The wave of recent events culminating in geopolitical unrest across parts of North Africa and the Middle East is having wide-ranging repercussions on these varied and complex societies. It has also led to the emergence of that great enemy of the business community – uncertainty. We have already seen short term erratic stock markets, currency movements and fluctuating oil prices. Company business plans however must look to the medium and longer term and this will prove perhaps the greatest challenge for us all.
RSM International has significant representation in the region with member firms or correspondents operating in several Middle East and North African countries including Afghanistan, Bahrain, Egypt, Jordan, Iran, Kuwait, Lebanon, Oman, Saudi Arabia, UAE and Yemen. I have been speaking with our member firms in these countries recently and whilst not all markets are impacted in the same way, there are certainly common threads.
New foreign investment and capital expenditure programmes are at higher risk now across most of the region. Questions around oil are adding to uncertainty around the world. With North Africa and the Middle East together responsible for a large proportion of the world’s oil production, any disruption in either or both areas will have a significant knock-on impact on global economies, some still fragile as they emerge from the banking and debt crisis.
Within the region, Egypt of course is a major economy and following the political upheaval, many projects in the country are currently on hold. In particular, we can see the challenges facing the banking system and the Egyptian stock exchange, at the time of writing, is still closed. However, the picture is not all gloomy. In the UAE, Kuwait and Saudi Arabia our member firms report that businesses are operating as normal. The business situation in Bahrain and Oman is also relatively stable at the moment.
The common denominator across the region is the need for growth and jobs, especially to tackle the challenges of youth unemployment. Sound, sustainable growth is what all countries need in order to address the wider societal challenges they face - and those of us involved in facilitating international business development will remain absolutely key regardless of how the various political changes eventually emerge.
Finally, times like these highlight the importance of good contingency planning and having a robust risk management strategy in place. In this ever-changing world, so many things can disrupt business, such as the unexpected political unrest we have seen recently, the impact of natural disasters such as volcanic ash fall out, or man-made causes such as cyber attacks. As members of the business community, we must do our best to anticipate these scenarios and manage their impact for the good of national and regional business stability.