Dr. Ahmet H. Kirca

1
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
2
Countries in the Middle East- Turkey -
Cyprus- Iran- Iraq- Kuwait - Syria-
Lebanon- Israel- Jordan- Egypt- Saudi
Arabia- Oman - Qatar- Yemen- UAE- Bahrain
3
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)

4
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.

5
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).

6
Key Points - II

• Regions 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.

7
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.

8
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)