The third symposium on Canadian Business Opportunities in the Middle East illuminated the topic for professionals, students and business people of all backgrounds during a half-day conference at the Rotman School of Management, University of Toronto.
In a closed-door session, H.E. Wael Aboulmagd, the Egyptian Ambassador to Canada, and Arif Lalani (via Skype), Canada's Ambassador to the United Arab Emirates, updated the crowd on the status of the Arab Spring with regards to its impact on investment and business opportunities.
Subsequently, Bessma Momani (U of Waterloo) and Walid Hejazi (Rotman) discussed some of the facts and figures relating to the economic and financial linkages Canada has with the MENA region. “What’s the next big thing?” is always what business minds need to know, said Momani. What the Arab region has to offer is young people. Many of them. For instance in Egypt, nearly a third of the population of 90 million are 15 or younger. “That is when people are choosing to drink Pepsi Cola, Coca Cola or Mecca Cola.” Momani argued that times are changing and economic power is becoming more diffused – it is no longer about a few markets that dominate.
Hejazi, best known for his expertise in Islamic finance, shared some surprising figures. His premise was that “unbelievably strong” evidence suggests Canada is under-trading with the Arab region. The Middle East gets 1.16 per cent of total Canadian exports, despite the fact that MENA is growing at the same rate as the rest of the world, he said. He also discussed the need for Arab countries to continue diversifying their economies, while acknowledging the time it takes to do so. “The first step to creating change is to create a sense of urgency.” As a shining example, Dubai went from being dependent on oil in 1970 (50 per cent of its economy) down to just 2 per cent in 2012
Next was a panel on Islamic finance and the opportunities presented therein. Importantly, the panelists made a point about what Islamic finance is and isn’t. It’s a parallel option, they said, that may have little or nothing to do with religious expression. Rather, it has to do with money, markets and momentum, said Dany Assaf, partner at Torys law firm. It’s a system that weathered the global financial crisis well and has gained in popularity and interest ever since. It’s a tool, Assaf said, that gives access to new markets. Those markets include ones Canada is keen on entering, such as Malaysia. Cassim Docrat, of DDCAP (DIFC) Limited, pointed out that actors who still view Islamic finance as “too exotic” will ultimately lose out on opportunities.
For those ready to do business in the Gulf, businessman Rehan Huda had some advice. Take your time and build relationships, build trust, and build ties – including with Arab colleagues who may be your best ambassadors. Furthermore, as Docrat pointed out, “nuance is everything” and countries are not synonymous simply because they share borders. Ned Ismail later noted, “You wouldn’t think to look at Belgium and paint the rest of Europe with the same brush.”
So what are the business opportunities in the Middle East? Theophilos Argitis (Bloomberg News), Saad Aboudeh (entrepreneur), Ned Ismail (Contingent Workforce Solutions) and Mohamad Sawwaf (Investor’s Group) offered their insights.
Overall, Argitis suggested there were indicators that Canada was improving business ties with the Middle East (despite saying that Canada under-trades with everyone but the U.S. and U.K.), including increased exports – particularly around aerospace, and high-level visits.
Ismail pointed to opportunities in finance – there are many banks, a lot of money, many sophisticated players but not enough sophisticated products. Furthermore, those banks largely have yet to feature prominently internationally.
While many Arab countries are currently cheap-labour dependent, that will change and so too will the need for upgraded technology. Ismail also highlighted business opportunities in IT, health care, low-tech investments (people will always need diapers and medicine), and vocational education.
Sawwaf, the youngest of the panelists, took a different angle, focusing instead on the cultural shifts needed. He described how past generations, including that of his parents, largely did not save as a habit, and invested in tangible assets over intangible ones – land, gold, jewelry. Families often rely on their children to take care of them in their old age. Instead, he argues, we must shift toward cultivating a society of savers (he uses China as an exemplar) and to strive for independence in retirement years where it’s not about making ends meet, but about enjoying those increasingly long non-working years.
The symposium was co-presented by the Canadian Arab Institute, Rotman School of Business and the Canadian Arab Business Council (CABC), Rotman MBA Middle East Business Association, Rotman Institute for International Business and Torys international business law firm.