View from the Top: Gerard Gallagher, EY

Gerard Gallagher, Managing Partner for EY Advisory Services in the Middle East and North Africa, speaks to the MCA about the consulting industry in his region, including the impact of the financial crisis and the Arab Spring.

How has the financial crisis affected the Middle East?

From a financial perspective the crisis has had a minimal impact on Middle East domestic business because of their own wealth and reserves. However, there has been a knock in confidence from the international market causing a slowdown in activity around hubs like Dubai or Abu Dhabi in particular in the area of Real Estate. Other hubs like Qatar and Riyadh have got so much infrastructure momentum around them that it didn’t really knock the growth of the region.

Overall I’d say that confidence is coming back dramatically and the volume of activity here is just tremendous.


How has the Arab Spring affected the Middle East?

The Middle East essentially is very asset rich with oil and gas reserves and the real challenge is to try and turn that into revenue and sustainable income in a finite window of time.

The Arab Spring really has come from the disparity of the wealth in the region. Many Arabs are still very poor. We see variations of that around the regions; Libya and Egypt are up and down, still not sustainable. Syria is a different scale, more of an international situation than the Arab Spring.

If you look at the Syria situation it is notable how business stopped and slowed down during the period when the Americans were threatening to bomb. The political upheaval will increase and decrease with intensity but it is business as usual. Recent positive momentum about sanctions in Iran could open up one of the biggest markets for consultant support in any of the emerging markets.


How do you feel the Middle East compares to other emerging markets?

I feel the Middle East is the one that has come through the hype of the emerging markets and is actually the one that continues to grow the fastest, certainly in consulting. It has really come on in its maturity and is now quite a sophisticated industry.

'The economic momentum in the region is just increasing every day. Last night Dubai was announced as the winner of Expo 2020. Competing with global heavyweights from Brasil, Russia and Turkey. Dubai alone has earmarked an additional $8bn for physical infrastructure and many more $bns for the social and eGovernment infrastructure agenda.
Dubai's economy alone is expected to have a boost of an additional $23bn as a result of Expo, creating 270,000 more jobs as we welcome 100 million additional visitors to the city.
This is the first time a city in the region has won this event and it is another example of the region stepping up to become a global player. Alf Mabrook Ya Dubai!!


Where is the investment coming from?

There is quite a lot of international investment but everything is essentially funded or supported by the government in one way or another with regards to the indigenous companies and organisations.

Doing business is different, the Middle East is based much more on relationships and trust. From this I understand why western organisations sometimes struggle to do business successfully because they are trying to apply the left to right logic, process and controls. Although it could seem a little bit erratic in the Middle East, within this flexibility there is actually a strong set of values, hierarchies and processes that work, you just have to navigate them.


In the past certain countries in the region have had strong British ties and look at British expertise as a standard of quality. Do you feel this is still true?

Yes it is true, particularly in countries like Oman, Saudi Arabia, UAE, Kuwait and Jordan where there is definitely a premium on British and European consulting. These are places where the British have a significant influence but the Americans, Canadians and Indians are also investing in the sector. Healthcare is mostly Canadian, Americans centre on Oil and Gas, Power & Utilities (especially in Saudi Arabia). The British focus is financial services and industries like aerospace, defence and security which are all significant. Around cybercrime and cyber defence we are very well respected. It is very competitive and I feel that organisations are now placing their best talent they have in the region- this was not historically the case. If you want to win across all sectors you need to think carefully about which global resources support which area.


Does Britain’s foreign policy affect its influence?

It does affect it. For example the vote on-going to war with Syria was covered considerably in the Middle East and was hailed as a very mature decision by the British Parliament. That had a significant positive influence in the region. I think foreign policy really does have a significant impact on how the regions do business with companies from certain countries.


What do you think is key to sustaining a presence in the Middle East?

Patience and courage is important. It is very easy to look at CNN and think it is tough in there. In reality it is a long way from what Western TV covers. Actually in the region its business as usual; businesses here have got used to dealing with change.

Adding to the communities you work with locally is key. You need to be seen to help and support their local economies.

Building relationships is also important. If you are looking for a quick buck the Middle East is definitely the wrong place to be. Relationships run deep and memories are long so loyalty is important. My own business is the oldest in the region and has been here for over 90 years with our first office in Damascus, Syria. This legacy really helps us in the region.


What are the differences from perception and reality in terms of the political situation?

It’s disproportionate. What you observe in the press from the UK is amplified; people here just get their heads down and get on with it.

I have been amazed about how welcoming the people are. I really do feel like a global citizen when I work in the region, it seems like everyone in the world is here at the moment. As a society it is very diverse and most people rub well together, I don’t think you get to see that side much in the press in the UK. From a distance it looks complicated but in the region it feels normal and it is the most international environment I have ever worked in- good for challenging those preconceived ideas of the region


How is the Middle East tackling technology?

The technology is very impressive; I have been blown away at how much is electronic and mobile.

The UK has a lot to learn from the Middle East. Because their scale of growth and technology development is recent I think they actually skipped ahead of some of the legacy issues we have in the UK. For example, post doesn’t really exist in the way we recognise it in the UK. I think they are ahead already with some of the infrastructure as they started with a blank canvas. The number of eGovernment initiatives in the region makes the UK feel like it is still in the dark ages.

Social media is a huge thing. I am impressed about how sophisticated and global our staff is. There is some really high quality talent in the Middle East.

The knowledge economy and R&D is immature. We recognise and are investing in it; media and TV hubs being set up in the master plans for the major cities. It’s probably not going fast enough but this is where consultants have an opportunity to drive innovation.


How does the working day differ from the UK?

The working day starts earlier and finishes later because of the time zones, having calls with the Far East to UK and the Americas.

For our consultants we operate regionally, so we have hubs where people live so they would expect to fly to a client site across the region. Lunch tends to be more social; you may meet a client for lunch for two hours but you would cover a lot of business. In essence people will go home around 6pm but because of the weather people spend more time out doors with their family. The population tends to be very young – the average of our employees is around 29 – so it is a young dynamic population, who can expect to work long hours, travel and be rewarded very well

The quality of life away from work from a personal perspective is far better than I experienced in the UK. The weather and cultural diversity make living and working in the region a real pleasure.