ARAB WORLD, DOING BUSINESS IN
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Few areas have received more attention from businesspeople in the industrialized world in recent decades than the Arab World. While Europeans have long held an interest in the Arab World, the United States had been relatively unaware of the region until after World War II. Even the European interest has historically been adversarial (as in the Crusades of the European Dark Ages or the European Catholic struggle for the control of Spain after 700 years of Arab civilization there) or subjugative (in the form of the 19th century European colonization of much of the Arab World following the French conquest of Algeria in 1841, and lasting in some regions until the 1970s). The significance of the current attention to the Arab World is that—in business terms at least—the Arabic countries are being viewed as a source of potential partners and as equals.

In part, the reason for this has to do with a shift of control of the rich natural resources of North Africa and the Arabian peninsula in the 1970s from U.S.- and European-owned natural resource companies (most notably petroleum) to domestically run operations in the Arab oil-producing states. This also has to do with the growing recognition of the richness and venerability of Arabic culture, a culture as distinctive as any business culture in the industrialized world. Finally, the geographic location of the Arab World, sitting at the crossroads of three continents, has helped to place it at the center of an increasingly integrated world economy.

DEFINING A DIVERSE REGION

The very term "Arab World" is a questionable one. An Arab is a member of a linguistic group—that is, one who speaks Arabic. The Arab World, then, can best be defined as the region in which people predominantly speak Arabic. Yet throughout what would be considered the Arab World, tens of thousands of people speak languages other than Arabic, ranging from the numerous dialects of Berber on the African coast of the Mediterranean to Kurdish and Armenian in southwest Asia, from Nuer and Dinka in the Sudan to Fula and Wolof in Mauritania, and so on.

The modern Arab World consists of between 19 and 21 nations. Listed in eastward geographic order 19 of these are indisputable: Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, the Sudan, Syria, Tunisia, the United Arab Emirates (itself consisting of seven emirates), and Yemen. Additionally, Palestine won self-rule in 1994 in the formerly Israeli administered West Bank and Gaza. Finally, Somalia—though Arabic there is a minority language with the majority of people speaking Somali—has been a member of the Arab League since 1974.

Moreover, it is important to note that the constituent parts of the Arab World are themselves quite diverse. Geographically, they cover a region spanning all of North Africa from the Atlantic coasts of Mauritania and Morocco in the west, well into southwest Asia with Iraq, south into Sudan, and into the nations of the Arabian peninsula. Religiously, nations such as Saudi Arabia and Libya are almost exclusively Islamic, while other nations contain substantial Christian and Jewish populations. Over 10 million Arabs are Christian and 40,000 Arabs are Jews. Numerous other religions, such as the Druze of Lebanon and Syria, have ancient communities while the large number of Indian foreign workers in the Gulf countries of Qatar, Oman, Kuwait and the United Arab Emirates have led to substantial resident Hindu communities. In several parts of the Arab World, different religious groups live in peaceful integration, such as the Islamic, Jewish, and Christian communities of Morocco, while in Lebanon for decades nearly equipollent Christian and Moslem fought in a civil war that has only recently ended.

Nor is the Arab World particularly unified in political terms. Iraq's Gulf War invasion of Kuwait and attacks on Saudi Arabia are only the most dramatic illustration of this point, but other less belligerent tensions also exist.

DIVERSE ECONOMIC SITUATIONS

The Arab nations have a wide range of economic performance. These range from the single commodity economies of great oil-producing nations of Saudi Arabia and Kuwait to the highly diversified emerging market of Egypt. Since the economic situations in each nation differ greatly, it is necessary to briefly examine the major Arab states in more detail.

SAUDI ARABIA AND THE GULF STATES.

The six Gulf States together have a gross national product (GNP) of $300 billion, a staggering figure when one considers that the six nations have a mere 26 million people between them. Of the six, Saudi Arabia is the most significant economic force, with a GNP of $173 billion. Yet the nation is almost entirely dependent on oil, with over half of its economy based on the public sector. In this respect, Saudi Arabia is typical of its Gulf State neighbors Kuwait, Qatar, Bahrain, and Oman. All are almost wholly dependent on oil exports, yet all require diversification to secure their futures.

Only the United Arab Emirates (UAE) among the Gulf States has made any real effort to diversify. With proven oil reserves of 98 billion barrels, the UAE is third in the world. Yet unlike its neighbors in the Gulf, the UAE doggedly pursued diversification of its economy throughout the 1990s. By mid-decade, fully 63 percent of the UAE's GNP rested on nonpetroleum sources, and Dubai had become the region's largest free trade zone. Consequently, the UAE successfully transformed itself by decade's end into the service hub for the region with promising signs of becoming a manufacturing center as well.

YEMEN.

On the other economic extreme from the Gulf States, Yemen is representative of the most impoverished Arab nations. Formerly two separate countries, present-day Yemen took shape when communist South Yemen and Islamically conservative North Yemen united.

The resulting nation has not been economically promising. With 15 million people, its population is only slightly smaller than that of Saudi Arabia. Yet Yemen's GNP is a meager $23 billion, less than one-sixth that of Saudi Arabia.

In 1996 Yemen received an $80 million assistance package from the International Monetary Fund (IMF), yet the country has little with which to work. While oil is central to its economy, its oil reserves are, comparatively speaking, negligible when compared to its neighbors, and while Yemen has attempted to build up its tourism and agriculture sectors, neither appear particularly promising. Finally, the nation's inferior transportation infrastructure, poorly run financial system, and strong import restrictions generally have frightened off foreign investors.

EGYPT.

By contrast to Yemen, the most impressive turnaround story in the Arab World has been Egypt's success in the 1990s. At the beginning of the decade, Egypt—the most populous Arab nation—ran a fiscal deficit of 20 percent of GNP and its foreign reserves were negligible. In 1991 Egypt turned to the IMIF, which has throughout the decade pointed to Egypt as one of its greatest successes. Over the next seven years, Egypt privatized more than half of the 314 companies the government had so earmarked, leaving roughly 80 percent of all Egyptian companies in private hands.

The greatest indicator of Egypt's newfound economic strength was its resilience during two severe blows to its economy in 1997. Of all Arab nations, Egypt was most affected by the East Asian economic crisis, since the collapse of shipping both to and from Asia seriously hurt revenues from Suez Canal traffic. Additionally, following the terrorist murder of 58 innocent tourists in November 1997 at Luxor, Egypt's $4 billion tourism industry nosedived, destroying the nation's chief source of foreign exchange.

Yet despite these economic trials, Egypt's economic outlook remained bright. Indeed, in 1998 the IMF declared Egypt as too healthy to warrant a continuation of its aid packet, and with good reason. Despite the effects of the Asian crisis and the tourism terrorism, Egypt was able to sustain a growth rate of approximately 5 percent, with inflation kept under 4 percent. Its foreign reserves, which in 1991 had been unable to cover even two months' worth of imports, had grown to $18 billion or enough to cover 14 months of imports. Most significantly, its budget deficit, which less than a decade earlier had been averaging 20 percent of GNP, had fallen by the end of the 1990s to a mere I percent.

JORDAN.

Like Egypt, Jordan too found it necessary to turn to the IMF for assistance, though at a later date and for different reasons. Following the Gulf War, Jordan was perceived to have sympathized with Iraq. As a result, Jordan suddenly found itself with reduced trade options and without its previously substantial aid from the Gulf States, notably Saudi Arabia. Jordan subsequently replaced Saudi funds with IMF aid.

In 1996 the IMF loaned Jordan $120 million. The results have been mixed. While the resultant export promotion and freer economy subsequently enabled Jordan to post an annual GNP growth rate of 5 percent (reaching $17 billion by the late 1990s), the IMF-imposed measures forced Jordan to reduce government spending. When Jordan, as part of these cuts, reduced government bread subsidies, Jordanians rioted.

SYRIA.

In stark contrast to the economic flowering of Egypt or the more painful growth of Jordan, Syria is one of the most stagnant major economies in the Arab World. For most of the Cold War, Syria was the Soviet Union's closest ally in the Middle East. Soviet aid financed Syria's economic isolation from the reach of the global economy. When the Soviet Union collapsed in 1991, however, Syria suddenly found itself without an external source of income.

In 1992 Syria changed its investment regulations, which encouraged some foreign investment. Still, Syria's $74 billion GNP will likely remain stagnant for two reasons. First, its authoritarian ruler Hafez Assad continues to maintain a strongly centrally planned economy, as he had during its years of Soviet influence. While Assad has given lip service to liberalization, Syria retains a heavy export tax and the governmental bureaucracy is often criticized for corruption and inefficiency. Second, unlike Egypt and Jordan which have made peace with Israel, Syria obsessed with its Jewish southern neighbor. As a result, Syria continues to spend 60 percent of its GNP on military needs.

LEBANON.

For decades, Lebanon was the financial and cultural center of the secular Arab World. This ended when Lebanon found itself plunged into a civil war between its Moslem and Christian populations. The war lasted for 15 years.

Once the war had ended, Lebanon began to rebuild. Still, it has probably lost permanently the service and banking dominance it once had held throughout the Arab World. Nevertheless, since 1992, Lebanon began to regain economic stability and its GNP (currently at approximately $16 billion) has averaged an 8 percent annual growth rate throughout much of the following decade, among the most rapid rates of growth in the Arab World.

Yet the political state of the nation is questionable. While clearly the most democratic nation in the Arab World, Lebanon remains heavily dominated by the hostilities of its neighbors Israel and Syria. Israel continues to occupy a ten-mile swath of the nation for the entire width of Lebanon's southern border. Syria, in turn, has since its 1990 invasion, held Lebanon in a state of quasi-occupation, with 35,000 troops permanently deployed in the country.

MOROCCO.

Throughout the 1990s, Morocco has gradually begun to pursue a policy of greater trade liberalization. From 1993 to 1995, for instance, its maximum import tariff was cut from 400 percent to 50 percent. Though this was still high, such measures are strong signs that the nation is moving in the direction of greater international trade. During the same period, Morocco lifted its ban on foreign investment in banks and eliminated its restrictions on the repatriation of funds. Additionally, after more than 30 years in which most industry was controlled by the state, Morocco began in the mid-i990s to encourage privatization of a wide range of industries from its important fertilizer makers to hotels and telecommunication firms.

The resulting shift in policies has been slow but significant. Once the victim of hyperinflation, Morocco had managed to keep inflation below 6 percent by the mid-1990s. Moreover, Morocco's GNP had reached $29.5 billion by 1995, an increase of more than seven times its $3.98 billion GNP of 1970.

LIBYA.

In August 1996 the United States passed its Iran-Libya Sanctions Acts. The acts require mandatory sanctions against any company, whether it be a U.S. company or not, that invests in Iran or Libya. The act has little effect on Libya itself, nor on U.S. companies, which had not dealt with Libya in any case. The resultant backlash from European and Asian nations, however, has actually raised Libya from the status of pariah to one of sympathy. In particular, France openly supported the $2 billion agreement with Libya that was set in 1997 between the French company Total, the Russian company Gazprom, and the Malaysian national petroleum company Petronas.

IRAQ.

The least promising economy in the Arab World is Iraq. Following its unsuccessful attempt to invade Kuwait in the Gulf War, Iraq has been the subject of a United Nations-sponsored international boycott. Its 1990 prewar GNP of $17 billion has dwindled by 75 percent to under $5 billion a decade later.

DIVERSE POLITICAL SYSTEMS

The political systems in force in the various Arab states also differ markedly. The governments range from monarchies to military dictatorships and from one-party democracies to nascent actual representative governments.

Even the monarchies are highly diverse in how they are ruled. On the one extreme is Qatar's Sheikh Hamad al-Thani, who though technically still an absolute monarch has, since his 1995 coup over his father, demanded democratic rule, often over considerable opposition. Since coming to power, Qatar's sheikh has eliminated newspaper censorship and established a highly controversial television station whose broadcasts reach throughout the otherwise heavily censored programming in the Gulf region. In 1999 Qatar held the first election of any Gulf State open to all citizens, including women.

On the other extreme, Saudi Arabia and Bahrain remain hereditary absolute monarchies in which the only type of popular voice comes from hand-picked advisory councils. The United Arab Emirates forms a federation of seven emirs, each an absolute monarch in his own state, but jointly ruling the federation.

Most Arab state monarchies, however, fall somewhere in between. Thus, Jordan, on paper a constitutional monarchy, was until 1999 ruled nearly as an absolute monarchy due to immense popularity of the late King Hussein; in the aftermath of Hussein's death, the new King Abdullah may find the provisions of representative government likely to come more to the fore. Other nations, such as Morocco and Kuwait, allow representative elections but severely limit the power open to those elected in such areas as defense, foreign policy, and money spent by the monarchs.

It is, however, one of the contradictions of the Arab World that an absolute monarchy such as Qatar is arguably more representative than many of the regions nonmonarchies. Both Syria and Iraq, for example, are police states, ruled by dictators with absolute power exceeding that of most of the region's monarchies. More typical are the region's democracies which put on a show of elected leadership. Thus while the region's most populous nation, Egypt, is technically a democracy, the country has been long dominated by a single party, the National Democrats. Indeed, two times in 15 years, Egypt dissolved its parliament on grounds that the election procedures were unconstitutional. After Egypt's 1995 election, opposition candidates went to court to question the results in more than half of the nation's 444 seats open to vote.

Still, sincere efforts toward true elected democracy have surfaced in the 1990s. Yemen, for example, was much-praised for its open elections in 1993, but the political dissent the elections bred contributed to the civil war that broke out there in 1994. More encouragingly, Algeria ended the civil war that had raged there throughout much of the 1990s through the institution of national elections.

Nevertheless, in well over 20 years, only one Arab state—strife-torn Lebanon—has changed leadership through democratic elections. By the end of the 20th century, the length in office for Arab heads of state averaged 22 years.

HISTORY

Another definition of the Arab World is historical, as its members share certain common attributes of culture derived from a shared history. Most of the Arab World was united in a period ranging roughly from the eighth to the thirteenth centuries A.D. under an empire that at its height exceeded in size ancient Rome. The historic Arab Empire, however, included much of what is today no longer part of the Arab World. In the east, it stretched to the Chinese border (and so included Iran and much of south central Asia, none of which are Arabic). In the north it included the Italian islands of Sardinia and Sicily, and virtually all of present-day Spain and Portugal. Still, much of the borders of the historic Arab Empire match the region of the modern Arab World. Though the Arab World is not easy to define, the combination of Arab language, North African and southwest Asian geography, and historical and cultural ties to the Arab Empire may present a working definition of the region.

The history of the region of the Arab World certainly predates the Arab Empire, but not as Arabic history.

Egypt was united in 3200 B.C. and has remained a single entity to the present. Mesopotamia—in modern-day Iraq—was the seat of the first civilization to perfect writing. Significantly, the Mesopotamians invented writing in order to carry out business.

The Phoenician trading empire of the eastern Mediterranean gave the entire Arab World a sense of the importance of international trade in ancient times, flowering in Carthage in North Africa with an empire rivaling Rome and eventually destroyed by the Ro-mans. The region was also unified under the Byzantine Empire after the fall of Rome.

Still, the history of the Arab World is the history of the Arab Empire. In the seventh century A.D. Islam began to spread very rapidly from the Arabian peninsula where Mohammed had lived and founded the religion as its Prophet. From the death of Mohammed in 632 A.D., it took Arab armies only three generations to form an empire reaching as far west as Spain and as far east as China. Many factors contributed to the rapid spread of Islam, including the preexisting trade routes, the popularity of the monotheistic message of Islam and its accompanying tenets of the equality of all believers, the tolerance Islam preached for Jews and Christians as "people of the book," and the fragmented leadership of much of the region where it spread.

With the spread of Islam and the conquest of the Arab armies came unity under Arabic government. Although the area of the domain included many language, the language uniting this vast empire for trade and government was Arabic. This in turn spread Arabic culture in the empire. The importance in Islam of pilgrimage to Mecca also served as a unifying element since it promoted travel across the region and with it the exchange of ideas and awareness of cultural practices.

The seat of the Arab empire shifted from the Arabian peninsula early on to Baghdad in modern-day Iraq. Baghdad was the center of the medieval Arab World for over 500 years. Because Islam places great value on learning, the Arabs were able to avoid much of the struggle between faith and reason that acted as an obstacle to trade and science in Christian Europe at the same time. Out of this respect for learning the Arabs built up enormous libraries, saving in the process the writings of the ancient world and reintroducing them to Europe, laying the foundation of the Renaissance.

Only after the invasion by the Mongols, including the destruction of Baghdad in the thirteenth century, did the golden age of the Arab Empire begin to end. With the empire's decline, several factional groups rose in the fourteenth and fifteenth centuries, most notably the Mamluks. By the early 16th century, however, the Ottoman Turks—a non-Arabic but still Islamic people—had conquered Egypt (doing so in 1517), then extended their rule over most of the Arab World (with the exceptions of Oman, Bahrain, and Morocco) in the next 100 years. The Ottomans held sway over most of the Arab World for the next two centuries until their rule, weakened by internal difficulties, was increasingly challenged by European colonizers.

Beginning in the first third of the nineteenth century, Europe began to divide the Arab World (along with much of the rest of the globe) in a policy of imperialism. As early as 1839, Britain established a base on the Arabian peninsula to protect its Indian trade routes. It was, however, France which began the occupation of the Arab World in earnest when in 1841 it wrested Algeria from the Ottomans after more than a decade of warfare. Britain established an exclusive treaty—negotiating its occupation—with the formerly independent Bahrain in 1861. France then took over Tunisia outright from the Ottomans in 1881, and Britain occupied Egypt the next year in 1882. Britain set up more exclusive treaties, first with independent Oman in 1891, but then with Ottoman-controlled areas of the United Arab Emirates (1892) and Kuwait (1899) over which they then assumed administration, effectively transferring control. In 1911 Italy declared Libya a protectorate. Soon after, France conquered the formerly independent Morocco in 1912. In 1916 Britain entered into one of its last exclusive treaties, negotiating the occupation of Qatar.

The Ottoman Empire—what remained of it—entered World War I on the German side, and lost. Following World War I, the victorious French and British divided the rest of the Arab World—France taking Lebanon and Syria while Britain took over Iraq, Palestine, and Jordan.

Resentment of colonial occupation led to independence movements throughout the Arab World. This resistance led to a rather rapid return to at least partial self-rule in the British territories of Egypt (1922), Jordan (1923), and a bit later in Iraq (1932) in the interwar years. Still, it was not until after World War II that Britain gave up its military control and at least partial political governance.

After World War II, the European powers were substantially weakened and the Arab World broke away in a series of independence struggles. Italy, which had lost the war, was the weakest and its colony Libya was the first to achieve postwar independence (1951). Tunisia and Morocco broke free of France in 1956. Independence had to wait until the 1960s, however, for Mauritania, Kuwait, and Yemen; and even the 1970s for Bahrain, Qatar, and the United Arab Emirates. The last colony, Djibouti, received independence from France only in 1977.

While retaining much of the unity of a shared culture and even gaining a new commonality in its hatred of colonial occupation, the Arab World emerged from occupation as fragmented as the myriad colonies the Europeans had carved out of the Ottoman Empire.

With the last vestige of colonialism thrown off only in the 1970s, it is not surprising that a reemergence of nationalism among many former European colonies, including those of the Arab World, also resurfaced in the period following World War II. With this new nationalism came the desire on the part of the former colonies to reclaim control of their natural resources. In 1960 several oil-producing nations joined together to form the Organization of Petroleum Exporting Countries (OPEC). Since OPEC included only oil producers and since roughly half of these nations were non-Arab, an additional Organization of Arab Oil Producing Countries was formed in 1968. Both OPEC and OAPEC helped coordinate pricing of petroleum exports.

It was during the 1970s, however, that the most significant shift in the control of oil took place. First Libya, and then Iraq and Algeria, nationalized their foreign oil companies. During the same decade, both Saudi Arabia and Kuwait purchased controlling interest of theirs. Before this shift in control, eight major companies based in the United States, Britain, and France controlled virtually all of the profits derived from the production of oil in the Arab World. Indeed, both Britain and the United States made more in taxes on oil from the Arab countries than the combined money made by all the Arab countries themselves.

Concurrent with this shift in control of the key natural resource of petroleum from U.S. and European interests to those of the Arab nations, a predictable shift in attention to doing business in the Arab World followed. With this background in mind, the following sections touch on some of the major characteristics of doing business in the Arab nations.

LANGUAGE

The Arabic language is the foremost unifier of the nations of the Arab World. It is the official language of all of the Arab nations, by definition. Arabic is also an official language of the United Nations; it is a greater unifier of the Arab World than any other characteristic joining together such ethnically and racially diverse groups of people.

While Arabic is spoken as a first language by millions of Christians as well as thousands of Jews and Druzes, it remains a language of religious importance far beyond its approximately 190 million native speakers since it is the holy language of the world's approximately I billion followers of Islam.

Because of the colonial experience, many Arabs speak at least one European language. English and French are extremely widespread among the educated elite, many of whom were educated in Europe, Canada, or the United States. Nevertheless, the value of speaking Arabic is significant. Because many of the former colonial French and British occupiers of the Arab World felt that speaking Arabic was beneath them and failed to appreciate the richness of Arabic culture, speaking English or French without making any effort to learn even a little Arabic may well carry with it negative feelings. On the other hand, even speaking a small amount of Arabic is usually very much appreciated and establishes the English or French speaker's respect for Arabic culture.

The Arabic script is the lettering system of Arabic as well as dozens of other African and Asian languages such as Farsi and Urdu. Arabic script is relatively easy to master for nonnative speakers as it is phonetic with a particularly consistent system of spelling. Nevertheless, several vowels in Arabic—as with its sister Semitic language Hebrew—are indicated by nonletter marks (e.g., dashes) that are present only in formal writing. As a result, the writing of everyday life may be somewhat difficult for those learning to read the language in a structured setting.

Arabic is based on a root system of words. Words are formed around a root of three consonants. This is both a help and a hindrance to the speaker of Arabic as a second language. It is a help as a single root will open up dozens of related words, allowing the rapid acquisition of a vocabulary and a fairly accurate method for guessing the meaning of words not yet learned. It is a hindrance because Arab dictionaries are organized by root, not alphabetically as in European languages. This makes looking up new words difficult for the novice.

Modern Standard Arabic is taught in schools throughout the Arab World. Nevertheless, dialect differences are significant. Not all dialects are fully understandable to all others. The businessperson translating documents into Arabic would be safe in using Modern Arabic Standard. The marketer trying to reach a local market, by contrast, would do well to employ a translator familiar with the dialect of the targeted region.

ENVIRONMENT AND TECHNOLOGY

The Arab World is at once resource poor and resource rich. The economic success of the Arab World rests in its richness of natural resources—especially petroleum. Yet the majority of Arab nations have few other natural resources. The majority of the Arab countries are very dry with limited agriculture.

Additionally, most Arab nations are painfully dependent on a single commodity. Ten of the Arab nations rely on petroleum for over 50 percent of their export revenues: Algeria, Bahrain, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Syria, and the United Arab Emirates. Additionally, two more Arab nations depend on a single resource other than petroleum for over 50 percent of their export revenues: Morocco (fertilizer) and Mauritania (iron ore). Thus, over half of the Arab nations are extremely dependent on a single nonrenewable commodity. To this end, Arab business culture is centered on trading this diminishing natural resource for a long-term benefit.

The traditional Arabic view of technology may be called a subjugation attitude. Much of Arab culture has been heavily influenced by Islamic tradition. While Islam has long favored education and was the bastion of science when Christian Europe had abandoned it during the Middle Ages, Islam also teaches acceptance with the way the world was divinely made. Technological innovations are welcome as long as they act to serve God's will; long-term planning or change may be resisted in some strongly Islamic nations—including those outside of the Arab World—because it threatens to disrupt the divine will. This does not mean that numerous Arabic companies—especially in the Gulf countries—do not have the latest in computer technology and other technological devices; it does mean that the ramifications of how technology is used is more likely to be considered in the Arab World than in the West.

SOCIAL ORGANIZATION

FAMILY TIES.

The concept of family in the Arab World is generally much broader than that of the United States and northern Europe. Close family ties exist between cousins, in-laws, and many other familial relationships considered to be distant in the United States. The number of close relations—akin to the loyalty of nuclear families in North America in many Arab families often exceeds 100.

This family concept becomes important in business because, as Margaret Nydell explained in her book Understanding Arabs, "Family loyalty and obligations take precedence over loyalty to friends or the demands of the job."

Family ties, in turn, influence those with whom one does business. Nepotism, which carries a negative connotation in the United States, is considered a positive virtue in most of the Arab World. Hiring one's own relatives ensures loyalty and trust. "The family in turn," Michael Field wrote in The Merchants, "is the foundation of the intensely personal view of the world that Arabians have … People—individuals and families—are much more real to Arabians than institutions." Field went on to note, speaking particularly of the countries of the Arabian peninsula, "Arabians do not see society as a vast, impersonal mass of people containing a few individuals whom they will meet at various times in their lives and with whom they will form business or personal relationships. Rather, their world is made up of a web of communities, tribes and families—some they know personally, but all they know of."

Religion.

Many people outside of the Arab World do not see its religious diversity. Nearly 14 million Arabs are Christian. Large Arabic Christian populations exist in Lebanon, Syria, and Sudan, representing sizable percentages of the overall population. Although the percentage of the total population is smaller due to its greater overall population, the largest Arabic Christian community is in Egypt, center of the 6 million strong Coptic Church. Numerous other Eastern Rite Christian churches are primarily comprised of Arabs, most notably the Assyrian Church of the East, the Syrian Orthodox, and the Armenian Orthodox. Non-Eastern Rite churches also have large followings, notably the Maronite Catholics of Lebanon and the numerous Eastern Rite Catholics recognizing the Pontiff in Rome.

Additionally, ancient communities of Jews live in Morocco, where they are well integrated into society. Less well accepted communities of Jews also form a sizeable minority in Syria and Egypt.

Still, the overwhelming majority of Arabs follow Islam as their religion. Over 90 percent of the people in 17 of the Arab countries—excluding foreign workers—practice Islam.

It is important to note that while Islam is the predominant religion in much of the Arab World, Islam is much more widespread than the Arab World. Indeed, of the five nations with the largest Moslem populations—Indonesia, Pakistan, Bangladesh, India, and Turkey—none is Arab. This is not to deny that the Arab World is very important to Moslems worldwide. Arabic is the language of the Koran. Mecca, the holiest city of Islam, is in Saudi Arabia, and the Haj—or pilgrimage to Mecca—is one of the five pillars of Islam required of Moslems.

Islam, in many of the Arab countries, pervades all aspects of life making no distinction between the secular and the religious. Islam is as much a lifestyle as a religion in this respect.

Prohibitions of certain products (for example, those containing alcohol) can play a factor in business. Non-Moslems are banned from Mecca and Medina, the holy cities of Saudi Arabia, a fact that made the initial installation and maintenance of those cities' telecommunication systems difficult for workers of Bell Canada. The discussion of religion is more likely to be assumed in heavily Islamic countries since it is so much a part of life. Not being Moslem is, however, less a detriment than not believing in a religion. Being a Christian or Jew, for example, is not only understood but recognized in the Koran; being an atheist or agnostic may exceed belief and would certainly undercut one's respect.

GENDER ROLES.

Gender roles are strongly differentiated in the Arab World. Considerable diversity exists among how women are treated from one Arab country to another. Education for women is one area in which particularly rapid advances have been made. In Egypt, for example, many women hold advanced degrees in a variety of fields and teach in university level positions. Several Egyptian women have held positions at the United Nations. Women have held high positions at universities and organizations in other Arab countries as well, but these individuals represent the exceptions.

While many writers suggest that Islam is at the root of the secondary role of women in most Arab nations, this is not fully true. Islam itself lays out gender differentiation, but Islam does not teach subjugation to a secondary role. Moreover, there are millions of Arab Christian women who must be considered separately from such generalizations.

Nevertheless, many Arab women are relegated to a secondary status. While they may be honored and cherished in their household roles, the business world is customarily prohibited to most Arab women. Socially, women are protected from scandal by chaperoning in public. Indeed, in Saudi Arabia women are prohibited from driving.

CONTEXTING AND FACE-SAVING.

Arab culture is what Edward T. Hall termed "high context"; the United States is a "low-context" culture. The more highly contexted a culture is, the more the context of what is communicated matters and the less the actual words used. The more low contexted a culture is, the less important the situation surrounding the message is and the more important the actual words communicated.

Since Arab culture is high context, the amount of stored information needed to communicate effectively in business is quite extensive in order to form a context by which to judge any individual communication exchange. The actual new information needed to communicate, by contrast, is relatively small since most of what is communicated is shared through stored information. By contrast, the U.S. businessperson is accustomed to low-context information where one needs to know little or nothing about the person with whom one communicates since virtually all of one's meaning is transmitted directly through explicit words.

The clash of low- and high-context communication can cause serious misunderstandings. In the eyes of many U.S. businesspeople, Arabs, as high-context communicators, are seemingly concerned with irrelevant or personal details (building a context) while unduly vague and indirect (since the context, not the words themselves, convey the meaning). By contrast, U.S. businesspeople in the eyes of many Arab businesspeople are seemingly overly direct and require to have even the most obvious details explained to them (that is, they can understand only what they are told since they cannot effectively read the contexted information).

Arab culture also tends to place great value on how well something is said. The rhetorical value in how one words one's point is important. Since context allows the receiver of a message to understand what is really meant, one is free to exaggerate for rhetorical effect. This elaboration for eloquence's sake is often misunderstood by U.S. businesspeople in the Arab World as lying. Conversely, the U.S. businessperson's failure to elaborate may make his or her presentation of the information appear dull, uninspired, and ultimately unconvincing.

As in most high-context cultures, face-saving—the act of preserving one's prestige or outward dignity—is very important in the Arab World. The need to show adequate respect often leads to the exchange of formalized politeness. The U.S. businessperson is thus usually taken aback by the extreme hospitality of his or her Arab hosts, but is unable to differentiate true politeness from the expected exchange of niceties. Moreover, the Arab businessperson must accommodate the lack of concern for face so widespread in the United States and other low-context cultures or risk misreading what may be a series of unmeant slights as intentional.

NONVERBAL BEHAVIOR

Nonverbal behavior shifts dramatically from country to country. Arab and U.S. nonverbal behavior shifts most noticeably in the following areas.

DRESS.

Arab dress differs radically in many parts of the Arab World. In Lebanon and Syria, Western-style clothing is commonplace. In Saudi Arabia and the Gulf States, the ghutra (head cloth) and thobe (long, generally white, flowing robe) are the standard. The U.S. businessperson would do well to learn to recognize distinctions in the clothing of the region he or she is in to tell appropriate dress from inappropriate and to tell clan or nationality indicators. It is also useful to determine when an Arab associate has dressed in Western garb because it is customary for him to do so or because he is attempting to make his Western counterpart feel more at ease.

It is not necessary for Westerners to dress in traditional Arabic outfits. Few Arab businesspeople would expect this or even desire it. It is, however, necessary to make sure that one's own outfit is customarily modest. While levels of modesty vary from one part of the Arab World to the next, exposure of bare skin in shorts or short-sleeve shirts would almost universally be inappropriate for men or women. One should look closely to the materials one has brought along as well. It is not uncommon to have brochures or reports with models dressed immodestly posed next to a product or to have people in standard U.S. work situations or leisure time activities photographed in outfits that would be considered inappropriate.

BODY SPACE.

Body space or proxemics shifts dramatically between U.S. and Arab standards. Most people speaking face to face in business situations in the United States stand at approximately arm's length. Most Arabs consider about one quarter of that distance to be appropriate. It is not uncommon to feel the breath of the other party on one's face in the proper Arab distance.

The customary U.S. distance is misread as being too standoffish by Arabs. The average Arab distance is misread as being too aggressive and pushy by their U.S. counterparts.

HAPTICS.

Haptics or touching behavior also differs radically between the United States and the Arabic World. Arabs of the same gender are very haptic, that is they touch extensively when speaking. Arm-patting and even knee-touching is not uncommon. Men often walk hand in hand in many parts of the Arab World. Greetings are usually accompanied by hugs and gestured kisses between men. Virtually all of these behaviors make most U.S. businesspeople uncomfortable. The United States is essentially an ahaptic or nontouching culture. Aside from the handshake—which by Arabic greeting standards is very brief and attenuated—virtually no touching among the same gender is tolerable.

Touching between genders in much of the Arab World is, by contrast, totally forbidden in public. While some Arab countries (most notably Lebanon) do not hold handshaking as taboo and while most businessmen accustomed to Western businesswomen may be willing to shake hands with Western women in business situations, such behavior is usually a concession and should be viewed as such. Refusal to touch a woman does not mean that the Arab businessman is sexist or refuses to deal with Western businesswomen; it is a moral breach for him. Western men and women should also take care to avoid moral breaches by, for example, taking care regarding kissing or hand-holding in public.

TIME CONCEPTION

The Arab World runs on what Edward Hall called "polychronic" time; the United States runs on "monochronic" time.

In the Arab conception, time is fluid; in the United States, time is concrete. In the Arab World, as in all polychronic cultures, preset schedules are subordinate to interpersonal relations so that personal ties affect the schedule. In short, the schedule is flexible. In monochronic societies such as the United States, the schedule dominates interpersonal relations. The preset schedule, not the people involved, coordinates the length of time people will meet. In other words, the schedule is rigid.

In the Arab conception of time, each task is handled through completion and as a result multiple tasks can be undertaken simultaneously. Because people in authority must give the people who are with them as much time as needed to complete the task at hand, Arab culture relies heavily on people who screen for these people. This in turn encourages personal relationships at work in order to receive preferential treatment and not be screened out.

The United States, by contrast, is organized on exactly the opposite conception of time. The schedule precludes any preferential treatment based on personal relationships. Indeed, personal relationships at work are looked on with suspicion since they may subvert maintaining one's schedule. One's appointment—not one's personal relationship—is what determines when one person sees another in the schedule.

The resulting friction deriving from these two conceptions of time and personal relationships can be quite severe in U.S.-Arab interactions. U.S. businesspeople are seen as having no concept of personal relationships; Arab businesspeople are seen as having no concept of schedule.

CONCLUSION

While the Arab World is a highly diverse combination of various peoples, many characteristics are shared in history and culture that affect the workplace. The reader is urged to seek further sources of information on the specific countries in which he or she will do business. The United States maintains consulates in most of the Arab countries which can provide further information on specific countries. Also, most of the Arab nations have consulates in the United States. Many Arab countries have chambers of commerce and many U.S. chambers of commerce exist in several Arab countries as well. Several organizations, such as the Arab Information Centers in Washington and New York and the Arab Studies departments of many universities, are also good sources of information. Finally, several major U.S. cities with substantial Arab American populations, such as Detroit, have American Arab Chambers of Commerce which are also useful sources of information for research on Arab subjects.

SEE ALSO : Cross-Cultural/International Communication

[ David A. Victor ]

FURTHER READING:

Butt, Gerald. The Arabs: Myth and Reality. New York: St. Martin's, 1997.

Fernea, Elizabeth Wamock, and Robert A. Femea. The Arab World: Forty Years of Change. New York: Anchor, 1997. Field, Michael. The Merchants: The Big Business Families of Saudi Arabia and the Gulf States. New York: Overlook Press, 1984.

Hall, Edward T. The Dance of Life: The Other Dimensions of Time. Garden City, NY: Anchor Press/Doubleday, 1983.

Lamb, David. The Arabs. New York: Vintage, 1987.

Lysterm, Michael. "Don't Pass Me By." World Trade 10, no. I (January 1997): 54-59.

Nydell, Margaret. Understanding Arabs: A Guide for Westerners. Rev. ed. Yarmouth, ME: Intercultural Press, 1996.

Victor, David A. International Business Communication. New York: HarperCollins, 1992.



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