My thoughts on “Dubai & Co.”

“3000 Abandoned Cars at Dubai Airport as Economy Turns Down ”  http://www.juancole.com/2009/01/3000-abandoned-cars-at-dubai-airport-as.html

Riz Khan – Dubai: Is the party over?: Part 1

I read and reviewed the following book before recession hit.

Dubai & Co.: Global Strategies for Doing Business in the Gulf States by Aamir A. Rehman (Author)

The Gulf Cooperation Council (GCC) founded in early 1980’s, is a political and economic body linking six continental Arab states namely Saudi Arabia, United Arab Emirates (UAE: seven states including Dubai), Qatar, Bahrain, Kuwait, and Oman. “Middle East”, as pointed out by some historians, is a term that was coined by the Western European powers to define a region to their East but not as remote as China. Some define the term to include all Arabic speaking countries. To understand the map of the Middle East, Rehman mentions a three-cluster model rooted in the indigenous differentiation within the region. The first cluster is the well-known but conflict ridden Levant, which includes Iraq, Jordan, West Bank, Gaza, Lebanon and Syria. The second cluster is  the vast but somewhat poor North Africa, and the third cluster is the Arabian Peninsula consisting of the six GCC states and Yemen. Arabian Peninsula or the Gulf, the subject of this book, is resource rich, prospering, and fast growing into an economic powerhouse. The most ominous sign of GCC’s rising prestige is Halliburton’s plans to move its headquarters to Dubai.

Riz Khan – Dubai: Is the party over?: Part 2 

The author has made a commendable attempt at alleviating misconceptions and stereotypes associated with the Gulf region. In 2006, the per capita income of GCC was three times more than China’s, with Qatar set to have the world’s highest per-capita income by 2011. This leads to the misconception that everybody in GCC is rich and invokes the image of Oil-rich Sheikhs. However, the reality is that unemployment in many Gulf countries is in double digits and Gulf’s GDP per capita, although much higher than that of India or China, is roughly the same as Portugal which is the poorest Western European country. This means that there are plenty of business opportunities for non-luxury goods related businesses. 

Blood, Sweat and Tears Part 1:

Another misconception is that since Gulf is so oil rich, only oil and gas related businesses should think about this region. GCC states are well aware of the fact that their oil is running out, and are making massive investments in real estate projects, tourism, ports, industrial zones, manufacturing, retail, and services. UAE has 30 malls and is constructing the world’s largest mall. Dubai alone has 300 hotels and attracts 6 million visitors a year and 28 million passengers fly through Dubai Airport every year. Dubai has created free zones allowing private ownership. Dubai Technology and Media free zone has attracted leading global companies like CNN, Microsoft, and Oracle. Dubai Financial Center, with a planned office space of 22 million square feet, has attracted firms like Goldman Sachs and Merril Lynch. Many other free zones are being planned. Another misconception is that the people in Middle East hate the West and thus global brands and companies cannot succeed. The reality is that Gulf consumers embrace global brands and they will buy from the multinational companies that offer them products that meet their needs. Another misconception is that women do not matter in Gulf. However, the billboards and television ads tell a different story. There are many more women in the mall than men, and far more stores cater to women than men pointing to the fact that women exert considerable influence in purchasing decisions.

Multinational companies can enter the Gulf region at an engagement level of their choosing ranging, in ascending degree of risk, from simple distributor agreements, to joint ventures and partnerships, to organic/acquisition-based direct market entry. An astonishing fact about the Gulf States is that in half of the GCC countries there are more expatriates than locals, and one third of the GCC’s total population is foreign. English is used as the primary language in most private-sector institutions, and is the lingua franca in UAE where expatriates are the majority. Depending upon the product and target market, multinationals can go without any customization in their marketing campaigns owing to the huge expatriate population, or choose to customize their marketing message by using both Arabic and English, or customize their product mix to suit the population’s needs, or they could create market-specific products and services. As far as HR is concerned, there is a lot of discrimination in GCC countries where an American/European expatriate is paid more than an Asian/African to do the same job. Foreigners are not allowed to become citizens and are in the Gulf on a renewable two-year contract, which means that commitment and loyalty are rare for foreigners who form the backbone of Gulf’s workforce. While multinationals cannot do much about immigration regulations, they should avoid discrimination so that their international image is not tarnished by allegations of unfair treatment.

Blood, Sweat and Tears Part 2: