Doing Business in Algeria
‘Algeria’s economy needs its Belmadi.’[1]
Authors of the article: Idris Negrouche & Oriana Saib.
This article has been written following an interview with Mr. Akli Brihi, the Founder and Managing Partner of KBB Advisory, a ‘consultancy firm capable of accompanying foreign companies willing to invest/grow/consolidate in the Algeria market and this, whatever the political context.’ Prior to that, he had a successful career in the private energy sector in London, Paris and Algiers having worked for multinational companies such as BP, GE Energy and Schneider Electric.
The main goal of this paper is to inform readers who might be considering investing in Algeria, but also those not familiar with this country, about its general framework and economy.
As not everyone may know, Algeria is a North African country. Population: 44 million inhabitants mainly concentrated on the northern coast of the country. Area: 2.382 million km², the largest country in both Africa and the Arab World, the 10th largest in the world and more than five times the size of mainland France. In the North, the country opens onto the Mediterranean Sea with a 1200 km long coastline dotted with around 10 harbours, such as Algiers, Annaba, Bejaïa, Arzew or Skikda. In the South, the country has most of the Sahara Desert, which contains iron, steel, precious metals such as gold and silver, industrial minerals including baryte, bentonite, cement, gravel, gypsum, helium, limestone, marble, nitrogen fertilisers, phosphate, pozzolan, quartz, salt and sand in all its states. Algeria also has large deposits of unexploited minerals such as diamond, manganese, crystalline quartz, rare earth minerals, tungsten and uranium, and silicon. Also and most importantly, Algeria ranks fifteenth in the world and third in Africa with 9.2 billion barrels of oil and proven reserves of 0.9% of the world total, noting that Saharan Blend is ideal thanks to its low sulphur content; and it abounds in of more than 4,500 billion m3 of gas, not to mention shales gas.
What are Algeria's assets when it comes to investment opportunities? In order to answer this question and to better understand the current framework of the Algerian economy, it is first necessary to take a step back in time, right after the independence war. Indeed, as the —a bit modified— title of a major work by Paul Gauguin will remind the readers, it all comes down to two major questions: D’où venons-nous et où allons-nous?[2] Next, the article will focus on a practical statement of what a foreign investor should know.
The Algerian Economy from 1962 to Nowadays [3]
On 3 July 1962, Évian Accords were signed leading to Algeria's official independence a few days later — 5 July. Before that date, the Algerian economy was mainly based on agriculture. For an overview, in 1954, 80.8 % of the Algerian population lived from agriculture,[4] whether it was the culture of cereals such as wheat, vineyards, fruits, especially olives, or livestock breeding.
At the end of the independence war, with Mohammed Ben Bella at the head of the State, the country had to develop other sectors of its economy such as the industry [5] while maintaining the agrarian economy at a high level. Hence, under both Ben Bella and Boumediène presidencies, large industrial sites were created such as the gas liquefaction plant in Azrew inaugurated on 21 February 1978.[6] Around 400 projects including 270 plants started to operate between 1971 and 1977.[7]
At the same time, ideological choices were made in favour of a socialist ideology. Thus, the nationalisation of agricultural colonial land was decided in 1963,[8] and in 1971 for both oil [9] and non-colonial agricultural land.[10]
No need to discuss the fact that oil and gas fields were discovered and/or exploited during the same period thus providing the country with great incomes. The readers will remember for instance that the El Gassi El Agreb oil field was discovered in 1961 while exploitation began that very same year.[11]
Overshadowing a few years, the 1986 and 1993 oil counter-shocks —the price per barrel falls to USD 8 in 1986[12]— hit Algeria which was mainly —almost exclusively– oil and gas dependent. This was closely followed by a period called the ‘Black Decade’, the civil war which took place between 1991 and 2002 and costed the lives of around 250.000 people.[13] Facing these challenges, the country was struggling with an economic crisis. For some figures, during the 1970s the debt amounted to less than USD 5 billion. In the 1990s, it amounted to USD 32 billion.
Nevertheless, crises do not tend to last forever. During the 2000s, the improvement of the oil situation led to some kind of a relaxation of the budgetary constraint. The Bouteflika government passed a USD 7 billion economic recovery support plan (2001-2004), a USD 50 billion growth support plan (2005-2009) — increased to $100 billion in March 2006— and a USD 286 billion development plan (2010-2014). Thus, from 2000 to 2014, the authorities allocated nearly USD 40 billion to the construction of dams and seawater desalination plants, invested in the expansion of water storage, production and distribution capacity which resulted in almost 90% of the population being now connected to the sewerage system. Investments were also made for the access to energy with the construction of power plants and the extension of gas and electricity distribution networks leading to respectively almost 99.4 % and 53% of the households being connected to the electricity and gas networks in 2014. Lastly transport infrastructures were also prioritised with investments amounting to almost USD 35 billion between 2000 and 2014 whether it was for roads, bus stations, tramways, or the upgrading of ports and airports.
To wrap up on that historical overview, nowadays and since the achievement of independence, Algeria is a ‘rentier system’ which is mainly based on oil and gas incomes. Indeed, it accounts for almost 97 % of total exports, two thirds of state revenues and one third of gross domestic product in 2014. However, while a country cannot rest indefinitely on rents which are not infinite by definition, it appears that Algeria is slowly waking up and has implemented some legal reforms in order to diversify its economy, and to catch up.
A Guide for Foreign Investors
Overview of the Algerian Legal Framework for Foreign Direct Investments
The most well-known Algerian regulation on foreign direct investment is surely the ‘49-51 rule’ provided for in Article 58 of the Additional Finance Act for 2009. According to that rule, all foreign operators and Algerians not resident on the national territory must be associated with a local public or private partnership, and may only own a maximum of 49% of the shares in the company or project in question.
This rule was particularly burdensome for the Algerian economy. For instance, foreign direct investments in Algeria in 2018 amounted to USD 1.5 billion, and USD 1.2 billion in 2017. In contrast, foreign direct investments reached USD 7.4 billion in Egypt and USD 3.8 billion in Ethiopia in 2017.
Hence, pursuant to Article 109 of the 2020 Finance Act, Algeria repealed the 49-51 rule except for some strategic sectors. Foreign investors are now free to invest in Algeria thanks to 100% owned vehicles. Only the following sectors remain subject to the rule: the mining sector as well as the energy one, the military industry, railways, ports and airports and the pharmaceutical industry. Other measures were also undertaken, such as the lifting of the state's pre-emptive right on transfers of shares in an Algerian company by or to foreign investors —replaced by an authorisation for the said strategic sectors— and the lifting of the local financing obligation for instance.
Last but not least, it shall be reminded to the readers that Algeria is party to the Washington Convention and signatory to numerous bilateral investment treaties allowing for the settlement of disputes with foreign investors through arbitration and all its benefits.
Foreign Investors’ Reluctance Towards Algeria
According to Mr. Brihi, foreign investors are often still quite reluctant to enter into the Algerian market. There are several reasons explaining the reluctance of the international investment community towards Algeria, but a few stand out: difficult repatriation of dividends; strict foreign exchange control; need for visa and work permits; decrease of oil revenues. Most importantly, the lack of legal stability is the decisive factor when it comes to assessing Algeria’s country risk. Algeria is therefore seen as a risky market by the international investment community. Consequently, the cost of credit for investing in Algeria is high and can discourage foreign financial actors. The country definitely must work on its credit ranking in order to reassure investors.
Covid Impact
As for the Covid impact on the Algerian economy, Mr. Brihi sees the closing of borders as a double-edged sword. Algeria did benefit from this drastic measure in regard to its negative trade balance as imports have sharply decreased making the Algerian economy more resilient than expected. However, foreign investment has been severely hindered by travel restrictions and a drying-up of foreign currency.
Why Should You Invest in Algeria?
In Mr. Brihi’s opinion, there is no doubt the country is full of opportunities: ‘If you are looking for international expansion in the region of North and West Africa and are familiar with those markets, it is in your best interest to invest in Algeria.’ As one of the largest economies in Africa, and a member-state of the Greater Arab Free Trade Area and African Continental Free Trade Area, Algeria can be seen as a platform to export towards neighbouring markets. A Western company seeking to expand its activities to African markets should definitely invest in Algeria. In order to do so, and according to Mr. Brihi, it can be good to start by setting a foothold in Algeria or by finding a local partner before developing further business strategies in the country. As such, investing in Algeria can be done without a high, and therefore, risky cost.
Mr. Brihi further points out the attractiveness of Algeria’s legal framework which provides one of the most competitive economies in the region. Similarly, the cost of energy is much cheaper in Algeria than in neighbouring countries, such as Morocco or Tunisia. Same goes for the potential of the consuming market. Unfortunately, as much as the legal environment and productive cost can be highly attractive for foreign investors this asset is rarely known by financial actors. The main reason being a lack of national ‘marketing’ on the matter which suffers from a poor image as far as legal stability is concerned.
According to Mr. Brihi, Algeria is definitively seen as a military and diplomatic power in its regional landscape. But the third pillar – the economic power - is lagging by far. That is the key point to make Algeria a promising and attractive land for investment. To do so, Mr. Brihi strongly advocates the government to unleash the potential of its formidable youth by promoting the freedom of entreprise and initiative whilst getting rid of its anachronic bureaucracy. Algeria has everything to succeed: smart people, energy, modern transportation infrastructure and a strategic regional positioning.
Key Sectors
Mr. Brihi views the imperative need for Algeria to build its four ‘independances’ as to not be much dependent from abroad: food & water, healthcare, energy and digital technologies.
Mr. Brihi’s take on key upcoming sectors of the Algerian economy is that foreign investors should assess the needs for the national demand and see how to meet them. Mr. Brihi often advises his clients to start by identifying the sectors that fuel Algerian imports and then evaluate a way to produce locally. Such sectors are likely to encounter a high demand and eventually financial success. More importantly, this follows the political will to boost local production as expressed by President Tebboune’s guideline for a significant decrease in imports. Three main sectors can be identified as promising.
Firstly, agriculture and food processing sectors have unmatched potential as Algeria aims at maintaining its food security and exporting its surplus to neighbouring countries. Products such as cereals, soy or milk are still imported whereas Algeria enjoys a huge area of arable land.
Similarly, the healthcare industry is in need of investments in the country. A local production of treatments for chronic diseases such as diabetes or hypertension is on Algeria’s priorities. New molecules for the production of such medicine will be highly welcomed by the biochemical industry.
Thirdly, chances are that the oil and gas sector still have bright days ahead as domestic energy demand is growing while petroleum and gas remain a huge share (95%) of exports revenues. Yet, major companies are still resorting to costly imports of heavy equipment, such as oil valves or pipework. Once again, Algerian-made supplies in this sector would be a great step forward.
Other interesting sectors include the manufacturing as well as the mining industries without forgetting the new cutting-edge digital technology businesses. In the long run, the tourism industry might eventually take off in Algeria, a country which decided not to develop this ‘unexploited deposit’ so far.
Culture & Investment
Algeria is a quite unique country, with its own specific values and characteristics. For a foreigner to invest there, it is therefore necessary to have a proper understanding of the local ecosystem. The public sector is particularly prevalent, a thing that might be unusual for Westerners who will have to deal with a heavy bureaucracy when investing in Algeria. Carrying out detailed market research is the first step in order to analyze and evaluate the economic environment. This will allow the foreign investor to set an industrial business plan that will determine practical aspects such as the amount of money needed for the project or whether to work with a local partner. If so, due diligence will be notably important to comprehend Algerian ethics and standards when it comes to business transactions.
Who Are the Foreign Investors in Algeria?
Due to historical factors, France remains one of the top investors in the country, ranking as high as the first source of FDIs excluding hydrocarbons. However, this traditional position is being challenged by other countries such as Turkey. While being its top commercial partner, Chinese investments are limited to the imports of made-in-China manufactured products into Algeria.
As for the diaspora’s role in FDIs, it remains negligible. Mr. Brihi, himself a member of the diaspora, calls on the Algerian community abroad to invest back in their homeland and take part in the economic development through FDIs but also technology and know-how transfer. Being optimistic, Mr. Brihi is convinced that if the diaspora is hugely welcomed this would greatly help Algeria to finally reach its outstanding potential.
This article has been written with the collaboration of Oriana Saib and Idris Negrouche.
[1] We would like to express our thanks to Mr. Akli Brihi who kindly granted us an interview which ended with this nice comparison with the national football team, a particularly important sport in Algeria.
[2] “D’où venons-nous ? Que sommes-nous ? Où allons-nous ?”, Paul Gauguin, 1897-1898.
[3] It should be noted that the division between these different time periods was made in accordance with Mr Akli Brihi’s interview and presentation of the Algerian economy's evolution since independence.
[4] “L’agriculture algérienne de 1954 à 1962”, R. Lequy, p. 43. Available at: https://www.persee.fr/doc/remmm_0035-1474_1970_num_8_1_1081.
[5] “Implantations industrielles et aménagement du territoire en Algérie“, G. Mutin, Rev. De Géographie de Lyon, 1980, p. 7. Available at: https://www.persee.fr/doc/geoca_0035-113x_1980_num_55_1_1263
[6] ”A Azrew M. Boumediène a inauguré le plus grand complexe de liquéfaction de gaz du monde”, P. Balta, Le Monde, 23rd February 1978. Available at: https://www.lemonde.fr/archives/article/1978/02/23/a-arzew-m-boumediene-a-inaugure-le-plus-grand-complexe-de-liquefaction-de-gaz-du-monde_3132503_1819218.html
[7] “Implantations industrielles et aménagement du territoire en Algérie“, G. Mutin, op. cit., loc. cit.
[8] “L’Etat et la révolution agraire en Algérie”, G. De Villiers, Revue française de science politique, 1980, p. 112. Available at: https://www.persee.fr/doc/rfsp_0035-2950_1980_num_30_1_393880.
[9] “Algérie : 50 ans après, la nationalisation du pétrole en question“, R. Andrea Mounecif, Le Point, 15 March 2021. Available at: https://www.lepoint.fr/afrique/algerie-50-ans-apres-la-nationalisation-du-petrole-en-question-15-03-2021-2417787_3826.php.
[10] “L’Etat et la révolution agraire en Algérie”, op. cit., loc. cit.
[11] ”Pétrole et gaz naturel au Sahara”, R. Fosset, Annales de Géographie, 1962, pp. 279-308, spec. p. 282. Available at: persee.fr/doc/geo_0003-4010_1962_num_71_385_16198.
[12] ”Pétrole : les cinq dates qui ont marqué l’histoire de l’OPEP”, E. Goetz, Les Echos, 2016. Available at:https://www.lesechos.fr/2016/11/petrole-les-cinq-dates-qui-ont-marque-lhistoire-de-lopep-222302. Also see, ”Chocs et contre-choc pétroliers depuis 1973”. Available at: https://prixdubaril.com/comprendre-petrole-cours-industrie/61826-chocs-et-contre-chocs-petroliers-depuis.html.
[13] “Guerre d'Algérie, combien de morts ?”, L’Histoire, n° 140, janvier 1991. Available at: https://www.lhistoire.fr/guerre-dalg%C3%A9rie-combien-de-morts#:~:text=Le%20nombre%20des%20victimes%20de,000%20bless%C3%A9s%20et%20485%20disparus.
Highlighting Morocco's Characteristics: Culture, Traditions and Business
If you are a tourist visiting Morocco for the first time, you will surely start with the most active and cheerful city Marrakech, and no doubt you will fall in love with its charm and no longer have the will to leave it, but do not make this decision quickly, there is too much to discover in other cities. . . To motivate you, we are going to take a tour in the next few lines to excite you further to know more details about this wonderful country.
Annie Spratt (2018) source
Morocco is a multi-millennial country, the heir of centuries of tradition. Nothing fixed yet in the kingdom! The culture is alive, incarnated day by day in the small gestures of everyday life, in the feasts, the rituals or simply the habits of everyday life. Stay there for a while and soak up this sweetness, this art of living.
The best is to walk through the towns and villages, through the narrow streets of the old districts. You are as close to people as possible to exchange with them. You will certainly be invited to share a glass of tea with a Moroccan: hospitality and ceremony will be at the rendezvous.
As it is a joyful country, Morocco is well known by its festive events, which called museums, including its own traditions with a variety of shows and spectacles, all these events are for you the opportunity to make contact, to live with the different cultures that make the diversity and all the richness of Morocco.
This is only a small glimpse of the cultures still living in Morocco. Travel the country to discover these little treasures of intangible heritage
The Cultural Connections
Morocco is an enigma of culture, a strategic position on the North-Western Coast of Africa, a geographic accident permitted a mixing of the modern society of Europe, and traditional aspects of Arabs and has become an aperture to the worldwide culture.
Damian Entwistle (2009) source
Approximately near the port, discover the bastion of the Sqala, a fortified monument of the eighteenth century. Today, it is a chic coffee-restaurant where you can enjoy delicious local specialties. Not far away, a few steps from the port, the Medina unfolds its allies. Rebuilt after the 1755 earthquake, it is the most recent in the country, one of the most original too: behind its walls, Arab-Muslim architecture mingles with inspirations from Europe.
Delicious Food, Various Dishes
Choosing tagine or couscous from the restaurant menu is always a good choice, those special dishes are just one of the various foods that can be tried, you can also taste the bastila, or egg and tomato tagine.
Ulvi Safari (2019) source
Renowned worldwide, Moroccan gastronomy is of an astonishing variety: one does not cook in the same way on the shores of the ocean and in the Middle Atlas. Agadir has thus made a specialty of cooking with Argan oil, while in the mountains, it is the sheep that are accommodated in tasty makes for the greatest pleasure of the taste buds.
The Boulevard
The Boulevard of young musicians, commonly known as L'Boulevard, is a competitive urban music festival held in Casablanca, Morocco. It allows young musical groups to make themselves known by a wider audience, through competition. The event is divided into three parts: the festival boulevard, the competition called Tremplin and Sbagha Bagha which is an opportunity for several street graffiti artists to transform some walls of the White City.
Gnaouas Culture
This is a Moroccan music festival created in 1997 to promote the Gnawa (Haratin artists descended from former slaves) which is held at the beginning of each summer in the Moroccan city of Essaouira. The founders' goal was to make it a story of encounters, mergers and openness to others.
Jazz
By its two Jazzablanca and Tanjazz versions, since its debut in 2006, the festival has become an essential meeting place for fans of jazz, pop and world music. A true place of exchange, it also promotes the White City and the north queen Tangier and has achieved a status of the North African institution.
Modern Society
Morocco is a country resolutely oriented towards the future that has managed to preserve its traditions and prosper its cultural heritage, by valuing them as levers of development. The city of Marrakech is a perfect example: the district of the Medina and its souks retain an incomparable charm of yesteryear, while Guéliz and Hivernage offer the most modern facilities and infrastructures.
Moroccan Lifestyle
The Moroccan society is a conservative and modern society at the same time, a population well known by its solidarity and family oriented, they do everything together, and know everything about each family member, because of sharing culture. When about meals, a true Moroccan will push you to eat until you are stuffed, especially when it comes to traditional meals as tagine, Tangia, couscous, they eat all in one plate, while talking and sharing stories.
Tourists are mostly surprised at how Moroccan people can form friendships quickly, and even the carpet-seller in the old medina can be your friend just by giving you tea, even people you meet on the road while passing are likely to remember you the next day with greetings.
Ben Ostrower (2018) source
Business Culture
The combination of a variety of cultures as Arabic, Berber, Muslim and French, has given Morocco a specific business etiquette. As most of Moroccans practice Islam, Islamic values have a big impact on the business culture and relations.
Relationships are more important than knowledge:
· Moroccans prefers to do business with people they know, which gives them a sense of respect and trust, so building a network would be preferable if you aim doing business in Morocco.
· Even in business, Moroccan's hospitality is often present, so expect serving tea as a symbol of hospitality.
· Business meetings are based on the way you present yourself, make sure that your appearance is more elegant, and your manner is clear and precise.
· Dressing well is so important to affect a Moroccan investor/Partner, there is no special attire you can wear as a foreigner but if ever you wanted to impress a Moroccan, having Moroccan traditional clothes would give you a lot of appreciation.
· Appointments are necessary and should be scheduled and confirmed.
Business Negotiations:
· Generally, in companies, decisions are taken after a long time and procedure
· Moroccans look for long term business relationships
· Try to avoid using high-pressure methods as they will work against you
· Moroccan can be deliberate and forceful negotiators
· In Morocco do not engage in discussions that tend to be negative, saving face is so important
· Generally, one’s attire had better be conservative and formal for both men and women.
· There is no formal protocol sharing business cards, but take intention to give business cards in Arabic or French as most negotiations are conducted in these languages.
Morocco is a mixed voices country that refers to history, behavior, knowledge and traditions of Moroccan society.
Whether a tourist or an investor, you will enjoy the charm of each city or village, you may find that Moroccans’ behavior is strange and different from other cultures –European culture as an example- but they mean each word and each action.
Morocco is the best place to start a business because of the cost competitiveness, its strong and stable macroeconomic performances, free trade access to one billion consumers, world class infrastructure, qualified labor force, sectorial plans, and the constantly improving business climate.
Ressources:
https://www.visitmorocco.com/fr
https://simply-morocco.com/moroccan-food/
https://www.pinterest.com/pin/340303315576165707/
http://m.2m.ma/fr/programme/lboulevard-ambiance-de-la-2e-journee-video-20180917/
https://lnt.ma/festival-gnaoua-20-ans-toutes-dents/
https://maroc-diplomatique.net/ouverture-a-casablanca-de-12eme-edition-de-jazzablanca/
https://discovermyuniverse.wordpress.com/tag/moroccans/
Edited by Hiba Arrame
Pakistan: From Terrorism to Tourism
Photo by Muhammad Khubaib Sarfraz on Unsplash
If you live in America or Europe and watch the news regularly, you would have probably heard about Pakistan. It is located on the crossroads of the Middle East, Central Asia and South Asia. It is bordered by Afghanistan to the north and west. Iran makes up its southwest border.
In the east, it is bordered by India, while on the south is the Arabian Sea. China sits northeast while Kashmir makes up the rest. Islam is the state religion of Pakistan, and about 95-98 percent of Pakistani people are Muslims.
For a long time, Pakistan has been known for all the wrong reasons. Due to the negligence of previous governments, terrorism and lack of facilities, the country’s tourism industry suffered from a drastic downfall. But now the image of Pakistan as an unsafe country for foreign tourists is gradually changing and Pakistan is quickly becoming one of the world’s new favorite tourist destinations.
A country with diverse cultures and natural beauty, Pakistan can be a heaven for any tourist. From snowcapped peaks and frozen lakes to serene valleys and beautiful shores, interspersed with the ruins of ancient civilizations and Mughal and Abbasi monuments in Lahore and Bahawalpur, Pakistan is full of breathtaking views. The Kashmir region is known as heaven on Earth for its beauty while Swat Valley of North Pakistan is considered the Switzerland of Asia. Moreover, the religious sites of Hindus and Sikhs are also a great source of attraction for local and foreign tourists.
Pakistan’s northern region Gilgit is considered heaven for geologists and mountain climbers. It is blessed with long range of mountains and beautiful landscapes. The world’s second highest mountain ‘K-2’ and world’s deadliest mountain ‘Nanga-Parbat’ is also located in this region.
Every year during summer, North Pakistan is filled with thousands of national and international tourists who keep the local businesses running. Those who call these regions home rely heavily on tourism and in past 5 years the number of hotels and restaurants in these areas have doubled due to the surge in tourists.
Photo by Muhammad Khubaib Sarfraz on Unsplash
Pakistan has a rich culture filled with traditions and customs which represent the history of this region and if you are travelling in rural or tribal areas of the country you would observe that after every 100 kilometers, the ethnicity and language changes.
Pakistani people are known for their hospitality and they consider guests as a gift from God. So, if you are a foreigner in Pakistan, it might be a possibility that people will not charge you or rip you off even when they can.
Many languages are spoken in Pakistan depending upon the region, but Urdu is the national language of the country which connects the inhabitants of the different provinces. English holds the status as the official language in the country so the curriculum in schools, colleges and universities is in English. Therefore, English is widely spoken and understood.
The recent surge in tourism is the result of the Government’s new policies and decisions to promote tourism in Pakistan. The Prime Minister believes that tourism can save Pakistan's struggling economy. In regards to this, Pakistan has launched an online visa application service for 175 countries and 48 counties for visas on arrival to end mandatory no objection certificate for foreign tourists seeking to visit certain parts of Pakistan.
The British Backpacker Society in 2018 ranked Pakistan as the world’s top adventure travel destinations, describing the country as: “… one of the friendliest countries on earth, with mountain scenery that is beyond anyone’s wildest imagination.”
Forbes has endorsed tourism of the country, putting Pakistan on the list of coolest places to visit in 2019.
Imran khan also sees religious tourism as way to boost the economy and create thousands of employment opportunities. In regards to this, he has decided to restore hundreds of neglected worship sites of Hindus, Sikhs and Buddhists. Under his leadership, Pakistan has also shown interest in opening ‘Katas-Raj’ temple for Indian tourists to visit this holy shrine via the Wagah Border.
In November of 2019, Pakistan opened the ‘Kartarpur Corridor’ allowing visa free access to Indian Sikhs to visit one of their faith’s holiest sites ‘Dera Baba Guru Nanak’ located in Kartarpur, Pakistan which is just a few miles away from the Indian border. Since the partition of India-Pakistan, Sikhs have been demanding and praying to visit this holiest site and now each day, hundreds of Indian pilgrims visit this holy site in Pakistan where their founder ‘Baba Guru Nanak’ spent 18 years of his life. Pakistan spent millions of US dollars on this corridor which clearly indicates the ruling government’s commitment to promote religious tourism in the country.
Photo by Muhammad Khubaib Sarfraz on Unsplash
Between 2018 and 2019, many international travel bloggers visited Pakistan and shared their wonderful experiences with the world, highlighting the beauty and hospitality of the country. In 2019, the royal couple Prince William and Kate Middleton also visited Pakistan which indicates the improved security conditions in the country. These stories shared by international travel bloggers and the visit by the royal couple have put Pakistan back on the map for the international world as a tourist destination.
Pakistan’s tourism industry has suffered a lot due to terrorism but now tourism is on the rise but there still are many remaining areas of development that need to be addressed by the government.
So, if you are a traveler who doesn’t believe in media and want to experience the lifelong epic adventure with scenic views, visit Pakistan.
The Volunteer's Guide to the Galaxy
I have been living in Romania for eight months, working for an NGO in an EVS project. This experience brought up the best of my life.
Firstly, some information. EVS means European Voluntary Service, probably the most known Erasmus+ program. Now, it is going to be completely replaced by the new European Solidarity Corps. The only requirement is age: between 18 and 30. For non-EU participants, selection might take longer. English is welcomed but not mandatory. To know more, check the European Youth Portal.
International volunteering means being part of a community. You are one of those who can make positive changes. This “guide” is made for all people who want to discover new worlds! Here, you can find some tips and clues before starting this adventure.
We will start by describing four phases: motivation, adaptation, understanding of the experience and creativity. Warning! They are not set in a temporal sequence!
Do you want to save those hungry children in Africa? Is your dream to build peace in the world? If the answer is yes, relax! You are not Wonder Woman or Spiderman – but if you are, please contact me!
Number one: find your motivation! Its meaning is complex and easy to misunderstand indeed. You are a normal person in a crazy world, right?! What can you do then? What is highly important is getting into the position of being part of the community. This corresponds to a sustainable intervention logic; a volunteer should be an active piece of society, and a long term transformation from the community to the community. In other words, motivation should not mean "I will do it for you", but "We will reach our goals together".
Many times, I find myself wondering wether a given activity was helpful and met the needs of students – our beneficiaries – or not. It is part of the game! You must deal with contradiction.
Apart from theoretical rhetoric, volunteering is a great opportunity to learn by learning, being aware of other cultures and knowing more about yourself. Travelling is also part of this experience. But be wise in spending money if you are not into currency exchange.
Did you think the motivation phase has ended? Sorry, this was just about pre-departure concerns! Motivation is like a river that turns right and left. And it happens several times during your experience. You can start from either the beginning or the end or the middle. Just try not to drown!
So, your luggage is ready, and you cannot wait to leave your country. What is missing? Are there guidelines to live there? Any survival tips around? If you have a sending organization, ask for guidance before leaving. Also, your host organization should provide training to improve your experience. After that, take your flight!
When you arrive, the adaptation phase starts. You may not know the language. Even if you do, it may be quite different because of the accent. You barely know something about the culture, stereotypes mainly. And, you are scared and excited at the same time.
Adaptation is a never-ending phase since it depends on the environment, personal and external factors. You might not like either your accommodation or your office, the city, the community and so on. I met a volunteer that used to chop wood to have heating and cook, in a forest, in Transylvania.
Language barriers can be part of this environmental issue too. Firstly, it might seem impossible to learn the domestic language or to communicate with locals. Furthermore, some of your colleagues might not understand your accent and vice versa. Even the accommodation can become a problem. Reality can be disappointing! Be open to changes and enjoy your environment!
On the very first day of work, I was wondering about how to proceed. Until I realized that the best method is going through the experience. At the outset, we talked about our personal and team objectives. You might find it interesting to define them together with your team, facilitators, managers, etc. It is really helpful!
As soon as we got into this, we were able to design our activities. Afterward, it was surprisingly stimulant to receive and share our know-how. A sort of quid pro quo or, even better, what is called peer learning. This relation must be mutual and continuous to be effective.
You can also improve by observing the community. That is how you can adjust and assess results better. For example, over-focusing on an issue might conduct to a wrong approach. Especially with an incorrect perception of processes and causes. Experiment and learn from your mistakes!
Passing through phases is easier and easier. That is because we are on the wave!
Here comes the creativity phase. Designing ideas, planning them and preparing a strategy to avoid risks and issues seems difficult, but it is electrifying. This is not something that comes to everybody at the same time. No worries then.
Anyway, a sense of initiative is essential to spur your team. In this segment, leadership and pro-activeness are additional and complementary skills to develop. Take care of ideas, whoever they come from. Do not go into a slippery slope argument. It is valuable to be empathetic and develop active listening. However, sometimes you might dislike propositions, which is normal when you work in a multidisciplinary and intercultural team. But it is a fantastic opportunity to learn from other perspectives.
Hey, we have just passed the border! Finally, the team-building phase begins!
Whenever it comes, a discussion is a chance to analyze the risks and benefits of a proposal. Then, listen, share your doubts and find solutions within your team. Finding a common way to address conflict and differences is indeed crucial.
In the graphic below I represented two main approaches to problem-solving: by rules or processes. For example, you can decide by voting or discussing. The second approach in my experience brought on a more shared and collective choice.
Implementing a proposal sometimes leads to unexpected impact, positive or negative. Use feedbacks to rearrange your strategy. Networking competences and skills is a solid base to start with that. By sharing your perspectives, you will easily make adjustments, integrate new ideas and find solutions to possible or experienced issues. Again, defining a strategic plan might be an efficient solution, particularly useful to establish milestones and short-term objectives. In other words, the team must create a vision linked to project community objectives.
Last but not least, always support your team. Volunteering is part of your life, which means you can live bad and wonderful moments together. In my experience, friendship and community relations are handy to cross the most strenuous phases of volunteering. Try to facilitate others’ experiences if needed and lead your team through good vibes and a positive attitude.
As an afterthought, it appears extremely arduous to explain how much I felt changed. Evaluating all this experience, in a nutshell, is out of my reach. But, reviewing my Youthpass and looking at everything I learned, developed and shared with other people around the world is a powerful sensation.
What are you waiting for? Apply now!
Edited by Hiba Arrame
Approaches While Negotiating in Another Business Culture
If you have visited countries other than your own, you might have noticed that the culture is different from home. It might not be much difference, perhaps it’s just a few norms separating this culture from your own. If you travel far, chances that the differences in culture are more significant. This phenomenon is also the case when negotiating in another culture. We say it’s a clash between business cultures. In this article I will discuss how different business cultures might create difficulties in negotiations, and hopefully provide you with a few tools to overcome these difficulties.
“International business deals not only cross borders, they also cross cultures.”
Ivey Business Journal (2004)
Richard Gesteland is an American businessman who did research on business cultures. It is his dimensions that will be used through this article. As a starting point, and an absolute foundation for communication between business cultures, it is worth to note his “two iron rules of business”:
The visitor is expected to understand the local (host) culture
The seller is expected to adopt to the buyer. The customer is king.
The first potential pitfall when negotiating is when relationship-focused and deal-focused cultures meet. Gesteland claims this dimension makes a “great divide” in the world. In a relationship focused culture, people tend to avoid doing business with strangers. The participants of this culture would rather prefer to do negotiations with personal contacts. In a deal-focused culture, the marketer will often be able to make contact with a potential buyer without having any personal relationship or common external contact in common with him.
Examples of relationship focused cultures are countries from most of Asia and Latin America. Examples of deal-focused cultures are countries from Northern Europe like Norway and Germany, but also countries from North America and Australia.
So how do you overcome these differences, and succeed in your communication? If you come from a deal-focused culture and will negotiate with a representative from a relationship focused culture, you might consider arranging for a suitable person or organisation to introduce him. In that way you might be able to build a relationship, and hereby trust, faster. The first meeting is crucial to establish a good relationship, and you might consider to not start the business discussions at the first meeting.
Another dimension defined by Gesteland is the clash between direct and indirect communication. In a negotiating setting, this will dimension will especially express itself in how explicit the respective negotiator formulates his wishes and intentions. A negotiator with a direct communication approach has as a priority to be clearly understood and might show anger. A negotiator with an indirect communication approach will on the other hand prioritise to maintain harmony and choose his words carefully.
To overcome this dimension, it is key to show a certain flexibility. It will be the safest approach to choose your words and body language carefully. To succeed in business negotiations internationally, it is necessary to learn the ability it includes to handle both of these kinds of communication.
In relation to the previous discussed dimension about direct and indirect communication, Gesteland defined a dimension involving the clash between hierarchical (formal) and egalitarian (informal) business cultures. A formal business culture, often organised in hierarchical structures, tend to reflect major differences in status and power. On the contrary, informal business cultures are based on more egalitarian principles with smaller differences and power.
If you come from an informal business culture and are going to meet with a negotiator from a formal business culture, the first action to consider is to dress up in an appropriate matter. This does not necessarily mean that you must perfect the Windsor-knot on your tie, but a nice shirt should be considered a minimum in such a situation. Do not forget to address the negotiator in a polite way! First impression is everything; if you start behind the eight ball, you will never get in front. Therefore, it is a handy rule of thumb that if you are in any doubt, choose the formal way of behaving. Finally, it cannot be understated that knowledge about your field of business will be decisive in what the other negotiator will think about you.
Norway and USA are examples of informal business cultures, while China and Germany are examples of formal business cultures.
In negotiations with representatives of other business cultures, you might observe that they have a different view on time than you do. This is the central point in the last Gesteland dimension I will discuss in this article. In the business world we find both ridged (monochronic) and fluid (polychronic) time business cultures. While the monochronic business culture find punctuality very important, this is not the case with a polychronic business culture. Another aspect of this dimension is that a negotiator from a monochronic tend to find interruptions in a meeting disturbing and disrespectful, it might be welcomed by a negotiator from a polychronic business culture.
Norway, USA and Japan are examples of business cultures with a monochronic business culture, while China is an example of a business culture with a polychronic business culture.
“The great diversity of the world’s cultures makes it impossible for any negotiator, no matter how skilled and experienced, to understand fully all the cultures that may be encountered.” (Ivey Business Journal, 2004). As a leader or negotiator, it will either way be central to meet cultural differences with understanding and knowledge. If you follow the two iron rules of business and obtain knowledge about the respective business protocol, you will have come a long way in succeeding at cross-cultural negotiations.
References:
Gesteland, Richard R.: Cross-Cultural Business Behavior : A Guide for Global Management (2007)
https://www.linkedin.com/pulse/direct-indirect-communication-styles-marjorie-friesen/