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In this member spotlight, see how Bahrain’s young startup ecosystem is coming to life in the Fintech sub-sector.
Bahrain took the spotlight in the startup world earlier this year when it hosted the Global Entrepreneurship Congress 2019 in April.
The event gave the country a chance to show off its emerging startup economy to a much broader audience.
Bahrain is well known for being a world leader in getting its citizens connected to the internet.
The latest Global Competitiveness Report published by the World Economic Forum ranked Bahrain third globally for the percentage of internet users by (98%), fifth globally in mobile broadband penetration rate (147.3%), and 10th globally for mobile penetration (158.4%). This naturally has helped encourage startup creation.
Another attractive aspect for startups is that Bahrain offers 0% corporate and personal tax, making it the most liberal tax regime in the Gulf.
These government efforts have attracted entrepreneurs from other countries, with more than a quarter of Bahraini founders moving to the country from somewhere else.
When it comes to specific startup sub-sectors, Fintech is on top and showing momentum.
This is partly due to Bahrain ranking first globally in Islamic finance regulation in the Global Islamic Finance Report.
Another factor is that the Bahrain government reduced capital startup requirements from $50,000 to $100 for some businesses and introduced a regulation-exempt “sandbox” for Fintech startups, meaning it would be easier for startups to experiment and grow quickly.
EDB Bahrain believes Fintech will continue to attract attention for the years to come, with an “increasing rise of challenger banks, digital-only banks, and non-traditional, algorithm-powered lenders” coming on to the startup scene. It expects Gulf-based FinTech startups “to attract $2 billion in private funding over the next 10 years, compared to $150 million over the previous decade.”
Other Bahrain startup ecosystem highlights from the 2019 Global Startup Ecosystem Report include:
- Top 15 Global Ecosystem for Affordable Talent.
- Average early-stage funding per startup totals $159,000.
- Ecosystem valued at $594 million.
- Output Growth Index of 9 out of 10, showing there is meaningful growth in total startup creation, calculated in an annualized growth rate.
Our local member in Bahrain is Tamkeen, a public authority established in August 2006 with the goal of supporting Bahrain’s private sector and playing a positive role in Bahrain’s Economic Vision 2030. Tamkeen has two primary objectives: 1) foster the development and growth of enterprises and 2) provide support to enhance the productivity and training of the national workforce.
In fact, Tamkeen says it has created more than 330 different initiatives that have served more than 230,000 Bahraini individuals and businesses to date.
“One of Bahrain’s key competitive advantages in the region is its educated, economically active young population,” Dr. Ebrahim Mohammed Janahi, CEO at Tamkeen, told us. “We have redoubled our efforts to support globally recognized training solutions to broaden and deepen our pool of tech-savvy professionals.”
source: startupgenome
The country’s growth is expected to accelerate to 2.6% this year from 1.6% in 2018, Kuwait-based banking major NBK said in a recent macroeconomic outlook
Qatar’s non-oil activity has been buoyed by government investment and the country’s growth is expected to accelerate to 2.6% this year from 1.6% in 2018, banking major NBK has said in a macroeconomic outlook.
The country’s growth is driven by a recovery in the hydrocarbon sector output (0.4%) and ongoing gains in non-hydrocarbon activity (4.4%) as the government’s expansive public investments bear fruit, it said.
Over the medium term, as infrastructure projects related to the FIFA World Cup 2022 and work on the broader Qatar National Vision 2030 advances, non-oil growth is expected to moderate to around 4% by 2021, NBK said.
By this time, the private sector should have assumed a greater role in driving diversification through greater-value add — in sectors such as manufacturing, services, transportation and real estate—as per 2018’s Qatar National Development Strategy 2018-2022 (NDS-2), NBK said in its July outlook.
NDS-2 also prioritises raising the average productivity of its local and foreign workers, which partly explains last year’s decision to offer long-term, skilled expats permanent residency and permit 100% foreign ownership across all business sectors.
The hydrocarbon sector, meanwhile, should get a welcome boost in 2020 from the commissioning of the delayed $10bn Barzan gas production facility, NBK noted.
“This should raise gas output by 12% (2 bncf/d) and drive higher condensates and NGLs volumes. The most significant contribution, however, will come over the medium-to-long term when LNG capacity expands by over 40% to 110mn tonnes per year (mn tpy), with the addition of four new LNG trains by 2024,” NBK said.
Qatar’s fiscal position has strengthened since the authorities began the process of fiscal reform and consolidation (merging ministries, liberalising fuel prices etc.) after the oil price downturn and as energy prices began to recover from their 2016 nadir. Qatar recorded a surplus in 2018 (2.2% of GDP); that should improve further to 3.2% by 2021 amid continued spending restraint and stable energy prices, NBK said.
“The improvement in government finances will also have a positive bearing on public debt. While the authorities accessed the debt markets in 2018 and early in 2019 — securing favourable rates amid considerable investor demand—to the tune of $24bn, debt levels are expected to fall from 53% of GDP in 2018 to 41% of GDP by 2021,” NBK’s macroeconomic outlook showed.
The external current account (CA) balance, which moved back into surplus in 2017 and reached an estimated 8.3% of GDP in 2018 should remain in surplus over the forecast period. Notwithstanding a slight deterioration in 2019 to 6.4% of GDP on softer oil and gas prices, the CA will benefit in the medium-to-long term from higher gas exports and returns from the Qatar Investment Authority’s overseas assets.
Qatar’s banking sector, NBK noted, “has overcome the shock” of non-resident capital flight and tighter liquidity associated with the 2017 blockade. Foreign deposits have returned (+29% year-on-year), private sector credit growth is at a near-three year high (+12.6% y-o-y) and overall liquidity has improved.
But, NBK cautioned, volatile energy prices and LNG competition are the main risks Qatar faced.
It said the country faces several challenges including continued sensitivity to volatile global energy prices and capital flows as well as increasing LNG competition (especially from Australia and the US), which could put downward pressure on prices.
source: .gulf-times
Saudi Arabia plans to introduce Hajj Smart ID instead of passports in 2020 in a move to ease the pilgrimage for millions of Muslims in Makkah, Al Arabiya reported.
The new ID will contain the pilgrim’s information and documentation instead of carrying official documents including passports.
The card, which stores each pilgrim’s health information, was used by 150 pilgrims during Hajj in 2019, and it was powered by a battery that runs for up to two years.
Moreover, the Ministry of Hajj and Umrah also developed a smartphone app for smart ID services.
source: mubasher
The worldwide 5G wireless network infrastructure revenue will reach$4.2 billion in 2020, an 89 per cent increase from 2019 revenue of $2.2 billion, said research and advisory firm Gartner in a new report.
Additionally, Gartner forecasts in the report titled “Forecast: Communications Service Provider Operational Technology, Worldwide, 2017-2023, 2Q19 Update” that investments in 5G NRnetwork infrastructure will account for 6 per cent of the total wireless infrastructure revenue of communications service providers (CSPs) in 2019, and that this figure will reach 12 per cent in 2020.
“5G wireless network infrastructure revenue will nearly double between 2019 and 2020,” said Sylvain Fabre, senior research director at Gartner.
“For 5G deployments in 2019, CSPs are using non-stand-alone technology. This enables them to introduce 5G services that run more quickly, as 5G New Radio (NR) equipment can be rolled out alongside existing 4G core network infrastructure.”
In 2020, CSPs will roll out stand-alone5G technology, which will require 5G NR equipment and a 5G core network. This will lower costs for CSPs and improve performance for users.
5G rollout will accelerate through 2020
5G services will launch in many major cities in 2019 and 2020. Services have already begun in the U.S., South Korea and some European countries, including Switzerland, Finland and the U.K. CSPs in Canada, France, Germany, Hong Kong, Spain, Sweden, Qatar and the United Arab Emirates have announced plans to accelerate 5G network building through 2020.
As a result, Gartner estimates that7 per cent of CSPs worldwide have already deployed 5G infrastructure in their networks.
CSPs will increasingly aim5G services at enterprises
Although consumers represent the main segment driving 5G development, CSPs will increasingly aim 5G services at enterprises. 5G networks are expected to expand the mobile ecosystem to cover new industries, such as the smart factory, autonomous transportation, remote healthcare, agriculture and retail sectors, as well as enable private networks for industrial users.
Equipment vendors view private networks for industrial users as a market segment with significant potential. “It’s still early days for the 5G private-network opportunity, but vendors, regulators and standards bodies have preparations in place,” said Fabre.
Germany has set aside the 3.7GHz band for private networks, and Japan is reserving the 4.5GHz and 28GHz for the same. Ericsson aims to deliver solutions via CSPs in order to build private networks with high levels of reliability and performance and secure communications. Nokia has developed a portfolio to enable large industrial organizations to invest directly in their own private networks.
“National 5G coverage will not occur as quickly as with past generations of wireless infrastructure,” said Fabre.
“To maintain average performance standards as 5G is built out, CSPs will need to undertake targeted strategic improvements to their 4G legacy layer, by upgrading 4G infrastructure around 5G areas of coverage.
“A less robust 4G legacy layer adjoining 5G cells could lead to real or perceived performance issues as users move from 5G to4G/LTE Advanced Pro. This issue will be most pronounced from 2019 through 2021, a period when 5G coverage will be focused on hot spots and areas of high population density,” he added.
source: zawya
The UAE has ranked first in the Arab region according to the 2019 Government Electronic and Mobile Services, GEMS, Maturity Index.
Issued by the United Nations Economic and Social Commission for Western Asia, ESCWA, the indicator is a measuring tool of progress at the national level in achieving transition to digital services. It was carried out across 13 countries including, the UAE, Saudi Arabia, Syria, Oman, Palestine, Iraq, and Lebanon, amongst others.
The GEMS Maturity Index is measured across three sub-indices - Service Availability and Sophistication, Service Usage and Satisfaction, and Public Outreach.
According to the ESCWA report, the UAE achieved a 90 percent score in the 'Service Availability and Sophistication' category. This category uses various metrics to provide insights on what government services are available online or via mobile applications, and also measures accessibilty of government data via these channels.
Despite scoring 79 percent in the 'Public Outreach' category -- which determines what governments have done to make citizens aware of digital services in vital sectors -- the UAE scored 51 percent in the 'Service Usage and Satisfaction' index. The latter measures how frequestn government digital services are used, as well as end-user satisfaction with the digital service.
The GEMS index is measured across 84 core services. According to ESCWA, these services offer a fair representation of government services and illustrate the potential consequences if they are not provided effectively. Core services range across the health, education, work, transportation, tourism and social welfare sectors, among others.
Out of the 84 core services sectors, the GEMS Index report revealed that the UAE has a total of 70 that provide electronic services. It noted that e-Government services could be improved in the judicial and immigration services mechanisms -- each of which registered only two e-services provided within the country.
Commenting on the results, Hamad Obaid Al Mansoori, Telecommunications Regulatory Authority, TRA, Director-General, said, "Smart and advanced services are the key to customer happiness, therefore, we develop our government services in the UAE, inspired by the directives of our wise leadership, which emphasise on people as the goal and aim of the overall process of digital transformation."
"Achieving the first position in GEMS Maturity Index is the result of the collective efforts of the UAE Government towards full digital transformation," he added.
The Index allows to track the progress in the transition to e-channels for government service provision, by annual comparison of the national performance.
Salem Al Housani, Acting Deputy Director-General for Information an e-Government Sector, said, "This achievement comes one year after announcing the TRA as the entity responsible for smart government and digital transformation of the UAE’s model of digital government maturity."
"The UAE model of digital government maturity is a unified reference for electronic/digital government in the UAE, which guides the work on the various pillars of digital transformation, and measures the capability to create a digitally mature government and maintain its stability. TRA has launched the Digital Government Maturity Model to achieve the National OSI, and to reach the first position globally in OSI," he added.
According to the TRA, the UAE Government provides about 3,730 federal and local online services through its official portal. It also provides more than 270 procedural services at the federal level.
source: wam
The European Bank for Reconstruction and Development (EBRD) expects to keep investments in Egypt at over 1 billion euros this year, boosting its equity portfolio through a delayed privatisation programme, its regional director said.
The bank intends to participate in an expected share offering for state-run Alexandria Container and Cargo Handling Company, among the first of dozens of state-run companies planning to sell stakes, Janet Heckman, managing director for the southern and eastern Mediterranean, said in an interview on Wednesday.
It also hopes to help finance a monorail project that will link Cairo to a new capital being built in the desert, and for which a consortium led by Bombardier has been identified as the preferred bidder, she said.
Set up in 1991 to help ex-communist countries of eastern Europe shift to market economies, the London-based EBRD has extended its operations over the last decade to more than 35 countries, from Morocco to Mongolia.
It started operating in Egypt in 2012, a year after the uprising that toppled former president Hosni Mubarak and threw the country into turmoil.
Last year Egypt overtook Turkey as the EBRD’s largest country of investment, with about 1.2 billion euros invested in renewable energy, power, property and tourism, agribusiness and transport.
“It’s been quite a quick ramp-up. As of last month we’ve invested roughly a little over 5 billion euros ... in 95 projects, all but 11 of which are private sector,” said Heckman.
More than half those investments have come since 2017, a year after Egypt began implementing a three-year economic reform programme tied to a $12 billion loan from the International Monetary Fund.
The reforms included a sharp devaluation of the Egyptian pound that made Egypt more attractive to private capital.
Equity only makes up about 5% of the EBRD’s portfolio in Egypt, but that share was expected to rise, said Heckman.
“This year in conjunction with the IPOs and other investments we’re looking at, we expect it to shift significantly,” she said.
The state owns vast swathes of Egypt’s economy.
A programme to launch share sales has been held up since last year, partly due to emerging market uncertainty.
Egypt has been praised by international lenders for its speedy reforms, though austerity measures and inflation have left many Egyptians struggling to get by.
Gross domestic product is forecast to top 5% for a second year running, but investment outside the energy sector has been falling.
“People want to see a period of continued stability and progress, because it’s a big decision to begin significant manufacturing facilities in a country,” said Heckman.
She said she was encouraged by the start-up scene, signs big Egyptian companies are investing more domestically and expanding infrastructure for investors such as legal and consulting firms.
“We continue to be quite bullish and optimistic about Egypt ... it’s a big country, almost 100 million people and at the same time it’s greatly positioned in terms of export opportunities, which I think have been highly underdeveloped,” Heckman said.
source: reuters
Last year, Morocco witnessed a 36% increase in foreign investments to reach $3.6 billion, primarily in the finance and automotive sectors.
The significant jump in foreign direct investment in Morocco confirms the growing confidence of international corporations in the country’s business climate. Morocco ranked fourth in Africa in their amount in the latest ranking by the UN Conference on Trade and Development (UNCTAD) thanks to last year’s whopping 36% increase over 2017 to reach $3.6 billion, primarily in the finance and automotive sectors.
Data show that the flow of foreign investment to North Africa increased by 7% to reach $14 billion, the largest share of which went to Egypt and Morocco, while Algeria and Tunisia received between $1 billion and $2 billion in investments.
UNCTAD said Morocco continues to benefit from a relatively stable economic performance, in addition to having a diversified economy that is appealing to foreign investment in finance, renewable energy, infrastructure and the automotive industry.
The largest investment made last year in the country was the acquisition of 53% of Saham, Morocco’s largest insurer, for $1 billion by the South African Sanlam Group.
African countries, including Morocco, are increasingly relying on special economic zones, including free zones, with the availability of 237 such areas on the continent providing a special tax environment to attract foreign investment in various value-added industries.
According to UNCTAD, special economic zones represent an important means of export promotion for most countries, especially those of manufactured goods. For Morocco, these zones represent about 60% of the net non-oil exports.
In a new initiative that reflects the solidity of the Moroccan business climate, the Casablanca Financial Pole and the World Financial Centre in Toronto, Canada, signed a partnership agreement to promote sustainable investment opportunities between Canada, Morocco and the rest of Africa.
According to Manal Bernoussi, director of strategy, marketing and communications at Casablanca Finance City, this “agreement will open the door to exploring opportunities for cooperation between North America, Morocco and Africa.” She also noted that this new partnership with the Canadian financial institution would allow Casablanca’s financial pole to reinforce its network of partners and strengthen its international cooperation.
The agreement reflects both Rabat’s interest in the Canadian market and the attractiveness of the African continent to investors from North America. The agreement will provide a platform to promote best practices in green financing and environmentally friendly infrastructure, in addition to sharing knowledge and expertise to accelerate the development of professional, educational and training programmes in finance.
Jennifer Reynolds, president & CEO of Toronto Finance International, said that through cooperation with Casablanca’s financial hub, her company will facilitate the exchange of information and expertise to create new opportunities for enhanced international cooperation. “Africa is one of the fastest growing economic regions in the world and its trade and investment relations with Canada are improving,” said Reynolds during the signing ceremony.
American corporation Keller Williams, a global real estate network, recently announced that it had chosen Morocco as a new centre for its business. The company said it would launch its business from Casablanca after being encouraged by Morocco’s previous ranking on the 2018 Africa Investment Index, issued by the international group Quantum Global Research Lab, as the most attractive destination for business.
In order to ensure the development of the future structure for investments, the Moroccan government has launched the activity of collective real estate agencies, as this type of move has proven effective globally as an investment mechanism.
Moroccan Minister of Economy and Finance Mohamed Benchaaboun said the activity of these agencies will contribute to modernising financing methods and instruments and will help create a dynamic in the financial markets so that the latter can play their role in mobilising savings and using them efficiently in investment.
The agencies operate according to strict rules in terms of governance, supervision and investment, making them modern investment tools of high quality. They also meet the needs of some companies in terms of long-term investment backed by real estate assets based on rental income, as well as providing flexibility in terms of access to various real estate markets.
These agencies are expected to contribute to the development of a sufficient and good supply of leased properties in the areas of trade, services, industry and hotels, as well as mobilising new financial resources for companies and helping them restructure their financial positions.
Nezha Hayat, head of the Moroccan Capital Markets Authority, said the launch of the initiatives is part of a strategy to diversify financial instruments that respond to the needs of investors. These initiatives are “a key backing of real estate financing and constitute an essential stage in implementing the specific vision for developing capital markets in order to effectively contribute to financing the economy,” she said.
Source: Thearabweekly
Cities do not have to expand higher and lower, they can grow in the use of time.
Expanding night time creates jobs and supports social inclusion
The Evening Economy (EE) is increasingly capturing the attention of researchers, policymakers, private business, public agencies, the media and the wider community.
The UK’s EE alone supports 1.3 million jobs and creates $100 billion per year in revenue. The EE accounts for 10-16 percent of town center jobs in Sydney. New York’s EE supports around 300,000 employees.
Last week, the Saudi Council of Ministers endorsed the regulation to grant the private sector the right to extend business hours to 24 hours.
This will have a positive impact on the economy by increasing employment opportunities, consumption and disposable income, and allowing new small and medium enterprises (SMEs), especially restaurants and retail operators, to participate in evening hours.
Due to the recent deregulation of business hours, there will be 45,000 direct jobs created in the restaurant and retail sectors, and 20,000 indirect jobs created, over the short to medium term.
An estimated 30,000 part-time jobs could be established.
Female and youth employment could also be encouraged over time. Female unemployment is still high at
31.7 percent but is down from the fourth quarter of 2018.
SMEs could see an uptick in business activity by 6-8 percent, and an increase of 5-6 percent in terms of new establishments.
Restaurants could see an increase in 7-9 percent of their annual business turnover, which could translate to SR68 billion ($18 billion).
Total non-oil gross domestic product (GDP) would amount to an increase of 0.4-0.5 percent of additional value added over the next three years. In terms of gross value added, it translates to SR90-100 billion per annum.
The impact on tourism GDP would amount to an increase of 2.4 percent. The entertainment sector could see an increase of 4 percentage points in value-added terms.
Deregulated business hours is the direction that most developed economies worldwide are taking.
The effects of deregulating business hours are unequivocally positive on the overall economy.
Deregulation will have a negligible effect on inflation on average prices throughout the economy, even as more recently the food and beverage sector has seen prices rise by 1.1 percent.
International agricultural prices have been rising in conjunction with an uptick in some local food items.
Throughout history, towns and cities have had some manifestation of an economy that operates in the evening and at night.
In ancient Greece (and probably before), people traded objects and services beyond the end of the commonly understood working day.
In Asia, night markets selling domestic goods, medicines and food have existed for thousands of years.
But in the 21st-century leisure or post-industrial age, the transactional nature of the evening and night has appeared to grow in importance to the functioning of towns and cities.
So while not having the same weight of economic contribution as daytime activity, what happens “after dark” has greater strategic interest than ever before.
This makes the importance of measuring the location, makeup and economic significance of the EE relevant to a range of policymakers and planners.
This is particularly true in Western and Western-influenced nations, where regenerated post-industrial areas have developed a strong focus on leisure consumption linked to the rise of complimentary changes such as the increase in city-center living, agglomeration of industries attracting mobile young professionals in the new economies and the rise of urban tourism.
The many potential benefits of a vibrant EE have been underemphasized.
There have been no studies of the wellbeing and mental health benefits that may come from enjoying a city’s EE provision.
With Vision 2030 targets to raise female participation rates, working hours in the retail sector gain extra significance. Youth unemployment and part-time employment would also be supported over time.
Businesses are expected to extend their working day by an average of three hours.
This should give people more opportunities to shop in the evening.
Unlike other countries, Saudi Arabia’s peak hours tend to center around the late evening window (around 9 p.m.) for climate and social reasons.
According to the UN, by 2050 more than 80 percent of the world’s population will live in urban areas.
This can be seen as a challenge or an opportunity. To feed and house people, cities will have to create more on the same land.
Cities do not have to expand higher and lower, they can grow in the use of time. Expanding night time creates jobs and supports social inclusion.
Source: zawya
From Belarus to Bahrain, the small states going big on cryptocurrency
30 Jul 2019 Written by Admin AdminBahrain launched rules in February for cryptocurrency companies such as trading platforms, including rigorous customer background checks, governance standards and controls on cyber security risks
When Belarusian President Alexander Lukashenko met entrepreneur Viktor Prokopenya in March 2017, their discussion was scheduled to last for an hour but went on for three times that long.
The meeting, Prokopenya said, ended with Lukashenko asking him to propose regulations to boost the country's tech sector. Prokopenya worked with IT firms and lawyers to draft guidelines to cash in on an emerging digital industry: cryptocurrencies.
Some two years later, the rules are in place. Investors can trade bitcoin on an exchange run by Prokopenya, while other companies are launching their own cryptocurrency platforms.
"The idea was to create everything from scratch," Prokopenya told Reuters in an interview in London. "To make sure that it is free in some of the aspects it needs to be free, and very stringent in other aspects."
Contacted for comment, Lukashenko's office directed Reuters to an account of the meeting on the president's website.
Belarus is among a handful of smaller countries coming up with specific rule books for digital currencies. Their efforts could help shape the development of the global market and the growth of industry players, from exchange platforms to brokers.
So far, cryptocurrency companies have often had to choose between two extremes when deciding where to set up shop.
Major financial centres like London and New York, which apply traditional financial services rules to the sector, might be attractive to big institutions seeking safety but the compliance complexity and costs preclude many of the startups at the heart of the fledgling industry.
Conversely, lightly-regulated jurisdictions like the Seychelles and Belize allow far easier market access. But states with light rules can offer less protection for investors and have looser checks on money laundering, lawyers say.
The likes of Belarus and other newer entrants - including Bahrain, Malta and Gibraltar - are seeking to offer a third way: crafting specific rules for the cryptocurrency sector, betting they can attract companies by providing regulatory security as well as perks like tax breaks.
While there is no guarantee of success, cryptocurrencies represent a rare chance for these states or territories to grab a slice of an emerging market, potentially attracting investment and creating jobs, at a time when big financial hubs are adopting a more conservative, "wait-and-see" approach.
"There are jurisdictions in the see-no-evil, hear-no-evil camp," said Jesse Overall, a lawyer at Clifford Chance in New York specialising in crypto regulation. "On the other end there is the U.S., UK, EU. In the middle, that's the juicy part of the spectrum."
Overall said both countries and companies could benefit from the emergence of frameworks specifically for cryptocurrencies. But states that get the rules wrong could fall foul of global rules to stamp out illicit use of digital coins, he added.
Indeed, there are major questions over whether these nations will be able to consistently prevent the hacks and illegal activities, such as money laundering, that plague the opaque sector and could hammer their reputations as secure centres.
Another risk of building rules for an unpredictable and rapidly evolving industry is that they could soon become outdated.
'CARROTS WITH NO STICKS'
ZPX, a Singapore-based crypto firm, will launch a cryptocurrency trading platform, Qume, next month catering to institutional investors such as high-frequency proprietary trading firms and hedge funds.
It has decided to base the business in Bahrain's capital Manama - and the considerations it faced are emblematic of the quandary confronting many players across the industry.
ZPX's CEO Ramani Ramachandran said it decided against operating in a so-called offshore jurisdiction with low or no regulation. Such a base could deter big investors as scrutiny of digital coins heats up from global regulators and politicians, he said.
"As the market matures analogous to traditional capital markets, mainstream institutional capital will increasingly look to come to regulated exchanges such as Qume as opposed to 'light-touch' venues in offshore jurisdictions."
Bahrain launched rules in February for cryptocurrency companies such as trading platforms, including rigorous customer background checks, governance standards and controls on cyber security risks.
It's also usually far cheaper in terms of compliance and administration costs to set up in smaller locations like Bahrain than in major financial hubs, said Ramachandran.
ZPX estimates such costs would come to around $200,000 a year in Bahrain, versus at least $750,000 a year in London.
Another advantage of setting up in a smaller country, said ZPX co-founder Aditya Mishra, was the close communication companies could have with regulators, something that would be difficult in a big financial centre. Bahrain also offered good access to Gulf markets, he added.
Another cryptocurrency trading platform, iExchange, began operating in the Belarusian capital Minsk this month, aiming to attract investors from the CIS market of Russia and the former Soviet states.
Co-founder Igor Snizhko said Belarus was the best option because it had a regulatory framework that other countries in the region lacked.
Belarus demands audits of issuers of digital coins and details of the projects underpinning any issuance. For trading platforms, the rules include keeping tabs on suspicious transactions to meet international money laundering standards.
"For many the CIS market is very promising and very dangerous at the same time," he added. "Many large and accomplished players are still afraid of one factor - a lack of transparency. We didn't want to work in any 'grey' jurisdiction."
Sweeteners offered by Belarus include tax breaks for companies mining or trading cryptocurrencies. The rules, described by PwC as "carrots with no sticks," also give firms looser rules on currency controls and visas.
In the United States, by contrast, digital coin transactions are taxable. In Britain, capital gains taxes apply.
iExchange said it had also initially looked at other countries including Estonia and Malta, but chose Belarus because of its proximity to its target market.
BESPOKE APPROACH
The size of the global cryptocurrency sector is hard to gauge because of its complexity and lack of transparency. Still, Ireland-based Research and Markets reckons the sector will grow to $1.4 billion by 2024 from $1 billion this year. Other estimates see a faster rate of growth.
Crypto regulations vary through the world. While Facebook's unveiling of its Libra coin has prompted signs of a coordinated backlash against cryptocurrencies by major economies, a patchwork of approaches still rules from country to country.
China has even banned cryptocurrencies outright, while an Indian government panel last week recommended a similar measure.
Sui Chung of Crypto Facilities, a London-based cryptocurrency futures exchange, said there were clear benefits to being in a major financial hub, including having access to highly skilled employees.
"You need to be in place where you can get the staff," he said. "Our product teams, development teams have financial institution experience."
Being regulated in an established centre can also allow companies access to deeper, more liquid markets and provide greater certainty on securities law, said Ann Sofie Cloots, one of the authors of a Cambridge University study on cryptocurrency regulation.
"It may mean you have a more sophisticated investor base, greater access to capital," she said. "It's also a reputational thing."
To be sure, it is not just the likes of Belarus and Bahrain that have coined their own crypto rules: Some larger countries like France and Japan have also made moves in that direction.
But it's the smaller countries that have tended to launch the most sophisticated "bespoke" approaches, according to the Cambridge University study.
That could bring clarity to both cryptocurrency companies and related services like banks previously wary of the sector's unclear legal status, said Cloots.
Belarus entrepreneur Prokopenya, whose Instagram posts of sports cars in Cyprus and beaches in Dubai are followed by 5.6 million people, acknowledged the risks that came with blockchain technology, including the potential for money laundering.
But he said these could be mitigated with clear regulation, and that countries like Belarus should not miss out on a chance to grab a slice of an emerging market.
"The biggest risks come from not taking any risks," he said.
Source: zaway
Global experience shows that entrepreneurship stimulates job creation in the economy. The degree of entrepreneur success depends on the maturity of the underlying ecosystem.
Traditional pathways for job creation and growth, however, are at risk of not producing enough jobs in the future. The Government of Jordan has been encouraging entrepreneurship to shift these forecasts and accelerate the rates of job creation.
Jordan’s ranking in the Global Entrepreneurship Index, which measures both the quality of entrepreneurship and the extent and depth of the supporting entrepreneurial ecosystem in 137 countries, improved by 23 ranks between 2014 and 2018 (going from 72 to 49). According to the Global Entrepreneurship Index 2018, the score of Jordan is equal to the Arab region’s average score of 37%. Jordan outperforms the region in product innovation, technology absorption, competition, startup skills, and cultural support indicators.
On the other hand, Jordan lags in high growth, risk capital, risk acceptance, networking, and human capital indicators.
In 2019, the World Economic Forum (WEF) included 27 Jordanian startups among the top 100 in the Arab World. Jordan’s technology entrepreneurs have shaped the region’s tech scene in the last decade (Maktoob, Souq.com, Arabia Weather, Mawdoo3, and many others). There are thousands of Jordanian technology professionals, who assume senior positions in key technology companies in the Arabian Gulf region and look for good opportunities to work back in Jordan.
According to the survey, 94% of the Jordanian startups key founders hold BA degree or above, 62% have 10 years of experience or above, and 20% have 6-9 years of experience.
The majority of Jordanian entrepreneurs (71%) have previous experience working at middle- or senior- level jobs, and most of them (91%) worked as employees in a private enterprise, including their own, before establishing a business.
Jordanian entrepreneurs also tend to work in groups where co-founders bring in a mixture of diverse but complementary skills to support business operations.
These characteristics show high quality composition that align with the characteristics of WEF’s 2017 top 100 startups from the Arab World.
The World Bank surveyed the top 100 startups back then, studied entrepreneurship trends and policies, and published a chapter on entrepreneurship at the Arab World Competitiveness Report 2018 to inform government policies in the region.
As a step to support entrepreneurs’ aspirations, the Government of Jordan and the World Bank facilitated the participation of 14 leading entrepreneurs from Jordan at the 2019 London Initiative.
The entrepreneurs demonstrated the scale of ambition of Jordan's economic transformation, highlighted the growth potential in digital entrepreneurship, and pitched investment opportunities to global funds. Expansion into the wider regional/global markets is key for the Jordanian entrepreneurs, considering the relatively small size of the local market.
On challenges, Jordanian entrepreneurs perceive taxes as the key barrier facing their business (73%), followed by laws governing investments in startups (62%), excessive government formalities (58%), obstacles related to customs law and regulations (55%), and social security (52%). Focus group discussions provided insights on these challenges and suggested that tech-enabled entrepreneurs are unclear on the economic classification of activities that are tax exempted, burdened by the relatively high tax levy on imported/input services (26%), and troubled by the requirement to file tax on a monthly basis. Startups also expressed concerns about the complicated company restructuring process (increasing/decreasing capital, changing shareholders, etc), difficulty in obtaining work permits for skilled foreign labor, and inconsistent estimation of custom fees on imports. Clearly, there are specific legal and procedural reforms that the Government could implement to support businesses in Jordan. Entrepreneurs expect the Government to enable a friendly business environment, help open local and regional markets, and develop the local entrepreneurial ecosystem, according to World Bank’s survey.
In May 2019, the Government of Jordan introduced a new cabinet Ministry for Digital Economy and Entrepreneurship (MoDEE) to expand the mandate of the former Ministry of Information and Communication Technology and support digital entrepreneurship, electronic payments, and digital skills development. This comes as an organic step to support the growing role of the Government in supporting these digital economy pillars.
The Government has taken key steps in supporting the digital economy by endorsing a PPP model for expanding the national broadband network, supporting digital skills development for hundreds of youth, launching an ambitious plan for government e-payments, and supporting access to growth finance and global markets for entrepreneurs. These efforts will contribute to World Bank’s Moonshot initiative for MENA, which calls for doubling broadband access by 2021 and expanding access to digital payments.
To enable a business-friendly environment in Jordan, entrepreneurship ecosystem representatives (including Intaj, Oasis 500, Endeavor, JEIA, Startup Council, and others) and MoDEE have started a consultative effort, facilitated by the Word Bank and the Jordan Strategy Forum — a leading local think tank, to develop a policy matrix for addressing these challenges. MoDEE will recommend specific regulatory reforms to the Cabinet of Ministers for endorsement and lead the implementation afterwards.
To support the digital economy development in Jordan and the Mashreq region (Jordan, Lebanon, and Iraq), the Government of Jordan will host the first Digital Mashreq Forum in Amman on June 29-30.
The two-day high-level regional event will serve as a platform to discuss the role of digitalization in shaping the region’s future through the lens of government and business leaders. The Forum will provide a business networking opportunity for Jordanian entrepreneurs with regional and global investors. The Forum will also showcase Jordan as a regional hub for technology enabled services. Growing the entrepreneurship ecosystem and digitalizing business activities in Jordan would offer promising growth potential for the economy.
source: worldbank
