Arab Countries: Keys to Effective Negotiation

• Keys to effective negotiation in Arab countries:
  • 1. Islam as a catalyst for society and the economy
  • 2. Personal relationships are more important than corporate ones
  • 3. The concept of time is different than in the West
  • 4. Negotiating prices
  • 5. Calendar and work week
  • 6. Rules of etiquette

If the 22 Arab countries made up a single country, it would be the 8th world economy in terms of GDP, ahead of countries like Russia or India. GDP per capita would be $ 6,700, higher than China or India and would be made up of a growing middle class of 150 million people, out of a total of 350 million.

Despite the turbulence caused by terrorism and the political instability of the countries in the area, it is a market that we cannot ignore

The fast train construction project between Mecca and Medina brings together large Spanish construction companies such as OHL and ACS in a consortium, as well as companies from other sectors such as Renfe, Adif, Indra and Talgo, among others. Food companies such as Dulcesol invest in a new bakery factory in Algeria. Banco Sabadell opens the first branch in Morocco of a Spanish bank.

In the United Arab Emirates alone there are more than 100 established Spanish companies. These are some of the many business cases that exist between Spanish companies and Arab countries. The opportunities are many.

But business codes are conditioned by the different existing cultural values and misunderstandings can act as real barriers to access when negotiating efficiently.

Keys to effective negotiation in Arab countries:

1. Islam as a catalyst for society and the economy

Religion is one of the 2 common elements, together with the language that serves as a common link to all this great market. Religion is present in the daily life of people and companies and can greatly condition our successes in the area.

There are countries with a strict application of Islamic law such as Saudi Arabia or Iran and others with a more relaxed attitude such as Morocco, but it is important that we do not forget that in the Arab world we must always maintain a vigilant attitude against possible mistakes that we commit by carelessness or ignorance in everything related to religious matters.

In 2005, the sales of the Danish dairy giant, Arla Foods, fell by more than € 275 million in just a few weeks, after the publication in a Danish newspaper of cartoons depicting Muhammad.

In the late 1990s Unilever modified its new corporate logo days before its global launch, noting from its subsidiary in Saudi Arabia that some logo angles resembled the word ” Allah ” in Arab countries. We must always be aware that religion can greatly influence the business world .

2. Personal relationships are more important than corporate ones

The inhabitants of Arab countries do not usually separate professional and personal life. Business is closed between people . Trust and mutual knowledge are essential when doing business with a company. It is important to cultivate the personal relationship, to earn their trust, not to rush through the negotiation process.

One of the relational problems that have appeared in the construction of the “Ave Arabia” and that has been about to cancel the contract is that the Saudis felt that they did not have a fixed interlocutor who would give them confidence and with whom they could sit down and deal of the problems that arose. According to the newspaper “El confidential digital”, the Saudi transport minister did not want to speak with more politicians or businessmen, but with a person with whom he understood. That figure was the previous monarch, Juan Carlos I, who for many years has had excellent personal relationships with the Saudi royal family.

Along the same lines, the concept of family is very important in the world of the Arab countries. Respect for older people and their experience is much higher than in our current Western environment. Feel free to start any business conversation, taking an interest in the families of your interlocutors. It will be a show of respect that they will appreciate.

3. The concept of time is different than in the West

Patience! Negotiations will take time . Decisions are not made in a hurry. In a negotiation you will rarely get to the bottom of the matter immediately, before the meeting will be opened with a tea or coffee and you will talk about different topics.

Meetings are often plagued with interruptions, phone calls, silences, and unclear statements. Once again, we must be patient. The business will be done ” Insha’Allah “, if ” God willing “, which would be equivalent to our Ojala! It is important that we are punctual, although aware that our appointments may be delayed.

4. Negotiating prices

The initial poses are usually quite far apart. It is normal to open with an offer or ask for a discount that is abnormally out of the ordinary, for other markets. Our interlocutors will wait for another series of concessions such as payment of transport or additional discounts. They are tough negotiators, but we must always have a friendly tone and avoid any kind of confrontation.

5. Calendar and work week

In general , Friday is your public holiday , equivalent to our Sunday and the weekend extends to Saturday, but this general rule can change from one country to another. Before traveling, it is better that we make sure with our interlocutors about the holidays.

Ramadan is one of the times that we have to take into account in our trips to the area. Their dates change from year to year, as Ramadan is the ninth month of the lunar year. It is important that we ask when it falls each year, if we are not sure. Daily habits during Ramadan, including business ones, change quite a bit . You fast throughout the day and although this prohibition does not affect visitors, it is not recommended out of respect, meals in public during that time. Likewise , office hours can change and are made more flexible . Many companies allow their employees to check in later in the morning and leave later than usual.

The Ramadan is a spiritual period, but also festive, it is such an important sales period such as Christmas in the West. Much of the new launches are made at this time, TV advertising rates skyrocket, even despite the fast, paradoxically food companies see their sales increase substantially.

6. Rules of etiquette

There are certain customs that we must avoid in our travels around the world of the Arab countries.

We must restrict our use of the left hand as much as possible. Hand considered “impure” for dedicating itself to tasks related to hygiene. If you are left-handed, it would be very polite, even to excuse yourself before writing. Your interlocutors will understand you with a smile.

Alcohol or pork are prohibited.

Personal space is different from the western concept. They tend to get closer and have a shorter physical space than in the West.

It is rude to cross our legs when we are sitting or direct the sole of the shoe towards our interlocutors.

It’s best to avoid talking points like sex, politics, religion, or the Arab-Israeli conflict.

It is advisable to dress discreetly.

The hospitality of the Arab countries is one of their oldest traditions. Once we have managed to gain the trust of our interlocutors , generosity and hospitality will be two traits that will always accompany our relations with the people of the Arab world.