self-interest. Actually, it’s in the corporation’s self-interest and should be mainstream. Perhaps not immediately, but certainly over time, smart corporate social responsibility will contribute to the bottom line.

The Quarterly: Where do you see the greatest need for businesses to assume a stronger social role?

Richard Haass: There is a potential role for global corporations and organizations to play in matters of public health, such as building up local health-delivery systems and the health infrastructure in certain parts of the world. Businesses and corporations could also do things closer to home, such as building up resilience against natural or man-made disasters for the communities they operate in, including supporting local infrastructure and response mechanisms.

Companies and businesses operating throughout the world could also make an investment in the area of female literacy. There is the potential for great impact. If more girls learn how to read, it has tremendous consequences for everything from the rate at which infants survive to disease incidence to the economic success of the society.

The Quarterly: Those are both examples of causes businesses could adopt. More broadly speaking, should they be louder in advocating certain policies?

Richard Haass: US business leaders and corporations don’t do enough to project what might be called the corporate statesman’s voice. Maybe CEOs are simply too busy, or they are worried about political landmines. But in the United States, at least, we are seeing unfortunate trends, such as the growth of protectionism and an increasing closed-mindedness, whether one is talking about trade, investment, or people. Look at the immigration debate in the current race to elect a new US president. It has emerged as a hot-button issue.

The business community has traditionally been the most stalwart, vocal, and committed community in the United States arguing for openness and pushing back against protectionism. One of the reasons the debate has increasingly tilted against openness is that the business community has not been as active.

The Quarterly: On the other hand, more companies have been vocal about climate change. Why is there more positive movement there?

Richard Haass: Climate change is, no pun intended, an increasingly hot issue, whether on campuses or in communities or with the public at large. For the most part, the prevailing political winds are arguing for a more responsible, active role in that area. Additionally, many businesses find that doing the right thing for climate change also turns out to be good for business. It saves money.

The Quarterly: Polls around the world reveal that the average citizen thinks globalization is a bad thing. Is this a question businesses should address?

Richard Haass: Businesses have been cautious about taking on those issues because they are politically controversial. There are two trends that ought to concern businesses. First, at an international level, there is a gap between the forces of globalization, many of which are potentially quite destructive, and the rules, arrangements, and institutions that manage them. Second, there is a gap in most societies between the realities and the politics of globalization. Businesses ought to be much more forceful advocates for portable safety nets, to give an example—retirement benefits or health care or retraining and educational opportunities that follow workers when they change jobs. That will dramatically affect the willingness of societies to stay open to the forces of globalization.

The Quarterly: Some executives seem to be more willing to suffer bad policy than to take on the risks that come with speaking out on social and political issues. Why?

Richard Haass: Today, the environment that business leaders operate in is fundamentally different than it was a generation or two ago. It’s far more political. There is a conceit in the business and management literature that businesses face the toughest problems and have a lot to teach the rest of us. But the reality is that the environment business leaders operate in is increasingly political. It is global and it involves tremendous transparency, greater accountability, independent stakeholders, less freedom to maneuver, and an inability to narrowcast messages. That sounds a lot like politics. Businesses actually have a lot to learn.

In any case, executives should realize that it is always easier to be aware of the potential costs of acts of commission. But it is equally important to weigh the potential costs of omission or inaction.

The Quarterly: So how would you change the literature?

Richard Haass: There is a slightly hermetic quality to management books that doesn’t quite capture an increasingly political, transparent, and demanding reality. Too much of the business literature operates within the confines of the firm, inside the balance sheet, or inside headquarters. That is important and necessary, but insufficient. Taking a more politically complicated role as a CEO or senior executive requires training far beyond an hour-long course on how to look good before a camera or what to do when you are hauled up in front of a congressional committee. The new role involves nothing less than a fundamentally different way of doing business. It is about dealing with a wider and more powerful group of stakeholders and constituencies and being proactive, not reactive, with them. If I am right, whether you run a hospital, a city, a think tank, or a Fortune 500 company, the environment and management demands are increasingly similar. Business schools and the management literature do not capture this new mind-set; on the contrary, they are slightly apolitical.

The Quarterly: Would you say that understanding the political element is essential for businesses to be accountable and a trusted partner as these new networks evolve?

Richard Haass: It is a challenge for both sides. Just as governments have to learn to deal with a much broader array of actors, players, and forces, businesses have to understand and interact with everything from governments and NGOs to media organizations and lobbies.

The danger is that many businesses too often have offices focused on government relations. It is the equivalent of a government having an environmental minister—something that tends to be a bad idea. This marginalizes and isolates that issue from what people at the top do. There is a danger in thinking you can channel those interactions or concerns to narrowly based functional offices rather than headquarters and the executive suite. The new world calls for a different sense of how the CEO orders his or her priorities.

The Quarterly: What advice would you give rising executives on how to prepare for a more complex environment?

Richard Haass: When we think about training for rising executives, instead of simply considering business school why not think about a slightly broader academic exposure? This curriculum could include a little political history and something about the more complex environment of business. Why not make it a requirement that before anyone could be considered for promotion to a senior level, he or she would need to spend a year or two in a nonbusiness experience? This could mean an NGO, a couple of years at the statehouse, or working as an aide to a member of Congress. It would be good for the country, for the development of this younger man or woman, and for the business in the long term.

The Quarterly: What role does the Council on Foreign Relations play in all of this?

Richard Haass: It begins with the notion that ideas matter. If you deconstruct most things going on in a society, you’ll find an idea sitting there somewhere, behind this or that public-policy act or proposal. The Council on Foreign Relations is a producer and a distributor of ideas. We are also a nonpartisan, independent venue where ideas are introduced and debated.

Beyond this, intellectual organizations have to overcome the conceit that if you simply produce good work, people will listen to it. We have to work as aggressively as any tire company at wholesale and retail marketing and try to identify critical consumers who could make use of our analysis or leverage it.

The Quarterly: How do you measure the success of your marketing?

Richard Haass: At my first or second board meeting in this job, I was bragging about how well we were doing. I said we were producing quality work at the council and I cited a few examples, adding that I thought it was really making a difference. Suddenly, one board member boomed out, “How the hell do you know? Prove it to me.” It took me aback, but it was the right question and shook me out of my complacency.

Still, assessing the impact is difficult. It is a great discipline for any nonprofit to constantly try to answer that question. We look at a wide range of quantitative measures, from page views and downloads on our Web site2 to magazine and book sales to media citations. Before every significant project we do, I ask for justification. What impact might this have? And following a sizable project, we complete after-action reports and reviews devoted to measuring and assessing the influence of the project on debates and policy.

The Quarterly: How do you ensure that your work is relevant?

Richard Haass: The first thing is knowing your competitors. It is a big mistake for an organization like mine to see only similar organizations as the competition. We are competing for people’s time and attention. We are competing with the New York Times and CNN and the Economist. The challenge for us is how to do that, being relatively modest in scale by comparison.

We have got to concentrate on areas where we can be the “market maker.” So I ask myself, what are the issues where ideas really could make a difference? Years ago, I wrote about the concept of “ripeness.” Certain issues are ripe for a solution. And certain public-policy issues are riper at some moments than others for intellectual input. Ripeness can reflect where debates are or whether there have been recent developments that create room for organizations like this one to be heard.

The Quarterly: What issues are ripe now?

Richard Haass: I talked before about the lag between globalization and global arrangements. That is one of the areas we are going to be focusing on, where we can make a real impact over the next couple of years. What to do about sovereign wealth funds is but the latest example. Climate change is another good example. This is an area in which outsiders can contribute to thinking about new rules, new organizations, and new approaches. Yet another issue is what sort of regional architecture to develop in Asia. Speaking of Asia, there is the question of how best to integrate a rising China and a rising India into that region and the world. And I haven’t even mentioned the Middle East, which contains enough issues to keep anyone occupied. The uncomfortable reality is that there is no shortage of subjects worth thinking and writing and speaking about if your business happens to be assessing political, economic, and strategic risk and suggesting what to do about it.

About the Authors

Drew Erdmann is a consultant in McKinsey’s Chicago office, Roger Kline is a director in the New York office, and Lenny Mendonca is a director in the San Francisco office.

Back to top

Notes

1 Richard N. Haass, The Bureaucratic Entrepreneur: How to Be Effective in Any Unruly Organization, Washington, DC: Brookings Institute Press, 1999.

2 CFR.org.

 

March 2008

http://www.menareport.com/en/business/223631/&searchWords=Injazat

Sustainable growth of Middle East economies requires strong technology leadership, says IDC Posted: 13-03-2008 , 14:37 GMT

The Middle East and African region will be one the world’s leading “hotspots” for technology investment in 2008, alongside China and India, according to new research from leading analyst house IDC.

This year, total investment could reach USD 40.5 billion – growing by more than 13 percent over 2007 – with GCC investment amounting to USD 9.1 billion. Nearly 40 percent of this investment will be in support of new initiatives, in sharp contrast to markets like Europe and the US, where most investment is going towards replacing and updating existing technology infrastructure.

This high investment forecast has created international interest in the potential of the Middle East market. However, if the investments are to result in genuine productivity benefits for companies – and concurrent social and economic benefits – then strong technology leadership is required across enterprises and organisations.

To support the decision-making processes of Chief Information Officers (CIOs) operating within the Middle East, IDC has organised one of the most significant gatherings of senior executives and technology companies ever held in the region.

The first-ever CIO Summit held in the Middle East has the support of Dubai Internet City as a technology partner, in addition to partnerships with APC-MGE, Alcatel Lucent, , Cisco, Dell, Etisalat, Fujitsu Siemens Computers, IBM, Injazat Data Systems, Intel, ITS2, McAfee, Nokia, Research in Motion, Samsung, SAP, Symantec, and Trend Micro.

Frank Gens, Senior Vice President & Chief Analyst, IDC, said: “Our forecast for 2008 is that the total IT market for Middle East and Africa will reach nearly USD 40.5 billion – an all-time high for this region. Set against the relatively flat growth of the US market, and the much lower growth levels of Europe, the Middle East will be a bright spot in the world market.”

“Capitalising on this growth, and utilising technology to its full potential to help develop the region’s economies, requires an informed, experienced management layer across all businesses. By bringing together some of the world’s leading technology companies and the region’s most senior technology decision-makers, we’re aiming to provide a key forum to add to the understanding and the skill-set of CIOs operating in the Middle East,” added John Gantz, Chief Research Officer and Senior VP, IDC.

The ongoing development of key industry sectors, including energy, the public sector, aviation, real estate and retail, is one of the factors driving the growth of the IT sector. Much of the forecast investment for 2008 will focus on building infrastructure, including security, storage, customer relationship management, and enterprise resource planning.

IDC’s forecast for 2007 – 2011 suggests that Egypt, Saudi Arabia, Kuwait and the UAE will emerge as the markets with the highest compound annual growth rate. Egypt is set to realise 14.1 percent over the five year period, Saudi Arabia is set to realise 12.8 percent, Kuwait is set for 11.9 percent and the UAE 11.3 percent CAGR.

Such significant sector growth – more than double the predicted GDP growth rates – indicates the long-term potential of the Middle East technology market.

By way of contrast, only fast-growing markets like India (17 percent estimated CAGR) and China (8.6 percent) are likely to match the development levels of the Middle East market. Established markets like Western Europe (5.7 percent), USA (5.1 percent) and Japan (1.7 percent) will record much lower rates.

Among the speakers analysing these issues at the CIO summit will be Ahmed Abdulkarim Julfar, Chief Operating Officer, Etisalat and Graeme Hackland, IT Manager, Renault F1 Team. There will also be special roundtable sessions on security, building a data centre, energy-efficient IT, and corporate governance.

© 2008 Mena Report (www.menareport.com)

https://alumni.mckinsey.com/alumni/default/public/content/jsp/alumni_news/20080310_IsobelColemanFeature.jsp

Isobel Coleman: An advocate for global development issues

McKinsey News

Monday, March 10, 2008

A typical day for Isobel Coleman (NYO 92-00) might involve testifying to Congress about global health issues, or providing context for a Middle East news story in an interview with BBC News. She might be speaking at an academic conference, working on an op-ed piece for a newspaper, or revising a chapter in her latest book.

An author and respected Middle East expert, Isobel is a Senior Fellow for U.S. Foreign Policy at the New York City-based Council on Foreign Relations. The Council is a respected and powerful nonpartisan foreign policy membership organization whose mission is to promote understanding of foreign policy and America’s role in the world.

At the Council, Isobel focuses on development issues in the Middle East, Southeast Asia, and sub-Saharan Africa, and also directs a program that she designed and implemented at the Council, “Women in Foreign Policy,” which examines the role of women in economic and political development issues around the world.

From public policy to private sector … and back againIsobel didn’t originally intend to stay at McKinsey for eight years. While on a fellowship to complete a Ph.D. in International Relations at Oxford, she received an offer from the Firm. She deferred for several years, but decided in 1992 to give it a try. “I was intrigued by the private sector, and I believed training [in that sector] is important and beneficial,” Isobel recalls.

Echoing what many alumni share about their years here, Isobel says that she is grateful for the analytical training she received. “I’m a far better researcher, analyzer, and writer because of my time there,” she asserts. She says she enjoyed the steep learning curve and the variety of people that she worked with at the Firm.

Isobel had already been involved with the Council on Foreign Relations before becoming a consultant at McKinsey. She joined the CFR as a term member at age 25, while a Research Fellow in Foreign Policy Studies at the Brookings Institution.

In many ways, Isobel says, her work at McKinsey prepared her for her current role, which she began in 2002. “People often ask me how I made the leap from McKinsey to the CFR,” she says. “In fact, the way I work is quite similar. It involves problem-solving, and most importantly, developing a way to communicate [findings] to a relevant audience in order to have the most impact.” She continues, “At McKinsey, if I was working to convince a client to take a certain action, using that skill set in marshalling data and analyzing it and communicating it in a cogent fashion [is] similar to what I do today, just with different set of issues.”

McKinsey and the CFR do, in fact, share a public relationship; the Firm has done pro bono studies there to help shape its strategy, and also funds a roundtable series through CFR’s geoeconomic center.

Women in Foreign Policy ProgramIsobel began the “Women in Foreign Policy” program at the behest of Leslie Geld, the president of the Council at the time she joined. “There are a number of very critical foreign policy issues that intersect with the roles of women in economic and political development in my areas of focus – South Asia, Sub-Saharan Africa, and the Middle East,” Isobel explains. “The role of women in society is a lens for looking at a whole range of development issues. As I got into this work I realized how important and fascinating this lens is.”

The work she does focuses for the most part on the importance of girls’ education; issues around microfinance (more than 90 per cent of micro borrowers are women); the Millennium Development Goals (eight goals that 189 United Nations member states have agreed to try to achieve by the year 2015); maternal health; and women’s empowerment in general. She has also focused on issues of religious extremism and how it impacts women, and the role that women are playing in pushing back on religious fundamentalism.

She discusses this last subject in depth in an upcoming book, “Paradise Beneath Her Feet: Women and Reform in the Middle East.”

An advocate for girls’ educationOne of the lynchpins in women’s empowerment, Isobel says, is ensuring that girls are educated. As she straightforwardly sums it up, “The cost of not getting girls in school is so high.”

According to Isobel, girls in the three regions of her focus are isolated by the time they reach puberty due to both traditional and cultural factors. Dropout rates skyrocket when girls hit their teenage years. How, she asks, do you break that dynamic in a culturally sensitive way? “This is an important piece to solve because so many international development dollars are going into girls’ education,” she explains. “The answers are relatively simple: have the girls taught by female teachers; ensure the schools are located within a 15-minute walk; and provide sanitary facilities for girls. This is much more likely to keep them in school.”

The math, she says, is simple: The longer girls stay in school, the fewer children they have; the fewer children they have, the more likely the next generation is to be educated and productive, and the lower the maternal and infant mortality rates. Educated girls also have much lower levels of HIV. Getting the education piece of the puzzle fitted into place has a knock-on effect for a number of other major issues.

“Mothers are the cornerstone for improving prospects for the next generation,” she continues. “Educated mothers are far more likely to send their children to school than are uneducated mothers or educated fathers.”

The other related piece is around women’s access to income, which is where microfinance comes in. “When women are able to earn money and control a bit of it, there are similar positive spillover benefits,” Isobel says. “Women are more likely to invest that money in the family – for instance, to immunize the children, get them in school, get more nutritious food.

“You realize that, for any number of development issues, you have to come back to the role of girls in society as a central starting point.”

A voice in the debateIsobel says that by being at the Council on Foreign Relations, she is able to bring these issues into mainstream foreign policy discussions, where they have been neglected or under-represented over the years.

She explains, “Because the Council is known for its nonpartisan approach, it’s a really effective platform to bring attention to these issues for that very reason. Part of our role is to help inform. What I try to do is work with organizations to bring their voices to the discussions that we bring up.”

She writes and speaks about issues on a regular basis. For example, there is an important appropriations bill currently making its way through the United States Congress, which, if passed, will funnel an enormous amount of money into global health. Isobel is working with lawmakers on Capitol Hill and various agencies around Washington to make sure that maternal health is included in the bill. “It’s arguably the most basic component of a healthcare system, and unfortunately one of the most neglected,” she says. “I am trying to make sure that it’s not neglected in this package.”

A proud motherWith a list of such impressive accomplishments to her name, one might think Isobel would find it hard to choose among them when asked what she’s most proud of. She doesn’t hesitate, though. “Without a doubt, my greatest accomplishment is my five children,” she says. Her three boys and two girls, who range in age from four to thirteen, are “all works in progress.”

How does she balance her busy life with raising them? Well, part of the reason she is so busy, Isobel explains, is that she budgets plenty of time to spend with them. She tries to be in the office for no more than six hours a day. “I work a lot from home, and at night, and at odd hours when the kids are asleep.”

Somehow, we feel Isobel’s children must be as proud of her as she is of them.

Isobel lives outside New York City with her family. Her new book, “Paradise Beneath Her Feet: Women and Reform in the Middle East,” will be published by Random House later this year.

Related content

Click here to read a February 2008 McKinsey Quarterly interview with Richard Haass, head of the Council on Foreign Relations.

May 2008

http://www.arabnews.com/?page=1&section=0&article=109754&d=10&m=5&y=2008

Harvard Islamic Studies Program Opened

Arab News

 

 

 

Prince Alwaleed bin Talal at the inauguration ceremony of the Islamic Studies Program at Harvard on Thursday. (AN photo)

 

CAMBRIDGE, Mass., 10 May 2008 — Prince Alwaleed bin Talal, chairman of Kingdom Foundation, had endowed $20 million in 2005 to establish an Islamic Studies program at Harvard University. He was at Harvard University in Cambridge, Massachusetts, on Thursday to inaugurate the program.

The program was named “Prince Alwaleed bin Talal Islamic Studies Program.” Roy P. Mottahedeh, professor of history in the Faculty of Arts and Sciences, had been appointed director of the program.

Prince Alwaleed and the accompanying Kingdom Foundation delegation were briefed about the program. The program is building on Harvard’s strong commitment to the study of the religious traditions of the world. It is also augmenting Harvard’s existing strength by increasing the number of faculty focused on Islamic studies, providing additional support to graduate students, and making rare Islamic textual sources available in digital format.

“I am pleased to support Islamic studies at Harvard and I hope that this program will enable generations of students and scholars to gain a thorough understanding of Islam and its role both in the past and in today’s world,” said Prince Alwaleed. “Bridging the understanding between East and West is important for peace and tolerance.”

Scholarship on the Islamic tradition at Harvard encompasses a broad range of disciplines, from religious studies, history, and law, to art and literature. This endowment will make it possible to add strength in important disciplines such as the history of science and new areas of study, such as Islamic Inner-Asian, Southeast Asian, or South Asian studies.

The foundation has funded many cultural, educational and philanthropic projects globally including a £16 million endowment to create two new research centers for Islamic studies at the University of Cambridge and the University of Edinburgh. In 2005, $20 million was presented to Georgetown University to create the Center for Muslim-Christian Understanding, a $20 million donated to the Louvre in support of its collection of Islamic art.

Prince Alwaleed also made a $5 million donation to establish the Center for American Studies and Research (CASAR) at the American University in Beirut (AUB) and donated $10 million to finance both the construction of the Humanities and Social Sciences building in the new campus of the American University in Cairo (AUC), and the Institute of Arab and Islamic Studies at the University of Exeter, UK, received a 1 million euro endowment from the prince.

He also gave a $5 million gift to support Harvard Medical School’s research center in Dubai. He has also made donations to President George H.W. Bush Sr. Scholarship fund established by Phillips Academy, the Carter Center for Peace and the James Baker III Institute, Rice University.

http://www.arabianbusiness.com/press_releases/detail/19933

Kingdom Foundation Chaired by Prince Alwaleed donates a further $125,000 to Muslim Leaders of Tomorrow

Posted on

Thursday, 29 May 2008

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Kingdom Foundation* (KF) Chaired by HRH Prince Alwaleed bin Talal bin Abdulaziz Alsaud made a further donation of $125,000 to the Muslim Leaders of Tomorrow (youth leadership project).

KF had previously supported the Muslim Leaders of Tomorrow (MLT) with a $180,000 contribution through the World Economic Forum. In 2004, the American Society for Muslim Advancement (ASMA) brought together 125 diverse young Muslim civil society leaders from across the United States to craft a strategy for improving the image of Islam in the American public.

This event inaugurated ASMA’s ambitious Muslim Leaders of Tomorrow (MLT) program, which has since expanded to Europe and is now poised to become a global movement for positive Muslim-West interaction. MLT program has identified emerging and dynamic young Muslims committed to collaboration, community building and constructive change.

They are journalists, academics, artists, Arabs, South Asians, Americans and all acutely aware that their strength derives from the unity they can achieve through their diversity. The MLT is developing a global network of young global leaders, coordinating media and leadership training as well as providing continuing support and strategic management for its global members.

Kingdom Foundation has funded many cultural, educational and philanthropic projects globally including, the Integration of Islamic Ethical Values into the Medical Curriculum, the Minaret of Freedom institute, the film “Reason and Revelation: Averroes, Maimonides, Aquinas in their times and ours, ” the film and book lost History: The Enduring Legacy of Muslim Thinkers, Inventors and Artists,” “BESA: Muslims Who Saved Jews in World War II,” the Center for Islamic Society of North America (ISNA) to support the HRH Prince Alwaleed Bin Talal ISNA Fellowship Program, the Center for the Study of Islam & Democracy (CSID), National Council on U.S-Arab Relations (NCUSAR) to support the council’s core operations, the James Baker III Institute, Rice University, the Dagmar and Václav Havel Foundation VIZE 97 in Czech Republic, the Muslin Women Lawyers for Human Rights, KARAMAH Organization’s Annual Law and Leadership Summer Program in the US and the Unity Productions Foundation’s (UPF) “Ending the Clash: An Education Outreach Initiative.”

Moreover, HRH donated $20 million to Georgetown University as a gift to support and expand its Center for Muslim-Christian Understanding (CMCU) and donated $20 million to Harvard University to create the University-wide Islamic Studies Program.

* Kingdom Foundation’s Executive Director is Ms. Muna AbuSulayman and the foundation is an independent entity from Kingdom Holding Company.

related – http://www.beliefnet.com/Faiths/Islam/2006/08/Harnessing-The-Future-Of-Islam.aspx

July 2008

http://www.mckinsey.com/mgi/mginews/new_power_brokers.asp

BusinessWeek

By Diana Farrell

July 15, 2008

The past year has seen much financial unrest, but three players—Asian sovereign investors, oil exporters, and private equity firms—have helped stabilize the market.

Many market participants have struggled to cope with the financial turmoil of the past year. But three players have continued to grow in wealth and clout: Asian sovereign investors, oil exporters, and private equity firms. Moreover, several of these actors gained new prominence by using their vast pools of capital to help recapitalize the balance sheets of other financial institutions and help contain the crisis. Their actions highlighted the benefits they offer—but also heighten concerns about the potential risks they pose.

In an October 2007 McKinsey Global Institute report, we labeled these three investor groups, as well as hedge funds, “the new power brokers” because their rising influence reflects a dispersion of financial power away from traditional Western institutions and toward new players and other parts of the world. In a new update, we examine how the four power brokers have fared through the crisis. And we find that collectively, they have done very well: their combined financial assets grew 22% in 2007—faster than before—to $11.5 trillion in 2007.

Much of this gain reflects the Asian countries’ swelling trade surpluses and the oil exporters’ soaring petro-profits. Additionally, both private equity and hedge funds saw their assets under management grow in 2007, but had to adjust to a sudden loss in the leverage they had used to amplify returns. Private equity survived in reasonably good shape by employing new investment strategies—including taking minority stakes in publicly traded companies and expanding in emerging markets. Overall, private equity continues to attract investor capital. But hedge funds were harder-hit; several closed, many posted large losses linked to credit products, and fund-raising slowed to nearly nothing by early 2008.

The Stabilizers

Clearly, the power brokers have financial influence because of their sheer size. Three individual institutions in this group—the central bank of China, the Bank of Japan, and the Abu Dhabi Investment Authority (ADIA)—rank among the top 10 largest asset managers in the world. And Russia’s oil revenues have made it the third-largest holder of foreign reserves, after Japan and China.

But it was by using their riches to help recapitalize and stabilize other financial institutions that the power brokers emerged as key players in the crisis. We calculate that together, Asian and oil-based sovereign investors invested $59 billion in Western financial institutions from March 2007 through June 2008. ADIA, for example, provided Citigroup © with $7.5 billion in emergency capital. Sovereign wealth funds such as the Kuwait Investment Authority and Korean Investment provided new funding for Merrill Lynch (MER). And the Qatar Investment Authority is injecting $3.5 billion into Barclays (BCS).

Private equity also has helped stabilize troubled institutions. The private equity firm TPG, for example, took a stake in the struggling mortgage lender Washington Mutual (WM). Private equity firm Corsair Capital pumped millions into ailing National City (NCC). And several private equity firms have found new investment opportunities in buying banks’ distressed debt. Private equity funds announced fund-raising of $84 billion in new distressed debt funds in the first quarter of 2008—more than triple the total in all of 2007. These debt purchases will enable the banks to improve their balance sheets, which should help them resume lending.

These combined actions helped prevent the credit crisis from spreading, and demonstrated some of the benefits offered by the power brokers. They were able to tap large reservoirs of liquidity. They have spurred the increasing availability of private financing as an alternative to troubled public markets, which should make the financial system more resilient and efficient. And the flexibility of their investment strategies and long time horizons allowed them to provide infusions of capital at a time when they were not attractive short-term investments. Indeed, we calculate these stakes have lost approximately $14 billion in value so far, but are likely to generate positive returns over time.

These qualities have proven valuable not just to the institutions that received the capital infusions, but also to the broader financial system. It is doubtful Western governments could have provided taxpayer-funded financial assistance to the banks on the same scale without triggering a public uproar. It is unlikely the banks could have raised as much capital through the public equity and debt markets amid such turbulence.

Some Risks

But the power brokers’ growing size and impact on the markets also highlight the risks they pose. We have identified four:

First, the liquidity they provide may inflate asset prices. In recent years, the capital provided by Asian and petrodollar sovereign investors have helped lower long-term interest rates by as much as 75 basis points. In retrospect, it is clear this cheap credit environment helped contribute to the credit boom that has now turned into a bust.

Second, some observers worry that state investors might have noneconomic motives for their investments. This concern has grown as rising oil prices have boosted the financial reach of some petrodollar powers, such as Russia and Venezuela, with histories of mixing business and politics.

Third, the large amount of debt that private equity firms load onto their portfolio companies could lead to rising defaults. This has not happened yet, but might occur if the current downturn continues.

Fourth, large hedge fund failures could cause the kind of financial system crisis that followed Long Term Capital Management’s near collapse in 1998. This has not happened in the current crisis, but many of the hedge funds that relied on quantitative models to drive investments did contribute to equity market volatility in the autumn of 2007.

These concerns are genuine and require monitoring. And these four investor groups will continue to grow, gain influence, and shape global capital markets for years to come. But thus far, the benefits of the new power brokers have outweighed the risks.

Diana Farrell is the director of the McKinsey Global Institute, McKinsey & Co.’s economics think tank.

Fall 2008

http://www.mckinsey.com/clientservice/publicsector/pdf/TG_Bahrain_new_vision.pdf

November 2008

http://www.euractiv.com/en/climate-change/sky-high-cost-reducing-greenhouse-gases/article-177569

Not sky-high: The cost of reducing greenhouse gases

Published: Friday 28 November 2008

Jeremy Oppenheim, Eric Beinhocker & Diana Farrell, McKinsey

Increasing “carbon productivity” is key to tackling the double challenge of climate change and economic recession, Jeremy Oppenheim, Eric Beinhocker and Diana Farrell, researchers at consulting firm McKinsey, write in the 15 November edition of Newsweek International.

The researchers, from the McKinsey Global Institute and McKinsey’s Climate Change Special Initiative, argue that investment in the shift to a low-carbon economy will more than pay itself back.

Estimating that the shift would require new global capital investment of nearly $570 billion per year between 2010 and 2030, much of the cost will be in long-term investments financed over time, boosting economic growth and job creation, the team believes.

Carbon productivity, measured as the amount of output produced per metric ton of greenhouse gases emitted into the atmosphere, must reach $7,300 by 2050 if we are to avoid disastrous consequences of global warming while at the same time reduce poverty in the Third World and maintain growth in developed countries, McKinsey argues.

This would require a tenfold increase compared to today’s productivity: the kind of challenge humankind overcame in the Industrial Revolution, the paper argues, before warning that the timeframe for action is now much shorter because continued emissions at current levels would produce irreversible damage within forty years.

The researchers thus call for a “clean-energy revolution,” starting with increased energy efficiency, the “low-hanging fruit” of energy-policy transformation. They argue that investing $170 billion annually over the next thirteen years in measures to limit energy demand, leading to significantly lower energy costs, would generate savings of over $900 billion per year by 2020.

Nevertheless, McKinsey acknowledges that in addition to slowing growth in energy demand, a dramatic increase in carbon productivity will require emissions to be curbed while maintaining economic output at the same time. It estimates, however, that 70% of the technology needed to decarbonise already exists, singling out renewables as well as more controversial sources of clean energy like nuclear and carbon capture and storage as promising examples.

The authors add that the transport sector is experiencing “a race between technologies”. They say city planners are also doing a good job by designing smart cities to reduce traffic. Moreover, large communities of entrepreneurs, venture capitalists and commercial labs are working on a “plethora of innovations” to provide the necessary new technologies.

Finally, the McKinsey team states that the road to greater carbon productivity goes beyond new technologies, arguing that preserving and expanding tropical forests (which absorb carbon emissions) and changing long-standing behaviour are equally important.

The researchers conclude that enormous progress can be made without compromising current lifestyles if businesses “start taking carbon into account in the design, packaging, supply chains and logistics of their products,” and if customers learn to make better purchase choices.

Newsweek International: Not Sky-High (15 November 2008)

 

From World Economic FORUM

The World Economic Forum is an independent, international organization incorporated as a Swiss not-for-profit foundation. We are striving towards a world-class corporate governance system where values are as important a basis as rules. Our motto is ‘entrepreneurship in the global public interest’. We believe that economic progress without social development is not sustainable, while social development without economic progress is not feasible.

Our vision for the World Economic Forum is threefold. It aims to be: the foremost organization which builds and energizes leading global communities; the creative force shaping global, regional and industry strategies; the catalyst of choice for its communities when undertaking global initiatives to improve the state the world.

We enjoy a unique global standing by recognizing and responding to two new developments: The world’s key challenges cannot be met by governments, business or civil society alone In a world characterized by complexity, fragility and ever greater synchronicity, strategic insights cannot be passively acquired. They are best developed through continuous interaction with peers and with the most knowledgeable people in the field.

To carry out its mission, the World Economic Forum has developed an integrated value chain by involving world leaders in communities, inspiring them with strategic insights and enabling them through initiatives.

The World Economic Forum is an independent, international organization incorporated as a Swiss not-for-profit foundation. We are striving towards a world-class corporate governance system where values are as important a basis as rules. Our motto is ‘entrepreneurship in the global public interest’. We believe that economic progress without social development is not sustainable, while social development without economic progress is not feasible.

Our vision for the World Economic Forum is threefold. It aims to be: the foremost organization which builds and energizes leading global communities; the creative force shaping global, regional and industry strategies; the catalyst of choice for its communities when undertaking global initiatives to improve the state the world.

Ramzi T. AbdelJaber

Principal and Head of Business Development, Investcorp, Bahrain

BSc (Hons), Kelley School of Business, Indiana University; MBA, Sloan School of Management, MIT. Founder and Chairman, Middle East North Africa Financial Network. Consultant: McKinsey and Company, Silicon Valley, US; Accenture, Middle East. Member, Jordan Chapter, Young Presidents’ Organization. Member of the Board, Injaz Bahrain.

Vikram K. Akula

Founder and Chairman, SKS Microfinance, India

BA, Tufts University, US; MA, Yale University; PhD, University of Chicago; Fulbright Scholar, India. Formerly: Management Consultant, McKinsey; since 1998, current position, saw flaw with inability of microfinance to scale to large numbers so launched SKS Microfinance on for-profit model. Profiled in media including CNN, Wall Street Journal. Recipient of awards including: Schwab Social Entrepreneur of the Year, India; Ernst & Young Start Up Entrepreneur of the Year, India; one of the world’s 100 Most Influential People, Time Magazine (2006).

Ahmet Ashaboglu

Chief Financial Officer, Koç Holding, Turkey

MSc in Mechanical Engineering, Massachusetts Institute of Technology. 1994, Research Assistant, Massachusetts Institute of Technology; Associate Director, American Treasury Bond Trading, UBS Warburg, New York; 1998-99, Head Trader and Branch Manager, FX Options, UBS Warburg, Philadelphia; 1999-2003, Management Consultant, McKinsey & Company, New York; with Koç Holding: 2003, Finance Group Coordinator; since 2006, current position.

Martin N. Baily

Senior Fellow, Brookings Institution, USA

1966, BA and 1970, MA, Cambridge University; 1972, PhD, Massachusetts Institute of Technology. 1972-79, Professor, MIT and Yale; 1979-89, Senior Fellow, Brookings Institution; 1989-96, Professor of Economics, University of Maryland; 1994-96, Member, Council of Economic Advisers; 1996-99, Principal, McKinsey & Company; 1999-2001, Chairman, US President’s Council of Economic Advisers; 2001-07, Senior Fellow, Institute for International Economics; since 2007, Director Business Initiative, Brookings; since 2002, Senior Adviser, McKinsey & Company. Member: American Economics Association. 1999-2001, President, Economic Policy Committee, Organisation for Economic Cooperation and Development; 1999-2001, Member, President Clinton’s Cabinet.

Scott C. Beardsley

Director, McKinsey & Company, Belgium

BSc (Hons) in Electrical Engineering, Tufts University; MBA (Hons) MIT Sloan School of Management. Previously worked for six years’ in sales and marketing functions for: Analog Devices; Advanced Micro Devices; the Sloan Management Review and Tufts University. Has given speeches and published extensively on telecom. Currently, Global Leader, McKinsey & Company’s Telecommunications Practice; Global Leader, McKinsey’s Special Initiative on Broadband Technologies; serves on McKinsey Committee that elects and evaluates partners; Director, McKinsey & Company. Board of Directors, Belgian American Chamber of Commerce. Guest Lecturer in telecom regulation, Institut d’Administration et de Gestion (IAG), Belgium.

Neeraj Bharadwaj

Managing Director and Country Head, Apax Partners India Advisers, India

BSc in Economics, Wharton School, University of Pennsylvania, US; MBA, Harvard Business School, US. Formerly with: Goldman Sachs; Morgan Stanley; Engagement Manager, McKinsey & Company. Since 1999, with Apax: guided investment strategies in telecom, digital media, IT services; involved in investments with Jamdat, Widerthan, NXP. Charter Member, Indus Entrepreneurs. Member of the Board, Friends of the Indian School of Business.

Kito de Boer

Director, Middle East, McKinsey & Company, United Arab Emirates

BSc in Management Science; MBA, Cranfield. Formerly with: Shell, the Netherlands; Burroughs Computers, US; Electrolux, Singapore, Malaysia, Thailand. Since 1985, with McKinsey: 1993, helped launch McKinsey in India, New Delhi; 1999, Founding Member, McKinsey, Middle East, Dubai; worked with over 30 clients in GCC, Jordan, Egypt; Pakistan; focuses on government, particularly reform issues, and telecommunications.

Lowell L. Bryan

Director, Global Strategy Practice, McKinsey & Company, USA

1968, BA, Davidson College; 1970, MBA, Harvard Business School. Former position with State Street Bank of Boston. Director and Senior Partner, McKinsey & Co.; responsible for North American Banking and Securities, New York. Extensive experience in financial institutions. Director of internal research efforts. Author and speaker on banking and securities issues.

Christian Caspar

Director, McKinsey & Company, Switzerland

1973, MBA, Stockholm School of Economics and Business Administration. Since 1975, with McKinsey & Company: 1985, Director; 1986-96, Managing Director, Scandinavian Office; 1988-94, Chairman, Client Impact Committee; 1994-98, Chairman, Directors Committee; Convenor, Global/European Corporate Finance. Chairman, Royal Swedish Academy of Engineering Sciences VI.

Ricardo Castro

Senior Vice-President, Cemex, Singapore

1976, Civil Engineer, Universidad De Los Andes, Colombia; 1977, MSc in Hydraulic Resource Management. 1977-95, with Schlumberger Oilfield Services in various capacities throughout the world including Vice-President and General Manager, Latin American Operations. 1996-97, Member of the Energy Practice, McKinsey & Company. Since 1997, Senior Vice-President, Corporate Business Development, Cemex, Singapore responsible for Asia, Middle East, Africa.

Basem Chbaklo

Deputy Chief Executive Officer, Middle East and Africa, Agility, United Arab Emirates

BEng in Computer Engineering, American University of Beirut; MSc in Business Management, Lebanese American University; MBA (Hons) in Strategic Management, Wharton. Formerly, Associate, McKinsey and Company, Houston, US.

Ian E. Davis

Worldwide Managing Director, McKinsey & Company, United Kingdom

Degree in Politics, Philosophy and Economics, Oxford University. Experience with paper manufacturing company. Since 1979 with McKinsey & Company: 1996, Head, UK office; since 2003, current position; experience in several countries and range of industries; Member: Shareholders Council. Member: Board of Trustees, Conference Board; Presidents Council, University of Tokyo; Advisory Board, Clinton Global Initiative for Poverty Alleviation Working Group; Advisory Board, Judge Business School, Cambridge University; International Advisory Council, IIM, Ahmedabad; International Advisory Board, SOAS. Expertise: consumer-related and retail industries.

Mark De Simone

Vice-President, Middle East and Africa, Cisco, United Kingdom

Degree in Engineering, Cornell University; MBA, Columbia University. Over 27 years’ industry experience. Formerly: with McKinsey; Vice-President, European Marketing, then General Manager, Medical Network Products and Services, GE; Vice-President, Europe, 3Com, US Robotics; Vice-President, Global Marketing, Lucent Technologies; Executive Vice-President: Storm Telecommunications; AduroNet. Since 2001, with Cisco including Vice-President: Technology Solutions and Corporate Solutions; Market Development, Channels, Alliances and Corporate Marketing.

Stuart M. Evans

Chief Executive Officer, Plastic Logic, United Kingdom

1971, BA, Cambridge University; 1973, MBA, Harvard Business School. Serial entrepreneur with over 20 years’ experience in venture capital backed high-tech start-ups, NASDAQ-listed and UK-quoted companies. 1973-77, IBM; 1977-82, McKinsey & Co; 1983-94, CEO, Cotag International; 1995-98, CEO, Electronic Security Group, Amtech Corp; 1998-99, Group CEO, Channel Holdings; since 2000, CEO, Plastic Logic.

John T. Gardner

Vice-Chairman, Heidrick & Struggles, USA

BSc in Industrial Management, Georgia Institute of Technology; MBA, Harvard Business School. Formerly: with General Electric; Warner Lambert; Consultant, McKinsey; Founder and Managing Partner, Industrial Practice, Heidrick & Struggles. Formerly, Member of the Board, Association of Executive Search Consultants and Chair, Government Affairs Committee.

Jared Genser

Founder, Freedom Now, USA

BSc, Cornell University; Master’s in Public Policy, John F Kennedy School of Government, Harvard University; JD, University of Michigan Law School. Formerly, Management Consultant, McKinsey & Company. 2006-07, Visiting Fellow, National Endowment for Democracy; 2008, Lecturer, University of Michigan Law School. Human rights clients have included former Czech Republic President Václav Havel, former Norwegian Prime Minister Kjell Magne Bondevik, Nobel Peace Prize Laureates Aung San Suu Kyi, Desmond Tutu and Elie Wiesel. Term Member, Council on Foreign Relations. Published op-eds on human rights topics, including Washington Post, Wall Street Journal Asia, International Herald Tribune, South China Morning Post.

Stephen Green

Group Chairman, HSBC Holdings, United Kingdom

Degrees, Oxford University and Massachusetts Institute of Technology. Formerly: with UK Ministry of Overseas Development; 1977-82, McKinsey and Company; since 1982, with HSBC Holdings: 1985, Head, Global Treasury Operations; 1992, Group Treasurer; 2002, Head, Corporate Banking; 2003, Group Chief Executive; Chairman: HSBC Bank; HSBC Private Banking Holdings; Director: Hong Kong and Shanghai Banking Corporation; HSBC North America Holdings; HSBC France; 2006, Group Chairman. Member of the Board of Trustees, British Museum. Chairman, British Bankers’ Association.

Hani Habbas

Principal, Solajan Advisors, United Kingdom

BA in Economics and Physics, Harvard College; MBA, Harvard Business School. Four years’ with JP Morgan & Co., New York; five years’ with McKinsey & Company, New York, London, Middle East. Currently, Principal, Solajan Advisors. Member: International Institute for Strategic Studies, London; Harvard College Fund, Reunion Gift Committee. Interests: education, economic policy and entrepreneurship.

John Hagel III

Co-Chairman, Deloitte Center for Edge Innovation, Deloitte Consulting, USA

1972, BA in Asian and African Studies, Wesleyan University, US; 1974, BPhil in Modern Middle Eastern Studies, Oxford University, UK; 1978, MBA in Strategic Management, Harvard Business School; 1978, JD, Harvard Law School. 1978-80, Consultant, Boston Consulting Group. 1980-82, Founder and President, Sequoia Group, Inc. 1982-84, Senior Vice-President, Atari. 1984-2000, Principal and Global Leader, E-Commerce Practice and Strategy Practice, McKinsey & Co. 2000-01, Chief Strategy Officer, 12 Entrepreneuring. Currently, independent consultant and author. Member, American Bar Association; Annual Meeting Faculty, World Economic Forum. Expertise and interests: strategic management; information technology; virtual communities; travel; history; the arts.

William A. Halter

Lieutenant Governor of Arkansas, USA

AB in Economics and Politics, Stanford University, Palo Alto, California; 1986, Master’s in Philosophy, University of Oxford. Formerly: Management Consultant, McKinsey and Company; with Clinton administration in 1993, 1993-99, Executive Office of the President, Office of Management and Budget; 1999, Deputy Commissioner of Social Security; Economist, Joint Economic Committee; Chief Economist, Senate Finance Committee. Acting Commissioner, Social Security, managing 65,000 employees in 1,500 offices. Since 2006, current position. Co-Author, study on management practices of successful companies. Member of the Board, Threshold Pharmaceuticals, a biotechnology firm developing cancer fighting drugs. Trustee Emeritus and Member, Humanities and Sciences Council, Stanford University. Member, National Advisory Board of Friends for Youth, which matches at risk youngsters with adult mentors.

Stephanie Holden

Director, Corporate Strategy and Business Development, Middle East Broadcasting Company, United Arab Emirates

BA in International Relations, University of Pennsylvania; studies in Multinational Management, Wharton School; MBA, Harvard Business School; MPA, Kennedy School of Government. Formerly, Mergers and Acquisitions Banker, Merrill Lynch, New York, Singapore; Strategic Planning, Walt Disney; Priceline.com; USAID, India; UN Relief and Works Agency, Beirut; McKinsey, Dubai. Expertise: finance, media, Asia, Russia, India, Middle East. Interests: reading, travelling, foreign policy.

Mazen Ahmed Al Jubeir

Adviser, General Manager’s Office, Saudi Oger, Saudi Arabia

AB (Hons) in Economics, Harvard College; MBA, Harvard Business School. Formerly, Management Consultant, McKinsey & Co.; Washington DC. Expertise: corporate strategy, finance, and operations. Interests: economic development, international relations, global finance.

Vikas Kapoor

President and Chief Executive Officer, iQor, USA

MBA and Baker Scholar, Harvard Business School; MA in Philosophy, Harvard University; graduate (Hons), Princeton University. Formerly: with McKinsey & Company; Co-Founder, Mitchell Madison Group, a management consulting firm; President and Chief Executive Officer, Walker Digital, an incubator of Internet businesses; President and Chief Executive Officer, Delano Technology, a customer relationship management software company; since 2004, current position. Member of the Board: Metropolitan Opera; Cooper Union; Rubin Museum of Art. Member: Young Presidents’ Organization; Philippine President Gloria Arroyo’s International Board of Advisors. Frequent speaker and commentator on corporate turnarounds, globalization and business trends. Interests: architecture, landscape design, furniture design, fine wine.

Manish Kejriwal

Senior Managing Director, Temasek Holdings, India

1991, BA in Economics and Engineering Sciences, Dartmouth College; 1995, MBA, Harvard Business School. Formerly; World Bank; Goldman Sachs; 1991-2004, Partner, McKinsey and Company; since 2004, current position. Member of the Board: Bajaj Auto; Kejriwal Stationery Holdings; Asia Financial Holdings. Member: Young Presidents’ Organization; CII. Co-President, HBSAI. Interests: travel, scuba diving, sailing, swimming.

Anil Kumar

Director, McKinsey & Company, USA

BTech, IIT, Bombay; MSc in Applied Mechanics, Imperial College, University of London; studies, Delft School of Management; MBA (Hons), Wharton School, University of Pennsylvania. Over 23 years with McKinsey, including: Managing Director, McKinsey Asia Center; head, private equity practice in Northeast; founder, Asia-Pacific corporate finance, outsourcing and offshoring practice; Founder and Chairman, McKinsey Knowledge Center, India. Co-Founder and Member of the Board, Indian School of Business. Member, Indus Entrepreneurs. Founder and Co-Chair, Indian American Council. Published by: Sloane Management Review; Harvard Business Review.

Gautam Kumra

Director, McKinsey & Company, India

BA (Hons) in Chemical Engineering, Indian Institute of Technology; MBA, Indian Institute of Management. Since 1993, with McKinsey: experience in Chicago, India, New York, Seoul, Vienna; leads McKinsey Centre for Asian Leadership; spearheads research initiative on globalisation of Asian companies; advises companies in industrial, healthcare and hi-tech sectors. Co-Founder and Governing Board Member, Public Health Foundation, India.

Aselia Kupueva

Director, Financial Evaluations Group, Alghanim Industries, Kuwait

BBA, Emory University; MBA, Tuck School of Business, Dartmouth College. Formerly: McKinsey & Company, US; Office of the President, Kyrgyzstan; Manager, Corporate Planning, Alghanim Industries.

Peter J. M. van Laarhoven

Group Director, Strategy, TNT, Netherlands

1982, degree in Applied Mathematics, Delft University of Technology; PhD in Combinatorial Optimization, Erasmus University, Rotterdam. Formerly, Researcher, Philips Research Laboratories, Eindhoven, The Netherlands; Senior Consultant, Centre for Quantitative Methods, Philips; Consultant Distribution Logistics, McKinsey & Company; 1996-2000, Full Professor, International and Distribution Logistics, Eindhoven University of Technology; Logistics Counsellor, KLM Cargo. Since 2000, current position. Author of two books and articles for international scientific journals.

Glenn Leibowitz

Group Head, External Relations, Greater China, McKinsey & Company, People’s Republic of China

BA, Cornell University; MA, Yale University, MBA, Wharton School, University of Pennsylvania. Fourteen years’ experience in Asia. Since 1997, with McKinsey including: Consultant advising financial services and high technology companies on strategic and organizational issues.

Achankeng Leke

Partner, McKinsey & Company, South Africa

Bachelor’s in Electrical Engineering, Georgia Institute of Technology; MSc in Electrical Engineering; MSc in Industrial Engineering and Engineering Management and PhD in Electrical Engineering Stanford University. Formerly: three years as part-time consultant, Pacific Monolithics and Spectrian Corporation, California. With McKinsey: 1998, Summer Associate, Johannesburg office; 1999, rejoined, Atlanta; currently, client work split between telecom, oil and gas, banking, private equity and economic development. Co-Founder and Member of the Board, African Leadership Academy, a co-educational boarding school which aims to develop next generation of African leaders.

Manish Kejriwal

Senior Managing Director, Temasek Holdings, India

1991, BA in Economics and Engineering Sciences, Dartmouth College; 1995, MBA, Harvard Business School. Formerly; World Bank; Goldman Sachs; 1991-2004, Partner, McKinsey and Company; since 2004, current position. Member of the Board: Bajaj Auto; Kejriwal Stationery Holdings; Asia Financial Holdings. Member: Young Presidents’ Organization; CII. Co-President, HBSAI. Interests: travel, scuba diving, sailing, swimming.

Helge Lund

President and Chief Executive Officer, StatoilHydro, Norway

Graduate, Business Economics, Norwegian School of Economics and Business Administration; MBA, Insead, France. Formerly: Political Adviser, Parliamentary Group, Conservative Party; Consultant, McKinsey and Company. 1993, with Hafslund Nycomed; 1997-98, Deputy Managing Director, Nycomed Pharma; 1999, Deputy Chief Executive and Chief Operating Officer, Aker RGI Holding; 2002-04, Chief Executive Officer, Aker Kvaerner; 2004-07, Chief Executive Officer, Statoil; since 2007, current positions.

Christophe de Mahieu

Managing Director, Gulf Growth Capital, Investcorp, Bahrain

BA in Economics and Engineering and Master’s in Corporate Tax and Finance Management, Solvay Business School, Brussels. Managing Director and Co-Head, Gulf Growth Capital, Investcorp; Director and Managing Partner, McKinsey & Company, Dubai and Singapore; Core Member, McKinsey Global Corporate Finance Practice; Exxon Corporation in Europe and US.

Tom Manning

Chief Executive Officer, Indachin Limited, Hong Kong SAR

Degree, Harvard University, US; degree, Stanford University, US. Formerly with; McKinsey and Company; CSC Index; Founder, US-China 2025 Project; with Ernst and Young: Chief Executive Officer, Cap Gemini, Asia Pacific; Chief Executive Officer, Consulting, Asia Pacific. Former Director, Bain and Company. Director: Bank of Communications; AsiaInfo; Gome Electrical Appliances; United Auto Parts; China Orienwise; Saybot; PreMediaGlobal.

Daniel Martinez-Valle

Director, Strategy and Business Development, Latin Amercia, Mexico

BSc in Economics, ITAM; diploma in Economics, London School of Economics; MBA, Stanford Graduate School of Business. Formerly: Consultant, McKinsey & Co.; Chief of Staff to Deputy Minister of Finance, Mexico; Chief Economic Adviser to Deputy Minister of Communications and Technology, Mexico; Founding Member, BBF Ventures, a US$ 150 million early-stage fund; Managing Partner, Nebli Capital Advisors; Chief Executive Officer, Aquanima, a provider of global supply management for large corporations in Spain and Portugal.

Miguel Martins

Chief Executive Officer, Ar Telecom, Portugal

Involved in technology wireless access and local loop, US and Spain; operations, Portugal and Brazil. Current focus in establishing operations and commercial partnerships in new world regions. Member of the Board: Seguros & Pensoes BCP Group; Companhia de Seguros Imperio. Senior Engagement Manager, McKinsey & Company.

Jorge Mata

Vice-Chairman, Buongiorno, Italy

MBA (Distinction), New York University; MSc in Physics, Universidad Autonoma de Madrid. Telecommunications Engineer, AT&T Bell Laboratories; Engagement Manager, McKinsey; Vice-President New Channels, Banco Santander; Vice-President Services, Europe, Broadvision.

Sylvia Mathews

President, Global Development Program, Bill & Melinda Gates Foundation, USA

Graduate, Harvard University; Rhodes Scholar. Formerly, with McKinsey and Company, focused on consulting for financial institutions. Served in the Clinton administration as Deputy Director of the Office of Management and Budget, assistant to the president, Deputy Chief of Staff to the President, and Chief of Staff to Secretary of the Treasury, Robert E. Rubin. 2001, Executive Vice-President; 20002-06, Chief Operating Officer and Executive Director. Leads four areas of grant making: Global Libraries, Financial Services for the Poor, Agricultural Development, and Special Initiatives & New Programs. Oversees advocacy activities for the Global Development program. Member of the Board of Directors, MetLife; Governing Council, Miller Center of Public Affairs. University of Virginia.

Horacio McCoy

President, Mexico and Chairman, Latin America, Korn/Ferry International, Mexico

BBA (Hons), Univ. of Southern California. Experience in marketing, Procter & Gamble, Mexico; Account Executive and Marketing Director, McCann-Erickson. Del Monte Foods: Manager, National Sales, Mexico; Manager, Advertising, Mexico, Central America and the Caribbean. Bristol-Myers, Mexico: Marketing Director; Assistant General Director. Consultant, McKinsey & Company. SUMESA: Director, Marketing; Operations Director; Member of the Executive Committee. With Korn/Ferry International: 1975, Partner and Vice-President, Mexico; currently, Co-Head, Global and North America Business Strategy Groups.

David H. McCormick

US Undersecretary of the Treasury for International Affairs

Degree in Mechanical Engineering, US Military Academy, West Point; PhD, Woodrow Wilson School of Public and International Affairs, Princeton University. Formerly: Army officer and veteran of first Gulf War; President and Chief Executive Officer, FreeMarkets and President, Ariba, two publicly-traded software and services companies; Consultant, McKinsey & Company; Undersecretary of Commerce for Export Administration, responsible for global policy and law enforcement for high technology trade and controls; Deputy National Security Advisor for International Economic Affairs to President responsible for coordinating US international economic policy, foreign assistance, humanitarian affairs. Since August 2007, current position, principal advisor to Secretary of Treasury on international economic issues, oversees policies on international finance, trade in financial services, investment, economic development and international debt policy, coordinates financial market policy with Group of Seven industrialized countries.

Waleed Al M. Al Muhairi

Chief Operating Officer, Mubadala Development Company, United Arab Emirates

BSc in Foreign Service, Georgetown University, US; Master’s degree, Harvard University. Formerly, Consultant, McKinsey & Company; Senior Projects Manager, UAE Offsets Group. Member of the Board: London Diabetes Centre, Imperial College; Oasis International Leasing Company; Piaggio Aero, du, Khalifa Fund; ZonesCorp. Member of the Board and Vice-Chairman: Abu Dhabi’s National Health Insurance Company; Leaseplan. Chairman: Injazat Data Systems; YahSat; Executive Committee, Abu Dhabi Aircraft Technologies. Member, Abu Dhabi Committee for Systems and Information, leading an e-government initiative. Director-General, Abu Dhabi Council for Economic Development.

 

Laxman Narasimhan

Director, McKinsey & Company, India

BSc in Mechanical Engineering, Pune, India; MA in Management and International Studies and MBA in Finance and Marketing, Wharton School, University of Pennsylvania, US. With McKinsey: 15 years’ experience working in Cleveland, Delhi, Tokyo, Toronto, San Francisco; leads consumer, retail, media and marketing practice, India; Works across geographies in the retail apparel, consumer goods, infrastructure and pharma sectors on a wide range of strategy, operations, and organization issues.

Roberto Newell Garcia

Director-General, Instituto Mexicano para la Competitividad (IMCO), Mexico

1969, BA, then 1973, MA, Universidad de las Américas, Mexico; 1979, PhD in Economics, University of Texas, US. 1984-2001, various positions including Director, McKinsey & Company; 2002-03, Chief Executive Officer, Fideicomiso de las Empresas Expropiadas, Sector Azucarero and Deputy Secretary, Agribusiness, Federal Government, Mexico. Author of books and articles.

Evan M. Newmark

 

1986, BA in Russian and Soviet Studies (Phi Beta Kappa), Wesleyan University; 1991, MBA, Harvard Business School. 1989-90, Soros Foundation, Assistant to George Soros and Program Officer. 1991-92, McKinsey, Associate. Goldman Sachs: 1992-1994, Director, Moscow Office; 1994-2000, Managing Director, Communications, Media and Technology Group. 2000-2001, Chief Executive Officer, Vizzavi Europe. Currently, Global Head, Technology, Investment Banking Group, UBS Warburg. Interests: history, golf, guitar.

Evan M. Newmark

 

1986, BA in Russian and Soviet Studies (Phi Beta Kappa), Wesleyan University; 1991, MBA, Harvard Business School. 1989-90, Soros Foundation, Assistant to George Soros and Program Officer. 1991-92, McKinsey, Associate. Goldman Sachs: 1992-1994, Director, Moscow Office; 1994-2000, Managing Director, Communications, Media and Technology Group. 2000-2001, Chief Executive Officer, Vizzavi Europe. Currently, Global Head, Technology, Investment Banking Group, UBS Warburg. Interests: history, golf, guitar.

Ndidi O. Nwuneli

Founder and Chief Executive Officer, Leadership Effectiveness Accountability and Professionalism (LEAP) Africa, Nigeria

Degree (Hons) in Multinational and Strategic Management, Wharton School; MBA, Harvard. Consultant: West African Office, Ford Foundation; Centre for Middle East Competitive Strategy, Palestine and Israel; Management Consultant, Bridgespan Group; McKinsey and Company; Founder, NIA. Director: FATE Foundation; Art of Life Foundation; Ovie Brume Foundation. Adviser, non-profit organizations in US and Africa. Author and public speaker. Recipient of awards.

Bilge Ogut

Partner and Managing Director, Warburg Pincus International, United Kingdom

BA. in Literature and BSc in Economics, Wharton School, University of Pennsylvania; MBA, Harvard Business School. Formerly: with Communications and Technology Group, Goldman Sachs International, London; with McKinsey & Company. Since 1998, with Warburg Pincus, focuses on investments in technology sector and activities in emerging Europe. Director, Mach.

Etsuko May Okajima

Chief Executive Officer, ProNova Inc, Japan

Graduate, College of International Relations, Tsukuba University; MBA, Harvard Business School. Formerly; with Mitsubishi Corporation and McKinsey; 2002, with Globis Management Bank including President, responsible for management team formation consulting, management placement services for venture companies; since 2007, Founder and current position, ProNova; teaches leadership classes, Globis Management School; Fellow, Globis Corporation; Adviser, Industrial Growth Platform. Member of several government committees. Frequent speaker, management conferences, seminars, workshops. Frequent magazine columnist.

Gordon Orr

Chairman, Greater China, McKinsey & Company, People’s Republic of China

Degree in Electrical Engineering, University of Oxford; graduate, Baker Scholar, Harvard Business School. Formerly: with GKN, UK; 1986, McKinsey, London and US; 1993, Greater China Practice; currently, serves Chinese enterprises, focus on technology, electronics and services industries, banking, trading.

Dimitri Papalexopoulos

Managing Director, Titan Cement Company, Greece

1985, MSc in Electrical Engineering, Swiss Federal Institute of Technology; 1987, MBA, Harvard Business School. 1987-89, Management Consultant, McKinsey & Company, New York. Since 1991, with Titan Cement: 1996, Managing Director and Chief Executive Officer. Member of the Board, non-profit organizations.

B. Waring Partridge III

Chairman and Chief Executive Officer, Virgin Reinsurance, Virgin Islands (U.S.)

Graduate, Yale College and Catholic University Law School. Experience in telecommunications products and services and Founder of companies in cellular telephone, paging and pay TV businesses. Formerly: Senior Consultant, McKinsey and Company; Executive Assistant to US Trade Representative; Chief of Staff to two members of Congress; Head, Corporate Strategy Group, Corporate Strategy and Development, AT&T.

Richard T. Pascale

Associate Fellow, Saïd Business School, University of Oxford, United Kingdom

Twenty years as member of the faculty at Stanford University Graduate School of Business. Consultant and Adviser to numerous Fortune 500 US and European corporations. Formerly, White House Fellow and Senior Staff at the White House task force which created the Office of Management and Budget. Co-Author: 1981, Art of Japanese Management; 2000, Surfing the Edge of Chaos. Author: 1990, Managing on the Edge: How the Smartest Companies Use Conflict to Stay Ahead; and numerous articles. Winner of the McKinsey Award for Best Article, Harvard Business Review.

Michael Patsalos-Fox

Director, Americas, McKinsey & Company, USA

BSc in Computer Sciences and Pure Mathematics, Sydney University, Australia; MBA (Hons), IMEDE, Switzerland. Twenty years with McKinsey, advising chief executive officers and senior executives in a wide range of strategic, marketing and operational areas across a large number of industries. Member, senior governance committees, McKinsey & Company.

Ben Pearcy

Vice-President, South-East Europe and European Biofuels, Bunge Europe, Switzerland

1990, BA in Modern History and Economics, Hertford College, Oxford University; 1999, MBA, Harvard Business School. 1993-95, Experience with McKinsey & Company, London; 1995, positions in Bunge, Turkey, Brazil, Italy, US; Director, Strategic Planning, Bunge United, New York; since 2003, current position. Author, HBS Course studies.

Luiz Pires

High-Tech Practice Manager, McKinsey & Company, Germany

MBA; MSCS. Scientific, Engineering and Technical Advisor, DARPA; Research Manager, Corporate Executive Board; Principal Research Scientist, Honeywell Research Labs; Manager, EMEA High-Tech Practice, McKinsey. Expertise and interests: technology, innovation, research and development.

 

Emmanuel V. Pitsilis

Partner, McKinsey & Company, Hong Kong SAR

Graduate, Ecole Polytechnique; graduate in Engineering, Ecole des Mines de Paris; MBA, INSEAD. Since 1993, with McKinsey and Company: currently, Head, Asia Pacific Financial Institutions Corporate Finance practice; co-leads Asia Pacific Wholesale Banking and Asset Management practice. Expertise: wholesale and investment banking. Author of Asset Management chapter in Banking in Asia: Acquiring a Profit Mindset.

Yves Pitton

Group Vice-President, Special Projects Strategy, Kudelski Group, Switzerland

MSc in Physics, University of Lausanne, Switzerland; PhD in Materials Science and Engineering, Swiss Federal Institute of Technology, Lausanne; MBA (Hons), SDA Bocconi School of Management, Italy. Formerly: Project Manager and Product Manager with responsibility for product and business development, Algroup Alusuisse Aluminium, Switzerland and Germany; Engagement Manager with focus on TV, new media, sports business, high-tech, industrial sector and manufacturing, McKinsey & Company, Zurich, Geneva and US. Since 2006, current position. Author of publications and papers. Member of the Board, Ligaris.

Luis Guillermo Plata

Minister of Trade, Industry and Tourism of Colombia

BA, University of Arizona; MBA, Harvard Business School. Formerly: worked in Japan and China; with Silicon Valley Internet start-up; with McKinsey and Company. Head, Proexport, a global Colombian trade and investment promotion organization; launched global campaign to revitalize image of Colombia; current goals include helping Columbian industry evolve to higher value-added businesses and service industries, bring more of informal economy into normal channels, initiate venture capital industry in Colombia, substantially increase flows of direct foreign investment into Colombia. 2006, Young Global Leader, World Economic Forum. Recipient of awards, for development of trade, investment and tourism between Colombia and several countries. Interests: mountain biking, travelling.

Karel Pleva

 

MSc in Engineering; MBA in Finance, Wharton School. Former Consultant, McKinsey & Co. Expertise: corporate strategy, performance improvement and organizational change, public policy, privatization and regulatory affairs, primarily in the telecommunications, utility and other industrial sectors.

Heinz Pley

Principal, McKinsey & Company, South Africa

1990, MSc, University of Regensburg, Germany; 1994, PhD, Stanford University, California. With McKinsey, mining and other basic materials clients globally. Interests: diving, squash.

Dieter J. Pommerening

Vice-Chairman, Felix Schoeller Holding, Germany

Studies in Law, universities of Berlin, Göttingen, Hamburg and Paris; degree in Law, High Court, Hamburg; PhD in International Company Law, University of Hamburg; 1969, MBA, INSEAD. 1977, Partner, McKinsey & Company; until 1992, Director. 1992-93, Chief Financial Officer, Tchibo-Holding, Hamburg. 1992, Professor of Economics, Leipzig; 1994-96, Managing Shareholder, Lazard & Co., Frankfurt; Chairman: Oncoscience; Vivanco; Macquarie. since 1995, Vice-Chairman, Felix Schoeller Holding, Germany. Member of the Advisory Board, Lehman Brothers.

Jacek Poswiata

Principal, McKinsey & Company, Poland

MBA, Columbia Business School. Currently, Principal, McKinsey & Company. Consulting in telecommunications, energy and transportation. Interest: skiing.

C. K. Prahalad

Paul and Ruth McCracken Distinguished University Professor of Corporate Strategy, University of Michigan, USA

CEO and Founder, Next Practice, specializes in developing new markets; involved in researching and advancing new approaches for developing markets at bottom of economic pyramid. Member of the Board: NCR; Hindustan Lever; World Resources Institute. Co-Author: Competing for the Future (1994); Future of Competition (2004); Fortune at the Bottom of the Pyramid (2004); The New Age of Innovation (2008). Recipient of awards: McKinsey Award for best articles in Harvard Business Review, three times; Lal Bahadur Shastri Award for contributions to management and public administration from President of India (2000); Global Indian Award (2004); The Thinkers 50 (2007).

Alessandro Profumo

Chief Executive Officer, UniCredit Group, Italy

Degree in Business Economics, Luigi Bocconi University, Italy. 1977-87, Banco Lariano; 1987-89, McKinsey and Company; 1989-91, Bain Cuneo; 1991-94, RAS; 1994, joined Credito Italiano, later, Chief Executive Officer; since 1997, current position. Chairman: HVB; Bank Austria Creditanstalt. Member of the Board: Teatro alla Scala; Luigi Bocconi University; Supervisory, Deutsche Börse; European Banking Federation. Member: European Financial Services Roundtable; Committee, Group of Thirty; Trilateral Commission; Investment Advisory Council for Turkey; Institut International d’Etudes Bancaires. Co-Author. Recipient of honours.

Bernard Ramanantsoa

Dean, HEC School of Management, France

Aeronautical Engineer, Ecole Nationale Supérieure de l’Aéronautique de Toulouse; MBA and PhD in Management Science, HEC. Formerly: seven years in Marketing Department, SNCF French national railways. With HEC: 1979, Professor of Strategy and Business Policy; 1993, Associate Dean, Faculty and Research; since 1995, Dean. Since 2006, Chairman, Community of Management Schools. Consultant to international companies, UN, EU; McKinsey. Co-Author: Business Strategy and Diversification; Strategic Technology Management (1992); Strategor (1988).

Cristiano Roriz Câmara

Chief Operational Officer, Organizaões Jaime Câmara, Brazil

1998, BSc in Civil Engineering, Universidade Catolica, Brazil; 2002, MBA, University of Michigan; 2007, MA in General Management, Harvard Business School. 1995-2000, Founder and General Manager, Netcam; 2001, Consultant, McKinsey & Co. With Jaime Câmara: 2002-06, Strategic Planning Manager, since 2006, Director of Strategic Planning and New Business.

Mauro Saladini

Chief Financial Officer and Executive Vice-President, Kudelski Group, Switzerland

Degree in Electrical Engineering, Swiss Federal Institute of Technology; MBA, INSEAD, France. Formerly: five years as Financial Services Consultant, Accenture; with Thema Consulting, set up Zurich branch, managed projects in foreign exchange, money market, risk management; 1997, with McKinsey and Company including: Head, Swiss Media Practice; Joint Head, European Media Practice; 2001, Partner. Since 2003, current positions.

Sheryl Sandberg

Chief Operating Officer, Facebook, USA

BA in Economics, Harvard University; MBA, Harvard Business School. formerly: Management Consultant, McKinsey & Company; Economist, World Bank, worked on eradicating leprosy in India; Chief of Staff for the US Treasury Department, helped lead work on forgiving debt in developing world. Since 2001, with Google. Member of the Board: Brookings Institution; Women for Women International; Ad Council; Leadership Public Schools; eHealth. Named one of 50 Most Powerful Women in Business, Fortune magazine and one of 50 Women to Watch by Wall Street Journal.

Peter Sands

Group Chief Executive Officer, Standard Chartered, United Kingdom, and Chair of the Governors Meeting for Financial Services 2009

Graduate. Oxford University, Masters’ in Public Administration, Harvard University, Harkness Fellow. Formerly: Director, McKinsey & Co; with UK’s Foreign and Commonwealth Office. With Standard Chartered: 2002, Finance Director; since 2006, current position.

Shirish Sankhe

Director, McKinsey & Company, India

BSc in Chemical Engineering, Bombay University; graduate degree in Management, Wharton Business School, University of Pennsylvania, US; PhD in Chemical Engineering, Purdue University, US. Formerly, Senior Research Engineer and Team Leader, gained experience in petroleum and petrochemicals, Mobil Oil, US. Since 1996, with McKinsey: experience in public policy, energy, metals and mining; 2000-01, led team that presented to Indian policymakers, how India could achieve 10% GDP growth; experience in manufacturing policy and urban reforms; 2004, helped author Vision Mumbai, a report with Bombay First.

Anamaria Schindler

Vice-President, Ashoka-McKinsey Center for Social Entrepreneurship, Brazil

MA in Sociology; PhD in Process. Created the international strategic partnership between Ashoka & McKinsey & Company. Expertise: building bridges between private and social sectors.

Jonathan I. Schwartz

President and Chief Executive Officer, Sun Microsystems, USA

Degrees in Economics and Mathematics, Wesleyan Univ., USA. Began career as Consultant, McKinsey & Co.; Chief Executive Officer, Lighthouse Design; 1996, Lighthouse Design acquired by Sun Microsystems. With Sun Microsystems: Head, Product Marketing, Java Platform; Head, Developers Tools Group; Head, Venture and Strategic Investment Group; currently, Senior Vice-President, Corp. Strategy and Planning. Member of the Executive Management Group, Sun Microsystems.

Adam Schwarz

Senior Fellow, McKinsey Global Institute, McKinsey & Company, Singapore

BA (Hons) in Economics, Duke University; MBA in International Business, Columbia University. Research Fellow, Asia Studies Centre, Murdoch Univ. Former Professor, Georgetown University and Johns Hopkins University. 1987-1997, Correspondent, Far Eastern Economic Review, Jakarta, Hong Kong, Bangkok and Hanoi; 1997, founded Nusantara Consulting, Washington DC; 2001, joined McKinsey & Company: specialist with more than 15 years experience working in Southeast Asia, including Indonesia, Thailand, Vietnam and Hong Kong; currently, Director, Communications, Asia. Author of “A Nation in Waiting: Indonesia’s Search for Stability”; “The Politics of Post-Suharto Indonesia”, among others. Member, Council on Foreign Relations.

 

 

Joydeep Sengupta

Director, McKinsey & Company, India

 

Degree (Hons) in Commerce, Delhi University; MBA, IIM, Ahmedabad. Formerly, with financial institutions in Europe, Asia and India on multi-year performance transformation programmes dealing with strategy, organization, operations, leadership; experience with central banks and governments, Asia. Currently, Director and Senior Partner, McKinsey and Company, leads Financial Services Practice, India and Asia, responsible for governance and oversight of global knowledge and technology initiatives.

 

 

Achmed Al Shahrabani

Associate Principal, McKinsey & Company, United Arab Emirates

MBA and Master’s in Political Sciences, Friedrich-Alexander University, Germany. Since 1998: with McKinsey & Co., working in areas of strategy, organization and corporate finance for telecom, basic material and private equity.

Jonathan Siegler

Senior Vice-President, Corporate Strategy and M&A, Energy Future Holdings, USA

1994, BSc (Hons) in Electrical Engineering, US Naval Academy; 1996, MSc in Electrical Engineering, Stanford University. Formerly: Lieutenant, US Navy; Engagement Manager, McKinsey & Company.

Kanwarjit Singh

Senior Programme Officer, Policy and Finance, Global Health, Bill & Melinda Gates Foundation, USA

Master’s in Philosophy and Economics, Oxford; MBA, MIT; MD, Columbia. Board certified in Internal Medicine. Formerly: Consultant, McKinsey; experience in pharmaceutical and biotechnology sectors, GSK, Amgen and Bayer. Currently, Senior Program Officer, Business Strategic Planning Group, Global Health, Bill and Melinda Gates Foundation

Pradeep Singh

Chairman and Chief Executive Officer, Aditi Technologies, USA

Degree in Electrical Engineering, Indian Institute of Technology. 1979. MBA, Harvard Business School. 1984. Formerly: Programmer, Qatar; Consultant, McKinsey; Corporate Strategy, Texas Instruments. with Microsoft: 1986, Product Manager, Excel; Group Manager, Mobile Services Group, Windows 95 Division. 1994, Founder, Aditi Technologies; 2000, Chairman and CEO, Talisma; since 2003, current position. Member, Advisory Board, Grameen Technology Foundation. Recipient, Distinguished Alumni Award, IIT Delhi. Interests: hiking, sailing, cycling.

David Skilling

Chief Executive Officer, New Zealand Institute, New Zealand

Bachelor’s in Accounting and Finance and Master’s (Hons) in Economics, University of Auckland; Master’s and PhD in Public Policy, Harvard University. Formerly: three years as Teaching Fellow, Harvard University; OECD, McKinsey & Company; Deloitte; Principal Adviser, New Zealand Treasury. Member, Advisory Board, Business School, University of Auckland. Recipient of award, Young Alumnus of the Year, University of Auckland (2006).

David W. Song

Director, Footwear Business, Nike, USA

BA, Richard Ivey School of Business, University of Western Ontario; MBA, Harvard Business School. 1994-99, with Nike Inc.; 2001-03, Consultant, McKinsey & Company; since 2003, Director, Footwear Business, Nike Inc.

Lothar Stein

Director, McKinsey & Company, Germany

Diploma and Doctorate in Physics. Currently, Director, McKinsey & Company. Leader, Business Building Practice with focus on innovation and technology management, McKinsey & Company.

Keith Stock

 

BA in Economic History, Princeton; MBA in Finance, Univ. of Pennsylvania. Former: Managing Partner, Andersen Consulting; Principal and Mgmt Group Member, McKinsey & Co.; Chairman and Chief Executive, St Louis Bank. Vice-President and Partner, AT Kearney. Chairman of the Board of Directors, AFS-USA.

Kevin Steinberg

Chief Operating Officer, World Economic Forum USA

AB (Hons) in Economics, Harvard University; MBA and JD (Order of the Coif), Stanford University. Formerly: ten years with Wholesale and Investment Banking Practice, McKinsey & Company, New York and Switzerland, primarily focused on corporate, business unit and product strategy, serving wholesale and retail financial companies and non-profit institutions. With World Economic Forum: overseeing industry teams; leading Membership and Partnership department; guiding Institutional Strategy function; since 1992, internally or as external adviser, led several initiatives including launch of Global Leaders for Tomorrow community, organization of worldwide Industry Summits, leading Foundation-level strategy projects; currently, Chief Operating Officer, World Economic Forum USA, the North American affiliate, which acts as global headquarters for Centre for Global Industries; responsible for New York-based industry groups with focus on Financial Services sector, as well as overall operations.

Alexander Straub

Co-Founder and Director, Strategy, and Member of the Board, Truphone, United Kingdom

Degree in Engineering, University of Oxford. Formerly: Consultant, McKinsey & Co; Goldman Sachs; Founder and Chief Executive Officer, Mondus; General Partner, Lazard Technology Partners.

Steven Strauss

Director, Head of Capital Markets Initiatives, World Economic Forum

BA in Computer Science, New York University; MA, MPhil and PhD in Management, Yale University; 1996-2002, Yale University Fellow. Formerly: over 10 years experience in investment banking, primarily mortgage and asset-backed securities, derivative products for global financial institutions; adviser to several start-ups in negotiations for venture capital; investment adviser and trustee for several trust funds; five years with McKinsey & Company: Financial Institutions Practice in US, UK, Europe and Middle East; primarily focused on health insurance systems reform, banking, insurance and asset management clients, sovereign wealth funds. With World Economic Forum: led several initiatives including Real Estate Community, Insurance and Asset Management Community, Diversified Financial Services Community, Capital Markets Initiatives; currently, Director, USA, and Head, Capital Markets Initiatives. Invited speaker on management: Tuck Business School, Dartmouth University; Yale University, Olin School of Business, Washington University; Said Business School, Oxford University; Marshall School of Business, University of Southern California; other universities and conferences.

Alyce Su

Founder, China Queen Capital (HK), Hong Kong SAR

1998, PhD in Physics and Biotechnology, California Institute of Technology, US. Formerly with: Institutional Business Development, China, Goldman Sachs; Corporate Finance and Strategy, China, McKinsey; Financial Engineer, PIMCO; Head, Banking Industry Cooperation, Monte Jade Science and Technology Association, Hong Kong; Director, Asia Pacific, GAM. Member: Private Equity Core Team. Recipient of awards.

Kohey Takashima

Chief Executive Officer, Oisix, Japan

MA in School of Engineering, University of Tokyo Formerly: with McKinsey & Co. 2000, founded Oisix. 2007, member, committee, Ministry of Economy, Trade and Industry. 2007, Young Global Leader, World Economic Forum. Recipient of awards: Dream Gate (2007); Entrepreneur of the Year (2007); Grand Prix , Japan Online Shopping Prize (2005).

Cephas Takavarasha

Investment Director, HSBC Holdings, United Kingdom

BSc (Hons) in Chemical Engineering, University of Wales; MBA, Wharton School, University of Pennsylvania. Extensive experience as investment banker, strategy consultant and operational manager. Formerly with: Anglo American; Bankers Trust; McKinsey & Company; Bain & Company. Currently, Investment Director, HSBC Principal Investments, Emerging Markets, Africa; responsible for sourcing, evaluation and execution of private equity transactions in Sub-Saharan Africa and oversight and monitoring of investments.

Tang Haisong

Chief Executive Officer, etang.com, People’s Republic of China

1989, BA in Laser Physics, Fudan University; 1998, MBA, Harvard Business School. Extensive international work experience. Formerly: with McKinsey & Co., Hong Kong and London; Assistant to the Chief Executive Officer, Ermenegildo Zegna. Co-Founder, Chairman and Chief Executive Officer, etang.com.

Itaru Tanimura

Representative Director, So-net M3, Japan

1987, studies at International Christian University. 1987-2000, with McKinsey & Co; since 2000, with So-net M3.

Yael A. Taqqu

Associate Principal, McKinsey & Company, USA

BA, Yale University; MBA, Harvard Business School. Associate Principal, Global Media and Entertainment Practice, McKinsey & Company, New York; producer of award-winning documentary on HIV/AIDS for Showtime Networks. Member of the Board, Lincoln Center Film Society.

Kathryn I. Taylor

Vice-President, Global Vaccine Policy and Public Health Partnerships, GlaxoSmithKline Biologicals, Belgium

MBBS, University of Melbourne; MPH in International Public Health, Johns Hopkins University. An Australian medical doctor and public health specialist. After several years of clinical practice, joined McKinsey and Company, where worked in strategy and organizational issues across a range of industries. Since 2001, Director, Global Health Initiative. The World Economic Forum’s Global Health Initiative (GHI) works to increase the quality and quantity of business activity against HIV, tuberculosis and malaria. The GHI is a collaboration between member companies and UNAIDS and the World Health Organization’s Stop TB and Roll Back Malaria partnerships. The GHI also coordinates private sector relations/serves as the focal point with the boards of the Global Fund to Fight AIDS, Tuberculosis and Malaria and the Stop TB and Roll Back Malaria Partnerships.

Tidjane Thiam

Chief Executive, Europe, Aviva, United Kingdom

1984, degree in Engineering, Ecole Polytechnique; 1986, degree in Civil Engineering, Ecole Nationale Supérieure des Mines de Paris, France; 1988, MBA (Hons), INSEAD, France. 1986-89 and 1989-94, Consultant, Strategy and Organization, McKinsey & Co., Paris and New York; 1990, Young Professional, World Bank, Washington; since 1994, Director-General, Bureau National d’Etudes Techniques et de Développement; since 1996, Special Adviser on Strategic Planning to the President of Côte d’Ivoire; since 1997, President, Nat’l Council on Information Superhighways and Nat’l Secretary for Human Resources Development; 1998-99, Minister of Planning, Development and Coordination of Côte d’Ivoire; since 2000, current position.

H. Brian Thompson

Executive Chairman, Global Telecom and Technology, Global Information Infrastructure Commission, USA

MBA, Harvard Graduate School of Business; degree in Chemical Engineering, Univ. of Massachusetts. Former Management Consultant, McKinsey & Company, Washington DC; 1981-90, Executive Vice-President, MCI Communications Corporation; 1998, Vice-Chairman of the Board, Qwest; 1991, joined LCI; 1999-2000, Chairman and Chief Executive Officer, Global TeleSystems Group; currently, Chairman and Chief Executive Officer, LCI International. Member of the Board of Directors: Bell Canada International; Williams Communications Group; DynCorp; ArrayComm; Axcelis Technologies; United Auto Group. U.S. Co-Chairman, Global Information Infrastructure Commission. Member, Irish Prime Minister’s Ireland-America Economic Advisory Board. Chairman, Advisory Committee for Telecommunciations and of the Advisory Committee on Infocoms, Ireland’s Department of Public Enterprise. Non-Executive Chairman, Telecom Eireann.

Anthony Tjan

Vice-Chairman and Senior Partner, The Parthenon Group, USA

AB, Harvard College; MBA, Harvard Business School. Former Consultant, McKinsey. 1998, Founder, ZEFER. Currently: Vice-Chairman and Senior Partner, The Parthenon Group; Chief Strategic Advisor, Thomson Corporation. Fellow, Belter Center, Kennedy School of Government, Harvard University. Thought-leader on the business strategy and technology. Contributing Author and Columnist: Harvard Business Review, Punto.com, Red Herring. Speaker and guest Lecturer: Harvard, Kellogg, MIT, Wharton. Member of the Board of Trustees, From the Top. Recipient of awards.

Lord J. Adair Turner

Chairman, Financial Services Authority (FSA), United Kingdom

Studies in History and Economics. 1979-82, taught Economics, Cambridge; with BP and Chase Manhattan Bank; 1982, with McKinsey & Co including: 1988, Partner; 1994, Director; 1992-95, built Eastern European practice. 1995-99, Director-General, Confederation of British Industry. Visiting Professor, London School of Economics. Fellow, WWF. Chairman: Committee on Climate Change; FSA. 2005, Independent Member, House of Lords. Author, Just Capital – The Liberal Economy.

Paul Twomey

President and Chief Executive Officer, Internet Corporation for Assigned Names and Numbers (ICANN), USA; Chair, Global Agenda Council on the Future of the Internet

BA, University of Queensland; MA in Political Science and International Relations, Pennsylvania State University; PhD, University of Cambridge. Formerly: Executive General Manager, Australian Trade Commission, Consultant, McKinsey & Company; research officer, international refugee organisation; founding Chief Executive Officer, Australian National Office for Information Economy and Special Adviser for Information Economy and Technology to Australian federal government; founded Argo Pacific, an international advisory and investment firm assisting companies in global Internet and technology businesses and strategic alliances. Contributed to books on industry policy, foreign and defence policy and development issues.

Laura D. Tyson

Professor of Business Administration and Economics, University of California, Berkeley, USA; Chair, Global Agenda Council on the Gender Gap

1969, Degree, Smith College; 1974, PhD in Economics. Massachusetts Institute of Technology. 1993-95, Chair, Council of Economic Advisors, White House; 1995-96, National Economic Adviser to President Clinton and Member, National Security Council and Domestic Policy Council. Formerly: Dean, Haas School of Business, University of California, Berkeley; 1998-2001, Dean, Haas School of Business; 2002-07, Dean, London Business School; since 2007, current position and Chair, Board of Trustees, Richard C Blum Center for Developing Economies, Haas School of Business. Member of the Board: AT&T; Eastman Kodak; Morgan Stanley; Brookings Institution; Council on Foreign Relations; Bruegel. Senior Adviser; Centre for American Progress; Hamilton Project, Brookings Institution; LECG; McKinsey Global Institute.

Sakon Uda

First Executive Officer, Japan Post Service Co. Ltd, Japan

BA, University of Tokyo; Master’s degree, University of Tokyo Graduate School; MBA, University of Chicago. 1981-89, with JFE, NKK; 1989-2006, McKinsey and Company; 2004-05, Visiting Professor, Hospital Management, Tokyo Medical and Dental University Graduate School; since 2006, current position. 2004-05, Member, Counselling Board, Japan Post Privatization.

Frits D. van Paasschen

Chief Executive Officer and President, Starwood Hotels & Resorts Worldwide, USA

Bachelor’s degree, Amherst College; MBA, Harvard Business School. Formerly: eight years as Management Consultant, McKinsey & Company and Boston Consulting Group; two years as Vice-President, Finance and Planning, Disney Consumer Products; seven years with Nike including, responsible for business in Europe, Middle East and Africa; 2005-07, President and Chief Executive Officer, Coors Brewing Company, the largest division of Molson Coors Brewing Company. Since September 2007, current position. Director: Jones Apparel Group; Oakley.

Hans Van Willige

General Manager, Europe, Middle East and Africa Distributors, Nike, Netherlands

MSc in Economics, Erasmus University; London Business School. Formerly: with McKinsey & Company. Interests: sport.

Ramesh Venkataraman

Partner, McKinsey & Company, India

BTech in Electronics and Communications Engineering, Indian Institute of Technology, Kharagpur; MPhil in International Relations, Oxford University; MPA (Hons) in Economics and Public Policy, Princeton University. Formerly: with the Economist Intelligence Unit, New York; with the UN Development Programme, Philippines. 1992, joined McKinsey; Partner, New York office; since 2000, current position. Speaker at high technology seminars, US and India. Author of several articles on strategy theory, software services, telecommunications and e-commerce.

Ruben Verhoeven

Director, McKinsey & Company, Belgium

Master’s in Engineering and Economics, Catholic University of Louvain, Belgium. Formerly, with Exxon. Since 1992, with McKinsey, Antwerp, Belgium: Leader, Global Basic Materials Practice and Benelux Industrial and Energy Practice; Leader, European Merger Management Practice.

Roland Villinger

 

Master’s degree in Business Economics/Psychology and Finance, Universities of Munich and Cambridge; PhD in International Management, University of Cambridge. 1991, joined McKinsey & Company; has worked for clients in financial and IT services, the public sector and energy, chemicals and various manufacturing industries. Currently, Managing Director, McKinsey & Company, Bangkok.

 

Marjon Wanders

 

Studies, London Business School; Master’s degree in Business Economics, Tilburg University, Netherlands. Trainee programmes with Royal Dutch Shell, Rijswijk and Price Waterhouse, Sydney. Formerly, ten years’ advising McKinsey’s clients out of McKinsey’s Amsterdam, London, Singapore and Kuala Lumpur Offices. Currently, Director, Client and Geographical Development, Southeast Asia, McKinsey & Company.

Wang Sing

Partner, TPG Capital Group, Hong Kong SAR

BA, St John’s College, Oxford University; BSc, Yunnan University, China; MSc, Linacre College, Oxford University; MA, Oxford University. 1992-93, Associate, McKinsey & Co.; Manager, Wardley Direct Investment Management Co.; 1993-2000, Executive Director, Goldman Sachs Asia; 2000-06, Chief Executive Officer and Executive Director, TOM Group; since 2006, Partner, TPG Growth.

Mark Weldon

Chief Executive Officer, New Zealand Exchange, New Zealand

Bachelor’s in Commerce and Masters (Hons) in Economics, University of Auckland; Juris Doctorate and diploma in International Law, Columbia University, New York. Formerly: nine years in New York including: Mergers and Acquisitions Attorney, Skadden, Arps; with McKinsey & Company. Since 2002, current position, led change from mutual to listed company, changed approach domestically and internationally, brought home relevance of capital markets to New Zealand. Olympic swimmer, competed for New Zealand at 1992 Barcelona Olympic Games and Commonwealth Games.

Miles D. White

Chairman of the Board and Chief Executive Officer, Abbott Laboratories, USA

BSc in Mechanical Engineering and MBA, Stanford University. Management Consultant, McKinsey & Co.; since 1984, with Abbott Laboratories; since 1999, current position. Member of the Board of Directors, Federal Reserve Bank of Chicago. Trustee: Field Museum, Chicago; Northwestern University; The Joffrey Ballet. Member of the Board of Directors, Executive Committee and Chair of the finance committee, Pharmaceutical Research and Manufacturers of America.

Simon M. Winter

Vice-President and Regional Director, Africa, TechnoServe, USA

1998, PhD in Economics, School of Oriental and African Studies, University of London. 1998-2003, Engagement Manager, McKinsey & Co.; five years as Economic Planner, Government of Botswana; five years with Barclays Bank; since 2003, current position. Expertise: private sector development, economics, consulting, development finance.

Gerd Wittkemper

 

Degrees in Physics and Business Administration; PhD in Nuclear Physics. Industrial Engineer, later Head of Production, Proctor & Gamble; Consultant, Strategy and Electronics, McKinsey; Head of Corporate Development, Philips, then Member of the Leadership Team, PKI; Head, Communications, Media and Technology, Booz, Allen & Hamilton; Chairman, Europe, Booz Allen Hamilton. Senior Vice-President, Booz Allen Hamilton Inc. Member of the supervisory board of several companies in the old and new economy. Member, Münchner Kreis (Telecom Association).

Michael J. Wolf

Principal, Farallon Point, USA

Formerly: President and Chief Operating Officer, MTV Networks; Managing Partner, Global Media and Entertainment Practice, McKinsey & Company.

Yoshinori Yokoyama

Chief Executive Officer and Social System Designer, Social System Design Institute, Japan

BEng, Tokyo University; Harvard Graduate School of Design; MSc in Management, Sloan School, MIT. 1966-73, Architectural Designer, Kunio Maekawa and Associates, Davis Brody and Associates; 1975-2002, various positions including Tokyo Office Manager and Director, McKinsey & Company; 2002-03, Senior Fellow, Research Institute for Economy, Trade and Industry; 2002-05, Visiting Professor, Hitotsubashi University. Member of the Board: Orix; SMBC; SMFC. Director: Opinion NPO; Life Learning Development Foundation; Health and Medical Development Organization.

Yoon Songyee

Vice-President, SK Telecom, Republic of Korea

BSc in Electrical Engineering, Korea Advanced Institute of Science and Technology; PhD in Computational Neuroscience, MIT. Formerly: Engagement Manager, Asia Pacific High Tech and Media Entertainment Leadership Group, McKinsey & Company; Adjunct Professor, Yonsei Graduate School of Journalism and Media Communication. Adjunct Professor, Ewha Women’s University School of Business Administration. Member of the Board, NC Soft. Recipient of awards: New Asian Leader (2004); Young Global Leader (2006).

Yu Jeong-Joon

President, SK Energy, Republic of Korea

Degree in Business Administration, Korea University; MSc in Accounting, University of Illinois at Urbana-Champaign. 1987, Senior Accountant, Deloitte & Touché, New York; 1991, McKinsey & Co., Seoul; 1998, Corporate Planning and Overseas Business Development, LG; since 2000, with SK: Head of New Business Development; 2001, CFO and Head, Corporate Planning; 2004, Senior Vice-President, Resources and International Business; since 2006, current position; President and CEO, SK International. Member, AICPA.

 

Adil Zainulbhai

Managing Director, India, McKinsey & Company, India

BA in Mechanical Engineering, Indian Institute of Technology; MBA, Graduate School of Business Administration, Harvard University. Since 1979, with McKinsey including: starting Minneapolis office; leading Washington DC office; currently, heads India office, advises Indian companies on growth with emphasis on globalization efforts, large public sector units on transformation programmes and multinationals on their India entry and growth strategies. Member of the Board: Indian CEO High Tech Council; Indus Entrepreneurs; American India Foundation; Saifee Hospital; Advisory Board, Indian Institute of Technology, Health Management and Research Institute.

Giuseppe Zocco

General Partner, Index Ventures, Switzerland

BA in Corporate Finance, Bocconi University, Milan; MBA, Stanford Graduate School of Business. Five years as Consultant, McKinsey & Company in several European offices, advised major corporations including European entry strategies, strategic positioning, marketing, new product introductions; 1996, Co-Founder, Index Ventures, current investment focus includes ecommerce, services, advanced communication components and devices. Director, several companies including: Telegent Systems; Ozon.ru; Artimi; Certess; VirtualLogix.