Businesses in the Gulf have been hard hit, as those in other regions, by the economic downturn. However, they are less negatively affected than others by changes in consumer demand and global commodity prices, the ICAEW Global Enterprise Survey revealed.
Businesses across the world, and especially in the Gulf, are increasingly positive towards further globalisation and are developing their globalisation strategies.
The 2009 ICAEW Global Enterprise Survey measured the impact of the economic downturn on businesses and looks at their growth plans and attitudes towards globalisation and regulation in five regions across the world; the Gulf, the UK, EU, Asia (Hong Kong, Malaysia and Singapore) and the US.
The Survey found that Gulf businesses are the most positive in their growth expectations, with two-thirds planning annual turnover growth in excess of five percent, ahead of all other regions. Additionally, most Gulf businesses regard their domestic regulatory and taxation environment as business-friendly (87%), much in line with those in Asia, but ahead of those in the US and, particularly, Europe. Gulf businesses are however more likely than those in other regions to witness high short-term borrowing costs.
Amanda Line, ICAEW Regional Director for the Middle East, said:
"Last year was a critical one for businesses across the world, but it is heartening to see that the Gulf still remains positive about business and growth prospects not just locally, but also globally. Over half of the Gulf businesses surveyed plan to expand the target countries they sell products to, and many plan acquisitions in other countries to enhance their market presence within the next five years.
"However, in order to maintain these levels of confidence, more has to be done to elevate financial reporting standards in the Middle East. Consistent and transparent financial reporting is essential to drive confidence and this requires well qualified and technically up-to-date professionals who have been trained within a rigorous and ethical framework."
Those Gulf businesses affected by the downturn anticipate, typically, that it will continue for another one to two years (47%) - ie, half way into 2010 or 2011 - much in line with views in the other regions. However, 40% of them were expecting the end of its effects within the next year, a little less optimistic than those in Asia (nearly 50%) but more optimistic than those in the EU and US (around 30%).
Gulf businesses are generally positive about the benefits of the globalisation of markets and are looking to expand their international trading activities. However, they see corruption as the greatest barrier to international expansion and are also more likely than those in other regions to cite access to finance as a barrier to globalisation.
The ICAEW Global Enterprise Survey report 2009 can be found on: www.icaew.com/enterprise
11 November 2009
Media enquiries:
Preeti Chhatbar. Hill & Knowlton, on +9714 33 44 930 or email preeti.chhatbar@hillandknowlton.com
Kirstina Reitan, ICAEW press office, on +44 (0)207 920 8607 or email kirstina.reitan@icaew.com