On February 18, 2014, in a rare tribute to the wisdom reflected in “Management in the Whole of the Arab World,” I was honored with the Golden Arrow Award in Dubai, and the Middle East Excellence Awards Institute selected me as one of the “Best Government CEOs 2016” in the Middle East due to my continuous efforts to improve the business environment.
I always say, “The most peaceful language on earth nowadays is the language of business.” If we need a peaceful world, a better tomorrow, and sustained global relationships, we should push the business bar and make deals.
One way of doing this is through the creation of free zones. According to the World Bank, free trade zones are “small, fenced-in, duty-free areas offering warehousing, storage, and distribution facilities for trade, trans-shipment, and re-export operations.” Free-trade zones can also be defined as labor-intensive manufacturing centers that involve the import of raw materials or components and the export of factory products.
Free zones can be referred to as follows:
The UAE has several free zones across its seven emirates. They may be broadly categorized as seaport free-zones, airport free zones, and mainland free zones. Free trade zone incentives to attract Foreign Direct Investment (FDI) are:
There are more than 37 free zones operating in the UAE, and each of them is designed around one or more business industry categories.
Licenses are offered only to the companies which lie within those categories. An independent Free Zone Authority (FZA) governs each free zone and is the agency responsible for issuing FTZ operating licenses and assisting companies to establish their business in the FTZ.
I personally had a great experience managing two free zones in the UAE: the Hamriyah Free Zone and Sharjah International Airport Free Zone. Furthermore, I saw the contribution we made to the economy and to improving international trade and investment.
A book I wrote, My Green Journey in Hamriyah Free Zone, summarises my full decade of service in one of the most successful free zones in the world. It discusses the importance of following the 12 principles of competitiveness to attract and retain FDI.
In March 2000, I was appointed Director General to lead the Business Unit. I remember that, when I took over, we had 78 companies, mainly SMEs, with a turnover of US $3.6 million and total assets worth US $57 million. Over a period of 13 years, Hamriyah Free Zone became a multibillion-dollar conglomeration of almost 6,000 companies with total assets valued at US $545 million and 60,000 people representing 159 nationalities.
Prominent business leaders from across the Gulf Region formed the Pearl Initiative in 2010 to create a non-profit vehicle for the private sector that would take a lead in adopting higher standards of corporate accountability, transparency, and governance. Its vision entails a thriving economy in the Gulf Region, underpinned by a private sector that embraces good governance as a pillar of sustainable growth.
The Pearl Initiative believes that proactively raising standards in these areas enhances business innovation, opportunity, and value creation.
On October 27, 2016, the UAE-based Pearl Initiative and the United Nations Global Compact (UNGC) hosted their second regional forum on “Sustainability in Action: Business and the Sustainable Development Goals,” in Dubai, under the patronage of Sheikh Nahyan bin Mubarak Al Nahyan, the UAE Minister of Culture and Knowledge Development. The forum served as a successful call to action, encouraging collaborative strategy and practical action towards creating diverse, prosperous, and competitive economies. It was a great experience through which to explore sustainability and a chance to learn from an informative panel discussion.
Latif Ahmed, Congress Manager from Alleem Business Congress, and Ms. Shabih Fatima, Research and Development Senior Officer of Alleem Research and Development Center, attended the forum to actively participate in the network and discussions and show our full commitment to, and support for, the initiative that aligned with our “Alleem 21 Global Goals for Sustainable Development.” The most relevant goal was Number 21: International Cooperation.
At this significant event, Sheikh Nahyan said, “The UAE is deeply involved in both the Pearl Initiative and the UNGC. Within our country, 143 countries, business associations, SMEs, NGOs, and education institutions are already participating in the United Nations Global Compact. We are also seeing increased cooperation with other nations in developing solutions to important environmental issues that impact all human societies, now and in the future.” Sheikh Nahyan went on to emphasize how the power of global coopera-
tion could work wonders. He cited the successful negotiations of the Montreal Protocol, ratified by 197 UN member countries, which was widely considered to be one of the most important environmental treaties for the Protection of the Ozone Layer, as it phased out the production of numerous substances that were responsible for ozone depletion. He also credited both the Pearl Initiative and the UN Global Compact for their understanding of the complex relationship between corporate responsibility and corporate profits. “A critical bottom line for the Sustainable Development Goals (SDGs) is that private enterprises must be somehow persuaded to commit to sustainability. Corporate leaders must develop a new, shared understanding of what sustainability leadership requires or face the prospect of becoming irrelevant,” remarked Sheikh Nahyan. Moreover, he acknowledged Ban Ki-moon, the Secretary-General of the United Nations, for his leadership and efforts to leave a notable legacy for the transformation of the world through the 17 UN Sustainable Development Goals. Ban Ki-moon said, “Governance failure, humanitarian crises and persistent economic inequality have devastating consequences. That is why we must redouble efforts to help businesses recognize that sustainable development creates immense opportunities.” Then, he concluded, “The private sector is crucial to realizing the 2030 agenda for sustainable development. More and more leaders understand that sustainable development is not just the right way forward, but serves the long-term interest of business and stakeholders by improving stability and prosperity.”
I appreciate the outstanding work they did with such a wonderful vision of sustainability.
Another area of interest to me that aims toward the improvement of internal trade and investment is the concept of Public-Private Partnership (PPP).
Although there is no specified definition of PPP, the PPP Knowledge Lab describes it as “a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance.” We can also call it “a service that is funded and operated through a partnership of government and one or more private sector companies.”
A PPP can be used to finance, build, and operate projects such as public transportation networks, parks, and convention centers. If a project is financed through a PPP, it has a higher possibility of being completed soon. Both parties manage their own sets of jobs. For instance, the private partner participates in designing, completing, implementing, and funding the project, while the public partner focuses on defining and monitoring compliance according to their objectives. With the distribution of jobs comes the distribution of risks, according to the ability of each partner to assess, control, and cope with the project.
A PPP comes with several benefits: private-sector technology and innovation help to provide better public services through improved operational efficiency. The public sector provides incentives so that the private sector can deliver projects on time and within budget. In addition, the creation of economic diversification makes the country more competitive at enabling its infrastructural base and boosting associated construction, equipment, support services, and other businesses.
BOO (build–own–operate) is one of several related PPP project types, which includes BOOT (build–own–operate–transfer), BLT (build–lease–transfer), and BLOT (build–lease–operate–transfer).
It is a model in which a private organization builds, owns and operates a facility under the encouragement of the government. Moreover, it involves large amounts of finance and a long payback period. Although the government doesn’t work in, or fund this model directly, it may offer other financial incentives, such as a tax-exempt status, then allow the BOO parties to deal with them independently.
Usually, the ownership of the project (e.g., a mobile phone network) remains with the project company; hence, the private company gets the benefits of any residual value of the project. This framework is used when the physical life of the project coincides with the concession period.
Consider the example of water treatment plants: private companies run these facilities to process raw water that the public sector entity provides. The water gets filtered then returned to the public-sector utility for delivery to customers.
Build–operate–transfer (BOT) or build–own–operate–transfer (BOOT) have extensive applications in infrastructure projects. In the BOT framework, a third party, for example, the public administration, delegates to a private-sector entity the design and building of infrastructure and the operation and maintenance of these facilities for a certain period. During this period, the private party has the responsibility of raising finances for the project, is entitled to retain all revenues that the project generates, and is the owner of the concerned facility. The facility is then transferred to the public administration at the end of the concession agreement without any remuneration to the private entity. Many entities use the BOT model or the BOOT model; namely: Pakistan, Thailand, Turkey, Taiwan, Bahrain, Saudi Arabia, Israel, India, Iran, Croatia, Japan, China, Vietnam, Malaysia, the Philippines, Egypt, Myanmar, Canada, Australia, New Zealand, Nepal, and a few US states (California, Florida, Indiana, Texas, and Virginia). Unfortunately, the PPP concept is not widely used in the Arab world due to unawareness regarding its benefits.
Wal-Mart-Ing America
According to an article published in Forbes magazine on January 30, 2007, “becoming a giant doesn’t just happen.” The status is earned through innovation and discipline—the traits that experts point to when explaining the meteoric rise of Wal-Mart from country store to controversial retailing giant.
Wal-Mart drives productivity, which has been crucial to the turning around of the US economy, according to Louis Galambos, Professor of Business History at Johns Hopkins University. That Europe hasn’t realized the same types of gains in productivity is partly a result of its reluctance to embrace the big-box retail model, which allows a company to take full advantage of the world supply chain to obtain and sell goods cheaply.
With its enormous growth over the years, of course, Wal-Mart has launched itself to the forefront of public debate on the question of how big is too big. Supporters point to the company’s ability to serve the public with wider selections and lower prices of everyday goods.
How much has Wal-Mart grown? Consider its $250 billion domestic annual revenue, which is about five times that of Microsoft. It also outpaces the annual sales of Ford and General Motors combined, coming in at about two-thirds of all North American car sales including those by overseas competitors.
The company is more than 10 times the size of the radio advertising industry and three times the size of the domestic airline industry. In fact, Wal-Mart’s annual sales are a full 35% of those of the entire travel and tourism industry, the second-biggest contributor to the country’s GDP and job market. And speaking of GDP, Wal-Mart’s sales in 2006 were greater than the economies of 144 countries, according to the International Monetary Fund.
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement that the World Trade Organization (WTO) administers and that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to the nationals of other WTO members. It was the TRIPS agreement that, for the first time, introduced intellectual property law to the international trading system and remains the most comprehensive international agreement on intellectual property to date. The developing countries were concerned that the developed countries were insisting on an overly narrow reading of TRIPS. Hence, they initiated a round of talks that resulted in the Doha Declaration on the TRIPS Agreement and Public Health, which the WTO Ministerial Conference adopted in Doha on November 14, 2001.
The Round was officially launched at the WTO’s Fourth Ministerial Conference in Doha, Qatar, in November 2001. The Doha Ministerial Declaration provided the mandate for the negotiations, including those on agriculture, services, and an intellectual property topic (which had begun earlier).
Its aim was to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules. The work program covered about 20 areas of trade. The Round is also known semi-officially as the Doha Development Agenda or the Doha Development Round, as one of its fundamental objectives is the improvement of the trading prospects of developing countries.
During my decade of service as a Director General of Customs in the government of Sharjah, I created a fully-fledged intellectual property protection department to spread awareness in the community about the importance of intellectual property and to fight counterfeit and fake products. For that, Daimler Mercedes Benz recognized me internationally in early 2014.
The president of Chad made a personal request to the international investment community to come and invest in Chad.
This came on the coat-tails of the 2017–2021 Chad National Development Plan’s two-day Round Table, which began on September 6, 2017, in Paris. Development partners were meeting there to approve Chad’s budgetary gap of 3,710 billion FCFA (Foreign Countries Financial Assistance/Aid).
In Paris, Chadian President, Idriss Deby, addressed a distinguished and talented group of international partners who would be validating the financing of the next step of Chad’s National Development Plan. He said, “Today, as the partners approve pledges at the Paris Round Table, I personally invite business leaders from around the world to come and invest in Chad. Your investments will not only support the development of an emerging country, but the opportunities in Chad will represent handsome returns for those who join us.”
Not all readers know the degree to which the world relies on Chad to help enforce the security and stability of central Africa and the African continent. Chad has also emerged as a global model for the humane integration of hundreds of thousands of immigrants, whom the nation has welcomed and educated. Chad has adopted an inclusive and consensual development framework and has fostered a constructive dialogue that involves its administration, civil society, religious groups, parliament, and technical and financial partners.
