The head of GE’s Middle East operations says he expects delays in the decision making and execution of significant infrastructure projects in Iraq as civil unrest in the country grows.
Nabil Habayeb, the president and CEO of the global manufacturing giant’s Middle East, North Africa and Turkey (MENAT) region, said the security of GE’s staff was its key focus.
“What’s happening in Iraq concerns us first of all from the security of our people and this is our primary focus now,” he told Arabian Business in a wide-ranging interview. “There is huge potential in Iraq – it needs everything from monetising the oil and gas to power generation, to the healthcare, to the transportation system and we have been working on a lot of these projects and we continue to support our customers now.
“The impact is going to be a delay in some of the decision making for some of the big projects, a delay in the execution because of the security situation and I think the biggest concern also is the confidence level that the financial institutions will have in investing in Iraq.”
Habayeb said in 2012 that the potential following the Arab Spring uprisings was akin to another Saudi Arabia and could reap between $6bn to $10bn in revenue for GE.
Asked if this had eventuated he said: “Whatever Government comes in place after the Arab Spring their focus was how can I respond quickly to people’s needs, building infrastructure, responding quickly to improving the lives of the people – that’s what people want to see, so that created a lot of opportunity from our point of view. Iraq, or any other place, where security of the people plays into the decision making, that slows down. The Arab Spring security was manageable, but when you have a civil war… it delays the timing of that opportunity.”
Revenue in the MENAT region grew by 11 percent for GE last year to $10bn, accounting for 6.85 percent of GE’s $146bn global turnover, while GE’s regional order book has almost doubled that with a 23 percent increase to $12bn in 2013, more than 10 percent of the global total.
Since taking on his current role in 2004, the region has grown from a turnover of $1.5bn to last year’s figure, with staff numbers increasing almost four-fold from 1,200 to more than 4,200 people.
Habayeb said the region now accounted for almost 35 percent of GE’s $181bn industrial backlog globally and while by no means the biggest market (it is the second-smallest after the Americas) it is one of the fastest-growing along with Russia. He expected “double-digit” growth again this year.
“In the fourth quarter of last year, this region was bigger than Europe,” he said. “So while you see the numbers in total, this is still the largest region outside the United States after Europe.”