Understanding the culture of Middle East countries and the specific mentality of their people is key to success when launching and doing business in the region, hardly less significant than the amount invested. Susanna Kalantaryan, Director of mediation agency TripleA Advisory, is convinced of this. In an interview with BRICS Business Magazine, she shared particular examples of how important it is to understand country specifics and the nuances of cross-cultural communication when dealing with partners from the Gulf states.
Some time ago, I was approached by a private investor from Russia who, together with a partner from the Emirates, had invested about USD 10 million in a development project in the UAE. But things went no further than letters of intent: work never began on the site and the partner was inactive. The Russian found himself in a rather ambiguous situation: it would have been quite costly to withdraw from the project and close the company owing to penalties, fines, and other encumbrances. Yet he did not want to continue such strange cooperation. What to do in such a situation? Go to court, as the Russian businessman did. The court did, indeed, recognized that he was in the right and obliged the local entrepreneurs to compensate the Russian for his losses. Even so, over several years, he never received the court-awarded payment.
I cite this example not only to illustrate subjective feelings (it seems that the air of the Middle East has a mystical quality of switching off critical thinking in foreigners, as I have been convinced myself repeatedly when the plane landed at Dubai airport) but also an objective reality. The Middle East is a very specific and diverse region when it comes to entrepreneurial culture, business etiquette, and the way its inhabitants think. So, if that Russian investor with the stalled project had come to me not after the fact but before filing a lawsuit, I would have strongly discouraged him from taking such a step. A lost court case means loss of face, not only for the participant in the process themselves but for their entire family. And when your Arab counterpart loses face, consider the deal dead. This must not be allowed under any circumstances, as you deprive the counterparty’s family of the opportunity to rectify the mistake. In Arabic, there is a saying: “There are no sharp knives in the family.” This means that, even if someone has made a mistake, no matter how fatal it might seem, their relatives will do everything possible to protect them and make amends.
So, in the case described, an out-of-court resolution of the conflict would have been much more effective, especially since the negotiator from the opposite side was obvious. It was the uncle of the Russian investor’s Emirati partner, a very elderly, over 80 years old, and an equally respected man, also one of the founding fathers of the financial industry in Abu Dhabi. His word is heeded attentively in the region. I am sure he could have found a compromise without washing dirty linen in public. For example, the family of his Emirati counterpart could have compensated the Russian for his losses, as often happens.
Respect for age is very strong in the region. Hence, a practical piece of advice: at any meeting, greet the oldest person first, not by position, no matter how high it is, but by age.
When it comes to the Middle East, it seems to us from Russia that we are talking about a single, monolithic Arab culture. But that is not the case. The Middle East is made up of more than 20 different nationalities, a mosaic of cultures, religious features, and mentalities. Of course, there are universal recommendations such as respecting national traditions and culture. For example, I am sure your table companions will react very favourably if, at the table, you refuse their offer made out of politeness: “We will not drink alcohol but it will be perfectly fine if you do.” This applies not only to people from countries with strict religious norms such as Saudi Arabia but also to relatively secular Syria or Libya.
Small talk, uncharacteristic of our culture, secular chit-chat about nothing with a slightly familiar or completely unfamiliar person, plays a huge role in the Middle East. On the basis of how you hold a conversation on abstract topics, how you present yourself, what questions you ask, they will judge you as a person, your upbringing, and, ultimately, whether you should be seen as a serious business partner.
Considering that a visitor represents not only themselves personally but also their family, community, and their country as a whole, it is better to refrain from criticising one’s own country. For a native of the Middle East, this is an important marker characterizing a foreigner. National pride, acceptance of even those aspects of the homeland with which one disagrees, is one feature of the Arab mentality. Representatives of the Arab world expect the same position from others.
One must prepare thoroughly for negotiations and understand, for example, how to refuse a partner properly so as not to offend them and not put oneself in an unfavourable position. Entrepreneurs in the Middle East proceed from the fact that, if your paths have crossed, Allah must have willed it so. And refusing opportunities offered by fate is itself improper and bad. So, they often take on several projects at once, the combination of these clearly being beyond their capacity, but they will still try very hard to implement them.
Another area of cross-cultural differences: we believe that, if we tell a counterparty directly about our wishes for them, it will greatly simplify life for both and save time. In the Arab world, such behaviour is the height of disrespect. What we consider an inefficient waste of time is, for them, an investment in developing relations and creating a basis for a common future. Conversation in this paradigm should be built not on what I need, but on what my counterpart needs. This could be a proposal for a win-win construct: “I will help you strengthen your own positions so that together we can achieve new results.”
It was with this thought in mind that we prepared a strong Russian-Kazakhstani team with a quality technological product for collaboration with a powerful Middle Eastern development conglomerate operating on four continents. The first attempt to enter this market was unsuccessful precisely due to a lack of preparation and understanding of regional specifics. Having reached high-level management, our charges decided to impress them with an aggressive pitch in the spirit of: “Things aren’t going very well for you but we know how to improve them in order to capture the market, reduce the influence of the human factor, and make services more efficient.”
What was the result? A fiasco. The host party considered such a product presentation an insult, as if they were being told they did not know how to work and that people had come to teach them. These “know-it-alls” were taught a lesson, shown that things aren’t done that way here. After we worked with the team for 2.5 years, their project took off last November, a partnership was finally agreed. Working on the mentality was absolutely not superfluous.
We taught them how to interpret their partners’ problems and challenges delicately and very carefully, without criticizing them, but presenting them as a space for opportunity and development, as well as how to read between the lines and decipher signals correctly. In the Arab world, there is no direct and negative feedback, which for us is unusual. On the contrary, an abundance of compliments sounds the alarm for me. Excessive sweet talk can indicate either that your product has not been understood or that it is not interesting.
Readers have probably heard about a concept common to the entire Arab world, wasta, a mechanism for obtaining some benefit through family or friendly connections. In Russian, this is often translated as “nepotism” or “cronyism” but, of course, the phenomenon and semantics of wasta are broader than these definitions.
Irrespective of philological debates, in the context of the topic under discussion, it is important to remember that wasta means your connections, so you should invest in building a network of them. A person with a good reputation (i.e., developed wasta) will be listened to unquestioningly in the region. Remember the example with the potential elderly arbiter in the conflict between the Russian investor and his Emirati partner? Such a person cannot vouch for a company whose business is not well thought out or whose owners do not take their business seriously enough.
One should remember the wasta mechanism in less extreme situations as well, such as when opening a bank account. Owing to KYC requirements in the UAE, this procedure is not simple and is lengthy even for locals, not to mention foreigners. It is easier and faster to open a so-called privileged account. To do so, you need to convince the bank that you have a reliable business partner in the region and serious plans for joint work. Or a respected possessor of wasta can vouch for you.
Where to find such people? One option is to enter through big, reputable players most likely able to find common ground with local counterparts. In my experience, a very professional team works at the office of His Highness Sheikh Al Qasimi, Ruler of the Emirate of Ras Al Khaimah.
WASTA is a way of obtaining power rent in Arab countries. The term denotes mediation and applies to both an action and the person performing it. The benefit gained through family or friendly connections, bypassing legal procedures, can be a government contract or an election victory, a business advantage, better treatment and education, a sinecure or simply a job, a document or permit from the authorities, and even consent from a potential bride’s parents to marriage. Wasta differs from primitive nepotism by the length of the chain, requiring an intermediary to play the decisive role. It is known that wasta has sometimes been used to reconcile warring tribes, by engaging tribal leaders capable of acting as mediators between them. Wasta is closely related to the defining significance of the family in Arab society and may be considered a cultural pattern. The expectation that relatives will “connect” wasta and the conviction that, without wasta, it is impossible to solve any issue even remotely related to authorities, law or business, are characteristic of almost everyone in Arab culture.
Source: D. Grafov, research Wasta as Social Capital and Legitimate Conservative Order, Politeia Journal, No. 4 (103), 2022.
