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B300 TMA06 - Essay Example

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The Middle East business region has a significant level of international commerce and investment. It has an estimated US $120 billion dollars in exports and the presence of nearly 1,200 foreign-affiliate firms, with approximately $29 billion in investments in the region…
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Download file "B300 TMA06" to see previous pages... Iran, Saudi Arabia, and the United Arab Emirates (UAE), which compose the bulk of the population of the Persian Gulf states, have a rapidly growing export base, as evidenced by a 12 percent increase in exports between 1990 and 1994.
The region's international airports--Tehran International, Dubai,
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Jeddah, and Riyadh International--experienced more than a 50 percent increase in international air passengers between 1988 and 1994. The number of weekly international flights at Tehran International, Dubai International Airport, and Riyadh International increased by 6.3 percent from 1983 to 1993 (Withiam, 1994). In addition, the number of international markets served by Tehran, Dubai, and Riyadh has increased from twenty-two to 102 destinations in more than fifty-seven countries around the world (Journal of Commerce, 1994). Between 1983 and 1993, the region accounted for a 2.1 percent global market share in air passengers, and for 2.3 percent of the world's revenue passenger-kilometers in 1991, In 1992 the port of Sharja in the UAE handled 37,400 ton-equivalent units (TEU), a 146 percent increase over 1991, and about fifty-five thousand TEU in 1993.
There is an increased inflow of international investment in this region. The region's major international strengths include oil and natural gas, major international airports, ports along the Persian Gulf, high disposable income per household, an educated labor force, a growing high technology industrial base, and world-class financial centers. In addition, the region is home to many international and regional organizations. In the aftermath of the Arab-Israeli peace accord, people feel more confident about the stability of the region.
The region has many weaknesses. These weaknesses include a lack of positive image, a serious need for surface transportation improvements, a lack of efficient and speedy bureaucracies, a perceived high cost of doing business, inadequacies in the workforce, and the absence of a single entity to promote the region internationally. The Persian Gulf region has neither the competitive international reputation nor the economic-development focus of other competing regions. As such, it is not a priority location choice for American and Western European investors. The region possesses the basic assets and intellectual talents to compete with any region on the globe. However, it must operate, harmonize, and engage its combined resources to move forward in a deliberate effort to improve its international competitiveness ( Porter, 1986).
The Middle East must have a regional business policy which will be crafted by a regional international business council. This business council will be made up of public and private sector representatives. The business council needs to make a long-term commitment to increase the Middle East region's international competitiveness and to develop an integrated strategy for marketing it more effectively. In order to reduce uncertainty and provide greater economic stability, the Gulf countries must unite and develop a business policy that will diversify their economies. For this business policy to work, they need to focus on foreign investment and technology, subsequently enhancing the countries' ability to attract, absorb, and become globally competitive. There are three pending urgent actions that the Gulf countries need to undertake. One, develop a spirit of public and private partnership. Two, improve the region's internat ...Download file "B300 TMA06" to see next pagesRead More
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