How Arab investors can crack the Japanese market

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Abdulaziz, first right, and Furat, first left, explained what it’s like doing business in Japan. (Photo Supplied)
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There are more opportunities for Saudi entrepreneurs and aspiring investors. (Photo Supplied)
Updated 12 January 2020

How Arab investors can crack the Japanese market

  • Two Saudis based in Japan share their insights into how business is conducted in the country
  • Saudi Arabia's move away from an oil-based economy means more opportunities for Saudi entrepreneurs and aspiring investors

JEDDAH: As Saudi Arabia begins to move away from an oil-based economy, business ventures are being explored outside the hydrocarbon sector. This means opportunities for both Saudi entrepreneurs and aspiring investors in the Kingdom’s economy.

For many Saudis, this is as good a time as any to look to countries that offer business potential and unexplored opportunities. One such destination is Japan.

Running an international business is always a high-risk, high-reward proposition. Unlike other foreign countries, cultural and language barriers make conducting business with Japanese hard for Saudis.

Luckily, there are several Saudis in Japan working on overcoming those barriers to make the country’s market more accessible to the region.

Abdulaziz Alforieh is a Saudi who has lived in Japan for 12 years. Fluent in Japanese, he put his language skills to good use by working for a real-estate company that helped Arab students and expats find housing in Japan.

“Finding suitable housing, especially for foreigners, can be quite difficult in Japan. I would help by translating applications, helping people get in touch with rental companies, and so on,” he told Arab News.

He later expanded his activities and worked in tourism, translation and consulting services for Japanese companies interested in working with Saudi firms.

“I work as a kind of liaison between Japanese companies who are looking for business partners or investment opportunities, and vice versa,” he said.

He says the work is very rewarding but can also be challenging. Language barriers, cultural divides and differences in work attitudes can all pose problems.

Alforieh says there is a crucial difference in Japanese and Arab approaches to business. Arab businessmen are more likely to be lenient in negotiations in order to wrap up a deal quickly, he said. By contrast, the Japanese are less likely to make concessions during negotiations and prepared to wait for a more agreeable outcome.

“The Japanese are very systematic, which can be both a pro and a con. In most Arab countries, particularly in Saudi Arabia, our operations seem almost easygoing in comparison. Business in Japan is very organized, but can come across as overly strict to some foreigners,” he said.

Alforieh, who sees himself as perfect link between the two cultures, says the Japanese system can seem rigid to outsiders, but becomes easier with time to understand the intricacies of the country’s business culture.

“In general, the best advice I can give to anyone who wants to do business in Japan is to be very patient,” he told Arab News.

“If you’re looking for quick business, or someone who will hand over a contract after a day or two of negotiating, Japan isn’t for you. But if you’re willing to wait it out, the rewards can be great.”

Alforieh’s opinion is seconded by Furat Bantan, who has 13 years of experience in various jobs in Japan. Though currently working as a translator for the Embassy of Lebanon, he has in the past done consultation work for clients similar to that performed by Alforeih.

“The biggest difference between the Arab world and Japan is that people in Saudi Arabia generally want things done very quickly. In Japan, people are slow and steady in order to ensure that business risk is minimized,” he said.

Bantan points out that while relations between the two countries are getting warmer, there is much they need to learn about each other.

“The Japanese don’t know much about Saudi culture, so sometimes connecting them to people in Saudi Arabia can be a little tough. But Japan is full of amazing opportunities for any Arab, and there’s a lot of business to be done if you know who to contact,” he told Arab News.

Bantan looks forward to seeing more Saudi-Japanese business deals in the coming years, and is eager to facilitate them in any way possible.

“I hope that in the future that people like Alforieh and I can be the point of connection for Arabs who are interested in doing business with Japan,” he said.

OPEC, allied nations extend nearly 10M barrel cut by a month

Updated 22 min 45 sec ago

OPEC, allied nations extend nearly 10M barrel cut by a month

  • The meeting, originally scheduled for next week, was brought forward to Saturday

VIENNA: OPEC and allied nations agreed on Saturday to extend a production cut of nearly 10 million barrels of oil a day through the end of July, hoping to boost energy prices hard-hit by the coronavirus pandemic.
Ministers of the group and outside nations like Russia met via video conference to adopt the measure, aimed at cutting out the excess production depressing prices as global aviation remains largely grounded due to the pandemic. It represents some 10% of the world's overall supply.
However, danger still lurks for the market. Algerian Oil Minister Mohamed Arkab, the current OPEC president, warned attendees that the global oil inventory would soar to 1.5 billion barrels by the mid-point of this year.
“Despite the progress to date, we cannot afford to rest on our laurels,” Arkab said. “The challenges we face remain daunting.”
That was a message echoed by Saudi Arabia's Oil Minister Abdul Aziz bin Salman, who acknowledged “we all have made sacrifices to make it where we are today.” He said he remained shocked by the day in April when U.S. oil futures plunged below zero.
“There are encouraging signs we are over the worst,” he said.
Russian Energy Minister Alexander Novak similarly called April “the worst month in history” for the global oil market.
The decision came in a unanimous vote, Energy Minister Suhail al-Mazrouei of the United Arab Emirates wrote on Twitter. He called it “a courageous decision and a collective effort deserving praise from all participating producing countries.”
OPEC has 13 member states, including Saudi Arabia. The additional countries part of the plus-accord have been led by Russia, with Mexico under President Andrés Manuel López Obrador playing a considerable role at the last minute in the initial agreement.
Crude oil prices have been gaining in recent days, in part on hopes OPEC would continue the cut. International benchmark Brent crude traded Saturday at over $42 a barrel. Brent had crashed below $20 a barrel in April.
The oil market was already oversupplied when Russia and OPEC failed to agree on output cuts in early March. Analysts say Russia refused to back even a moderate cut because it would have only served to help US energy companies that were pumping at full capacity. Stalling would hurt American shale-oil producers and protect market share.
Prices collapsed as the coronavirus and the COVID-19 illness it causes largely halted global travel. That also hurt US shale production, drawing the ire of President Donald Trump. But Trump welcomed the earlier deal, as US Energy Secretary Dan Brouillette did on Saturday with the extension.
“I applaud OPEC-plus for reaching an important agreement today which comes at a pivotal time as oil demand continues to recover and economies reopen around the world,” Brouillette wrote on Twitter.
Under a deal reached in April, OPEC and allied countries were to cut nearly 10 million barrels per day until July, then 8 million barrels per day through the end of the year, and 6 million a day for 16 months beginning in 2021.
However, some countries produced beyond their quotas set by the deal. One of them was Iraq, which remains decimated after the yearslong war against the Islamic State group.
On Saturday, Iraq Oil Ministry spokesman Assem Jihad said in statement that Baghdad had “renewed its full commitment” to the OPEC+ deal.
“Despite the economic and financial circumstances that Iraq is facing, the country remains committed to the agreement," Jihad said.
Analysts had expected OPEC and the other nations to extend the cuts of 10 million barrels per day by one more month, but not longer, since the level of demand is still fluctuating.
“If the demand is great, countries like Russia will want to produce more oil, so they probably won’t want to get locked into a longer-term deal that may not help them,” said Jacques Rousseau, managing director at Clearview Energy Partners.