© Raymond A. Hopkins 2017, corrected publication 2018 2017

Raymond A. Hopkins, Grow Your Global Markets, https://doi.org/10.1007/978-1-4842-3114-2_7

7. Doing Business Around the World

Raymond A. Hopkins

(1)Chandler, Arizona, USA

There is something paradoxical in the fact that by establishing an export market we subject our entire domestic production to the vagaries of that market. i

—Benjamin Graham, influential economist and professional investor; May 9, 1894–Sept. 21, 1976

A world tour provides you a taste of business culture for the countries addressed hereafter and should whet your appetite for the additional research needed to manage cultural differences and ensure that you are ready for doing global business, negotiating, and selling products and services in your target world market. Culture is complex. Should you dismiss or minimize its importance in taking product global, the costs can be significant. Invest time to understand your customer and your customer will understand you. In addition to building trust and relationships, verify facts and the authority of your negotiating counterparts to reach agreement. The continental and country profiles that follow generally provide location, key demographic and economic information, and a description of business etiquette and business meeting practices.

Doing Business with North Americans

North America, the third largest continent, includes all of the mainland and related offshore islands that lie between the Arctic Circle and the Tropic of Cancer. Its east-west extent is 5,000 miles covering 9,355,000 square miles. To the north, the continent is bound by the Arctic Ocean, to the east by the North Atlantic Ocean, to the south by the Caribbean Sea, and to the west by the North Pacific Ocean.ii According to the latest data on global gross domestic product (GDP) released by the World Bank in February 2017, the United States still is the world’s biggest economy—by far, and North America, by itself, generates 27.95% of global GDP (United States [24.3%], Canada [2.09%], and Mexico [1.54%]).iii It is no wonder North America attracts the attention of global businesspeople. North America’s complexity is worthy of study by foreign businesspeople and natives alike.

North American Languages and Demographics

United States – American cultureiv strongly emphasizes individualism; being an entrepreneur; and a task orientation that leads to business behaviors that are challenging for many other cultures, for example, scheduling, punctuality, and one’s work being connected to one’s identity and self-esteem. In the context of business, Americans develop trust and credibility by suppressing their emotions while being more emotionally expressive with family and friends, principally in the southern United States and within African American and Latino American communities. In relating to others, Americans are relaxed, friendly, even informal, as one’s age, position, rank, and gender rarely sways how Americans communicate with others.

Canada – Many international businesspeople doing business in Canada anticipate relating to Canadians in the same way they relate to businesspeople in the United States. Although there may be some similarities, Canadian business and workplace culture are unique.v As in the United States, Canadians value time and punctuality. Their business meetings usually begin with formal introductions and small talk and progress as the parties become better acquainted. The language used will be either English or French depending on the province you visit as Canada is officially bilingual. You will find that in an English-speaking company, meeting attendees are encouraged to participate, whereas in a French-speaking company located in Quebec, management and senior staff dominate the discussion and decision making. In either case, be prepared with facts and figures to support any proposal you submit for Canadian review and discussion.vi

Mexico – unlike the United States, time is not money; money is for enjoying life! Mexicans work to live! The Mexican work day, depending on the industry and location, is between 9 a.m. and 7 p.m., although breakfast, a productive time for business meetings, may begin at 8:30 a.m. The mid-day meal is normally taken between 2 p.m. and 4 p.m. is a social opportunity, thus, it may not be as productive as early morning meetings are. A light evening meal, another social occasion, may take place between 8 p.m. or 9 p.m. Most business meetingsvii tend not to be creative, nor do they follow a strict agenda. Meetings are formal, may take longer than anticipated, but they do usually end with important decisions being made and carried out. It is best to deal with top executives as decisions reached by lower-level managers will be overridden, given the culture’s adherence to the role of hierarchy in the business structures of Mexico. This, in turn, requires you to send businesspeople to meetings with senior staff authorized and empowered to conclude business with their Mexican counterparts. To do otherwise would be offensive.viii

Doing Business with South Americans

South America, the fourth largest continent, includes all of the mainland and related offshore islands that lie between the Gulf of Darién in the northwest to the Tierra del Fuego archipelago in the south, encompassing a total area of about 6,878,00 square miles. To the northwest, the continent is bounded by the Caribbean Sea and north; the Atlantic Ocean to the northeast, east, and southeast; and the Pacific Ocean to the west. Drake Passage, south of the Cape Horn, separates South America from Antarctica. Its greatest north-south extent is about 4,700 miles, from Point Gallinas, Colombia, to Cape Horn, while its greatest east-west extent is some 3,300 miles, from Cape Branco, Brazil, to Point Pariñas, Peru.ix

South American Languages and Demographics

South America is linguistically diverse with 37 language families, 448 languages of which over 70 are unclassified. Indigenous languages are used throughout the entire continent spoken by over 11 million people alongside Spanish and Portuguese.x The subcontinent has a 2017 population estimated at 425,686,686, according to national estimates of its various countries and statistical calculations.xi

Brazil – Brazilians are friendly, free spirited, very risk oriented, and creative. Its culture is diverse and includes influences from Italy, Spain, and Germany and Africans brought over as slaves. This largely Roman Catholic (73%) nation values families that are large and often include extended family members. Family, educational, and socioeconomic backgrounds are important to Brazilians. When meeting people for the first time in Brazil, men will commonly shake hands. Appearances are important in Brazil, so make sure that you are smartly dressed with suits and ties prevailing for men, and simple dresses or trouser suits for women. Brazil’s official language is Portuguese despite 180 indigenous languages. In exchanging business cards, be sure to have them translated into Brazilian Portuguese. In conversing with Brazilians, expect them to be both animated and engaged as personal relationships are important in this culture. Be sure to maintain good eye contact in discussing business. Business meetings will typically be scheduled around two weeks in advance. Keep presentations short and to the point. Brazilian businesspeople may not respond positively to being pressured into making a decision, preferring a more relaxed approach to business. Make any follow-up meetings as personal as you can, either over the telephone or face-to-face.xii

Despite all the talk about emerging economies, the four biggest economies in South America (Brazil [2.39], Argentina [.79%], Venezuela [0.5%], and Colombia [.39%) produce only about 4% of global GDP. Still, this region presents major opportunities and challenges for improving the quality of life for its population. It is worth the attention of foreign businesspeople and can contribute to the economic growth of your own and their firms.xiii

Doing Business with Asians and Oceania

Asia is the world’s largest and most populous of the world’s continents. The continent borders Europe and Africa to its west, Oceania to the south, and North America to the east. Its marine borders are bound by the Arctic Ocean to the north, the Pacific Ocean to the east, the Indian Ocean to the south, and the Red Sea to the southwest.xiv Although most of Asia’s borders are clearly defined, unclear is the border between Europe and Asia, so the combined landmass is referred to as Eurasia. As a result, some countries have been mistakenly associated with Eastern Europe and at times been associated with Asia.xv

Oceania, a region centered on the thousands of islands of the tropical Pacific Ocean dominated by Australia, the smallest continent, is divided into the subregions of Polynesia (including Hawaii), Melanesia, Micronesia, and Malaysia. The region extends to Sumatra, Bonin Island, the Hawaiian Islands, Rupa Nui Island, and Macquarie Island. Oceania includes the countries of New Zealand, Papua New Guinea.xvi

The World Bank, according to the latest data on global GDP (April 2017) reports economic growth in Asia, in particular China, continues to be robust and the outlook is broadly positive across the continent. The developing economies of East Asia and Association of Southeast Asian Nation (ASEAN) economies, are projected in the near term to expand between 5 and 6% making the continent and the region prime markets for global business.xvii

Asian/Oceania Language and Demographics

Asia’s four major languages are Mandarin, Hindi, Russian, and Arabic. It is difficult, if not impossible, to identify all the remaining languages of Asia as many Asian countries have more than one native language. For example, there are more than 600 languages spoken in Indonesia, more than 800 languages spoken in India, and more than 100 languages spoken in the Philippines.xviii

Asia comprises a full 30% of the world’s land mass with 60% of the world’s current population that populate a total of 50 countries. In 2017, the population is estimated at 4,472,378,542 excluding Russia, although there are about 40 million Russians who live in Asia or east of the Ural Mountains.

The two most populous nations within the borders of Asia are China and India. China, leading the world as the most populous country, has a 2017 estimated population of 1,388,232,693 surpassing India’s 2017 estimated population of 1,342,512, 706. Each country is projected to have a population of 1.45 billion by 2022. This is not to say other countries in the region do not have large populations. The remaining most populous countries in the region include Indonesia, 255.46 million; Pakistan, 191.78 million; Bangladesh, 158.76 million; Japan, 126.89 million; The Philippines, 102.96 million; Vietnam, 91.81 million; Iran, 78.77 million; and Turkey, 78.21 million.xix

Selected Pacific Basin Countries

The People’s Republic of China, the world’s most populous country inhabited by nearly 1.4 billion people, stretches across nearly all of the Asian land mass and is south of Mongolia and Siberia, west of the Korean peninsula and Japan, north of Southeast Asia, and east of Central and South Asia bordered by Russia and North Korea, Vietnam, Laos, Myanmar (Burma), India, Bhutan and Nepal, Pakistan and Afghanistan, Tajikistan, Kyrgyzstan, and Kazakhstan.xx

China’s main imports are mechanical and electrical products, high-tech goods, crude oil, iron ore, copper, aluminium, and agricultural products.xxi

The most common language and official dialect of China is Mandarin. That said, it is difficult to do business in many parts of China without being supported by a translator. Communicating there can be slow, laborious, and laden with potential for misunderstanding and inaccurate translation. Be patient. As a foreign businessperson, you will likely need to cover the same ground several times and constantly verify your message is delivered accurately. Chinese businessmen have high expectations that you will be well prepared with multiple copies of any proposal. They prefer to establish a strong relationship before reaching agreement, likely requiring several meetings to achieve your business objectives. Appearance is also important so dress to look successful, but not overly so. Because Chinese culture is hierarchical and based on respect for age and authority, businesspeople in China usually enter the meeting room in hierarchical order. They will assume that the first member of your party walking into the room is the head of the delegation. Negotiations will likely be prolonged beyond any deadline you have established and should exclude political criticism of the government.xxii

Australia – is an island nation located in the Southern Hemisphere near Indonesia, New Zealand, Papua New Guinea, and Vanuatu. The country has the world’s 13th largest economy requiring as imports machinery and transport equipment, industrial and electrical machinery, telecommunications, and sound recording. In addition to these imports, the country requires petroleum, manufactured goods, chemicals and related products, food and live animals.xxiii

Australians, though ostensibly casual, are anything but in the context of business. The workday generally begins at 8:30 a.m. and ends at 5:30 p.m. with an hour for the mid-day meal. Australians respect the value of work and expect deadlines and commitments to be honored. It is best to always make meeting appointments and present a business card at the outset. In dressing for business meetings, dress conservatively without ostentation as Australians dress conservatively in business environments. Discussions will be forthright and honest as Australians have no reservations about telling you what they think. If someone introduces himself with his/her first name, you can assume that you can call them by that name unless corrected. If you are unsure how to address someone, sir or madam is always fine. During conversations like meetings and negotiations, speak plainly and expect that what you say will be taken literally. Social contact after hours is usually swift and simple to achieve business objectives. When speaking to others, maintain some distance as Australians are not very comfortable when others invade their private space, especially if it is during a formal business meeting.xxiv

Hong Kong – is a Chinese administrative region of the People’s Republic of China located east of the Pearl River on the south coast of China. The region mainly imports mainly machinery and equipment, manufactured goods and articles, chemicals, mineral fuels, and food.xxv

Understanding business, workplace culture, and etiquette are important for doing business in Hong Kong. There is some similarity to Western cultural business practice, but in Hong Kong some business practices are unique. Appropriate fashion for men are suits and ties and pant suits or business skirts for women. In greeting business contacts, it is proper to offer a handshake and a small bow making sure to greet the most senior person first before greeting others in his party. You will recognize the most senior person by the title on his business card. If possible, begin conversations with a phrase in Cantonese to demonstrate your effort and interest in this culture. Despite its apparent global economy, business in Hong Kong is rooted in the Eastern tradition, for example, having lavish business dinners. When in doubt about appropriate behavior in a social situation, take your cues from your host. For business meetings in Hong Kong, make the appointment as far in advance as possible avoiding any meetings on Christmas, Easter, or around the Chinese New Year. In arranging business meetings or appointments, provide at least 24 hours notice in advance. For added respect, have your business cards printed, one side in English and the other side in Cantonese. Negotiating in Hong Kong, as in China, may take some time and you should avoid pressuring your business partner, who may even be a woman, as large numbers of women hold senior positions in business and banking.xxvi

India – is a republic in South Asia flanked by the Himalayas in the north, the Arabian Sea in the west, the Bay of Bengal in the east, and the Indian Ocean in the south. The country shares land borders with Pakistan, China, Nepal, Bhutan, Bangladesh, and Burma (Myanmar). India has a territorial sea border with Sri Lanka, and with Indonesia in the Nicobar Islands.xxvii India, the largest democracy in the world, has a parliamentary system of government overseeing a population of 1.34 billion inhabitants (2017). Hindi is the Republic’s official language with English, the associate official language widely used for business and understood almost everywhere in India. Having gone through two decades of economic reforms, India’s economy is rapidly integrating with the world economy. India is heavily dependent on crude oil imports also importing, gold and silver, machinery, electronic goods, pearls, precious and semi-precious stones. India has recently become a substantial Asia exporter of petroleum. The country also exports engineering goods, chemical and pharmaceutical products, gems and jewelry, agricultural and allied products, and textiles and clothing.xxviii

The country is composed of many cultures so understanding the country to ensure your approach to its business community will be challenging, but nevertheless rewarding. Given the diversity of its society (small ethnic and tribal groups) and religions (Hinduism, Jainism, Buddhism, and Sikhism), one must be prepared to know more about the individuals with whom one deals. India is heavily dependent on crude oil imports and imports: gold and silver, machinery, electronic goods and pearls, precious and semi-precious stones.xxix In greeting your Indian counterparts, a handshake is customary and may be substituted by the Namaste, where the palms of one’s hands are brought together at chest level with a slight bow of the head, a sign of your understanding of Indian etiquette. Doing business in India demands punctuality and patience. Take tea, should it be offered and don’t be too direct in your comments. Above all, check the local calendar as India enjoys countless holidays that change depending on the year. On your arrival in India do not schedule business meetings during one of these festivals. Realize that India is a price competitive market in which government contracts are awarded to the lowest technically compliant bidder. Should you be marketing consumer products, understand consumers often prefer lower prices to quality or durability. Indians only deal favorably with those they know and trust—even at the expense of lucrative deals, so it will take time to establish a relationship with representatives, distributors, and above all consumers to be profitable in India.xxx

Indonesia, with over 18,000 islands and inhabitants numbering 248,215,193, is the largest archipelago on earth. The country borders Malaysia, Timor-Leste, and Papa New Guinea.xxxi The country’s primary imports products include oil and gas, nuclear reactions, boilers, mechanical appliances, iron and steel, organic chemical materials, and vehicles.xxxii

The business culture of Indonesia is very different from the Western style of doing business. Take time to get acquainted with its diverse ethnic, language, and religious groups as the country is a melting pot of cultures even though it is largely an Islamic nation. Business in Indonesia is conducted in either English or Bahasa Indonesian, thus, you will likely need the services of an interpreter. Punctuality is not paramount in Indonesia, so exercise patience. Initial introductions in Indonesian business are formal. Handshakes are generally exchanged before and after business meetings, but realize the grip is generally softer than those used in the Western world. Greetings are occasionally accompanied by a slight bow. When Indonesians communicate they are indirect and subdued in their speech. If you are being introduced to several people, it is customary to introduce yourself to the eldest member of the group. Business negotiations can be quite lengthy as Indonesians like to give enough time to carefully consider business proposals and do not like being rushed to reach agreement. Initial meetings generally serve only to make acquaintances, so work to establish trust and solid business relationships. Major industries in the country are petroleum, natural gas, and textiles.xxxiii

Japan – is a string of islands off the east coast of Asia and a country with a long history that has emerged since 1950 into an economic powerhouse that, like the United States, has had its economic ups and downs. Japan’s primary imports are: mineral fuels, electrical machinery, machinery, food, manufactured goods, chemicals, and raw materials.xxxiv Prepare yourself for doing business with a society that is hierarchical, relies on group decision making, and respects age and seniority.  Thus, it is essential to develop an understanding of Japanese business and social practices to ensure a firm’s success in Japan. It is best not to assume that Western social and business norms apply there. Study Japanese business practices and dress conservatively without ostentation as your business counterparts observe formality.

To build business relationships, one should emphasize trust, confidence, loyalty, and commitment for the long term. Decisions are not hurried. Business travelers to Japan should bring a large supply of bilingual printed business cards reflecting their title. Japanese executives deal with others on a last name basis. Initial business and social contacts are characterized by politeness and formality. Business travelers visiting a Japanese firm for the first time may require an interpreter or bilingual assistant and their counterparts expect that assistance. Although the cost of hiring an interpreter can be very high, bringing along an interpreter demonstrates that a visiting firm is serious about seeking to market its products and services in Japan.xxxv

Malaysia – located in Southeast Asia is a country formerly under the British Commonwealth. When established in 1963, it was comprised of the territories of Malaya, the island of Singapore, and colonies in northern Borneo. Malaysia has a fast-paced lifestyle, an emerging infrastructure, a highly qualified workforce and an emerging economy. Its society is multiracial with four major ethnic groups: Chinese, Malays, Indians, and others working alongside each other so the previously described business practices in those countries apply to doing business there. Malaysia’s main imports are electrical and electronic products, chemicals, petroleum products and machinery, appliances and parts.xxxvi In major cities like Kuala Lumpur, Penang, and Singapore, most business is conducted in English, although there are three other official languages—Malay, Mandarin, and Tamil.xxxvii Its economy is highly developed and trade oriented, but don’t let that stance lull you into complacency.

Malaysians are highly polite and a lazy Western attitude is not considered to be acceptable there.xxxviii In dressing for business, men should wear a suit with dark pants, a long-sleeved shirt, and a tie. Be punctual for business meetings starting discussion with small talk to build rapport. Make sure to treat persons of senior rank with great respect. As a general rule, address persons by their title and surname. Have your card translated into Malay, or if you are meeting Chinese partners, have it translated into Chinese as well. Beware of the prospect of corruption and comply with the U.S. Foreign Corrupt Practices Act.xxxix

Singapore – a city-state at the southern tip of the Malay Peninsula, declared its independence from Malaysia in 1963 to become the Republic of Singapore, renowned as the second densest city-states in the world with a 2016 population of 5.69 million and a global financial center built on trade and investment. The city-state thrives on its cultural and multiethnic diversity that includes populations from China, Malay, Indians, and Eurasia. English is the primary language used in business and educational institutions. The city-state is religiously diverse as well with Buddhism, Christianity, Islam, Taoism, and Hinduism. Singapore’s well-developed telecommunication and airport infrastructure meets the needs of business and industry in the region and beyond. Singapore’s biggest import product is machinery—equipment with electronic—accounting for a significant percentage. The country also imports crude oil, miscellaneous manufactures, and chemical products.xl

The work day begins at 8:30 a.m., ending at 5:30 p.m. Monday to Friday. In greeting your business counterpart(s), shake hands, follow with a slight bow, and exchange business cards with one’s name and title. In making introductions, be sure to use the addressee’s title and surname. Do not be surprised that the women of Singapore hold positions of authority and adhere to the regimen of Islam, for example, refraining from products of pigskin and alcohol. In Singapore, as elsewhere, punctuality or notifying others of any expected delay is key. Men should be prepared to do business by dressing appropriately with a white shirt, standard tie, and trousers; and women with a blouse with sleeves and a formal skirt or trouser suit. Business discussion should be respectful, but pointed and direct. If your day is consumed with business, your dinner and meals will be a time to socialize and build relationships, even after the evening meal.xli

Pakistan – officially the Islamic Republic of Pakistan, is located at the crossroads of the Middle East, Central Asia, and South Asia. It has a parliamentary system of government based on British law adapted to Islam, the one religion practiced by almost all Pakistanis with Hinduism and Christianity practiced in the minority. Its economy is semi-industrialized encompassing textiles (garments, cloth, and yarn), rice, chemicals, food processing, agriculture, and others leading to plenty of opportunity to advance this country’s level of prosperity. Mineral fuels, manufactured goods, beverages and tobacco, animal and vegetal oils and fats, crude materials except fuel, chemicals, machinery, food and live animals constitute Pakistan’s imports.xlii Its major trading partners are the United States, the United Arab Emirates, the United Kingdom, Germany, and Hong Kong.xliii

Although the major language is Urdu, English is the official language for conducting business in Pakistan. The services of an interpreter may be required to ensure communication is clear. The majority of surnames you will address originate from Arabic, Turkey, and Persian family names. Greetings are expressed between members of the same gender followed by a firm handshake using the right hand. Should a stronger relationship be developed, your greeting will include a hug. It is not wise to plan a business trip during the month of Ramadan in this Islamic country. With reduced office working hours in government and the private sector, it is difficult to get appointments. Plan business meetings well ahead of time, providing titles, positions, and responsibilities to enable your counterparts to be well prepared also.xliv

The Philippines – is an island archipelago nation of Southeast Asia in the Western Pacific Ocean. The country, officially known as The Republic of the Philippines, approximately composed of about 7,100 islands grouped into three major island groups: Luzon, Visayas, and Mindanao. The Philippines has a population of about 100 million people expected to increase to 148 million by 2050 with about 10 major ethnolinguistic groups. Although the country is officially secular, it is largely Christian, predominantly Roman Catholic. The culture reflects both Spanish and American influences. Its inhabitants include a mix of Chinese, American, Spaniard, Indian, Japanese, Arab, and Koreans. While its official language is Filipino with over 300 dialects, English is used professionally in business and academic communities. The cost of living in the Philippines is inexpensive and its currency is the Philippine Peso. Predominant industries in the Philippines are mining and quarrying, manufacturing, construction, and electricity, gas, and water supply. Recently business process outsourcing (BPO) to third-party service providers has taken off.xlv The Philippines’ major imports are electronic products, mineral fuels, and transport equipment.

Subordinate employees in the Philippine culture generally accept the hierarchy of prominent multinational companies operating there. Showing a genuine interest in your business partner, colleagues, or employees will go a long way toward building relationships in the Philippines. Business meetings are conducted over lunch and dinner meetings. Although punctuality is not overly stressed in this culture, make a point of arriving on time regardless even if your business counterparts do not.xlvi

Taiwan – located in the South China Sea, is officially known as the Republic of China. Taiwan boasts a highly successful value-added economy, heavily dependent on foreign trade for its survival. The country is strategically located to take advantage of Northeast Asia, China, and the nation-members of the Association of Southeast Nations (ASEAN). The country supports a well-educated population of some 23 million with approximately 11 million in its civilian workforce. Taiwan imports mostly parts of electronic products, mineral products, machinery, chemicals and base metals, given its lack of natural resources.xlvii

The Taiwanese maintain a strong work ethic putting in a 40-hour work with the expectation that their foreign counterparts will do the same. Given that ethic, you and your party should be well prepared to bargain and compromise before negotiating any business venture in Taiwan. Arriving on time for a meeting is important, as punctuality is highly valued there. Personal relationships or “Guanshi” are the keys to doing business in Taiwan. Greet your business counterparts with a handshake and on departing, a bow. It is best not to display affection in this culture and it is best to be reserved in your behavior. The Taiwanese prefer to do business with people they know, are friendly with, and trust. The official languages are Mandarin and Taiwanese; however, for international business in Taipei, English is spoken. Business dress is stylish, yet conservative for any meeting.xlviii In Taiwan, titles are very important so it is best to address others using their professional title followed by the surname. Be sure to have one side of your business card translated into Mandarin and to present your business card with two hands with the Mandarin side facing the recipient. Avoid hard selling, pressure tactics, and any sort of conflict or confrontation.

Thailandstrategically located in the center of mainland Southeast Asia, serves as a gateway to Asia, the largest growing economic market serving China, India, and the nations of Association of Southeast Asian Nations (ASEAN) . Since the 1960s increasing numbers of its population have moved away from agriculture to Bangkok, its capital, and to other cities.xlix Thailand, a foreigner friendly country that supports a population of 67 million, is characterized by steady, strong economic growth and a skilled, cost-effective workforce that attracts foreign investment. This country boasts of its ­world-class infrastructure consisting of seven international airports, mass transit, broadband access, sea and river ports that include containers and tank farms. Given its investment in a high-quality, business-based infrastructure, the government has targeted growth in agriculture and agro-industry, alternative energy, automotive, electronics and ICT, fashion, and value-added services including entertainment, health care, and tourism.l The country imports mainly raw materials and intermediate goods, fuel, parts of electronic appliances, materials of base metal, and chemicals, machinery, computer, and mechanical equipment in addition to consumer goods.li

English is widely used in Thailand for commercial and many official purposes. While Thai customs may seem very conservative to some Westerners, Thai people are generally very relaxed and easygoing, rarely taking offense if a foreigner fails to follow Thai etiquette. Punctuality for business meetings is important to the Thai, although meetings may not start as scheduled. In addressing others, use their professional title, although the use of first names is quite common. It is advisable to have one side of your business card translated into Thai; be sure to present and receive business cards with the right hand only. Business decisions come from the top down and can take a while, so patience is a must.lii Conservative colored suits with shirts and ties are the recommended dress for men; skirts and blouses are appropriate for women. Wear shoes that are easy to slip on and off, if possible.

The Socialist Republic of Vietnam – is the easternmost nation on the Indochinese peninsula with a population of some 90 million inhabitants. The country has long been dominated and, as a result, adapted to the ideas and institutions of its oppressors. Political and economic reforms, stemming from a constitution and civil law code, launched in 1986 to recover from war over the last 35 years, are transforming the country and its economy to produce more competitive, export-driven industries that are more inviting to foreign companies that want to do business there. Its workforce is literate and competitive as demonstrated by considerable Korean investment in Vietnam.liii The official language is Vietnamese, but increasingly English is a favored second language with some usage of French, Chinese, and Khmer languages. Major religious influences are Buddhist 9.3%, Catholic 6.7%, Hoa Hao 1.5%, Cao Dai 1.1%, Protestant 0.5%, Muslim 0.1%, and none 80.8%.liv Vietnam imports are machinery, transports and equipment, and manufactured goods (24%, chemicals, fuels, food and live animals, and crude materials except fuels).

While business is done mostly on the basis of referrals, cold calling and direct contacts are producing results. Appropriate dress for men includes conservative colored suits, shirts, and ties; for women conservative skirts, pants, suits, and blouses are proper. In greeting and departing business counterparts, two-handed handshakes, in some cases a simple nod, are common. It is always appropriate to address your business counterpart by his title, for example, Chairman Triet, Director Dung, or Manager so and so.lv As elsewhere in Asia, seniority is very important to the Vietnamese, especially if you are dealing with a state-owned or government body. In presenting a business card or a brochure, make sure you start with the most senior person and downward. When giving out a business card or receiving one, ensure that you stretch your arms out with both hands to receive the card. You must build relationships in Vietnam and avoid hard selling tactics or any sort of conflict or confrontation. Patience is also required as decisions are reached by consensus.

China, India, Indonesia, South Korea, and Japan are driving economic growth across Asia producing just over a third (33.84%) of global gross domestic product and their share is expected to reach 50 % by 2050.lvi Asia’s GDP current and projected economic growth highlights the importance of the region and its importance to growing your firm.

Doing Business with Europeans

Of the earth’s seven continents, Europe, a peninsula of Eurasia or a peninsula of peninsulas and islands, is the second smallest continent. Its main peninsulas are the Iberian, Italian, and Balkan peninsulas, located in Southern Europe, and the Scandinavian and Jutland, located in Northern Europe. The continent’s four major regions running from north to south: Western Uplands, North European Plain, Central Uplands, and Alpine Mountains.lvii Europe’s boundaries are relatively clear with difficulty defining them being in the east between continental Europe and continental Asia.lviii As a single country, the United States is the biggest economy in the world, but you could easily argue the 28 member countries of the European Union (EU) make for one big economy generating a gross domestic product worth of 16,397.98 billion U.S. dollars in 2016, equivalent to 26.45 % of the worldlix The EU consumer is also on top.

European Languages and Demographics

Today, the European Union recognizes 24 official languages in addition to those spoken by regional, minority, and migrant populations.lx As far back as 1958, European Community legislation recognized and specified German, French, Italian, and Dutch as its official and working languages. EU member states have always had fewer official languages, as some share common languages, as in Belgium where the official languages are Dutch, French, and German. There have always been indigenous regional, minority languages spoken in the European Union and languages that migrant populations have introduced. The European Council has authorized some regional languages, such as Catalan in Spain and Welsh in Britain These two have been recognized as co-official languages, while many European languages, such as Old Prussian, Cornish, and two Jewish languages, have become extinct while others are considered endangered.lxi

As of 2017, the population of Europe is estimated at 739 million,lxii approximately 10% (09.8%) of the world’s population, and it is projected to decline. Indigenous ethnic and immigrant groups from black Europeans to Asian Europeans populate the continent. The evolution of religion in Europe spans approximately 10,000 years from the Ancient Greek, Roman, and Nordic faiths to the spread of Christianity, Judaism, and Islam. Each of these faiths has influenced art, culture, philosophy, and law on the continent. Today most Europeans profess Christianity; the second largest religion practiced there is Islam; followed by Judaism, agnosticism, and atheism.lxiii

Western Europe

United Kingdom, located in the northwest coast of mainland Europe, is comprised of four distinct regions that include England, Wales, Scotland, and Northern Ireland. Be sure to acknowledge and respect each of these regions for success in doing business there. The United Kingdom’s two official languages are English and Welsh; however, 300 languages are spoken there. The United Kingdom is one of the world’s major economies with a marketplace of 65 million that includes a highly educated labor market with a high standard of living. It is an attractive destination for foreign direct investment offering access to the European Union’s 500 million-plus consumers. In addition, the United Kingdom offers 24 enterprise zones providing incentives designed to support new and expanding businesses.lxiv The United Kingdom mainly imports electrical machinery, mechanical machinery, cars, other miscellaneous manufactures, medicinal and pharmaceutical products, road vehicles other than cars, clothing, and refined oil.lxv

Although the culture of the United Kingdom is generally open, people in the United Kingdom value their privacy and personal space. Take time to develop business relationships while respecting these values and avoiding behaviors like slapping, asking personal questions, and hugging strangers. It is also best to avoid discussing topics like the relationship between the United Kingdom and the European Union, religion and the historical conflict between England and Northern Ireland, among others. When arranging business meetings with senior executives, plan ahead and provide advance information about the company you represent and the topics to be discussed. Punctuality is valued in the United Kingdom so be sure to arrive at the appointment time. You should also learn about the company you are meeting so you can understand its business culture, interests, and opportunities for synergy.lxvi

Francelxvii – bounded by the Atlantic Ocean and the Mediterranean Sea, the Alps, and Pyrenees, is one of the world’s leading industrial powers with a population of 65 million inhabitants that includes 4 million foreign residents and immigrants. Although the French economy has slowed dropping employment to a rate of 9.6% in 2017, it has nevertheless maintained demand based on strong public policy and its focus on newly developing countries. The service sector accounts for 75.7% of total employment compared with agriculture at 2.8%. The country’s industrial sector has suffered from increased competition from the Far East.lxviii France mainly imports computers, electronics, industrial and agricultural machinery, food, chemicals excluding perfumes, textiles, clothing, metal products, aircraft, motor vehicles, natural hydrocarbons, mining, and pharmaceuticals.lxix

Achieving your business objectives in France starts with appointments that should be scheduled and confirmed before their scheduled day. Be on time as the French appreciate punctuality. In addressing your business counterparts for the first time, make sure that you use their family name, preceded by ‘Monsieur’ for gentlemen or ‘Madame’ for ladies. Build relationships by learning more about the French language and culture. Many French speak and understand English, but prefer not to use it. An interpreter will probably not be necessary, but check ahead of time. Use French only for greetings, toasts, and occasional phrases unless your French is perfect.

Spain,lxx located in extreme Southwestern Europe dominates the Iberian Peninsula shared with its smaller neighbor, Portugal. The country, inhabited by a population of approximately 45 million, has 17 autonomous regions, each with its own unique character and distinctive atmosphere. The country’s economy has slowed accounting for the rise in unemployment to 18.75% in the first quarter of 2017.lxxi Manufacturing is the most important sector accounting for 82% of total production with the largest segments in food products, fabricated metal products, except machinery and equipment (9%); motor vehicles, trailers and semi-trailers; chemicals/ chemical products; other non-metallic mineral products, rubber and plastic products; machinery and equipment, basic metals, and beverages.lxxii The country’s main imports are equipment goods (22% of total imports); chemicals (16%); autos (14%); consumption goods (13%); food, beverages, tobacco (12%), and energy (11%).lxxiii

The style of life in Spain is more relaxed than that in its West European neighbors. In business relationships, communication is usually formal. In Spain, as elsewhere, building relationships is important. It is reasonable to expect that Spanish executives will speak English and may even speak other languages, such as French and German. Trust and personal relationships are the keys to the success of doing business in Spain. It is advisable to use the courtesy titles ‘señor’ for a man, ‘señora’ for a married woman followed by the family surname. Negotiations will be detailed so it is important to prepare thoroughly while respecting the culture, value, and traditions of your counterpart . Professional and academic titles are not normally used when addressing Spanish executives.lxxiv

Central Europe

The Republic of Bulgaria – is situated in Southeastern Europe on the Balkan Peninsula north of Greece and Turkey, with a long border to the north along the Danube River with Romania. To the west, it shares a border with Serbia and Macedonia and it borders the Black Sea to the east. With a population of more than 7 million people, the country has a small, open economy strategically located to serve Southeastern Europe. Bulgaria mainly imports fuels, machinery and transport equipment, metals, raw materials.lxxv Its infrastructure includes rail and highways, commercial ports on the Danube, and three major airports. The country’s 2016 workforce numbers 3.310 millionlxxvi well-educated men and women that have completed secondary, technical, or vocational education with others that have strong backgrounds in engineering, medicine, economics, and the sciences. This talent and Bulgaria’s inexpensive cost of labor offer foreign investment potential for companies interested in operating in this region.

Bulgarians observe punctuality in conducting business. Should you find yourself delayed, bring that to the attention of your Bulgarian host. How you dress for meetings likely depends on the industry and work environment in which it operates. Generally, it is best to dress conservatively. Business meetings take on an air of formality in Bulgaria and may be followed by meals. In greeting your counterpart, shake hands, exchange business cards, and greet the most senior person and then others using their family name. You will find your discussions to be candid. Take your time and be patient. If you find government permits may be required, realize bribery and corruption are still issues you will have to deal with. If confronted, observe the requirements of the U.S. Foreign Corrupt Practices Act and avoid paying “taxes” to government officials.lxxvii

The Federal Republic of Germany , located in Northern Central Europe, covers an area of 356,750 km2 bordered by Poland, the Czech Republic, Austria, Switzerland, France, Luxembourg, Belgium, the Netherlands, and Denmark. With a population of more than 80 million people, it has the largest European economy and is a founding member of the European Union. German is the official and most spoken language in both German and Austria. The country’s key imports are machinery and equipment, electrical products, vehicles, and mineral fuels. Other imports include pharmaceutical products, plastics, and optical, and photographic products.lxxviii Its capital is Berlin. The main business centers are Hamburg, North-Rhine Westphalia, Frankfurt, Stuttgart, and Munich, each with its own international airport connected by roads and railways. The German workforce is well qualified, motivated, and conscientious.lxxix

German culture prizes forward thinking and thorough planning, frowning on sudden, unplanned changes in business transactions. Germans manage time carefully respecting calendars, schedules, and agendas. Personal appearance is important to Germans regardless of their destination or position they hold. Meetings are taken seriously in Germany and discussions at these meetings may be detailed. In German business dealings, it is important to provide solid facts and examples supporting proposals, as Germans are competitive, ambitious negotiators. Make sure any printed material is available in both English and German, and submit printed material in both English and German. At business meetings always prepare and distribute minutes, information, etc., within 24 hours of your meeting.lxxx

Poland – a parliamentary republic with the sixth largest economy in the European Union, is situated in North Central Europe bordered by the Carpathian Mountains in the south and the Oder and Neisse rivers in the west next to Belarus, Czech Republic, Germany, Lithuania, Russia, Slovakia, and Ukraine. Factors making it favorable for investment include its 38.5 million inhabitants and labor force of 17.7 million, low labor costs, availability of educated staff, and the country’s political stability.lxxxi The government, with largely sound macroeconomic policies, has invested in infrastructure, education, and plans for other expansionary policies to spur long-term growth of 2.3%, progressive by EU standards. Since 2015, however, the government’s spending on social welfare programs has prompted a decrease in economic growth projections in the short term. GDP is projected to pick up in 2017 to 3.3% and stabilize around 3.2% over the medium term, driven by robust private consumption, a strong labor market, and an industrial structure dominated by low- and medium-tech manufacturing.lxxxii Promising import markets to Poland include machinery and transport equipment, intermediate manufactured goods, chemicals, minerals, fuels and lubricants for industrial retooling and for manufacturing inputs.lxxxiii

Although punctuality is valued in Poland, senior executives may arrive late for a business meeting to demonstrate the importance of their business status. Dress conservatively—dark suit, jacket, and tie for men and for women a suits with either slacks or a skirt. Greeting men should include a firm handshake and direct eye contact ; wait for women to extend their hand for a kiss as a sign of respect. Use professional titles in addressing your business counterpart. Initial meetings will likely be short, but as your relationship deepens discussions will be more detailed and may likely include dining at a local restaurant. Be prepared to support any proposal with actionable facts. Since Polish business structures are hierarchical, ensure you meet with a manager authorized to make a decision.lxxxiv

Northern Europe

The Kingdom of Denmark – in Northern Europe is a constitutional monarchy that consists of the Jutland Peninsula and in excess of 400 islands in the North Sea north of Germany. Its 5.7 million inhabitants with a labor force of 2.96 million reside mostly in urban areas. Given limited natural resources, Denmark depends on foreign trade for around 30% of its gross national product. The Danish economy, supported by a well-developed infrastructure, is one of Europe’s strongest with a surplus state budget, stable currency, low interest rates, and low inflation. The country can be further characterized as being politically and economically stable with a well-educated, highly productive workforce numbering 2.96 million.lxxxv In 2016, Denmark’s key imports consisted of machinery, miscellaneous manufactured goods, live animals, food, beverages, tobacco, chemicals, and transport equipment.lxxxvi Although the official language is Danish, English is spoken in many of the larger firms.

In business relationships, contracts may be made orally; however, a written contract is preferable. In business, Danes take punctuality for business meetings very seriously and expect that you will do likewise. Dress conservatively and polished, but don’t be shocked by occasional informality in business meetings. Be sure to schedule meetings well in advance. Handshakes are the accepted from of greeting; however, be sure to provide adequate personal space. Come well prepared to negotiate as the Danes are meticulous in analyzing information and proposals. Be factual and well organized in making any presentation. It is normal to discuss subjects thoroughly in order to reach an agreement. In individual meetings, a record should be kept of topics discussed. Ensure you acted on dated action items by the agreed-upon deadlines.lxxxvii

A parliamentary republic located in Northern Europe, Finland borders the Baltic Sea, the Gulf of Bothnia, and the Gulf of Finland and the countries of Norway, Sweden, and Russia. In 2017 the country’s highly educated inhabitants number 5.5 million, two-thirds of which reside in urban centers. Its capital and largest city is Helsinki; spoken languages are Finnish, Swedish, and Sami with English as the country’s unofficial second language. Finland welcomes foreign direct investment and has a business friendly, free-market economy with a developed infrastructure, highly industrialized manufacturing sector, and a skilled, cost-competitive workforce.lxxxviii Employers’ unions and worker trade unions negotiate the terms of employment in collective bargaining agreements. Finland’s major import requirements are food stuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, textile yarn, fabrics, and grains.lxxxix Finnish exports include telecommunications equipment; passenger cars; and forestry products, such as paper and paperboard.xc

The Finns are generally reserved in their behavior so respect their need for privacy and attempt to optimize the use of their time strictly adhering to schedules; thus be on time for any business meeting you arrange. Business attire is conservative, so dress accordingly. Business meetings are scheduled by e-mail, by formal notice for important occasions, and may require a detailed agenda. When greeting your business counterparts, shake hands briefly, but firmly. Only on the most formal occasions is a full bow of respect expected. Business discussion is often direct and factual. Verbal commitments are not taken lightly and are considered binding, even more so when followed by a handshake.xci

Sweden is a constitutional monarchy located on the Scandinavian Peninsula in Northern Europe bordered by the Baltic Sea, the Gulf of Bothnia, the Kattegat, Skagerrak, and Öresund straits, by Norway in the west and the north, and Finland in the east. The Swedish population numbers 9.9 million people (in 2017) largely residing in the southern part of the country; the capital and largest city is Stockholm; spoken language is Swedish with English spoken widely.xcii The Swedish parliament has legislative power and the government implements its decisions drawing up proposals for new laws and amendments.xciii Sweden’s import requirements include machinery , petroleum and petroleum products, chemicals, motor vehicles, iron, and steel; foodstuffs and clothing. Sweden has an export-oriented economy based largely on timber, hydropower, iron ore, telecommunications, automobiles, and pharmaceuticals.xciv

Punctuality is important to the Swedes in both business and social commitments, so ensure you arrive in sufficient time or provide your business counterpart advance notice of any delays. Although casual dress is acceptable in Sweden, conservative, fashionable dress is called for in business meetings, even something more upscale for evening engagements. Business meetings should be preceded with submission of an agenda that is adhered to. For a meeting, introduce yourself and members of your party, shake hands briefly with a firm grip and direct eye contact, both on arrival and at the meeting’s end. In face-to-face meetings, the Swedes are friendly and communicate openly in discussions; however, be well prepared when negotiating to provide lots of information for review and study. Also, realize any verbal commitments you extend must be backed by action.xcv Meeting minutes documenting required actions and deadlines should be prepared and circulated afterward.

Southeastern Europe

Italy, a Mediterranean peninsula country of South Central Europe, is bordered by the Adriatic Sea on the east coast, Mediterranean coast on the west, and the Ionian Sea to the south. Its northern borders are the countries of France, Switzerland, Austria, and Slovenia. Italy is a democratic republic divided into regions, provinces, and municipalities inhabited by approximately 60 million people. It operates on a system of civil law. Its economy is primarily based on the transformation of raw materials into finished products to satisfy domestic and foreign demand,xcvi specifically machinery and equipment, metals and metal products, textiles and clothing, food, beverages, and tobacco.xcvii Services represent about 75% of GDP and include commerce, transportation, communications, property rental, banking, and insurance. Manufacturing represents 24% of GDP and includes construction, textiles and apparel, chemicals, pharmaceuticals, non-metal minerals, and transportation vehicles with the remaining percentage in agriculture. The country’s level of economic development varies from region to region with high industrialization, good infrastructure, and a well-trained workforce in the north. The south is less blessed in its development. Its economy depends on large private companies, small business, and the public sector for its advancement. Italy’s imports are mostly fuel; metals and metal products; chemicals; transportation equipment; food, beverages, tobacco; textiles and clothing.xcviii

In face-to-face communications, Italians tend to gesture to emphasize their speech and maintain eye contact to demonstrate interest. English is the most used foreign language in addition to French and German. Usually, the first contact with an Italian business partner should be formal with written forms of communication preferred for a first approach. Dressing formally for your meetings will lend an air of importance to your business project. Establishing trust is equally important. Since business meetings will be more analysis oriented than decision based, be patient to enable your Italian partner to carefully evaluate both project risks and advantages.xcix

Occupying the southern end of the Balkan Peninsula, Greece and its many islands are bordered to the north by Bulgaria and the Former Yugoslav Republic of Macedonia, to the northwest by Albania, to the northeast by Turkey. Its maritime borders are to the west by the Ionian Sea; to the south by the Mediterranean Sea, and to the east by the Aegean Sea.c The country’s official language is Greek, while many young Greeks have widely adopted English as a second language; however, ask if an interpreter will be needed. The older generation speaks French and other popular languages include Spanish, Italian, and Chinese. Greece’s 2017 population is on the order of 10.9 million of which approximately 4 million constitute its workforce. It is well known that the Greek economy has encountered financial difficulty due to its public sector debt and trade deficit.ci Although these issues have affected employment since 2016, Greece’s economy is growing. Its labor market is another matter with unemployment in February 2017 at 23%, particularly high among young people at 48%.cii Greece’s main economic sectors are agriculture, construction, tourism, and shipping primarily located in the major cities of Athens, Piraeus, and Thessaloniki, where most of the country’s population resides. Services represents a growing sector of the Greek economy with the largest sectors being shipping and transportation, banking, insurance, tourism, trade; health care, education, communications, and professional services are currently the largest sectors. Greece’s main imports are mineral fuels, machinery, transport equipment, and chemicals. Others include food, live animals, manufactured goods, and miscellaneous products.ciii

Interpersonal relationships and family ties are of major importance in decisions. Family ties and friendships are deep and carry obligations. Punctuality is not a business characteristic of this culture, but ensure that you arrive as promised. Greetings can take many forms: a handshake, an embrace, or a kiss can all be encountered at first meetings or among friends and acquaintances but should include formal titles in your initial contact. They prefer face-to-face contacts over other means. Greeks are excellent negotiators, but to do business, one must be patient. Business is conducted by all modern means, but traditionally is often done over a cup of coffee or a working lunch or dinner in a restaurant. In negotiations, the most senior person will tend to dominate the discussion and the negotiation process.civ

East Europe/Eurasia

The Russian Federation or Russia stretches over Eastern Europe and Northern Asia. It is a federal, semi-presidential republic with a republic form of government that borders 14 countries including Norway, Finland, Estonia, Latvia, Lithuania, Poland, Belarus, Ukraine, Georgia, Azerbaijan, Kazakhstan, China, Mongolia, and North Korea. Russia also shares maritime borders with Japan by the Sea of Okhotsk, and the United States by the Bering Strait. Seventy-four percent of its 143 million inhabitants live in urban areas, a much greater percentage than the rural population in cities such as Moscow, Saint Petersburg, Novosibirsk, Nizhniy Novgorod , Yekaterinburg, Samara, Omsk, Kazan, Chelyabinsk, Rostov-on-Don, Ufa, Volgograd, Krasnoyarsk, Perm, and Voronez. Russia’s workforce, about 63% of the total population, is not highly paid, but well educated and qualified. Approximately 54% of the population works in trade and domestic service industries, manufacturing, and agriculture. Its official language is Russian and foreign languages are English and German.cv Russia’s main imports are machinery, equipment and transport, chemical products, foodstuffs, and agricultural products.cvi

In general, it can be said that Russian businesspeople attempt to avoid and evade complying with the country’s laws and regulations. In addition, whether or not the terms of business contracts are enforced and taxes are paid depends on close personal and political relationships and influence. Despite these concerns about doing business in Russia, Russia nevertheless has been identified as a high-growth, potential market, but doing business there must be done cautiously. In greeting business partners, a handshake on arrival or leaving is always appropriate and even better when your party uses at least a few phrases in Russian. What counts is the effort, even if your Russian is imperfect. Your team should dress smartly, but conservatively, wearing dark-colored clothing to enhance the team’s credibility. A business meeting may be convened more to obtain information than to debate the merits of a business proposal. Be patient and provide your business partners the opportunity to digest and confirm their understanding of your message as their level of English proficiency may be poor, if left unassisted. Should you be invited to dine, the event could lead to developing better relationships or a very detailed negotiation to finalize an agreement.cvii

The Republic of Turkey, a republican parliamentary democracy, is located in the region of Anatolia, lying partly in Europe and partly in Asia, sharing borders with Bulgaria, Greece, Georgia, Armenia, Iran, Azerbaijan, Iraq, and Syria. Based on the latest United Nations estimates, the population of Turkey is 80,426,601. This population practices the Muslim religion, mostly Sunni, and the country’s secular state guarantees freedom of work for non-Muslims. Turkish is the official language, but English is widely understood in the business community and tourist areas. Turkey normally has a booming economy with sustainable economic growth that slowed from 6.1% in 2015 to 2.1% in 2016, and an estimated 2.7% in 2017 as a result of a failed coup attempt that has lowered consumer and business confidence and tourism revenues. Despite these issues, Turkey is a first-class emerging market with state-of-the-art management, information technology, and marketing techniques. Major sectors that have attracted foreign capital include services such as those in the finance, telecommunications, and retail industries. Its key imports include machinery, chemicals, semi-finished goods, fuels, and transport equipment.cviii

When dealing with Turkish senior managers in most companies, use an interpreter as your business partner may not have shown an eagerness to learn a foreign language. To do business in Turkey you have to build on personal relationships and this may entail making several trips and completing smaller value transactions. It is best to approach first by phone and e-mail in the early stages, and then follow with direct communications. The Turks are rather experienced in working with foreign businesses. Foreign managers consider Turks flexible and practical. Turkish people are very traditional and formal when doing business. Therefore, scheduling appointments in advance is important. In initial business meetings, let your Turkish counterpart lead the discussion. Negotiations may take longer than usual as Turkish businesspeople do not like to be pressured or given deadlines. Any attempt to hurry the process will only produce negative results.cix

This sampling of European communities and their business cultures may help businesspeople bridge the gap between their own culture and their foreign target culture, while enabling them to participate in the transformation that Europe is undergoing now. It is a start down the road, though a much better understanding will be needed to interface with these European communities. Trade and travel will assist in that transformation along with European Union initiatives that promote free enterprise.

Doing Business with Middle Easterners

The Middle Eastcx is the region of lands situated chiefly in Western Asia, parts of North Africa and Southeastern Europe around the southern and eastern shores of the Mediterranean Sea extending from Morocco to the Arabian Peninsula. Its western border is defined by the Mediterranean Sea where Israel, Lebanon, and Syria lie opposite Greece and Italy in Europe. A common definition of the countries of the Middle East includes the states or territories of Cyprus, Syria, Lebanon, Iraq, Iran, Palestine, Israel, Palestine (the West Bank and the Gaza Strip), Jordan, Egypt, Sudan, Libya, Saudi Arabia, Kuwait, Yemen, Oman, Bahrain, Qatar, and the United Arab Emirates.

Economic growth in the Middle East is set to accelerate through 2018 following the bottoming out of oil prices in 2016.cxi For oil-exporting economies like Saudi Arabia, the recovery will be slow. Key risks to the outlook are a weaker-than-expected rise in oil prices and Middle East conflict-related spillovers. Challenges include diversifying away from oil; developing more dynamic private sectors; and harnessing the potential benefits of demographics. There is a world of opportunity for foreign businesspeople eager and willing to bring much needed economic diversification there.

Middle East Languages and Demographics

Languages commonly spoken in the Middle East can be categorized into four groups: Arabic, Arabic (Afro-Asiatic), Hebrew, Persian (Indo-European).cxii Arabic is the most widely spoken language being official in Algeria, Comoros, Djibouti, Iraq, Israel, Jordon, Kuwait, Libya, Lebanon, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Somalia, Sudan, the United Arab Emirates, and Yemen. English is spoken by the middle and upper classes and French is used in in Algeria, Egypt, Israel, Lebanon, Morocco, Syria, and Tunisia.

Shifts in the demography of the region directly impact critical issues that drive contemporary viewpoints and trends.cxiii The population of the Middle East is expected to continue its rapid growth in the foreseeable future, given some of the highest fertility rates that lead to projections of 1.1 billion by 2050.

Egypt– is a Middle Eastern republic with a socialist-democratic system of government geographically positioned in Northeastern Africa. Its natural boundaries are the Mediterranean Sea, Gulf of Suez, Gulf of Aqaba, and the Red Sea with land boundaries shared with Israel, Libya, Sudan, and the Gaza Strip.cxiv The country’s economy has suffered from instability, uncertainty, and stymied economic reforms from recent turmoil. Its government is working to reform its public finances and to enhance its business environment through investment and private-sector job creation.cxv Its economy is split between many nationalized businesses and companies that are either of Islamic or non-Islamic orientation. With a 2017 population of over 95 million, Egypt’s workforce, approximately 22 million, is experienced in the markets of its neighbors and has a good mix of unskilled, semi-skilled, skilled, and highly qualified labor that is an excellent source of productive, inexpensive labor.cxvi Egypt primarily imports mineral and chemical products, agricultural products, livestock, and foodstuff—mainly wheat, maize, and meat, machinery and electrical equipment, and base metals. Other imports include raw hides, wood, paper-making products, textiles and footwear, artificial resins, rubber, vehicles, and aircraft.cxvii

In addressing others, be sure to use their titles as this formality is important both in business and government circles. Before negotiating determine whether the company your business partner represents is either state owned or private; Islamic or secular in its approach. Personal relationships are the key to a successful meeting and good quality relationships can help to cut through the tendency toward an overly bureaucratic approach to doing business. Initial meetings supporting development of a business relationship involve coffee, cake, and lots of small talk. Don’t feel your personal space has been invaded when Egyptian businesspeople stand quite closer when communicating with you. Appropriate dress in Egypt is both conservative and modest. Egyptians pride themselves on their sense of hospitality and you can expect to be well looked after during any trip to visit business contacts in the country.cxviii

Saudi Arabia is a monarchy in the Middle East that occupies the north and central Arabian Peninsula. Saudi Arabia is bounded by eight countries— Bahrain, Jordan, Iraq, United Arab Emirates, Kuwait, Qatar, Oman, the Republic of Yemen—and three bodies of water—the Red Sea and the Gulf of Aqaba and the Persian Gulf.cxix Less than 1% of the country’s total area is suitable for farming so the country relies heavily on importing mineral and chemical products, agricultural products, livestock, and foodstuff—mainly wheat, maize, and meat), machinery, electrical equipment, base metals). Other imports comprise raw hides, wood, paper-making products, textiles, footwear, artificial resins, rubber, vehicles, and aircraft.cxx The kingdom’s economy relies on oil production, which accounts for nearly all its revenue and exports every year. Its economy in the first quarter of 2017 has contracted with the implementation of a December 2016 Organization of the Petroleum Exporting Countries (OPEC) agreement to limit oil production to bolster falling oil prices. Politically a new crown prince, destined to be in line for the throne, is expected to implement a reform agenda. Economists expect a 0.2% growth this before the economy accelerates to 2% growth in 2018.cxxi The country’s 2017 population is approximately 32.8 million with over 2 million illegal immigrants. Its 2017 workforce numbers 12.2 million, about 80% of which is not national (2015 est.).cxxii

When doing business in Saudi Arabia, realize the influence of Islam in the culture. In greeting a business partner, it is best to follow the lead of your counterpart. Men shake hands with men; for a businesswoman, wait for a man to offer his hand. There are several styles of greetings used; it is best to wait for your counterpart to initiate the greeting. A more traditional greeting between men involves grasping each other’s right hand, placing the left hand on the other’s right shoulder and exchanging kisses on each cheek. When meeting you will likely meet several others in a room enabling these Saudis to get to know you. Your ability to interact will determine their opinion of you. Visitors to Saudi are expected to dress in a conservative, smart fashion, a vital part of building a relationship.cxxiii When negotiating, don’t expect discussion topics to follow a sequence according to Western approaches. There will be bargaining and haggling. Remain calm and focused.cxxiv

Doing Business with Africans

Fifty-four individual recognized sovereign states and countries, 9 territories, and 2 de facto independent states are located in the continent of Africa, the second largest continent of the planet comprising an area of 11,730,000 square miles measuring 5,000 miles from north to south and about 4,600 miles from east to west. Its estimated population of 1,246,504,865 as of March 2017 accounts for just over 16.6% of the world’s human population making it the second most populous continent behind Asia.cxxv Its wildlife and climate terrains are wide ranging. It is also rich in minerals such as gold, uranium, diamonds, platinum, and chromium.cxxvi

According to the World Bank,cxxvii economic growth in Sub-Saharan Africa has decelerated with South Africa and oil exporters accounting for most of the slowdown while agricultural exporters and commodity importers remain generally robust. However, economic growth there is forecast to rebound to 2.9 percent in 2017 and rise above 3.5 percent by 2018, as policies in oil-exporting countries continue to adjust. Over time, global business professionals, in addition to humanitarians and tourists visiting this region, will recognize the growth opportunities there and enable Sub-Saharan countries to realize Africa’s bounty for Africans and their own firms.

African Languages and Demographics

There are 1500 different languages spoken in Africa; however, the principle languages include Arabic, French, and English. African languages can be categorized into four groups: Afro-Asiatic spoken in Northern Africa, Central Sahara, and the Horn of Africa; Nilo-Saharan spoken in Central and Eastern Africa; Niger-Congo spoken in Central, Southern, and Eastern Africa; and Khoisan, spoken in the western part of Southern Africa. The following 10 African languages are used to do business on the continent:

  • Swahili

  • Amharic

  • Yoruba

  • Oromo

  • Hausa

  • Igbo

  • Zulu

  • Shona

  • Portuguese

  • French

Other languages widely spoken in Africa include Berber, Somali, Fulani, Rundi, Kinyarwanda, Tigrinya, Chichewa, and Spanish.

In most African countries, the population growth is in excess of 2% every year. Forty-one percent of the African population is reported as being under the age of 15. Life expectancy is less than 50 years of age in many nations, averaging the age of 52 across the entire continent. It is nearly impossible to identify all of Africa’s demographic components. Over the last 40 years, the continent’s population has grown rapidly and can be characterized as being fairly young, with more than half inhabitants under the age of 25 years in some countries.cxxviii

West Africa

The Republic of Cote d’Ivoire , also known as the Ivory Coast, occupies approximately 124,500 square miles located in Western Africa bordering the North Atlantic Ocean neighboring Liberia and Ghana. Its geography contains a coastal strip in the south, interior dense forests, and northern grasslands. Its official language is French with over 60 varieties of native languages of which Dioula is the most widely spoken. Executives in large businesses may speak English. Its 23.7 million inhabitants practice Islam, Christianity, and several other native religions. This population lives at or below the national poverty line; however, those living in the country’s southern region earn more than their northern counterparts. The country’s primary imports are fuel, rice, machinery, and pharmaceuticals. Cote d’Ivoire is the major producer of cocoa and exports crude oil, coffee, palm oil, timber, cotton, fish, and gold.cxxix Despite government attempts to diversity, the country’s economy depends on agriculture and is affected by fluctuating commodity prices and weather conditions. Despite these dependencies and recovery from recent political instability, Cote d’Ivoire is regarded as a “Market of the Future” for the opportunity it offers global consumer goods companies with a projected nominal consumer goods growth rate of 9–10% in the coming five years with strong demand for apparel, consumer electronics, and appliances. The country’s currency, the CFA franc, is pegged to the euro and it is guaranteed by the French treasury; thus there is no currency risk for Eurozone members. Corruption has been an issue in the past and the country’s governance has room for improvement.cxxx

In doing business, realize the people of Cote d’Ivoire are relaxed and polite, greeting each other with inquiries about one’s health, family, and work. Men greet each other with a handshake on arrival and departure, while women greet each other with a kiss three times on the cheek, alternating sides. Eye contact, especially staring, is customarily avoided. It is customary to exchange gifts, especially to those respected in the community.cxxxi Although the country’s Civil Code protects intellectual property rights, its enforcement is lacking, which permits trade in counterfeit goods. Apply for patent protection before doing business in Côte d’Ivoire.cxxxii

West Central Africa

The Federal Republic of Nigeria can be found southeast of West Africa sharing land borders with Benin, Cameroon, Chad, and Niger with ocean borders with Equatorial Guinea, Ghana, and São Tomé and Príncipe. Its land mass encompasses some 351,649 square miles. Its primary rivers are the Niger from which the country derives its name; and the Benue, the main tributary of the Niger. The country is inhabited by a population of some 192 million people. Although its official language is English, some 250 additional languages are spoken there. Its capital city is Abuja, while Lagos, the former capital remains the country’s primary port and economic hub. The country’s legal system mixes English common law, Islamic, and traditional law.cxxxiii Nigeria’s economy, both mixed and emergent, includes manufacturing, financial, service, communications, technology, and entertainment sectors that produce goods and services for West Africa. The country’s key imports include industrial supplies, capital goods, food and beverages, fuel, lubricants, transport equipment and parts, and consumer goods. Exports of oil and natural gas are the primary drivers of Nigeria’s economic growth and the government prioritizes diversification via infrastructure development, agricultural production, and manufacturing for export.cxxxiv With political stability, strife in the region and extensive corruption, doing business in Nigeria has been viewed with suspicion despite its rich human, natural, and business resources.

On arriving in the country, make arrangements to be picked up by your own contacts or a company representative as personal safety is paramount and appointments should be prearranged. Relationships are all important in Nigeria. Dress conservatively, but to impress, to convey your personal importance. This also means having lightweight, comfortable, dark-colored clothing and an umbrella to protect yourself from frequent rainstorms. Business meetings may begin late, but do be punctual and be prepared for a delayed start. Establishing a strong relationship with your business partners requires a lot of social interaction; thus discussion will be both personal with questions about hobbies, family, and outside interests. Business entertainment will likely be called for after establishing trusted contacts, but aside from the best hotels, sufficient, but not excessive cash will be required to entertain well.cxxxv

North Africa

The Kingdom of Morocco, the country located on the northwestern corner of Africa, is bordered by the Atlantic Ocean in the west, by the Mediterranean Sea in the north, by Mauritania and Algeria, to the south and east.cxxxvi It shares small borders with Spain and maritime borders with Portugal. The country has a 2017 population of 35.2 million; capital city is Rabat, largest city is Casablanca. The government is parliamentary constitutional monarchy with a prime minister supported by a bicameral parliament consisting of a Chamber of Representatives and a Chamber of Advisors. Given its central location, it supports a variety of business activities, such as warehousing and redistribution among others and IT services reach around the globe to the EU, the Middle East, and Eastern Europe. The trade agreements it has established support tariff-free trading in major markets throughout these regions.cxxxvii Morocco’s key imports include crude petroleum, textile fabric, telecommunications equipment, wheat, gas and electricity, transistors, plastics. Its industries export phosphates, textiles, electric components, inorganic chemicals, transistors, citrus fruits, vegetables, and fish.cxxxviii

As a foreign businessperson, you will expend time and effort developing any business relationship with Moroccans. Business cards should be translated into Arabic or French. Your business meetings will be formal and emphasize the courtesy of advance notice and confirmation. Be sure to avoid scheduling meetings during the season of Ramadan or on Fridays between the hours of 11:15 a.m. and 3:00 p.m. so as to avoid conflict with Islamic prayer. Making a strong impression with conservative dress is key. It is only after much discussion and an established long-term business relationship that Moroccans will establish any business agreement. Government oversight will include several ministerial departments should government approval be required.cxxxix

East Africa

Kenya– is an East African country that borders the Indian Ocean to the southeast, Somalia to the northeast, Ethiopia to the north, Sudan to the northwest, Uganda to the west and Tanzania to the south. The country straddles the equator with a square mileage of some 224,961 miles. As of 2017 Kenya has a population of 48.5 million people. Swahili and English are its official languages, though numerous other languages, mainly Kikuyu and Luhya, are spoken. Its national capital is Nairobi and chief port is Mombasa.cxl The country’s economic mainstay is agriculture supported by the main crops of corn, millet, sweet potatoes, and various fruits. The main industries are small-scale production of consumer goods like tea, textiles, coffee, tobacco, food processing, iron and steel products, petroleum products, and cement. Its primary imports consist of imports mostly machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastic. Tourism is also important to its economy.cxli The government has established Special Economic Zones, Industrial Parks, and industrial clusters to promote small- and medium-scale manufacturing, development of niche products, and commercialization of its research and development activitiescxlii enabling Kenya to exceed the average growth of 1.4% for Sub-Saharan countries, with a growth rate of 6% expected in 2017. Unfortunately, business-government corruption remains a problem so companies will encounter demands for bribes and informal payments. Conceding to these demands is contrary to the U.S. Foreign Corrupt Practices Act. China has targeted Kenya for counterfeited goods that include medicines, automotive parts, electronics, alcoholic beverages, cigarettes, music, and videos. Border enforcement is poor given a lack of resources and other challenges necessitating patent and trademark registration as protection of intellectual property.cxliii

In business meetings, corporate dress code is formal, but not required. You can rely on Kenya’s business community to speak English. Punctuality there is valued and you can anticipate discussing proposal and project issues in detail. In dealing with the government, your Kenyan business partners will be helpful with overcoming bureaucratic hurdles.cxliv

Southern Africa

South Africa– is the southernmost country on the African continent encompassing 472,000 square miles. It is bordered by the Atlantic Ocean on the west, the Indian Ocean on the south and east. Namibia, Botswana, and Zimbabwe lie along its northern border from east to west; Mozambique and Swaziland border South Africa to the northeast. Three cities, Pretoria (executive), Cape Town (legislative), and Bloemfontein (judicial) serve as capitals. Important commercial, industrial, and cultural centers are Johannesburg, Durban, East London, and Port Elizabeth. Its inhabitants number 1.25 million. The government recognizes 11 official languages that include English spoken with a heavy South African accent. South Africa, the most sophisticated free-market economy on the African continent, moved into recession during the first quarter of 2017 with a decrease of 0.7% in GDP with trade falling nearly 6% and manufacturing by 3.7%. Positive growth in agriculture and mining industries was insufficient to avert the economy’s slipping into recession.cxlv With a strong industrial base and sophisticated financial sector, South Africa typically exports mineral products, precious metals, vehicles, and aircraft vessels, iron and steel products, machinery, and chemicals and requires machinery, mineral products, vehicles and aircraft vessels, chemicals, vehicle parts, and iron and steel products as imports.cxlvi

Before conducting business in South Africa become well versed in the country’s politics and economics. As in many countries, you will need to invest time and effort to establish business relationships. Dress conservatively, but with style, for your business meetings. Scheduling a business meeting in South Africa is best accomplished by initially using datafax followed by a confirming telephone call or e-mail message. Be sure to be on time as the South African business partners appreciate punctuality. Greet others with a firm handshake and maintain eye contact. Exchange business cards only at request. Should you dine at a business partner’s home, be sure to bring South African wine, chocolates, or flowers for the hostess.cxlvii

In summary, this global business cultural tour points out the importance of acquainting oneself and one’s firm with the business culture of the customer and its business community. Too often we fail to recognize the need to “unload” or take our own culture baggage into account and acquaint ourselves with the people of “new and different cultures and lands.” Hopefully, this global tour has awakened business owners, executives, and key decision makers like you to take advantage of the opportunities these markets offer and has increased your confidence that with an increased understanding of these cultures, growing global markets is achievable and worthwhile.

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