The rise of the MENA region: Succeeding in a ‘spiky’ world

Wolfgang Amann

Professor Dr. D.Litt (hon.) Wolfgang Amann is Professor of strategy and leadership, as well as academic director of open, custom, certificate and degree programs at HEC Paris in Qatar.

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Nadine Burquel

Nadine Burquel is the Director of Business School Services at EFMD.

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Laoucine Kerbache

Professor Dr. Laoucine Kerbache was previously Dean and CEO of HEC Paris in Qatar and is Full Professor of Operations and Supply Chain Management at HEC Paris. He currently serves as Chief Innovation Strategist at Qatar Foundation Research and Development in Doha.

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The world is not so much flat as ‘spiky’. Wolfgang Amann, Laoucine Kerbache and Nadine Burquel argue that traversing the rough terrain of the MENA region requires a lot of local knowledge

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There are many reasons for companies to globalise and therefore as many reasons for management development institutions to prepare graduates of all programme types for a globalising world. To name but a few examples: globalisation allows companies to gain access to new markets and customers, or develop and/or use cheaper technologies, more skilled or affordable HR, additional learning opportunities or simply to gain scale effects when venturing abroad.

However, a lack of deep insights into foreign markets and how best to serve them prevents the harvesting of these benefits. Furthermore, these benefits change over time, rendering past insights and solutions outdated, which does not make harvesting them any easier.

In line with New York Times columnist Thomas Friedman, one could argue that the world has become flat and that distance and cultures matter far less nowadays.

Nevertheless, globalisation expert Pankaj Ghemawat argues that globalisation is largely misunderstood. First, there is no such thing as full-blown globalisation. We live in a considerably less globalised world than we might believe.

Second, what globalisation refers to depends on its context. The globalisation of people, trade and capital flows clearly lags behind the developments in the field of information.

Third, the globalisation pendulum might well swing the other way if the overall level of enthusiasm for it weakens. Although there are voices that see signs of a “de-globalisation” due to spreading protectionism, statistics do not fully support this supposition, as they too give a mixed message.

In this context, two learning-related factors emerge. One is that organisations and individuals have to undertake their own analysis of what changes really mean for them. The second refers to organisations and individuals having to make an effort to truly learn more about the rich diversity of business environments that they face.

One of the drivers making the world “spiky” rather than “flat” is the rise of the MENA (Middle East and North Africa) region. While Brazil, Russia, India and China (BRIC) have received substantial attention, as have subsequent acronyms, such as the MINT (Mexico, Indonesia, Nigeria, and Turkey), the Next Eleven (N-11) or CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa), a case can also be made for the MENA region to become better known. Those venturing beyond traditional eurocentricity or the west northern hemisphere in general as a source of knowledge and wisdom can learn about new opportunities and challenges.

The MENA – a region on the rise

The MENA countries are also, although less commonly, referred to as WANA (West Asia and North Africa), or NAWA (North Africa and West Asia). This region usually includes the following countries and areas: Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, the United Arab Emirates and Yemen.

The Middle East is also often referred to as the “cradle of civilisation,” since three of the world’s major religions originated there. The region is highly diverse. This diversity needs to be acknowledged in order to avoid a false  oversimplification or the illusion of a one-sizefits-all approach to doing business.

The region includes impressively dynamic economies, such as Qatar, which has evolved into the richest country on the planet in GDP per capita. Hence, very poor and very rich areas meet in the MENA region.

The region’s 380 million inhabitants are likely to increase, with a GDP rapidly approaching $4 trillion. The only deplorable exception should be the various conflict-prone areas.

Nevertheless, the MENA region has roughly 60% of the world’s known oil and 45% of its gas reserves. MENA countries are rather heterogeneous – with three groups emerging, each requiring different recipes for success:

Group 1

Group 1 consist of resource-rich, labour-abundant countries, such as Algeria, Iraq, Syria, and Yemen, which produce and export successfully. These countries have a largely native population.

Group 2

Group 2 has resource-rich, labour-importing countries that produce and export energy related resources but rely heavily on foreign or expatriate residents. This group comprises the Gulf Co-operation Council (GCC) including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Group 3

Group 3 has resource-poor countries and areas that are smaller producers, or even importers, of oil and gas, such as Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Tunisia and Palestine.

Beware business idiosyncrasies

For decades, business knowledge published in international bestsellers and discussed in business schools around the world was primarily developed in the west northern hemisphere, with a strong focus on the Anglo-Saxon region. As other regions in the world develop, catch up, and become richer, the diverse, volatile nature of doing business internationally becomes more important. China, for example, has been transforming itself from the workbench of the world only a few decades ago to a broadly diversified innovation powerhouse.

With this accelerated progress comes a rediscovery and refocusing of its value heritage at the expense of Western business acumen. For example, in 2005, Professor Neng Liang of CEIBS, a Chinese business school and an increasingly global powerhouse in management education, received three prestigious awards at one of the international management education community’s most important conferences, the Academy of Management. He argues that US case studies simply do not work in mainland China and that learning from the West might therefore be erroneous.

The MENA region, in turn, has its largely shared Islamic faith as a common denominator. The more this region develops, the more prominent it becomes. The core idea is to create a Falah economy.

If businesses and all other members of a society were to work towards a Falah economy, which fosters universal happiness, well-being and self-created success, a number of management models and tools – which mostly have a US origin – must be re-interpreted in order to create a global patchwork of managerial solutions.

Capitalism and Islam differ, for example, regarding the views on human nature, the role of materialism, ownership, the centralisation or sharing of economic power, the role of money, the types of preferred contracts and financial services, priorities within economic development, and the ways knowledge is viewed and utilised.

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