Page 261 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Getting Things Done: Operations Strategy and the GCC 243

“infrastructure” here in a broad sense, including air, land, and
marine transportation, as well as utilities and support systems
such as electricity and telecommunications. GCC states have gener-
ally achieved or exceeded world-class standards in all of these
categories.
Investment in infrastructure has long been a theme of GCC
government agendas. As oil revenue began creating massive public
surpluses in the 1970s, it was crucial both economically and politi-
cally for rulers to invest in infrastructure. The business case was
clear: strong infrastructure enables economic activity across the full
range of industries and enables the private sector to take initiative
on its own. Infrastructure gives people some of the tools they need
to create thriving institutions. Politically, it was crucial for govern-
ments to demonstrate how they were “sharing the wealth” of oil
windfalls with the common citizen. The political contract was
straightforward: rulers have stewardship of the countries’ natural
resources and in return are expected to take care of their citizens’
needs. Basic necessities like roads and sanitation were to be pro-
vided at no cost (neither taxation nor tolls) and utilities like electric-
ity and phone services were to be heavily subsidized and enabled
by public-sector investment. If citizens were not looked after with
strong infrastructure, governments were not seen to be allocating
resources responsibly.
The GCC countries’ record of infrastructure excellence is good
for business. Some of the core benefits for multinational businesses
in particular are illustrated in Figure 9.1.
Airports and transport links have facilitated the flow of people
through the region—and especially through Dubai—in an unprece-
dented and remarkable fashion. The easy flow of goods—also pio-
neered by Dubai but quickly becoming more common in the
region—makes the Gulf an important hub for global trade. The GCC
is, as more and more global companies are coming to realize,
endowed with remarkable access to the core inputs required for
industry and manufacturing—including energy and labor. In addi-
tion, the region’s infrastructure provides reliable and increasingly
business-friendly support systems such as fast Internet access and
corporate business parks that facilitate opening offices in the Gulf.
Gulf-state governments, increasingly through partnership
with the private sector, continue to invest heavily in upgrading