New Corporate Security Challenges and Threats in the Gulf Region

Posted on July 7th 2011, by Rodrigo Quintero

As I said in my last blog, in recent years, the Gulf region has become an area of particular geostrategic relevance, both in political and socioeconomic terms.

It is a region which is permanently and constantly changing, and is also coming up against new, significant security challenges, even threats. These must be properly studied, assessed and taken into account by companies operating in the area and those planning to do business in the region.

The main challenges are:

1.- Real unawareness of the local market – Gulf Cooperation Council (GCC): rules, regulations, competence, modus operandi, trade habits and customs, main operators, etc.

2.- Unawareness of the structure of the government and power of the country where the investment is being made and of its position within the region.

3.- Unawareness of potential trading partners with which to begin operating the company in the country.

The main security threats are:

1.- Social unrest

2.- The risk of reactionary attitudes

3.- The presence and expansion of Al Qaeda

4.- Iran’s expansionist policies in the region

5.- The domino effect of border crises

However, by contrast, there are certain factors working in favour of the regional status quo, which balance out the situation:

1.- The presence of the main proponent of regional/international political and economic stability.

Saudi Arabia has positioned itself as the main mediator of conflicts following the fall of the Mubarak regime. This ensures that a balance of regional powers can contrast the influence of Iran, which is the main partner for western countries and an important ally for western economies dependent on oil.

2.- Consolidation of the GCC as the regional supranational defence organisation.

3.- The spirit of national unity which characterises the GCC countries, since an incident in one country has an immediate effect on the other countries of the region, meaning that they often act together.

Whether in terms of investment or risk control, everything that happens in one of the GCC states will have an effect on the others.

Another stabilising element is the fact that the region represents a major trading market for western companies.

According to data provided by ICEX, the Spanish Institute for Foreign Trade, 35% of the world’s oil reserves and around 24% of global gas supplies are located in the Gulf region.

These economies are experiencing strong GDP growth and there is high demand for infrastructure, civil works and engineering, as well as support for trade and monetary integration processes, which includes the implementation of transparent processes to combat fraud and corruption, among other things.

Bearing in mind the opportunities that the region offers for companies seeking to diversify risks and open themselves up to new emerging markets, companies must be encouraged to invest in this market, without, of course, forgetting the threats and challenges mentioned above – these must be properly dealt with.

Therefore, the formula that companies need to follow to open up their investments/interests in the area is a combination of trade opportunity and the necessary protection of their assets – by protection, I mean the implementation of measures to prevent and mitigate the risks present in the region.

We must not back down when faced with the threats that we can identify at the local or regional level. Instead, we must anticipate how likely it is that said threats will materialise and cause major harm to companies’ interests.

As such, it is necessary to:

1.- Draw up a suitable plan of the market and its access and behavioural features in advance, prior to going into it (in the initial phase, it will be important to select the correct local partner or representative and to have prior knowledge of the competition and the regulatory environment, among other things).

2.- Have analysis mechanisms in place to identify local (where our projects are located) and regional security threats for us, since, as I mentioned earlier, the main feature of the GCC countries is that they are closely interconnected. This is also a positive point as far as trade is concerned because, if we manage to set up in one Gulf market, it is likely that later on we will be able to extend this to other countries in the region, because the same, similar or interconnected players are often involved.

A setback in a project or investment in one GCC country will lead to a high risk of trade opportunities for the foreign company in the region drying up.

The same is true of the current threats. The appearance of a threat in one country in the region affects the rest of its partners.

A classic example of this is the social unrest that has recently shaken Bahrain. This has resulted in some GCC countries sending troops to work with the local authorities to restore order, reflecting a high degree of regional commitment.

As far as the risk to trade is concerned, in future blogs I will further explore the most important steps that a foreign company must take if it wishes to do business in the Gulf states. I will do the same with the chapter on security risks that end up directly affecting one of the most sensitive chapters in any company: Human Resources and as such, the Budget.

Investments/new market entry in the Persian Gulf: the new realities

Posted on June 20th 2011, by Rodrigo Quintero

My name is Rodrigo Quintero and I am the Managing Director of K2 Global Consulting responsible for the Middle East, Maghreb, and the Persian Gulf. I’ve been heading the K2 office in Bahrain for over six months and want to contribute to our blog regarding current events and to provide first hand observations. I would like to share ideas for guidelines that can serve to understand trends in Bahrain and the region, and to reflect upon the risks which Spanish companies face and how to mitigate them.
 
In this first post I want to talk about the new realities challenging companies that have investments in the Persian Gulf, or which are planning to enter the region.
 
I would like to focus attention on the importance to these countries of periodically following up on their evolution, development and growth from a regional as well as local perspective, and identify important political players that may become dominant in the region’s future.
 
This follow-up should be reviewed in the Risk Analyses that are done periodically. Its conclusions, which are reached by cross referencing data, information, and evaluations of the respective local and regional analyses, will indicate the path to follow with regards to prevention and asset protection.
 
It has been common and is still frequent to find that companies with interests and projects ongoing in countries in the region such as Qatar, the United Arab Emirates, Saudi Arabia, Kuwait, or Bahrain, among others, don’t feel that their assets are subject to any risk whether physical, financial, logistical or operational. This is because this geographical area has historically been free of conflicts and civil wars (except for forming a State when independence was declared).
 
Nevertheless, there is currently a convergence of certain factors on the international scene that, together with the events in the Gulf region, give special weight to this area and position it as geo-strategically important not only in terms of politics, but economics as well.
 
Events such as the popular uprisings in the Muslim world, and conditions like Iran’s regional interests, uncertainty regarding the future of countries like Iraq and Afghanistan, and the presence of Al Qaeda and its affiliates in the region, build a scenario that requires constant attention from companies with current or future interests in the region.
 
As such, even though our investments are located in countries whose internal situations are not threatening to our personnel or interests, it is also clear that these countries are part of a region where events, especially those related to the Gulf Cooperation Council (GCC) influence their respective interests.
 
We must ask ourselves if our companies are ready to respond to this kind of scenario, if they have the resources necessary to confront these situations, and if, in general, their assets are protected (personnel, infrastructure, investments, information, know-how, projects, etc.). It is essential for growth and constitutes a second level in their development.
 
Future blogs will explore each of the issues mentioned in depth with the intent of profiling the main trends the region is seeing regarding security – security being the protection of all company assets (personnel, investments, projects, business plans, infrastructure, information, etc.) – and how we should deal with said trends.

Inversiones/apertura de nuevos mercados en el Golfo Persico: nuevas realidades

Posted on May 9th 2011, by Rodrigo Quintero

Soy Rodrigo Quintero, Managing Director de K2 Global Consulting, responsable de la zona de Oriente Medio, Magreb y Golfo Pérsico. Llevo más de medio año liderando la oficina de K2 en Bahréin y voy a contribuir a nuestro blog cubriendo una serie de temas de actualidad, proporcionando observaciones “de primera mano”, con la idea de transmitir ideas guía que puedan servir para tomar el pulso de los acontecimientos en Bahréin y en la región, reflexionar sobre los riesgos que afrontan las empresas españolas y como poder mitigarlos.

En este primer post voy a hablar sobre las nuevas realidades a las que se enfrentan las empresas que tienen inversiones o plantean su entrada en países de la región del Golfo Pérsico

En primer lugar, me gustaría centrar la atención sobre la importancia que para estos países tiene el hecho de realizar un seguimiento periódico de su evolución, desarrollo y crecimiento desde una perspectiva regional, además de la local por supuesto, pues se localizan importantes actores políticos que pueden llegar a ser determinantes para el futuro de la zona.

Este seguimiento informativo debe ser plasmado en los Análisis de Riesgos que de forma periódica se realicen. Sus conclusiones – obtenidas tras el cruce de datos, informaciones y valoraciones de los respectivos análisis regional y local, – serán las que nos marquen la línea a seguir en cuanto a la prevención y protección de nuestros activos.

Ha sido habitual y continua siendo frecuente encontrar empresas con intereses y proyectos en marcha en países de la región como pueden ser Qatar, Emiratos Árabes Unidos, Arabia Saudí, Kuwait o Bahréin, entre otros, que consideran que sus activos no soportan ningún riesgo de seguridad, ya sea físico, financiero, logístico u operacional, al ser considerada esta zona un área geográfica que históricamente ha estado siempre libre de conflictos y guerras civiles (excluidos sus lógicos procesos de configuración de Estado tras su proclamación de su independencia).

Sin embargo, actualmente confluyen determinados factores en la escena internacional que, sumados a los acontecimientos registrados en la región del Golfo, confieren especial relevancia a esta zona y la posicionan como importante espacio geoestratégico no solo en términos políticos sino también económicos.

Acontecimientos como las revueltas populares del mundo musulmán, los intereses regionales iraníes, la incertidumbre de futuro en países como Iraq o Afganistán y la presencia de Al Qaeda y sus filiales en la región, entre otros, configuran un escenario que requiere una atención constante por parte de las empresas con intereses presentes o futuros en la región.

Por lo tanto, aunque nuestras inversiones estén localizadas en países cuya situación interna no presente indicios de amenazas presentes contra nuestras inversiones, personal e intereses, lo cierto es que estos países están integrados en una zona en la que los acontecimientos regionales, especialmente los relativos al Consejo de Cooperación del Golfo (CCG), marcan el rumbo de sus respectivos intereses.

Podemos preguntarnos si nuestras empresas están preparadas para responder a este tipo de escenarios, si disponen de los medios necesarios para hacer frente a estas situaciones y si en general la protección de sus activos (personal, infraestructura, inversiones, información, know how, proyectos, etc.), es pieza fundamental de su crecimiento u ocupa un segundo plano en su desarrollo.

En próximos blogs iré profundizando en cada uno de los aspectos mencionados con la idea de ir perfilando cuales son las principales tendencias que afronta la región en materia de seguridad, entendida ésta como la protección de todos los activos de la empresa (personal, inversiones, proyectos, planes de negocio, infraestructuras, información, etc.) y la forma en la que debemos abordarlas.

¿Están nuestras empresas prepararadas para retos como el de Oriente Próximo?

Posted on February 25th 2011, by Rodrigo Quintero

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