The Cosmopolitan Challenge in the Central Asian States

Why preparation is the key to successful development in the rapidly developing market in the 'Stans'

The former Soviet republics of Central Asia - namely Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and Tadjikistan - have come a long way in liberalising their economies since becoming independent countries at the start of the 1990s. While for much of the twentieth century, these countries were largely closedoff to trade and commerce with the outside world during their time under central authority directed from Moscow, in the 1990s they have become increasingly open to foreign businessmen.

The massive task of re-constructing their planned Soviet economies to ones based on market institutions, has called for voluminous capital injection into these states and resulted in their governments actively seeking to co-operate with the international business community. Many vital sectors of their economies, including oil and gas, mining, agriculture, telecommunications, power, steel works and tobacco, have been officially open to foreign businessmen for much of the past decade, resulting in an increasingly cosmopolitan business environment.

However, despite this new-found economic cosmopolitism, doing business in Central Asia's former Soviet republics remains a substantially more challenging experience than one may expect in the mature market economies of Europe, North America and other parts of Asia. In particular, from the perspective of business culture, one should appreciate that these are culturally very different societies to those in which we have developed our business acumen. Much of the population of the Central Asian countries hails from a Muslim civilisation that, while containing many of the personality traits from the Middle Eastern and South Asian Islamic societies, has been absorbed by the social values and the business practices which prevailed under the Soviet Union.

The resulting business culture in Central Asia is therefore an interesting hybrid of Soviet formalities and protocol (very similar to that encountered in Russia or Ukraine for example), and Central-Asian Islamic cultural practices - conservative social values, respect for seniority, strong clans and family networks in business, as well as genuine hospitality and often a highly social attitude towards the conduct of business (ie relentless wining and dining as a means of developing the business relationship). Or, to put it in other words, a strong blend of the post-Soviet secular modernism mixed with the deeply entrenched cultural traditions of the Central Asian states. The business experience awaiting the foreigner in these countries can therefore be just as rewarding socially as it can be challenging from the cross-cultural aspects of doing business itself.

It is rather important for the foreign businessman to develop a good relationship with their potential Central Asian partners during this first meeting, as it will set the standard for much of the subsequent meetings to come and will make the locals feel more comfortable in dealing with the visitors. You will find that the local business population does not like to be talked at and promoting such a course of action will quickly lead to a rather burdensome business experience for the foreigner in Central Asia.

When travelling to countries like Uzbekistan or Turkmenistan for example, one will quickly see that the local workforce and business community has little experience with modern business practices equivalent to those long taken for granted in the advanced market economies. This means that the locals are likely to have far less experience in effectively managing a foreign investor's business than one would generally like. However, given their eagerness to learn, and all round good work ethic, it will be far more effective in the long run to persevere with local employees and show patience, rather than getting frustrated when things don't always go as planned. Such gestures on the part of the foreigner will be taken as a sign of "paying your respect", and are often a vital ingredient in developing a harmonious business relationship in Central Asia.

Doing Business in Morocco

Morocco is the closest African country to Europe separated from the Spanish market and its 60 million tourists by a mere 9 miles through the straits of Gibraltar (a stone through from Tangiers).

Despite its association agreement and its formal application to join the European Community, Morocco is a North African country, an Arab and Islamic state. If Arabic and English are the common business languages in the Middle East, French is a must for doing business in Morocco. Arabic is the official language followed in terms of usage by Berber dialects, Spanish in the North and South . The use of English is on the increase in manufacturing and exporting companies, the Hotel industry, universities and private schools.

Compared to its North African neighbours, Morocco has a more diversified economy with tremendous untapped potential and prospects for business in a number of fields (Agribusiness, fisheries, mining exploration, tourism, export oriented manufacturing, infrastructure development).

France is still Morocco's main client and supplier. However, instead of going through a French or Belgian French speaking agent, British companies are now flying direct from UK airports to Tangiers, Casablanca, Marrakech (the beloved city of Sir Winston Churchill) or Agadir ( Morocco's French Riviera and second largest economic region after Rabat/Casablanca).
As an investor, your Moroccan hosts and partners will invest in supplying the necessary framework for communication. They will either speak English or provide an interpreter.

However if your aim is pure export of goods or services to Morocco ( you may already have dealings with France), you're advised to prepare yourself and be accompanied by a private or public export/consultant/interpreter who could guide you into the market both before, during and most importantly after the market visits.

The public sector projects are important but the private sector is very active in commercial and industrial activities. In the clothing sector alone, over 50 British manufacturers are operating from Morocco for re-exports to UK, Europe and world markets.

Kacem Debar speaks Arabic, French and English From 1982-1985 he was Economic Counsellor (Export Promoter) at the Moroccan Embassy in London. At present he is a Markeing and Business Consultant specialising in two way trade investments between the UK/France/Morocco and North Africa and other Arab and French speaking countries.

Doing Business in Kuwait - Be Yourself

Dr Jehad Al-Omari, Middle East Consultant, provides some important advice for expatriates and frequent business travellers.

One of the first things which strikes you when you arrive at Kuwait International Airport is that sense of modernity. You will be right in thinking that you are stepping into a highly prosperous society where only the best technology will do. Wander around the city of Kuwait, and you will be impressed by the high rise buildings, modern office blocks and electronic shops selling the latest technology on offer.

Investigate further, and you will realise that apart from being an oil producing country, Kuwait city is one of the oldest trading nations in the Gulf region, has the longest democratic tradition, and where freedom of speech is part of everyday life, whether you are sitting in a Diwanych or reading one of Kuwait's many daily newspapers.

Yet, you must dig deeper to realise behind all of this there is a deep-rooted pride in history, Islam, traditions, family and culture. Kuwait's modernity and outlook derives from a rich synthesis of the old and new, and the desire to acquire the best the world can offer while maintaining a firm grip on tradition. A Kuwaiti official once commented to a Western journalist that in buying Western-made fridges he does not have to eat souffles. Kuwaitis have gone a long way in developing their oil, investment and trading sectors, without compromising their family values. Putting one's parents in old people's homes is perceived as being inhumane and barbaric.
Talk to Kuwaiti managers and professionals and you would soon recognise that they are the product of a sophisticated educational system which ranks amongst the best in the Arab world. You will certainly come across more Kuwaiti managers with degrees behind them than you would in the UK - that is assuming that they have not done a second degree somewhere in the UK or USA. You will again be right to relax, and assume that the majority can speak your language, metaphorically speaking.

However, you must not drop your guard completely. Business and business dealings are not exempt from this blend of old and new. Great and lavish hospitality to guests is pursued with the same vigour as productivity and efficiency. Open door policy and consultation go hand in hand with delegation and empowerment. Loyalty to superiors and clients will override systems and procedures. Timing and confrontation avoidance remain as far more important than time and results.

In other words, "Business is Personal", and you cannot afford to ignore the subtleties of this simple statement. Your ability to engage in small talk, to carry out favours, to develop personal relationships, to avoid confrontations and to cultivate loyalty will all convince you that the most important thing you will be selling to the Kuwaitis is yourself.

Whether you are thinking of going to Kuwait on business for one week, or whether you intend to live and work there for the next three years, you will need a good deal of preparation.
Looking up books from libraries and information centres is a good starting point, but a more effective way would be to attend a specialised briefing where you will meet both expatriate and Arab experts who will be able to answer your queries, provide you with practical tips, and point you in the right direction.

Farnham Castle International Briefing Centre offers regular programmes for both expatriates and frequent business travellers on a scheduled and customised basis. Intensive language tuition in Arabic is also available.

The Middle East - Business Culture and Practices

The countries of the Middle East cover a very large geographic area from Iraq and Syria through the Arabian peninsula and the countries of North Africa to the shores of the Atlantic.
The affluence of the oil based Gulf States and Saudi Arabia contrasts with some of the less economically endowed and highly populated countries of the Arab nation.

Since the oil boom of the 70's world business has tended to concentrate on the massive development programmes of the oil rich Gulf States of the Arabian peninsula, but now consumerism is also finding its place in densely populated countries such as Egypt. Mass markets already attract the attention of the world's global Companies, many of whom have established bases in these territories. Other businesses follow to extend their potential trade in these areas.
The Arabs of the Middle East have been successful traders for centuries, long before the discovery of oil. One will find willing and knowledgeable partners, but some study of the necessities of doing business within the Arab culture may smooth the path to success.

Business culture, practices and etiquette
The business culture tends to have a greater social element in its characteristics than its western counterpart. This is evidenced by the warmth of welcome in all forms of contact that is always provided and the expectation of similar response.

No Arab businessman would dream of opening contact in any form without an exchange of pleasantries, before settling down to the matters for discussion.

The Arab businessman is essentially a trader and whilst he may not possess certain specific technical sophistication that his western counterpart may be offering, he will be financially astute and additionally a quick learner.

He will prefer to do business with someone he likes, to the extent that he may choose to refuse possibly lucrative results, if he finds the business contact unfavourable. Conversely, one may be fortunate to find a long term business and personal friend.

Historically the people of the Gulf, in particular, are tribal. As such there will be particular alliances, some geographically far reaching. This can be particularly useful in building your business intelligence of contacts to make and perhaps to avoid. This type of knowledge when offered can provide opportunity.

A businessman, foreign to the region, will be expected to know his proposition thoroughly. Should any omissions be discovered in contractual conditions the Arab businessman will be expert in finding these to his advantage and will exploit loopholes - believing these to be 'fair game'.

On his part he will act within the letter of such arrangements and fulfil his obligations.

The Arab will always understand the financial element, which is of course the end objective.

The Arab cannot say no directly - so it is vital to listen carefully to responses to your proposition, to avoid misunderstandings.

Business and social etiquette demands shaking hands on greeting and leaving. A few words of greeting in Arabic and in understanding the responses will be greatly appreciated.

Refreshments, always offered, should always be accepted. The one occasion where this may be refused is out of deference to the host who will be fasting in the month of Ramadan.

Preparing for your trip
Obviously in the vast majority of cases appointments will be made prior to your journey. There may be some flexibility in timings since Arabs tend to be fatalistic by nature and not hold to exact arrangements.

An in-date passport is obviously necessary.

In certain States it may be necessary to have received an invitation from your business host/sponsor before the appropriate visa is granted. In any event it is vital to understand the entry requirements, particularly in the case of Saudi Arabia and many other nations.

Generally preventive health requirements such as inoculations are not compulsory, except in the case of obtaining residence/work permits.

If during your visit you intend to make presentations requiring audio/visual aids, it will be necessary to establish that your host can provide appropriate facilities.

Comprehensive preparation enabling clarity of your objectives should be evident and the possession of the facts to answer searching questions, available.

Successful meetings
Having done one's homework on your 'target' will ensure that one is addressing a potential success. It is well to remember that the Arab does not refuse to meet someone, this is not in his culture of hospitality - so valuable time could be wasted.

Sociability, cordiality, respect and a non-patronising attitude will go far in developing a successful conclusion. Aggression, the hard-sell, blasphemy and arrogance are very distinct negatives.
Good preparation of your proposition, experience and knowledge of your subject will be well received. Listen carefully and observe the non-verbals as well.

Having a business card with two-sided printing of your name and Company, together with communication details in your language and Arabic, is very useful. The Arabic should be a phonetic pronunciation.

Women in business
With the exception of Saudi Arabia, where officially women are not involved for business, women are generally well accepted in the business world.

Arguably they have to exhibit their business skills and acumen to a greater degree than their male counterpart, in order to be successful in the Arab world.

Women will be observed and encountered in all types of business endeavours as their traditional role of family nurturer extends beyond the household.

Dress code
Formal meetings call for formal dress. Lightweight suits, ties etc. Standard meetings are relatively informal requiring a business shirt and tie.

The Arab businessman in his native 'thobe' will always look formal and immaculate. Always err towards the formal, sloppiness will be construed as disrespectful.

Corporate hospitality
Entertaining in its various forms is widely used in business life, whether it be business lunches or dinners or more formal presentations.

The Arab believes that having shared one's food with another brings them closer together.

The difficulty arises in whether to provide alcohol on these occasions. A devout Muslim will no doubt be offended in the presence of consumption of alcohol. Others will not object and may themselves partake. Homework is required - if in doubt don't provide or offer alcohol.

Arab society is a 'gifting' society and in formal conferences it is standard practice to offer a small appropriate gift on guests' departure.

Conclusion
The Arab culture is complex and intricate and its understanding can be very rewarding. This brief view of fundamentals cannot give full justice to a fascinating way of life, but may open the doorway to seek further exploration.

Farnham Castle/Robert Hughes
Robert Hughes worked in the Gulf States and Saudi Arabia continuously for the past twenty years. During this time he has had experience at top management level for some of the world's leading advertising and marketing agencies and their clientele, most recently J. Walter Thompson and their Unilever business. From his base on the Arabian Peninsula, his remit latterly also extended to Syria, Lebanon, Jordan and onwards to Egypt. His book 'Living & Working in the Middle East' was published in 2002.

Singapore

'A great commercial emporium' was how Sir Stamford Raffles described Singapore in the early years of its founding. Today, some 180 years later, those words still epitomise modern Singapore, and for the modern entrepreneur it offers opportunities in all major business sectors. Its 3 million citizens, of which 78% are Chinese, 14% Malay and 7% Indian, plus a further 1 million foreign citizens and expatriates, create a truly multicultural society.

In Singapore, as in the rest of Asia, establishing relationships is the key to starting and maintaining all business ventures. Singaporeans are well used to dealing with foreigners and are familiar with other cultural styles. However, you will still be expected to show an understanding of their culture, and tolerance and self-control are an important asset in achieving this.

The Singapore business scene is very professional and courteous, and you will be expected to be well briefed and knowledgeable on the market and your potential business partners, and you will find that your Singaporean colleagues are equally well informed. Meetings tend to be more structured and less confrontational, and conducting oneself in a calm and orderly manner will help to establish credibility. Negotiating styles differ from those in Europe and avoiding direct disagreement and being polite and courteous at all times is essential. The question of 'face' is never easy for Westerners to fully understand, but its importance throughout Asia must never be underestimated.

Singapore has 4 official languages - Chinese (Mandarin), Malay, Tamil and English, but English is the language of administration, and you will find 95% of Singaporeans you are likely to meet will speak and understand English well. However, the entrepreneur who can converse in a local language will always be at an advantage, and a knowledge of Mandarin, Cantonese or Malay will always set you above the competition and will help to cement personal relationships.

The authoritarian stance of government makes for a well disciplined people and foreigners need to portray a similar attitude when doing business. This is facilitated by clear cut and well regulated controls on external trade which make it a pleasure doing business with this modern, industrial nation at the forefront of 21st century technology.

Nick Curtis has spent 20 years as an expatriate living and working in Asia, Africa, Europe and South America. He has lived for four years in Indonesia and l0 years in Singapore working in multi-national companies in sales and marketing. Whilst based in Asia he also had extensive business travel in Hong Kong, Japan, Thailand, Malaysia, Pakistan, India, Bangladesh and Australia. His wife, Lindi, is Chinese Singaporean.

We are all responsible

Organisations of the 21st century can no longer limit themselves to producing and marketing products or services without any concerns for the impact they have on society. Philippe Nitzer, a senior intercultural specialist at Farnham Castle, examines one aspect of the increasing role of the corporate body in society at large

Shareholder and investment groups are now looking to companies to be accountable for fair and equitable working environments for staff. The published lists of 'best places to work' can be a determining factor in investment decisions since studies show a positive correlation between socially responsible workplace programmes and positive financial results.

Employees also recognise that they can have a role promoting change in the workplace. An increasing number of employers are responding to affinity groups covering a wide range of employee interests.

If they want to be trusted by their customers, employees and the public at large, companies are realising they have to be more socially responsible. With the rapid growth of multiculturalism in Britain, a key issue of Corporate Social Responsibility (CSR) which needs to be addressed is the effective integration of ethnic minorities in the workplace and the community. The publicity surrounding the increasing numbers of overseas nurses arriving in Britain to work in the NHS is a good example.

Demographic changes
The demographic changes of the 50s and 70s have left many British companies struggling to deal with the problem themselves. Many organisations have played a passive role in this integration process by staying just within the legal boundaries and are now experiencing difficulties in that area.

A lack of consideration of differences
One of the major reasons behind these integration problems is the lack of awareness and consideration for cultural differences. People from different cultural backgrounds have different sets of norms, different sets of values and different assumptions. This means that we all have different ways of reacting to events, different ways of communicating and different behaviours. We judge others from our own frame of reference and tend to think that 'our way is the right way'.

In a multicultural workforce, this can lead to misinterpretation, misunderstanding, incomprehension, mistrust and disrespect. As a result, rather than getting closer, people distance themselves from those they consider different, groups are formed on the basis of commonalities, whether it is ethnicity, colour, language etc and 'departmental ghettos' start to appear. Often, there are rivalries and tensions. In some instances, these situations can degenerate into discrimination, bullying or racist behaviours.

The law is not enough
Staying within the letter of the law is not enough for organisations experiencing these situations. It is imperative for them to resolve these issues if they want to retain a stable and productive workforce and be regarded as good 'corporate citizens'. Organisations can be more socially responsible by contributing to a smooth cultural integration of ethnic minorities into the workforce.

Being more socially responsible
Integration does not mean imposing one way. It means harmonising and synergizing differences. Having a clear and unbiased understanding of the context is the first step toward formulating proper integration strategies.

The second step is to develop cultural awareness. Being open to differences, understanding and respecting the other's cultural background are the key elements in preparing the ground for integration.

The third step is to build or rebuild trust.

Finally, only when trust has been demonstrated from all sides, can solutions be discussed. It is this step where different norms and values are reconciled and tangible and intangible elements of integration are defined. Building shared ownership of the solutions is at that stage essential to reinforce trust and guarantee implementation.

These steps can take different forms; for example, interviews with the various groups involved for step one, training programmes at the levels concerned in the organisation for step two and facilitated workshops for steps three and four, involving all concerned or a limited number of influential representatives of each group, who can then intervene as mentors to their members.
Being proactive in the integration process of ethnic minorities is a corporate social duty which can strongly impact on the community and contribute to a much more committed workforce.
During the last few months, Farnham Castle has been working with a number of clients in the development of programmes, using a training approach normally associated with supporting the integration of home and foreign workforces, to address the growing issue of multicultural tension within the domestic workforce. Because of the sensitivity of the issue, each programme has to be very carefully designed and often involves a number of programmes, each with a different perspective at each level.

The need to exercise corporate social responsibility is evolving in many different guises. In light of The Department of Trade and Industry's recently issued consultation paper entitled 'Towards Equality and Diversity', pre-empting proposed legislative amendments to comply with EU legislation, perhaps this one in particular needs our attention now.

http://www.intercultural-training.co.uk/
social responsiblity
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Globalisation is here to stay

The argument for increased intercultural understanding has never been greater
The level of globalisation seen in the last 20 years is not going to go away. Companies need to operate worldwide businesses, and they will continue to do so. Because so many multinational companies receive substantial revenues outside their home country, they cannot withdraw their current management, operations and resources without huge consequences. Substantial planning and structural changes are necessary before such decisions can be made.

In the short term, some companies might retrench and repatriate their people early. But with the current economic downturn, there may be no job opportunities back home! Other companies may choose to move their people out of 'risky' areas and relocate them to perceptibly 'safer havens'.

Twenty years ago employees were expatriated primarily to export their knowledge and skills to other countries. In today's environment, fewer expatriates are needed because companies have built up capabilities in production, marketing, technology, and management, to serve a global network which no longer has a specific home location.

As a result, the number of expatriates represents the core number of employees needed to support globalisation on a worldwide basis. Terrorist threats will not change the need for the development, exchange, and placement of key personnel globally.

The argument for increased intercultural understanding has never been greater. Working successfully in/or managing multicultural teams is a growing focus, along with long-distance management and effective communication strategies.

It is generally accepted that in Europe there is more respect for the time it takes to achieve the desired outcomes of business management programmes. In addition, there is a desire for a more thorough, in-depth exploration of issues and strategies.

A fragile, unhappy, fearful expat family may simply be pushed over the edge by all that they have witnessed. Catching these families early is a challenge to avoid the difficult consequences of an early repatriation.

Family issues will become more important as companies face increasing difficulty in filling overseas assignments with fewer willing to go. Now more than ever, family support will become paramount and forward-thinking companies will recognise this and provide the necessary emotional and factual preparation.

Mobility will not stop. People have to feel secure and their companies need to provide that protection, emotionally and physically. Without it, there can be no global workforce.