Doing Business in the Middle East
Dr. Ahmet H. Kirca
Michigan State University
Department of Marketing and Supply Chain Management
Eli Broad Graduate School of Management
7th Biennial International Business Institute
for Community College Faculty
29 May – 3 June 2007
Countries in the
Middle East:
- Turkey
- Cyprus
- Iran
- Iraq
- Kuwait
- Syria
- Lebanon
- Israel
- Jordan
- Egypt
- Saudi Arabia
- Oman
- Qatar
- Yemen
- UAE
- Bahrain
The Middle East in the Twenty-First Century
Regional conflicts – Security issues
Bilateral trade agreements with the US and EU
(e.g., Saudi Arabia, Israel, Jordan)
Restrictions and trade sanctions (e.g. Iran)
Dependence on oil revenues and state-sponsored
subsidiaries
Large cultural/economic/political differences
among countries in the Middle East. (e.g. Turkey,
Israel, Saudi Arabia)
Potential Economic Opportunities
Policies intended to attract FDI and to diversify
economically.
Privatization of traditionally state owned
enterprises.
Progress on building institutional infrastructure
(e.g., Israel, Turkey, Kuwait)
Population growth.
Regional integration efforts.
Reconstruction efforts in Iraq.
Key Points - I
Middle East is culturally, economically and
politically diverse (Arabs, Kurds, Iranians, Turks).
Resource rich countries with stable governments
with high rates of economic development (e.g.
Saudi Arabia, Qatar, Kuwait).
Countries with close trade relationship with the rest
of the World (e.g., Turkey, United Arab Emirates).
Potentially lucrative market but typical developing
country market environment.
Less fortunate countries of the Middle East (e.g.,
Syria, Iran, Iraq, Jordan).
Key Points - II
Region’s rich history, culture and religion, and their
implications.
Critical role of government in the Middle East.
The role of skepticism in the Middle Eastern World.
Islam is the glue of the Middle Eastern social fabric.
Collectivist, hierarchical and close knit societies.
The importance of shame / face / honor / consensus
/ respect for authority / seniority.
Some tips…
Who you know is key. Relationships and
connections are vital.
Get personal and understand face.
Invest time in building relationships.
Get used to informal agreements.
Appreciate the intertwining of religion and law.
Speak English when making deals. Speaking
English is a status symbol.
Show compassion for a business in trouble.
Entertainment and hospitality in business dealings.
Recommended Resources:
Legal Aspects of Doing Business in the Middle East
2006 By Christian Campbell – $ 86
Marketing in the Emerging Markets of Islamic
Countries - By Marin Marinov - $ 80
The Globalization of Business and the Middle East:
Opportunities and Constraints - By Masood Kavoossi $ 115
The Ottoman Centuries: The Rise and Fall of the
Turkish Empire - By Lord Kinross - $ 14
IMF reports (www.imf.org)
World Bank reports (www.worldbank.org)
globalEDGE (www.globaledge.msu.edu)