Aamir A. Rehman

In recent weeks, commentators around the world have become increasingly concerned about the menace of inflation. As pointed out in an Economist cover story, “inflation’s back” and is particularly damaging in emerging markets most sensitive to commodity prices and the cost of foodstuffs. The Economist rightly points out that at least half the Gulf states are grappling with double-digit inflation. In the Gulf context, however, it’s worth noting that policy makers have a unique toolkit for managing inflation which differs significantly from the tools available elsewhere.

Continue reading ‘A Unique Toolkit: Managing Gulf Inflation’

This month, Dubai & Co. has been featured in two major media outlets: the Wall Street Journal (WSJ) and Fox Business. The articles touch on significant trends in global business in which the Gulf region is playing a central role: the increased commitment of multinationals into the Middle East and the role of sovereign wealth funds in international private equity.

Continue reading ‘May Media Citations: WSJ and Fox Business’

The current unrest in Lebanon, which has caught much of the outside world by surprise, raises meaningful humanitarian, political, and economic concerns. To many observers, the situation evokes memories of Lebanon’s protracted civil war, in which decades of economic progress were lost. What, one might ask, are the implications for firms doing business in the Gulf?

Continue reading ‘Unrest in Lebanon: Assessing the Impact on Gulf Business’

Earlier this month, I was cited in a Wall Street Journal (WSJ) article entitled “Time Runs Differently in the Emirates.” In the piece, WSJ writer Emily Flitter discusses experiences of global businesspeople who have noted that expectations regarding the timing of meetings and the exactness of appointments may vary in certain UAE settings.

Continue reading ‘Wall Street Journal Citiation: Time Management in the Gulf’

Earlier this week, I appeared on “Wealth Talk America,” a radio show hosted by Garrett Sutton (an author in the Rich Dad series). The interview reflects the level of widespread interest amongst US businesspeople in learning about the Gulf in general and Dubai in particular.

My discussion with Garrett was broad in scope, touching on the various reasons why the Gulf is a region “no one can afford to ignore if they’re interested in global strategy.”

Continue reading ‘Wealth Talk America: The Dubai Opportunity’

In a major development for sovereign wealth funds (SWFs) – and capital markets more broadly – the Abu Dhabi Investment Authority (ADIA) issued a letter this week to finance ministers and international bodies (such as the World Bank / IMF) regarding its investment principles. The letter represents a major milestone for the historically guarded ADIA, and reflects the institution’s desire to accommodate demands for transparency – but on its own terms.

Continue reading ‘ADIA’s Letter: Transparency on its Own Terms’

Earlier this month, Business Intelligence Middle East published a review of Dubai & Co.: Global Strategies for Doing Business in the Gulf States. The publication, widely read in Gulf business circles, offered a powerful endorsement: “if you read just one book this year, we recommend that you pick up this one.”

Continue reading ‘Business Intelligence Middle East: Dubai & Co. Review and Interview’

This past week, the Financial Times ran a front-page piece on the increased role of sovereign wealth funds (SWFs) in providing debt to support private equity firms’ acquisitions. As the global credit market copes with the subprime crisis and slowing economic growth, SWFs — particularly those in the Gulf — remain strong and are a crucial source of capital and liquidity.

The FT quoted a Terra Firma executive who asserted that the Abu Dhabi Investment Authority (ADIA) “will effectively replace Wall Street.” While sovereign funds do have the capacity to provide debt financing, it is crucial to remember that they approach debt as principal investors, not as financial agents. When engaged as genuine co-investors — rather than as a new flavor of “banker”– SWFs can make private equity firms more effective and enable higher levels of return for all.

Continue reading ‘Sovereign Wealth Funds and Global Private Equity: Principals, not Agents’

Since the publication of Dubai & Co.: Global Strategies for Doing Business in the Gulf States, a number of US companies have contacted me with a similar and compelling question. While the book provides a strategic guide for international firms seeking to integrate the region into their global strategies, is the Gulf opportunity available only to large multinationals? How, if at all, can smaller businesses enter the region?

For small firms, business development is typically a key challenge. When development plans include Gulf aspirations, the challenge takes on unique — and exciting — dynamics.

Continue reading ‘Capturing Fair Share: Tips for Small Businesses on Accessing the Gulf’

Earlier this month, the New York Times ran a front-page story on the international expansion of US educational institutions. While the scope of the story was global, most of the examples were of US universities entering the Gulf.

Higher education is, without a doubt, one of the sectors in which global institutions can find significant opportunities in the Gulf. The most successful institutions, however, will be those that view Gulf expansion as a genuine strategic opportunity and not simply an “outpost.”

Continue reading ‘Educational Expansion: Opportunities, not “Outposts”’

Last week, I was in Dubai to present at a conference on strategies for the investment of endowments (called awqaf in Arabic) in the Muslim world and beyond. The event, entitled the Dubai International Conference for Endowments Investment, was hosted by the emirate’s government.

Endowment investment is a prime example of an area with opportunity for transferring global business models and best practices into the Gulf – and the Islamic world more broadly. At the same time, it is an area in which authenticity and consistency with indigenous values are critically important.

Continue reading ‘Endowment Investments: Opportunity for Authentic Business Model Transfers’

The Harvard Business Review (HBR), in its annual list of “Breakthrough Ideas,” has included my article highlighting Islamic finance as “the new global player” in the world’s financial system. The article was co-authored by Dr. S. Nazim Ali, Director of the Islamic Finance Program at the Harvard Law School.

The HBR’s recognition of Islamic finance is yet another indication of the industry’s mainstream relevance and reflects the fact that no financial services institution can be truly global without expertise in Shariah-compliant products and services.

Continue reading ‘Harvard Business Review “Breakthrough Idea”: Islamic Finance: The New Global Player’

The Gulf states and the US have long-standing, highly interdependent relationships. Events of the past week, in the GCC and here in the US, have demonstrated both increased public acknowledgment of this interdependence and visible signs of growing connectivity between the GCC and the US economies. This trend is an important one for global business leaders to watch.

Continue reading ‘Increased Public Engagement: Acknowledging US-Gulf Interdependency’

The January edition of the Wharton Leadership Digest (WLD) features an interview with me on the topic of “Leading the Gulf: Making Sense of Business Leadership in Dubai and Beyond.” The interview touched on a wide range of interesting topics, including:

• how much of Dubai’s success is a “leadership story,”
• the degree to which business leaders need to adapt to thrive in the Gulf environment,
• women in the workforce,
• effects of the Dubai Ports World controversy, and more.

Continue reading ‘Wharton Leadership Digest Interview: Leading in the Gulf’

A business unit of Cisco Systems, according to a recent report in the Financial Times, has revealed an ambitious goal: networking entire cities. City-wide Internet Protocol (IP) networks would not only give Web access to residents but also enable the Web-based management of government services and infrastructure (traffic lights, ports, etc.).

Don’t be surprised if, in 2008, we find Gulf cities competing to be the first to attain “fully networked” status. Besides the PR splash, are there real benefits to such a move?

Continue reading ‘Cisco’s Aspiration: A Fully Networked Gulf City?’

On the final day of 2007, the Financial Times formally dubbed the Middle East and North Africa “the next investing hot spot” – a weighty endorsement confirming a meaningful trend. The FT cites BlackRock, T Rowe Price, Mizuho Bank (Japan), and Permal as actively raising funds to tap this market. Permal’s “Silk Road” fund – capitalizing on the increased trade flows between the Gulf, MENA, and Asia – reflects an important insight on how the regions’ economies are evolving.

The fundamental growth of MENA economies – and especially the Gulf states – is certainly inviting. Investors and asset managers need, however, to recognize the limitations of listed equity markets in tapping into the region’s growth.

Continue reading ‘Tapping into the MENA “Hot Spot”: Limitations of Listed Securities’

In this usually quiet holiday period, the Financial Times broke a remarkable story (based on an unnamed source) that the Kingdom of Saudi Arabia (KSA) is contemplating a sovereign investment fund that would “dwarf Abu Dhabi’s $900bn” ADIA. The implications of such a fund, if and when created, would be far-reaching and profound.

For seasoned observers of the Gulf, the story raises more questions than answers.

Continue reading ‘Saudi Sovereign Fund: Scale, Demands & Surplus’

On Tuesday, the Financial Times published my letter regarding the recently-announced joint venture between Dow Chemical and the Kuwait Petroleum Company (KPC). The letter is entitled “Gulf Investors Exert New Control” and the text is as follows:

Continue reading ‘Letter in the FT: Gulf Investors Exert New Control’

Understanding of the Gulf region and its business opportunities is, for the most part, highly limited amongst senior management at multinational corporations. This lack of “GCC awareness” is somewhat understandable: the GCC union did not even exist until 1981 and the region has only been exciting from a commercial perspective since the 1970s.

Less excusable is the low level of GCC awareness amongst business students today. While working on Dubai & Co., the research team conducted a survey of students at an Ivy League university (with one of the world’s top MBA programs) asking what a set of international abbreviations stands for. How many could identify the GCC?

Continue reading ‘GWU MBA Program: A Model for GCC Awareness’

Earlier this week, ConocoPhillips struck a deal with Qatar Petroleum International (Qatar Petroleum’s global arm) by which the two will collaborate on expanding the Qatari firm’s global presence. Conoco will reportedly help QPI on energy projects beyond the Qatari market – which is phenomenally well endowed from an “upstream” perspective though small from the perspective of local consumption.

In reporting the deal, the Financial Times sees the arrangement as reflective of the “weakened position” of global oil companies when dealing with natural producers. Another perspective is that it reflects increased parity between producers and oil “majors”. In either case, the trends driving the shift in posture are here to stay.

Continue reading ‘Qatar & Conoco: A Shift in Posture’

Sunday’s New York Times ran a headline story on energy consumption in oil-producing countries. The data-rich piece stressed how local demand is reducing the level of oil exports and therefore the quantity available in international markets. This is seen a troubling trend for non-OPEC countries that import more oil than they ship abroad.

Observers of the Gulf should note a fundamental reality: the strategic implications of increased oil demand disproportionately benefit the GCC states more than other oil-exporting countries.

Continue reading ‘Oil Consumption & the Gulf’s “Reserve Advantage”’

Wednesday’s Financial Times reported that the Qatar Investment Authority (QIA) no longer seeks to increase its stake in the Nordic exchange OMX. This step leaves a joint offer by Borse Dubai and Nasdaq as the likely buyer of OMX, through a multi-step process. The process involves Borse Dubai purchasing the Nordic exchange and transferring it to a Nasdaq in exchange for (i) equity in a new JV and (ii) equity in the London Stock Exchange (LSE). The end result is that Borse Dubai is poised to end up holding pieces of both OMX and LSE, with Nasdaq as its partner.

Snatching up an exchange is, of course, a high profile acquisition. This begs the question: are Gulf buyers chasing exchanges as “trophy assets” or are there financial and strategic benefits to such transactions?

Continue reading ‘Chasing Exchanges: Borse Dubai, the QIA & OMX’

This past weekend, I spoke at a conference at Harvard on business in the Middle East and North Africa (MENA) region. Other speakers included the COO of Mubadala, Goldman Sachs’ Head of MENA Investment Banking, and the founder of McKinsey’s Dubai office. The first of its kind, the weekend-long event was a great success with over 400 participants.

The most powerful message of the conference was not the content presented, but the confidence with which the region was showcased.

Continue reading ‘Harvard Meets MENA: Regional Firms Show Confidence’

Last week, Deliotte announced the appointment of Mufti Hassan Kaleem, a classically-trained Islamic jurist, as its (presumably global) Shariah scholar. The appointment is a reflection of the fact that no financial institution – or advisory firm seeking to serve financial institutions – can be truly global without expertise in Islamic finance.

Reports in the press, including in the Financial Times, do not describe the scholar’s new role in detail. There is a reference to “signing off on products” and another to “different work with different exposure.” Were I defining the role, it would have three key elements:

Continue reading ‘Deloitte’s Shariah Appointment: Defining the Role’

Business headlines around the world are abuzz with news of the Abu Dhabi Investment Authority (ADIA) and its $7.5 billion capital injection into Citigroup. Today’s Financial Times opines that such liquidity injections from cash-rich sovereign investors could prove a “template for other banks hit by the US subprime crisis.” The FT may be right, but the point is even broader – it’s not just the banks that are affected by subprime woes.

Continue reading ‘Citigroup’s Gulf Capital: ADIA & Alwaleed’

In a post two days ago on Mubadala’s investment in AMD, I noted that “Gulf investors have choices, especially towards the East.” Yesterday, another UAE-based investor announced a major stake in a high-profile global firm: Dubai International Capital (DIC) is making a “significant investment” in Sony. According to the Financial Times, DIC now seeks to deploy 30% of its capital in Asia. Significantly – and not surprisingly – DIC increasingly finds the East a welcoming destination for its capital.

Continue reading ‘DIC & Sony: Music to Dubai’s Ears’

On November 16, the chip maker Advanced Micro Devices (AMD) announced that Abu Dhabi’s Mubadala Development Company has acquired an 8.1% equity stake in the California-based firm. The $622 million investment provides a major cash boost for the struggling US company.

Commentators on the deal have noted that government review of the matter is possible, as some see security risks in a foreign company owning a meaningful stake in a high-tech US company. Some assert that Mubadala – despite having less than 10% of AMD and not having a seat on the board of directors – could somehow compromise our national security. What happens in the weeks ahead will be closely watched by sovereign wealth funds and other international investors with portfolios in the US.

Observers would, however, be well-served to bear in mind the following key facts:

Continue reading ‘Mubadala & AMD: “Capable Capital” Turns to Chip Maker’