Exclusive Yet Diverse
As the Middle East economy grows and diversifies away from oil, human capital becomes more important. The United Arab Emirates banks and real estate firms are hungry for brainpower; Saudi Arabia’s chemical production sector is growing by the day and needs skilled labor; manufacturing zones across the region need skilled labor as well.
The region is opening up its borders and its boardrooms to diverse talent, and it is going the extra mile to ensure that it can retain that talent while nurturing its own. Outsiders in the Middle East may sometimes feel as if they are peeking into an exclusive club, but the insularity that has characterized the region’s business culture is giving way to a competitive meritocracy and prestigious training ground.
In the past, a typical company management lineup in the Middle East consisted of local talent, with a smattering of brainpower from the rest of the world. Today, there is a strong recognition that if the region wants to evolve into a real international player, it needs to reach out for talent, regardless of where that talent comes from. Countries are increasingly aware that attracting this talent means ensuring that the right ingredients are in place: equal advancement opportunities, proper corporate governance, and a meritocracy. As a result, there has been an influx of human capital into the Middle East.
The United Arab Emirates demographics are noteworthy. The majority of its inhabitants are non-natives, creating a unique hodgepodge of nationalities, cultures, and backgrounds. The country’s cosmopolitan nature and booming economy are now attracting talented people from the U.S. and Europe who probably would not have considered working in the Middle East in even the recent past.
The “exclusive yet diverse” tension in the region extends to financial capital as well. Traditionally, decision makers in the Middle East have been quite protective of their economies, taking baby steps when opening them up to outside investment, wary that they might lose strategic control.
In another bid to attract foreign investment, a number of Middle East countries have begun to allow non-nationals to own property in designated areas as an incentive to increase the number of long-term residents — who subsequently create wealth and add diversity to the population. Increasingly, incentives have also been implemented for non-nationals who want to participate in capital markets; these incentives attract a higher rate of investment and accelerate development. In the process, the region’s professionalism and transparency have increased.
The Road to Oasis
An understanding of the paradoxes and challenges governing the mind of the Middle East decision maker is essential when doing business in the region. For a foreigner, it is fundamental to combine an understanding of these tensions with respect for and sensitivity to the culture and traditions that have produced them. Any advice or recommendations made to Middle East leaders should be presented in a way that acknowledges the reservations, motivations, and challenges involved.
In the end, the emergence of a new regional, diversified economy is a fundamental shift that will affect not just corporate investment, but geopolitical activity as well. The Middle East may be developing a new type of economy, different from any other that has preceded it. It is not patterned on the models of North America and Europe. Instead, if anything, this economy is an attempt to re-create the flourishing, outward-looking Silk Road economy of the Islamic world of the 12th to 14th centuries, when Arab merchants were the world’s economic leaders. This phenomenon is being spurred on by a broad group of decision makers — government officials, bankers, manufacturers, and some outside investors and companies — who are trying to build a bridge between Middle East culture and its economic potential. They understand that if the region is to thrive, it must build its future on a diversified foundation. They realize, as a result, that they must foster the innate entrepreneurial spirit of their people, and create the solid infrastructure needed to compete on a global level and provide a range of middle-class opportunities for people who would otherwise be disenfranchised. If they can manage to create this unique economy, the oasis we see blooming today won’t be a mirage. It will be an attractive, sustainable, fertile valley.
