Drafts dated to year 2005

I was just deleting drafts on my blogger, dated to year 2005. It was over 35 drafts, wasted and outdated.

It's a clean up time to delete them and schedule posts.

Gulf sisters get short end of business stick

Gulf sisters get short end of business stick: "

In some Gulf countries women aren’t allowed to work in specific government jobs or hold senior ranks in public office. In other, more liberal, countries they have become chief executive officers of privately owned businesses and a force to be reckoned with. However, one area where the rights of girls in the business world can be compromised is with regards to inheritance in family businesses.

In the past decade or so many of the Gulf family businesses founders have passed away, and some companies have adapted better than others to the change. Some firms have even prepared for it in advance knowing that the patriarch was in ill health. In too few times did the patriarch lay foundations for his departure and even less have stepped down in their life time to “manage the shift”. In the worst-case scenario, brothers, some of whom can be from different mothers can be bogged down for years on end in court trying to sort out inheritance maters. In other times the male siblings are close and a smooth transition to the second generation of ownership is seen.

However, one side that is almost never highlighted is the issue of female inheritance. While it is very rare for girls to be left out of the inheritance equation altogether, and do receive a share in the vast majority of amicable settlements, sometimes they are not given a choice to inherit equity in the family business and are expected to be settle for an equivalent amount in cash. In other cases a woman’s shares are valued at a specific amount and she is given an asset such as a building or villas of equivalent value and compensated for the difference in value.

It is not uncommon for women to work in the family business, with the exception of those who are self-employed, engaged in other work, or choose to be housewives. Sadly, in some cases, even if woman is qualified she may not be allowed to work in a family business while her less qualified brothers are given that opportunity. The logic behind this seems to be that should a girl inherit shares in a company and legally becomes a shareholder, if she is married to someone from outside 'the family' then the shares would go down to the offspring of that couple, who are not seen to be from the 'original' family business.

This may go back to a question of what defines a family. Are one’s nephews from a bother closer to one's nephews from a sister? Does a woman still have 'loyalty' to her family if she is married? These assumptions may seem trivial but they do play a part in the minds of family businesses across the Gulf. In fact, in the next five to ten years it is expected that $500 billion in inheritance will be passed from one generation to the next as the founders pass on. This large amount of money will certainly be a cause to either bring people together or set them apart. And in some cases, the women won’t have a say.

But what can be done to safeguard the inheritance rights of women in the Gulf?

To avoid a situation where the potential male dominance in a family business negatively affects the daughter’s equity, a father can write the shares in his daughters' names during his lifetime. He must make sure that it is done in accordance with the law and have the papers authenticated by the courts. Preferably, the father can employ a lawyer to make sure that his daughter’s rights are safeguarded in case of his departure.

As in the case of young boys, a guardian can be assigned to protect a young girl's inheritance until she has reached adulthood. This guardian will have the right to sign on her behalf but must not be given the right to sell her shares or use them as collateral or sign this authority away to someone else. The father can also create a trust that is based offshore or in one of the more advanced financial free zones in the Gulf such as Dubai, Bahrain or Qatar. Unfortunately, not all Gulf States recognise trusts yet, while some assets can only be owned by a locally registered firm or even in an individual’s name.

The truth is that the mentality of not allowing females to own family business shares is not exclusive to the Gulf. Other regions in the developing world and some in the developed world, also find ways to discriminate against female inheritance. This should not be seen as a matter of gender rights; it is, in reality, a basic human right.

*This article first appeared in Gulf Business magazine, December 2009 issue

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Pay it forward

Have you ever watched 'Pay It Forward' the movie, which illustrates paying a good deed to someone after someone paid yours.

I personally came across this concept, when my sister & I were sitting and waiting for our turn after obtaining a ticket number. Ours was '5028', a gentlman came forward and gave us his ticket '5021', becaurse he finished his turn with the help of his friend who had ticktet number '5001', we thanked him.

After waiting for long time my sister noticed a man with bundle of applications, had ticket number '5038', she got up and gave him her old ticket number, i.e. '5028', the man was extreamly greatful and had a pleased smile in his face.

I am greatful for seeing this concept, which I loved it, in action.

If you aren't succesful, move on

If you aren't succesful, move on: "One of the main factors that discourage entrepreneurs from starting a business in the Gulf is the taboo of failure. Young men and women worry that if their project is not a success they will be forever labeled as failures rather than pioneers who tried their best. But the truth is that the taboo of failure does not only run in the young. It exists largely because it is not tolerated at the highest levels.

I always believe that each person should be encouraged to do their best. If they aren’t successful in a particular task, they should move on and keep the valuable lessons they gained from their experience.

In the Gulf it is no secret that many investment firms, real estate developers and banks have messed up. These companies over stretched their arms so far that they actually missed their targets and ended up in heavy debt. In some cases these firms had to resort to government bailouts - a term that was never used in the Gulf's dictionary.

So why are these institutions safeguarded from failure? Over 100 financial institutions have been allowed to fail in the US, including some of the most prominent ones, such as Lehman Brothers and Bear Sterns. In the UK, Northern Rock and HBOS are also examples. The same phenomenon can be seen all over the world but rarely in the Gulf.

We must keep in mind one rule of life that will never be changed: taking high risks to secure high returns also has a downside. No government in the world will be able to reverse that rule. When Gulf Bank in Kuwait took unnecessary risks by venturing into the derivatives and options markets - even though one board member who later became its chairman admitted that he had no idea what derivatives are - the bank failed miserably and had to be bailed out to the tune of KWD375 million. Rather than allow the bank to go under or be bought by another financial institution, the chairman stood down in favour of his brother, who, as a board member was witness to the risk taking.

In the UAE one government-owned developer is responsible for most of the owner’s debt and yet no changes have been made at the top. Also, banks across the Gulf have irresponsibly lent over US$10 billion to Maan Al Sanea’s Saad Group. This issue is so sensitive that a war of words broke up between the governors of the central banks of the Gulf via the Arabic media. Each one blamed the others for lack of supervision. Frankly, they are all responsible, but no one is willing to admit failure because this word does not exist in our dictionary.

In another case one Kuwaiti businessman committed suicide after allegations that he misappropriated several million dollars. Compare this with Bernard Madoff who is responsible for a $65 Billion fraud scheme and went about his life casually until his sentencing. In the Gulf you see, failure is taboo.

When a person is at the helm of a job, he may try his best and err. He should be replaced, but, ultimately, life goes on. There is no need to borrow billions of dollars to invest into bailing out failed individuals or the foreign firms they invested in to avoid labeling these investments as failures. After all, investment is a part of life; you can’t win all the battles. Bailing out these banks and investment institutions actually sends the wrong message in some instances. That message is: 'You can be irresponsible with the public’s money but the government will jump right in and save you.' The correct message should be: 'Try your best but if aren’t successful move on with life.'

Governments will never be able to secure jobs for all the region's youth in the public sector. Expanding the private sector and encouraging entrepreneurship are the only ways that we will be able to accommodate the aspiring youth of the region and secure the growth that we aspire to. In that process, failure is not uncommon. Not every new business that is started will be a success. By maintaining the taboo of failure, however, we are discouraging people from starting businesses, and that is the real failure of our societies.

How do we in the Gulf expect the young and hesitant entrepreneurs to take risks and start their own businesses when our governments frown upon failure?

*This article first appeared in Moneyworks magazine in the November issue.

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Wisdome of the day

"If you have your sight, you are blessed. If you have insight, you are a thousand times blessed."

Man flies from Saudi Arabia to India hiding in plane toilet

Man flies from Saudi Arabia to India hiding in plane toilet: ": An Indian national who wanted to return to his native village from Saudi Arabia found an easy and cheap way to travel home. He locked himself up in the toilet of an Air India plane. Habib Hussein, 26, from Moradabad district in the northern state of"

Happy New Year

I with everyone around the world, a happy new year and I hope everyone prepared their New Year's resolutions.