Doing Business in Islamic Countries

As our brothers and sisters are celebrating holy month of Ramadan I happened to notice very few people get ahead in negotiations with Muslim business people. Once you understand them and their culture, you have quite loyal business associates.

The business scene in the Islamic world may be as complex as its 1.3 billion people, but one rule is nevertheless quite straightforward for Westerners who want to do deals.

Business people, who work in the Persian Gulf and other Islamic regions such as Asia and North Africa, need to appreciate the extent to which religion and Islamic law are intertwined and permeate all levels of society, including commerce, to greater and lesser degrees depending on the country. “This law is seen as deriving from direct, divine command,” said Vogel. “This is important to grasp.”

Executives who understand the basic tenets of the Islamic religion as it relates to commerce will have an easier time abroad, they said. According to Hayes, the following principles of comportment are expected among businesspeople:

Contracts should be fair to all parties. Partnership is preferred over hierarchical claims.Speculation is prohibited. “They don’t like gambling.” “For instance, if you invested in an Islamic mutual fund, among those industries which would be barred from representation as funds would be the gambling industry. But gambling also relates to futures; it relates to currency hedging; so it’s a major situation that you have to be aware of.”Interest is prohibited. “This is the probably the thing that is most often identified with Islamic finance. Back in the time of the prophet Mohammed, some of the most rapacious individuals were the moneylenders; and so as a response to the things that these moneylenders did which were so reprehensible, part of the religious belief is that you do not charge interest or accept interest. Now, of course, that isn’t always practiced, but it is the theory.”Compassion is required when a business is in trouble. “In any country that has Islamic influences in its legal structure, if somebody is in bankruptcy or if somebody is experiencing financial reversals, you can’t put pressure on them, because that is not an appropriate thing to do when somebody is down. You don’t kick them when they’re down.”

On a practical basis, names are very important for doing deals in Islamic countries, as in most of the world. Who you know is key. Similarly, relationships and family connections are vital in business. “Relationships that have gone on over time inspire confidence, and of course that’s no different than in other countries.

Personal staff can be very influential and should not be underestimated, he continued. The man who meets you at the airport or who chats you up in a company’s waiting room may turn out to be a relative or confidant of the person you’re there to do business with.

While it’s good for Westerners to be able to speak Arabic socially in the Gulf region, many people would be insulted if you try to speak Arabic about something as important as a deal: “That would be like suggesting that they don’t speak English well enough.” Those at the business level have usually gone to college in the U.S, Britain, or Australia. Speaking English is a status symbol.

Doing Business During Ramadan
The Muslim holy month is upon us, and that means business practice in the Middle East in particular needs some cultural sensitivity. Stephanie Williams, our governance manager in the UAE and Qatar, gives some tips on how to do business during Ramadan.

It’s not that business comes to a standstill for a whole month – far from it. But doing business in an Islamic country during the holy month of Ramadan can be a challenge.

By government stipulation, working hours are reduced – and, of course, you won’t be able to conduct business lunches.

The reduced working hours also relate to Government and Authority offices, including banks, which tend to work half days, normally 9am-1pm, during Ramadan. When coupled with reduced hours elsewhere, it does mean that business transactions slow down. Many signatories or business heads tend to travel during this time as it is easier to conduct business outside of their home country.

But there are other, more cultural considerations that need to take place. For example, Shoulders and legs should also be covered, as more conservative dress is considered respectful and polite.

Muslims spend a large part of their days during Ramadan in prayer, and some offices in Saudi Arabia have been known to shut for half an hour five times a day to allow prayer. The religion also calls for fasting during daylight hours, and days can be long when pre-dawn and post-fast feasts come into play, so workers may be tired and less productive than normal. In fact, Samer Sunnuqrot, an economist in the Jordanian capital of Amman, claims that the productivity of workers declines by 35-50% during the holy month as a result of both shorter working hours and the change in behaviour.

Business lunches are often replaced by meetings during Suhoor, the meal after Iftar, or the breaking of the fast, normally at 8pm or 10pm. If you find yourself invited to an Iftar itself, this is a sign of trust and friendship, so accepting is advised. Building strong relationships is one of the keys to successful business in the region.

While business practice does need to change during the holy month, it should not deter you from doing business with them.

Providing you remain respectful and culturally sensitive, you will find plenty of opportunities to build relationships with your Muslim counterparts during Ramadan.

Posted by Charles Wahome
A Product Management Consultant
Zinjaka Consultancy Ltd

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