Good morning What is it like doing business in the Middle East these days? The Strait of Hormuz is permanently closed again Peace agreement between the USA and Iran remains elusiveand global airline profits have been halved this year, according to IATAblaming high fuel costs and war-related disruptions in the Middle East. Visitor arrivals in the region decreased by 14% in the first quarter. You could be forgiven for thinking things are looking dire.
But that’s not the case, argues Johannes Hummer, the Dubai-based CEO of Freedom Telecom International, an arm of Freedom Telecom International Freedom Holding Corp.that helps telecom operators embed fintech services into their platforms, especially in emerging markets. He has worked in the region for more than a decade and previously led Vodafone’s Middle East and Africa business. His message to Western leaders watching from afar: The companies emerging now are the ones that deserve the next chapter of Gulf growth.
Hummer points out that while the United Arab Emirates reported 13 deaths as a result of drone strikes early on, no deaths have been reported since the end of March. He says local businesses are taking advantage of the war-related downturn to improve their operations and infrastructure. “Hotels are closing to innovate, doing long-overdue maintenance and preparing for the fall when the season starts again,” he told me recently, referring to the government’s rollout of a series of measuresnew infrastructure projectsto. “Traffic got out of control because there were too many people coming and the infrastructure couldn’t keep up. Now they’re focused on getting it right.”
Additionally, he notes that companies like Revolut and Nubank have recently moved their headquarters to Dubai. Hummer argues that not only is the US a good base for finding multicultural talent and expanding into Asia or Africa, but also that it lags behind the UAE when it comes to digitalization. “I have all my stuff in one app – renewing my car license, insurance, bills, electricity, visas. If your car needs to be renewed, you can do everything in two minutes,” he said.
Every country expects companies to establish a physical presence to develop their market. As Hummer puts it, “If you come now, you are giving a very strong signal of commitment.” To better understand the perspectives and players in this changing business climate, subscribe to our new newsletter Assets Golf letter Newsletter written by an experienced journalist Melissa Hancock and published by London Kamal Ahmed.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
Top leadership news
SpaceX-Tesla merger?
The mathematics that governs a possible union has improved significantly. SpaceX shares have soared to such heavenly heights that the company can now buy Tesla by offering far fewer shares than would have been necessary if the valuation had settled at pre-trade levels. This scenario makes it easier to solve a pressing problem plaguing the Musk empire: how to save Tesla.
Richer but leaner
The top-selling US companies are getting richer but leaner. The companies continue the latest Fortune 500 report Total revenue was $21 trillion, profits increased by 12%, and market value increased by 19%. At the same time, the total workforce fell by 1% for the second year in a row, and AI-powered productivity improvements are only part of the story.
A new trade war is brewing
There is growing concern among European leaders about the flood of Chinese exports threatening their domestic industries Your Answer could resemble something from President Donald Trump’s trade war. French President Emmanuel Macron has proposed “the European equivalent of Section 301,” referring to the part of the 1974 trade law that allows the U.S. to impose tariffs in response to unfair or discriminatory trade practices.
The markets
S&P 500 Futures are down 0.12% this morning. The last session closed with a gain of 1.08%. The STOXX Europe 600 fell 0.13% in early trading. The British FTSE 100 fell 0.04% in early trading. Japan’s Nikkei 225 rose 1.55%. South Korea’s KOSPI Was up 0.69% today. China’s CSI 300 rose by 2.39%. Hong Kong’s Hang Seng fell by 0.65%. India’s NIFTY 50 rose 0.51%. Bitcoin was $64,000.
Around the water cooler
Their “protein maxxing” leads to whey shortages, driving up prices and forcing snack makers to cut costs or worsen recipes by Sasha Rogelberg
If you’re surprised at how well the stock market is doing, Jamie Dimon is too – he says a “small tsunami” is heading to the economy by Eleanor Pringle
World Cup teams receive a record $871 million: each team receives $12.5 million as a bare minimum for game and “preparation” funds by Emma Burleigh
CEO Daily is curated and edited by Joseph Abrams, Jason Ma, Claire Zillman and Lee Clifford.