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UAE Lags Saudi in Business Confidence

On the other hand, Gulf executives who responded to the survey perceive the UAE as setting the regional standard for government policies that are friendly to business and for legal and educational reforms.

James Zogby, a senior advisor at the US-based research and polling firm Zogby International, announced the findings of the study on Thursday night at the Dubai School of Government. Zogby International conducted the poll jointly with Oliver Wyman, a management consultancy also headquartered in the US.

The pollsters based their findings on interviews with126 chief executives and other senior managers in three Gulf countries — the UAE, Saudi Arabia and Qatar — during October 22 and 23.

Among the 47 respondents from the UAE, 15 per cent said their businesses were flourishing while 57 per cent said their businesses were in decline. The 67 Saudi respondents expressed almost the opposite opinion; 46 per cent of the Saudi-based executives said they were prospering, and only 15 per cent said they were in decline.

The Saudi group was also more optimistic about the future. Two out of three of the executives in Saudi Arabia expect to prosper over the next two years, compared to fewer than half of the UAE respondents, the survey found.

Among the UAE group, 51 per cent said they were dissatisfied with the UAE government’s handling of the economy during the crisis, whereas 27 per cent of the Saudi executives expressed unhappiness with their government’s response. The Saudi group felt “more nurtured” by their government, Zogby said, due in part to the Saudi government’s creation of a large investment fund to help cushion its economy during the slowdown.

“It was intriguing to me that the confidence here in the UAE among Emiratis was not high, but that (the UAE) still sets the standard for being business friendly and for legal and ecucational reforms,” Zogby told an audience of about 50 academics, businessmen and journalists.

Sixty per cent of all respondents said that the UAE set the pace in the Gulf for pro-business government policies. The Saudi government came in a distant second on this issue, with 23 per cent of the vote, followed by Qatar with 8 per cent, Bahrain with 7 per cent, and Kuwait with 2 per cent.

The UAE also leads the Gulf as the regional standard for its legal and education reforms, the study showed.

In the UAE, executives see a need for better transparency as the most urgent issue requiring immediate attention, followed by a need for additional labour reforms and changes in company ownership laws, the survey said.

Across the three countries surveyed, many executives — 47 per cent — said they believe the crisis would probably retard government reform efforts. The biggest obstacles to reforms, in their view, were vested interests and poor policy implementation. Executives see a possible conflict with Iran as the biggest external threat to stability in the Gulf, the survey found. At the same time, more than half of the executives polled said they believe that normalised diplomatic and commercial relations with Iran would be a boon for the region.

Zogby told reporters he was somewhat surprised at the positive view that many UAE-based executives have of the possible impact of any normalisation of ties with Iran. Many businesses in the UAE have prospered by trading with Iran while other countries have subjected Tehran to rigorous sanctions.

The Oliver Wyman-Zogby International Survey is the first of what is planned as an annual survey of regional executives.

· bruce@khaleejtimes.com