Originally published at: https://blog.12min.com/dubai-co-summary/
Global Strategies for Doing Business in the Gulf States
Have you heard of the Gulf Cooperation Council (GCC)? It is an economic and political alliance between Qatar, Bahrain, the United Arab Emirates (U.A.E.), Saudi Arabia, Kuwait, and Oman.
Who Should Read "Dubai & Co."? And Why?GCC states are becoming critical players in the world of finance. Corporations are increasingly recognizing the need to expand in these territories. Rehman’s book offers insight into GCC’s history, culture, economics, politics, geography, and overall their way of functioning.
Most importantly he is introducing the pros and cons of conducting business in those areas. Simply put, Rehman wrote a guidebook (Dubai & Co.) to improve the financial functioning in this region. All of this makes his work important for anyone keen to get to know and research the GCC market.
About Aamir A. RehmanAamir A. Rehman is a Harvard Business School graduate. During his career, he has worked for Boston Consulting Group and HSBC’s business unit as a global head of strategy. He has developed strategies and worked as an advisor for many international companies in the US, the U.A.E., Saudi Arabia, and Europe.
"Dubai & Co. Summary"These countries had a $20,000 per capita income in 2006. For illustrating purposes that is five times that of India and three times that of China. They invest in countless companies around the globe and contribute to the global savings with a more prominent rate than China.
Their population count, however, is 3% of China’s. It is not wrong to say that the whole world feels their influence. GCC countries rapidly become a moving force in shaping the modern economy. Why are they this powerful, you ask? Well, mainly because they control around 40% of the world’s oil reserves.
State members of GCC share a number of characteristics. They are rich in oil, have relatively stable governments, are located in the desert, have small populations and share parallel histories.
Aside from investing outside of their countries, by using their oil riches, they have launched a remarkable building program. They are building water facilities, roads, public transportation, airports, theme parks, etc. They have created a general customs protocol to facilitate shipping, and they aim to adopt a common currency.
Arabs are the ones that mostly govern GCC countries, but around half of GCC’s population is made of migrants. People from all over the world do business or work in that region.
That is why English enjoys the recognition as the preferred language in most institutions in the private sector. These areas are tempting for multinationals because of the promise of growth and attractive regulatory reforms. The negative side is that these countries’ wealth heavily depends on oil, and war and terrorist threats are not uncommon.
GCC countries generate profits primarily linked with oil, but still, there are some differences among them. For example, the U.A.E. is an exception from this profit strategy. It developed thanks to revenues linked to commerce, trade, hospitality industry and real estate.
The U.A.E. invested in infrastructure, made lifestyle policies more liberal and created a more business-friendly environment. On the other hand, Saudi Arabia is the GCC biggest oil market.
In this case, oil was a primary force that led to development. Three essential groups are making the Saudi society: the monarchy, the religious establishment, and the business sector. The Koran is the Saudis’ constitution. Furthermore, Qatar is a principal investor in education, healthcare, water plants and gas pipelines. And Bahrain works as a center for financial services.
Multinational business-people can enter the GCC market through three channels. Through a distribution arrangement, in a joint venture, or by ownership, the first being the most common.
GCC countries are changing the regulations in order to create “free zones” for direct market entry. In these zones, multinational companies can own their businesses, usually on a tax – free basis. All the while, the government is supporting them to adhere to these regulations.
Key Lessons from “Dubai & Co.”1. Adapt the marketing 2. Flexible staffing 3. Navigate regulatory protocols
Adapt the marketingEvery company that decides to expand to the GCC region must learn to adapt to that market. Marketing is an important area that businesses should customize to the customers.
They should translate the slogans, ads, and messages in Arabic. Also, they have to have in mind how liberal the countries where they operate are. Some messages may be considered appropriate for the more liberal market of the U.A.E., but not fit Saudi Arabia’s mentality.
Flexible staffingWorking in the GCC requires flexibility and adaptation in each area. Staffing is one of those areas too. Companies that look for experienced workers most of the time turn to the migrant community.
However, the completion for such workers is enormous. The challenge business face is offering expatriates professional engagement while they still hold the guest status in the country. Another option is hiring local professionals and training them according to the company’s needs. Adapting the working schedule is of importance too. In some nations, employees don’t work on Fridays and Saturdays, in others on Thursdays and Fridays, etc.
Navigate regulatory protocolsGCC states all have individual regulatory requirements. Some are more liberal than others, but still, it is essential to learn to navigate these regulators. The best way to ensure that international companies are following protocols is for them to get local help.
They can hire a local Public Relations Officer that will keep them compliant with regulations.
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“Dubai & Co.” Quotes[bctt tweet="Compromising a global reputation for a regional business is simply not an option, and standards must always be upheld." username="get12min"]
[bctt tweet=“Racism in the GCC countries is a real issue, especially for nonwhite expatriates.” username=“get12min”]
[bctt tweet=“Without a doubt, ADIA - the Abu Dhabi Investment Authority - is one of the most important investors in the world.” username=“get12min”]
[bctt tweet=“Expect to see hot competition for market access in Iraq when it achieves some measure of stability.” username=“get12min”]
[bctt tweet=“A presence in the market often means more than just having a distributor or a small sales team.” username=“get12min”]