Understanding Contexts of Business in Western Asia

The following sections are included:

• Foreword from International Business
• Foreword from Political Science
• Greeting from Michael Brecher
• Contents
• Preface
• Acknowledgements
• About the Editors
• About the Contributors

This chapter introduces this book about the contexts of Western Asia, a region that has long been important for business, including the spice trade that prompted cultural interaction among different cultures with unlike religions and resulted in the cross-fertilisation of ideas and spread of technology. The chapter provides a brief historical overview and shows how today’s countries have been shaped by colonial powers.

The bazaar is an ancient institution that continues to thrive today, holding a complex web of carefully managed relationships – in which sellers cooperate for mutual gain. In this sense, it is very similar to today’s airline sector in which United Airlines cooperates with others in the Star Alliance while giving “gold” status and related privileges to preferred clients of the alliance; not all customers are treated equally. Brand loyalty is influenced by preferential treatment that is based on relationships. Would-be competitors in the bazaar cooperate as do airlines within an alliance, reinforcing relationship networks. This chapter discusses the structured bazaar in detail, revealing that the degree to which the structured bazaar resembles the World Wide Web is striking. Managerial implications are also discussed.

Once known for its rich maritime history where Sinbad the Sailor had infamously sailed his dhow to China, the Sultanate of Oman plays a crucial role across the Persian Gulf and in the Middle East. Oman has been a tax-haven nation for its residents and businesses but has enforced VAT from 16 April 2021 and is expected to introduce personal income tax from 2022; this will have an impact on existing and future businesses.

The word “bazaar” is originally Persian and was introduced thousands of years ago in this region. A bazaar, as an integral part of the Iranian culture, was a place in which various goods were sold based on their nature. This logic was transferred to different Middle Eastern countries, and this region became the central place to use this traditionally effective and efficient marketing approach. Today, Iran is the second-largest country in the Middle East. It enjoys a dry desert climate and Mediterranean-type climate, and also cold in mountainous areas. Iran is a leader in fossil fuel production, and it has a young workforce. During the last decade, new technology-based firms have changed the business environment, and the country is experiencing a high-tech boom in different areas. Nevertheless, both traditional bazaars and the emerging markets are working simultaneously. Besides, the business environment is full of success stories of businesspersons who have made significant changes in Iran’s economy.

This chapter focuses on the important aspects of the business environment of Armenia. In the beginning an overview of historical, political and economic development of Armenia, since its inception, is provided. The work addresses the characteristics of the Armenian business framework conditions, with details describing the ecosystem dimensions. The chapter concludes with providing a brief outlook for the future and provides insights and few recommendations.

Azerbaijan is an oil and gas–producing country with both traditional and modern aspects. The country is a fascinating place to run a business as it was ranked 34^th globally in terms of the Doing Business index in 2020. Azerbaijan is a land of old bazaars for traditional sellers and modern markets for innovative firms. Besides oil and gas products, agriculture, tourism, construction and transportation are among the country’s major sectors. With a whale of touristic destinations in which there are different bazaars, Azerbaijan’s economy has kept these historical mechanisms to meet its people’s current demands and attract more tourists. After its independence, the country has profoundly developed in terms of socio-economic factors and entered into several innovative and emerging markets. Thus, there are plenty of business opportunities to be explored, evaluated and exploited by potential individuals or companies in this country.

The single best condition defining Georgia’s past, present and future is its location. From being the trade route to being the battleground, or being the land for mediation, Georgian soil has seen it all. Multiculturalism has been one of the key characteristics of Georgia’s existence. Trade and exchange of goods have been an integral part of building the Georgina identity since the late bronze age. Bazaars have played a major role in developing the nation. Modern Georgia readopted liberal policies and once again recommitted itself towards international trade and partnerships. The future of Georgia rests in the Georgians’ ability to reside and blend into the multicultural environment, encourage economic adaptation and modernise the existing markets to better meet global tendencies.

The island of Cyprus was annexed by the Ottoman Empire in 1571 and in 1573 the Venetians left the island. Cyprus gained independence from 1861 to 1868 and again from 1870 until 1878 when the British and the Ottoman sultan signed the Convention of Constantinople, putting Cyprus under British control. In 1914, the island was annexed by the United Kingdom. Cyprus was granted independence in 1960 but divided by Turkish occupation in 1974. This chapter is about the section of Cyprus that was not occupied in 1974.

In 1974, the northeastern portion of the island of Cyprus was occupied by Turkey. It has since been recognised as an independent country only by Turkey, upon whom it is highly dependent. This chapter is about this de facto entity.

Yemen is one of the least developed countries in Western Asia, and the most impoverished economy in the region, especially with the current instability in the country. The condition of Yemen acts as a prohibitive factor for the business sector to grow and contribute to the country’s gross domestic product (GDP), which is difficult to overcome without enforcing the laws, developing and reforming the education system and infrastructure and providing incentives to the business sector to encourage competition and establish a conducive business environment. This chapter is an attempt to present an overview of the business context in Yemen as an underdeveloped economy being different from neighbouring economies in the Gulf region and Western Asia in general.

This chapter focuses on several important aspects of the business context of the Kingdom of Bahrain, a tiny desert kingdom linked to Saudi Arabia by the 25-km long King Fahd Causeway. The chapter provides an overview of the historical, political and economic development of Bahrain since its inception, followed by a discussion of characteristics of Bahraini business framework conditions, wherein details of the ecosystem dimensions are described. The chapter concludes with providing a brief outlook for the future and provides a few insights and recommendations.

This chapter focuses on several important aspects of the business context of Kuwait. First is giving an overview of Kuwait’s historical, political and economic development since its inception. Second, the chapter addresses the characteristics of Kuwait’s business framework conditions and continues with Kuwait’s ranking in terms of ease of doing business, wherein details of the ecosystem dimensions are described. The chapter concludes with providing a brief outlook for the future and provides a few insights and recommendations.

One of the countries where tradition and modernity meet is Qatar. From a very poor country in the 20^th century to ultra-modern in the 21^st century, Qatar became a place in which visitors, workers and business people can find what they look for. The richness of the country’s diversified business outlook and culture appeals various stakeholders to stay, visit and do business in this country. In this line, the chapter portrays fundamental information on Qatar, its traditional doing of business through bazaars, the current context of business pursued in this country and the future regarding the country’s business stand up.

Afghanistan is considered a rich country from the natural resources’ perspective. This country has high investment potential in energy, mining and agriculture. Recently, the government of Afghanistan signed a contract with an Australian investor to generate solar energy up to 20,000 megawatts. Furthermore, Afghanistan has the largest copper mine in Logar province and is contracted with a Chinese firm. Lithium and gas are other elements that are available in several provinces of Afghanistan. Now, the current government is highly committed to economic development and helping foreign investors. Nonetheless, the Afghan economy is free-market economy, and this makes Afghanistan a market of interest for national and international investors. The geographical location of Afghanistan makes it eye-catching country as it can connect the region and regional countries to Europe through its short routes.

This chapter presents several important aspects of the business context of Turkey. Initially, an overview of Turkey’s historical, political, and economic development is provided. The chapter then addresses the characteristics of Turkey’s business framework conditions and continues with the country’s ranking in terms of ease of doing business. The chapter concludes with a brief outlook for the future and provides some insights and recommendations for doing business in Turkey.

Located at the heart of the Middle East, Iraq is an oil-producing country with economic potential. Although its economy relies highly on selling oil and gas products, the country has a fascinating history of traditional bazaars. In recent years, Iraq has changed dramatically due to increased foreign direct investments, especially in Kurdish regions. New technology-based firms are growing in terms of quantity and quality during the past decade. This chapter reviews the historical background of the country and also discussed the context of business in Iraq. Finally, the authors provide a series of directions for the future of Iraq.

The Lebanese Republic – Lebanon – is located in the Levant region of Western Asia. Its capital is Beirut, once known as the Paris of the Middle East, and its currency is the Lebanese pound. Lebanon is recognised for its religious sects, rich cultures, cuisine, which is extended around the globe and the hospitality of its people. Lebanon is a multilingual country, where Arabic is the main language spoken. Christian Maronites believe the word Arab is related to Islam and prefer to be known as descendants to the Phoenicians and do not like to be grouped as Arabs. A free trade model characterises the Lebanese economy, where the government has limited to nil intervention in the private sector. Lebanon is also known for its entrepreneurial awareness and involvement, as well as the development of family businesses. Lebanon has a vibrant market economy with expertise in marketing, educated and talented Lebanese individuals, and an advanced consumer base.

Since its start in 2011, civil war in Syria dramatically affected the economic life of the country and the entire region. Due to the ongoing conflict, the environment for business conduct has worsened in Syria, and business activities have considerably shrunk. Nevertheless, with its diverse self-sufficient economy, numerous natural resources and abundant human capital, Syria appears to be prepared for economic shocks better than any other Middle Eastern states (Lyme, 2012). Although prospects for democratisation in post-war Syria remain dim, the country would face the urgent need to reinvent itself both economically and politically.

Jordan is a small country with fewer natural resources than neighbouring countries. The financial crisis, regional turbulences, along with increasing food, power and oil prices have all put substantial pressure on Jordan’s economy. Furthermore, Jordan has been faced with rising unemployment rates that have worsened with the influx of Syrian refugees. Jordan has made important progress in promoting the country’s economic infrastructure, aided by openness to foreign trade and investments. Still, government services and finance are the main contributors to Jordan’s gross domestic product (GDP) and neither of these can be considered engine of economic growth. An enhancement of the macroeconomic and fiscal stability of Jordan through increased government revenues and the development of a diversified and competitive national economy are required.

Jews have continuously lived in Western Asia, where they have had their national ancestral homeland on the Land of Israel, before either Christianity or Islam was established. Jesus was among them. Some nations are secular in that they have a separation between church and state, and others – including Armenia and Georgia – have declared themselves to be Christian states; yet others are Islamic states, for example, the Islamic Republic of Iran. There is only one Jewish state, and that is Israel, the subject of this chapter.

For centuries, Palestinian lands were part of the Ottoman Empire. With the defeat of the Ottomans during World War I, the British occupied this region. The Principal Allied Powers subsequently gave the British full powers of legislation and of administration over Mandatory Palestine to create a national home for the Jewish people. In 1922, the land in question was divided. The eastern part, most of British Mandatory Palestine, was made into a new country, Jordan. In 1923, the United Kingdom ceded the Golan Heights to the French mandate. War broke out in 1947, leading to the occupation of Gaza by Egypt. In 1950, Abdullah annexed the portion of Palestine called the West Bank. In 1967, the Gaza Strip and the West Bank came under Israeli occupation. In 1993, the Oslo Accord with Israel gave Palestinians rule over the Gaza Strip and in Jericho, on the West Bank. The Palestinian Authority became the administrative body empowered to govern the Palestinian population and began its administration in May 1994. This chapter is about Palestinian territories, recognised by some countries as the State of Palestine.

This chapter aims to understand the context of business in the Kingdom of Saudi Arabia (KSA). It provides a historical overview of the KSA and examines enterprise development and implications for doing business in the country. The chapter highlights the deep transformation that the country has undertaken in all business sectors since the announcement of the vision of the kingdom of 2030. The chapter concludes with a look towards the future of the KSA as it progresses to achieve its objectives for the next decade.

This chapter examines how the United Arab Emirates (UAE) supports and thrives on international business. The UAE can easily be considered a leader of the Western Asian region in attracting foreign direct investment and supporting international business growth. Moreover, the UAE can be categorised as one of the most economically liberal countries of the Western Asian region. The chapter provides a historical overview of the UAE and examines enterprise development and implications for doing business in the UAE by comparing the UAE to other countries in the region. The chapter ends by looking towards the future of the UAE as it advances to shape its role as a benchmark country for international business development in the decades to come.

This chapter concludes this book about the contexts of Western Asia, a very diverse region with striking contrasts. It observes changes over time and emphasises the need for firms to adapt to changing contexts. Borders change and mindsets evolve. The chapter distinguishes between explicit and implicit assumptions that reflect cultural values. It reviews the characteristics of the bazaar and the firm-type economy. It then discusses the New Economy of high-tech booms and emphasises the similarity between the structured bazaar and the World Wide Web. After providing thoughts for the business sector, the chapter concludes with thoughts for policy-makers.