MENA companies need to globally project their brands better
WORLD FORUM for FDI session explores Geopolitics and Foreign Direct Investment Local businesses in the UAE have called upon Middle East major companies to globally project their brands better abroad as they have the potential, capability and ability to compete. The statement was made by representatives of local businesses during a session entitled “East Meeting West: Geopolitics and Foreign Direct Investment” at the three-day WORLD FORUM for Foreign Direct Investment currently running in Sharjah. Having commenced at the Jawaher Reception and Convention Centre on Monday, February 9, the WORLD FORUM for FDI is being held for the first time in the Middle East and is being hosted by the Sharjah Investment and Development Authority (Shurooq). The three-day conference is being attended by a prestigious line-up of experts and specialists in investment and business from all over the world, as well as senior CEOs of the local and international firms, international investment promotion agencies and economic development organisations. Speaking during the session, Badr Jafar, Chief Executive Officer, Crescent Enterprises, remarked “Businesses have the potential and for a region with 400 million people, it has lots to offer. This is the best way of projecting cultural growth. The region is so largely accessible in news but so under-projected in brands. I think some companies do not project their brands abroad because they lack confidence.” “Despite the fact that the US has such controversial foreign policies, the US culture has been so successfully projected in the world. We as a region have lots to offer and can successfully do so,” he added. Jafar has also stressed that the UAE has set an example for the region and has worked on many development projects over a span of 30 years that have gained it international stance and reputation. Thanks to UAE policies, the country’s impeccable reputation has attracted many foreign countries to set up base here and the UAE embassies abroad have helped UAE companies to expand abroad, as is the case with Crescent Enterprises which expanded into Russia, and Gulftainer, in the management of one of Florida ports in the US. Meanwhile, local and international businesses in the UAE have pointed out a number of global challenges facing FDIs including overnight policy changes, cultural disconnection, ineffective legislative systems, ornamental corporate governance, modes of operations, and corruption as major obstacles to foreign direct investment. “The biggest challenge concerns legislation. Judges attempt to make rulings on what they deem to be important, yet are themselves not aware of the full picture,” said Mishal Kano, Deputy Chairman, Kanoo Group. “Rule of law and enforcement and respect of contracts are major. Corporate governance should be implemented not ornamental. Some companies were asked to leave their host countries due to politics and this is a worry. In this case, a business has to look short-term to protect its operations,” explained Jafar of Crescent Enterprises. Suparna Singh, Head Minerals and Vice President Corporate Planning, Essar, expressed similar concerns about spending major investments in some African and developing countries where rapid and overnight changes in policies occur due to political conditions. Mode of operations in some companies and trade sanctions worried Moosa Al Moosa, President UAE and Finance Director Middle East and Africa, Dow Chemical Company, while cultural disconnection was an issue for Badlisyah Abdul Ghani, Chief Executive Officer, CIMB Islamic Bank Berhad. Local and international firms’ senior executives further stressed on the importance of local partnerships, government and public affairs, and understanding of local cultural sensitivities for the attraction of foreign direct investments. “You do not eat your pie, you always share your pie. Partnerships are important and the local people in their own host country are an invaluable resource, as they know what best works within their locality. Partnerships grows both parties and increase opportunities,” said Kanoo. He also advised FDIs to research their partners before they set up the business rather than having to change him through legislation in a later stage “I have seen the nature of partnerships changing. The use of a local name is no longer enough reason to share equity. I always advise FDIs to make sure the partner is truly sustainable and adds value over a period of time. This happens more now in the GCC states who are a little bit protective about doing business locally. Now offshore and free zone operations are available which cater to the interests of FDIs and UAE firms expanding globally,” said Jafar. Abdul Ghani, meanwhile, pointed out that FDIs helped grow the Malaysian economy by 9% in the last few decades. Malaysia as an economy competes with other economies in terms of providing investment the platform. Al Moosa stressed on the importance of having the right contacts at governments, collaboration with government bodies, and partnerships, while Suparna said diplomatic relations between countries improve businesses and FDIs brings economies together and improve the economic platforms of the host country and the balance sheet of the country investing into it. Organised by the Sharjah Investment and Development Authority (Shurooq) this international economic forum comes in implementation of the visions and directives of His Highness Sheikh Dr Sultan bin Muhammad Al Qasimi, Member of the Supreme Council and Ruler of Sharjah, in hosting the international events and highlighting the emirate’s business potentials regionally and internationally. The forum is being organised under direct follow up of Sheikha Bodour bint Sultan Al Qasimi, Chairperson of Shurooq. Organising the WORLD FORUM for Foreign Direct Investment in Sharjah in 2015, which is being held in the Middle East for the first time, marks another prestigious milestone for the Emirate. In previous years the world’s leading FDI platform has been held in prime locations including Amsterdam, Brussels, London, Valencia, Bologna, Vilnius, Tallinn, Shanghai, and Philadelphia.