|
THE BULLS OF ARABIA |
|
|
|
Written by Neal Asbury
|
|
Friday, 28 January 2005 |
With this article, we introduce a new To The Point feature: Asbury’s World. There are few international businessmen with more global depth and experience than Neal Asbury. His company,Greenfield World Trade,does business in 137 countries. 35 American manufacturers outsource to Greenfield every aspect of their international sales and service, from marketing to product service and training, to financing and overcoming legal and bureaucratic hassles. Can you even imagine doing this in 137 countries?
Thus Asbury’s World will provide insights on what it is actually happening in global business. No theory - just experience and reality. Constantly circling the globe, Neal will be sending us a dispatch about every other week. They will be exclusive to To The Point: you can read him nowhere else.
I’ve known Neal for close to 20 years, and am exceedingly grateful for him sharing his unmatched understanding of hands-on international business with members of To The Point. You know Neal is one of us when he proudly declares in his bio: “There is no more noble or important mission than to represent American products and workers around the world.” --Jack Wheeler
Just after 9/11, I received many comforting messages of support from my friends and business partners across the Middle East. However, to my amazement, these words of encouragement were for me personally, not for my country. Although my Arab friends were seemingly horrified by the falling of our Towers, they were mystified as to why I could not see the “truth.”
Many of these Arab Western-educated executives with degrees from our most prestigious universities, who have traveled extensively, vacationed in America and had strong ties to American companies, would tell me in a soft, measured voice how our Towers were brought down by the CIA and Mossad as a conspiracy against all Moslems. In their world, this was common knowledge and beyond debate.
Fast forward to mid-2003 and the height of the Iraq war. The backlash against American companies was severe. Many long time Moslem friends in senior management positions notified me that their customers instructed them to substitute American equipment orders with products from other countries whenever possible as a protest against our policies toward Iraq and Palestine.
The anger against America was heart-felt and wide-spread. They respected our personal friendship, however on a business level they could no longer support me. The unofficial embargo against American products was real and experienced throughout the Moslem world.
Let’s now bring ourselves to the present time. An unprecedented economic boom is underway on the Arabian Peninsula. Not since the American construction companies built Saudi Arabia in the ‘60’s and ‘70’s, has there been so much opportunity. Business throughout the Gulf region is buzzing.
This has all occurred because of the fall of Saddam. Yes, it is the US Military and its Commander-in-Chief that has unleashed the Bulls of Arabia. Forget the unofficial embargo on American products of 2003. Now every Arab importer, contractor and distributor worth their babaganoush is trying to find ways to enter Iraq and sell to the Iraqi Interim Government and American Command.
It is estimated that there is over $150 billion in property development about to start or underway on the Arabian Peninsula. If the foodservice industry which includes hotels, resorts, fast food restaurants, convenience stores, institutional catering and military camps, is a good barometer of economic growth and opportunity, then consider this... The upcoming Gulf Food Exhibition being held in Dubai next month has already sold 70% more space than in their last event and over 140 companies are on the waiting list.
The Palm Islands which are now under construction off the coast of Dubai are the world’s two largest manmade islands. When completed, these islands will add 72 miles to the Dubai coastline. This project is being touted as the “Eighth Wonder of the World”. The development will have 60 luxury hotels and more than 10,000 high end residences. Real estate owners and their immediate family members can obtain renewable residence visas. Anyone who has spent time or worked in the Middle East knows how difficult it is to obtain visas. Giving foreigners visas without a local sponsor is a tectonic shift in the attitude of how the UAE government views the world.
One of the largest ongoing construction projects in the world - a $5 billion enterprise called Dubailand - is the Middle East’s version of Disneyworld. It is anticipated to draw about 15 million tourists a year.
Upon its completion, the Burj Dubai is being promoted as the world’s tallest building. Its official height is still a closely guarded secret which adds to the intrigue as this site is being constructed. The complex will include the world’s largest mall expected to attract 35 million visitors a year.
Dubai Healthcare City aims to transform the Emirate into the regional hub for healthcare as well as medical research and education. $3 billion has been set aside for its first two phases. It includes a branch of the Mayo Clinic and the creation of the Harvard Medical School Education Center.
The Dubai International Finance Center is a financial free zone that intends to make this the “Wall Street” of the Middle East. It will eventually include several million square feet of office space. It offers 100% foreign ownership of businesses, a zero tax rate and the ability to repatriate capital without restrictions.
The Pearl of the Gulf project, in Doha, Qatar is comprised of a 1000-acre manmade island costing $2.5 billion. It will include luxury residences, four marinas, three hotels and plenty of retail space. To compete with Dubai, the Qatari Government is offering investors residency rights from the time of purchase until they sell. This kind of treatment was unheard of a very short while ago.
The only real consideration for opening a regional office in this part of the world is Dubai, as it positions itself as the “Hong Kong” of the Middle East. The price for setting up shop here reflects the frenzy of any boomtown. If this is the direction you are going with your business, be prepared for sticker shock.
(For a visual shock, take a look at this photo series of Tiger Woods teeing off of a helicopter pad 1,000 feet up on the 7 - yes, 7 - star Burj Al Arab hotel. Tiger is paid a $1 million appearance fee to participate in the Dubai Desert Classic no matter how he plays.)
With the Iraqi election upon us, many US business executives are starting to devise strategies to enter this market. Iraq is still struggling and presently is a difficult place to do business. American businessmen are being strongly discouraged to visit because of the inherent risks. The road connecting Baghdad International Airport (BIAP) to the city is still very hazardous. Highway 1 connecting Amman, Jordan to Baghdad and the roads connecting Kuwait to Basra and Baghdad are extremely perilous and unsafe.
Thus, despite the incredible Bull Run we presently see on the Arabian Peninsula, there is still no country in the region that has more business potential than Iraq. Almost all its infrastructure needs to be replaced or totally rebuilt. The question is not if, but when the economic boom of the Gulf reaches Iraq.
The second Rebuild Iraq Exhibition is upcoming on April 4-7, 2005 and being held in Amman, Jordan. “Rebuild Iraq” has implemented a program to maximize the number of Iraqi businessmen visiting the Exhibition. This is perhaps the safest way to start making valuable contacts with the folks on the ground in this region’s next boom market. (Click on the link above for information on how to participate.)
You can bet your last villa that the financial community funding some of the most ambitious development projects in the history of the world is very confident of this region’s future. With a political environment that will become increasingly more stable after the January 30 elections, Al-Qaeda on the run, the seeds of democracy planted, a significant American commitment with our military in the Gulf and Iraq, oil at $40+ per barrel and the euro at an all time high, American companies must take full advantage and not miss out as the Bulls run through Arabia on their way to Baghdad.
|
Discuss this item on the forums. (0 posts)
|
|
