Business Trends: 5 Ways You Can Make Money From The Middle East in 2008
Issmat A. | March 8, 2008I usually charge a fee for this information through my trade consulting firm Midman International. However, I am feeling charitable today. Besides, Canadian firms need all the help they can get to break out of their comfy shells and hatch into fully grown chickens who can fend for their own gruel in a global economy that is increasingly reducing its US trade dependence and directing it to the EU or eastern giants like China and India. This is my modest attempt at shining a small heat lamp on those companies to speed up the process.
Here are five leads into top business opportunities for businesses seeking to position themselves along growth sectors in the Middle East:
- Finance and Banking ICT & Software: The Arab banking sector will invest $1.8 Billion in information and communication technologies in 2008, a 15% increase from what they already spent in 2007. Arab banks boast one of the highest rates of growth in technology investment in the world (mainly because they got on the boat a little later than everyone else). Ofcourse, being a late adopter in this sector also means that Arab banks are being fitted with the latest technologies in the industry, giving them an edge compared to banks using archaic systems. Canada has 83 ICT companies that specialize in the Financial industry. Please, at least one of you should go down there and grab a contract or two!
- Sharia-Compliant Hospitality Products: Aha! Read that again. It’s not Sharia-compliant Banking. This time, a new Islamic trend is set to launch, and with it a new need for niche products. This May, Dubai-based Al-Mullah Properties will announce plans to invest $2 Billion to develop an Islamically-compliant hotel brand portfolio appealing to lifestyle travelers - both Muslim and non-Muslim. A new chain of up to 90 international hotels (branded as Cliftonwood, Adham and Wings) will operate with universal Islamic codes such as no alcohol and Halal food only. If you are a manufacturer/exporter of luxury and fine food products for the hospitality industry, now is the time to think about new product lines or re-branding existing products.
- Cement and Construction Materials/Technologies: Everyone knows it. Dubai is the fastest growing city in the world, with anywhere between 15 to 25% of the world’s cranes working constantly on its towers. The real estate boom in the UAE is about to face a crisis. Cement is on back log! Zawya.com reported that “Companies that provide ready-mix concrete have issued their clients notices that they are not in a position to supply more than 45 percent of the ready-mix orders. In some cases, ready-mix companies have even ceased production.” If any company has a solution, get on the next plane to Dubai and bring home some goat meat! (sorry, no bacon in UAE)
- Recycling and Industrial Waste Management Solutions: With all that construction comes much industrial waste. Lots of it. Recycling and Waste Management technologies have an open opportunity here. (Edit July 13 2008: This recommendation has been confirmed here).
- Oil, Oil, and Oil: Duh! Oil services are still in high demand. Better, cheaper extraction technologies. Maintenance services for older wells. Training services for labour localization initiatives. It’s all there. This week Bahrain announced plans to add 700 new oil wells to meet increasing energy demands. This summer, Yemen will award its first round of contracts for off-shore operations, prompting a scurry by local firms to find international partners who have much needed expertise in providing offshore services in a market that traditionally relied on on-shore production.
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And there you have it. If you are a company that found this advice helpful and was able to capitalize on it in any way, shape, or form… congratulations! You are one of very few smart chicks who found a crack in the shell of Canadian reluctance and broke out successfully!
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Thats an interesting article..keep it up :) but I feel
Wigdan A. alguneid | June 8, 2008Thats an interesting article..keep it up
but I feel that all what you mentioned are for big industries and you are suggesting either we work for them or be an investor in those sectors . How about the small projects in dubai ? I think they are popular(specially for people who dont have an extraordinary cvs or not bilinguists) same as big projects
since they offer the individual the opportunity of controlling the work and achieving the success.
All eyes are turned to DUBAI now but unfortunatly middle east young work force dont have the skills to shine and succed in such a global city..would be great if you discuss that and what is needed to be a big hunt for companys.
thank you
You obviously have not even been to Dubai. What you
Nick | July 13, 2008You obviously have not even been to Dubai. What you state is either copy-pasted from third hand sources, plain obvious or incorrect. A small but significant fib: of course there is bacon in the UAE -freely available in every supermarket!
Nick, Dubai resident
Thanks for visiting the blog and for your remarks, Nick.
Issmat A. | July 13, 2008Thanks for visiting the blog and for your remarks, Nick. Rest assured that I have visited Dubai several times and am very aware of the business, cultural, and religious realities of the region (by virtue of my own work, religion, and ethnicity, to say the least).
The information listed in the post has certainly been sourced through a variety of news outlets to ensure accuracy. I can share those with you if you wish. Can you be more specific about which information is incorrect and list your sources as well? I would hate to be giving faulty advice to unsuspecting readers.
The recommendations are a result of a little bit of deductive reasoning based on various announcements in business media. They are meant for Canadian companies who have very little or no knowledge of the MENA region. What may appear obvious to someone is news to another.
As for bacon in the UAE, my statement was meant to be more of a quip than a fib. As a Muslim country, the rules around bacon are the same as those with alcohol and premarital sex: it’s not allowed. However, I realize that Dubai has a ‘moratorium’ on these rules when it comes to foreigners and expats. Still, I would argue that the general sense in Dubai is that if you are going to indulge in un-islamic activities, then its best to do it discretely.
A case in point: the recent arrest of the British couple who were caught having sex on Jumeira beach. Charges laid against them included ‘having sex outside marriage’, which carries a sentence of up to 6 years in Dubai. (Click here for story).
(edited by moderator) ISSMAT, if i gave you a blank cheque,
maaliq mitchell | November 3, 2008(edited by moderator)
ISSMAT, if i gave you a blank cheque, what would you do with it as far as investing in the GULF goes.
Hello maaliq, Thank you for your comment. I appreciate your passionate
Issmat A. | November 3, 2008Hello maaliq,
Thank you for your comment. I appreciate your passionate reply, but I had to edit your post since it contained comments that were not related to this blog post. I hope you understand.
As far as investing in the Gulf goes, the options are many and it would depend on your particular area of interest. In addition to the areas mentioned in the post, I recently attended a reception at the Embassy of the UAE in Ottawa where I met some delegates from various ministries in the UAE who shared insight into upcoming areas of potential interest to investors.
For example, Abu Dhabi’s population is poised to triple in size by 2030. The much anticipated foreign ownership laws are on the final stages of approval, which is expected to propel Abu Dhabi into the same real estate madness that Dubai saw when they instated the legal framework that allowed foreigners to own, rent, resell, and mortgage property in Dubai.
Developers are lining up their proposals and waiting for the new laws to be instated, and investors are lining up behind these developers to get in on the first floor of the upcoming population and economic boom of the Emirati capitol city.
I should note that Canadian urban planners from Vancouver have been retained to help shape Abu Dhabi’s regulations for the anticipated urban construction boom. Abu Dhabi looks at Dubai’s rapid growth as an example of failure in urban planning, with fantastic structures that were laid out and approved in a manner that did not take into consideration associated population growth and traffic patterns.
In contrast to Dubai, Abu Dhabi wants to create an urban planning blueprint that marries its rich heritage with modern urban planning and design to create a guideline for all new developments to follow. The guideline will ensure that growth is built with an integration of public spaces, community enhancement, and public transportation solutions.
So, I would suggest that one place for you to invest that blank cheque is in the real estate market in Abu Dhabi. If you are a UAE citizen, do it before the new foreign ownership laws are implemented. If not, you can wait and invest immediately after the foreign ownership laws are in effect.
Then, you can sit back and watch as the value of your investment/property sky rockets in a similar fashion to what happened to the real estate market in Dubai after the foreign ownership rules were introduced over there.