Page 62 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

46 Dubai & Co.

global markets of London and Hong Kong. Bahrain, long the finan-
cial hub of the GCC, is responding to increased competition from
Dubai and elsewhere by investing heavily in its Bahrain Financial
Harbor project. The project is estimated to require $1.3 billion of
13
capital. Qatar launched its own Qatar Financial Centre in 2005,
with similar ambitions of regional leadership.
The crucial lesson from these and other initiatives is that busi-
ness in the GCC is about far more than energy. Multinational busi-
nesses in almost any sector can find relevant opportunities in the
region, and few companies that seek global growth can afford to
ignore the GCC.

Misconception 2: Everybody’s rich—only high-end products
and services are relevant.
Reality: Although some GCC consumers are wealthy, many
are not and unemployment is a serious issue.
The international media is rife with images and caricatures of
oil-rich Gulf Arabs with Rolls-Royce cars and private jets. While
certainly some GCC nationals are very wealthy, the bulk of GCC
consumers are not. In fact, global business leaders do themselves a
disservice by promoting such stereotypes, since they lead to the
false assumption that the only products and services in demand by
the GCC consumer are high-end goods. The truth of the matter is
that GCC society contains the full spectrum of social classes, and
businesses that meet the needs of the numerous middle- and work-
ing-class consumers can enjoy significant success. The purveyors of
midmarket mobile phones, for example, are just as relevant to the
GCC as are its high-end jewelers. In fact, one reality that usually
escapes international attention is that unemployment is in fact a
serious issue and that some people—typically unskilled foreign
workers—have a low standard of living.
To put this issue in perspective, consider the GCC’s GDP per
capita in purchasing power parity (PPP) terms. In 2006, the region’s
GDP per capita was around $20,000. Certainly this is a respectable
figure—almost three times that of China ($7,600) and more than five
times that of India ($3,700). From the perspective of emerging mar-
kets, the GCC’s prosperity is, without a doubt, remarkable.
For the same year, however, GDP per capita in the United
States was $43,500—more than twice the figure in the GCC. The EU