‘Arab Firms Should Engage in Smart Acquisitions’

DUBAI, 6 December 2006 — Businesses in the Arab world should exercise fiscal prudence now in response to record market liquidity, Emaar Properties Chairman Mohamed Ali Alabbar told senior business leaders and government executives at the ongoing Arab Strategy Forum in Dubai yesterday.

Addressing the plenary session titled “Arab World Goes Global” on the forum’s second day, Alabbar suggested Arab companies should engage in “smart acquisitions” to move away from the complacency that has settled into the region’s markets with regards to decisions on investments in global markets.

“There is an immense amount of liquidity in the Arab market now, and it is having an effect on the way we operate,” Alabbar said. “We tend to spend easily and extravagantly rather than thinking through the process of making every dirham count and thinking in the long-term. We have to spend our money wisely. If not, when the cycle goes down, as it will, the consequences will be painful. We should do all we can to prepare for it now. When the going is good, we need to tighten our belts.”

The problem with the Arab world’s global aspirations is not one of money but mindset, he added.

“We need to look at what we are investing in, and why,” Alabbar said. “In today’s world, the best investment is knowledge, not bricks and mortar. Knowledge will leapfrog us into the brand new world, and enable us to scale up quickly.” Alabbar said Arab businesses looking to spread their wings internationally should go early into emerging markets, with strong local partners, and be prepared for entirely different realities.

He encouraged Arab entrepreneurs and corporations alike to look East, specifically to India; to work within their core competencies, and unite to form an economic bloc.

“Traditionally, the Arab world has been unable to work as a political and economic bloc, but in the business sector, we must,” Alabbar said. “We have a common destiny.”

Alabbar also lauded the efforts of those governments who were working to support their business communities’ global ambitions.