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What is going to be the main business and economic issue that shapes 2008?
by ArabianBusiness.com staff writer on Monday, 17 December 2007
Each week Arabian Business invites you to have your say on a popular issue.
USER COMMENTS (3 COMMENTS)
TALENT-SCARCITY AND INFLATION: ISSUES FOR 2008
Posted by RAJENDRA ANEJA, DUBAI, UAE on 26 December 2007 at 15:23 UAE time
The key business issues in 2008, for the Gulf countries are a) sourcing world-class talent, and b) management of inflation.
Due to shortsighted, limited time scale policies, Gulf companies have neglected management development, training at all levels. Hence, many managers have been doing the same jobs for decades, without any professional or personal development. The inequities in salary structures are further damaging the reputation of the Gulf countries.
The second issue that will plague businesses in the Gulf, is the management of inflation, currently raging at 15-25%, depending on the basket of products. Gulf countries will also have to be mature and manage their own fiscal and monetary economies, instead of just pegging their currencies the US dollar, and hoping that the momentum of the USA economic ship will steer them to economic prosperity. A facet, which I have found confounding, is that many Gulf countries, have a venomous hate of the USA, yet peg their own currencies, hence their economic fates, to the US dollar!
If the Gulf countries need to comprehend the draconian impacts of hyperinflation, they need to study some of the Latin American economies like Argentina, Brazil etc. The joke in Argentina was, that when you go to a restaurant, please pay the bill, as soon as you order the food, otherwise, the prices will shoot up by about 100%, between the time you order the food and leave the restaurant after dining!!
The 20% increase in salaries given to government employees in UAE in February, 2007, followed by a 70% increase in November 2007, i.e. 120% compounded in a year, is unprecedented. However salary increase alone, will not contain inflation. They will assuage the public mood and provide some relief. Salary increases, are, purely a band-aid remedy. The economy has to be managed at the macro level, to nip the menace of inflation in the bud, before it strangulates the middle class and the economically weak.
What is required is a multi-functional committee, composed of Government, public and private sectors, to deliberate and action immediately, how to control the menace of inflation, immediately. Decisions would have to be made about regulating the supply and demand of each sector i.e. essential commodities, raw materials, prices of services like freight, banking etc. Gulf countries cannot take the stand, that these prices are a function of market supply, since the local currencies are pegged to the dollar; otherwise local currencies should also be subject to a free float vis-à-vis the dollar!
Posted by RAJENDRA ANEJA, DUBAI, UAE on 26 December 2007 at 15:23 UAE time
The key business issues in 2008, for the Gulf countries are a) sourcing world-class talent, and b) management of inflation.
Due to shortsighted, limited time scale policies, Gulf companies have neglected management development, training at all levels. Hence, many managers have been doing the same jobs for decades, without any professional or personal development. The inequities in salary structures are further damaging the reputation of the Gulf countries.
The second issue that will plague businesses in the Gulf, is the management of inflation, currently raging at 15-25%, depending on the basket of products. Gulf countries will also have to be mature and manage their own fiscal and monetary economies, instead of just pegging their currencies the US dollar, and hoping that the momentum of the USA economic ship will steer them to economic prosperity. A facet, which I have found confounding, is that many Gulf countries, have a venomous hate of the USA, yet peg their own currencies, hence their economic fates, to the US dollar!
If the Gulf countries need to comprehend the draconian impacts of hyperinflation, they need to study some of the Latin American economies like Argentina, Brazil etc. The joke in Argentina was, that when you go to a restaurant, please pay the bill, as soon as you order the food, otherwise, the prices will shoot up by about 100%, between the time you order the food and leave the restaurant after dining!!
The 20% increase in salaries given to government employees in UAE in February, 2007, followed by a 70% increase in November 2007, i.e. 120% compounded in a year, is unprecedented. However salary increase alone, will not contain inflation. They will assuage the public mood and provide some relief. Salary increases, are, purely a band-aid remedy. The economy has to be managed at the macro level, to nip the menace of inflation in the bud, before it strangulates the middle class and the economically weak.
What is required is a multi-functional committee, composed of Government, public and private sectors, to deliberate and action immediately, how to control the menace of inflation, immediately. Decisions would have to be made about regulating the supply and demand of each sector i.e. essential commodities, raw materials, prices of services like freight, banking etc. Gulf countries cannot take the stand, that these prices are a function of market supply, since the local currencies are pegged to the dollar; otherwise local currencies should also be subject to a free float vis-à-vis the dollar!
Business and Economic Issue
Posted by sav, Goa, India on 21 December 2007 at 10:57 UAE time
With rapid growth and competition, retaining customers will be a major issue. Companies will have to come out with innovative ideas. Soft skills and professionalism will play important roles in any business.
We should not forget the rule of nature that anything that grows faster dies earlier.
Posted by sav, Goa, India on 21 December 2007 at 10:57 UAE time
With rapid growth and competition, retaining customers will be a major issue. Companies will have to come out with innovative ideas. Soft skills and professionalism will play important roles in any business.
We should not forget the rule of nature that anything that grows faster dies earlier.
main business Issue for 2008 is recruitment & staff
Posted by Nicola Gregson, Dubai, United Arab Emirates on 20 December 2007 at 13:19 UAE time
The biggest barrier to expanding and offering excellent service in business is that you are only as good as the staff you employ. Here in the region, very good staff are hard to find, and when you do, they need to be snapped up, which then falsely inflates the market as the 'average' person thinks they are worth far more than they really are and the transient employment market continues to spiral out of control.
Posted by Nicola Gregson, Dubai, United Arab Emirates on 20 December 2007 at 13:19 UAE time
The biggest barrier to expanding and offering excellent service in business is that you are only as good as the staff you employ. Here in the region, very good staff are hard to find, and when you do, they need to be snapped up, which then falsely inflates the market as the 'average' person thinks they are worth far more than they really are and the transient employment market continues to spiral out of control.
