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Retooling Strategies to Help Dubai Retain its ‘Sizzle’
29 March 2009
BGR Group Managing Director Morris Reid says companies in the Gulf should change their approach and pursue business with smaller US companies
Morris Reid loves his cigar and is a self-confessed watch and cuff-links freak. A big man, when he is not jumping in and out of trans-continental flights to push what he calls commercial diplomacy, Reid can often be found on US television networks commenting on political and economic issues.
As Managing Director of the BGR Group, a large US lobbying firm, Reid mostly works with a full plate — at conferences, seminars, meetings and, as I learned, at lunches too. He worked earlier with the Clinton administration, following which he ran his own public affairs company for several years until it merged with BGR around the time the United States was electing a new president, at the end of last year.
Lobbying, for Reid, is a necessity in the world’s biggest economy. “I think the Catholic Church has a lobbyist too,” he says, tucking into his green salad on a fine March afternoon at the Capital Club (Reid was in town for the CONNECT-World CEO Conference). His mother strictly enforced a vegetables-first policy on the dining table, he tells me, adding that while lobbyists could be found everywhere in the world, the system has been formalised in the United States.
“Lobbying has been around since governments were created. There will always be a situation where people have interests that need to be represented and advocated for. Again, in the world’s biggest economy, there are certain winners and losers, and you certainly want to be able to advocate your position,” Reid tells me, defending lobbyists and power brokers while expanding on his definition of commercial diplomacy.
Reid calls himself a pro-business Democrat and tells me that, in a world that has changed hugely since Barack Obama took over the US presidency in January, he is seeking opportunities to bring together small and medium-sized businesses — the backbone of the US economy — with similar-sized firms in the Gulf region.
“I see my role as a facilitator of business-to-business, business-to-government and government-to-government interaction, but at the end of the day politicians cannot be the only solution. I see my role as being a conduit of bringing parties together from the Gulf and in America to do business,” he tells me.
Deals are important to a man who has worked with high-profile individuals, government officials and corporate executives in solving political and corporate issues for more than 15 years. His best deal, he says, is always the one he’s working on at the moment. “The deals I remember and reflect upon the most are those that had major economic impact and also serve a larger agenda,” he explains, while quickly asking questions about the impact of the global economic downturn on Dubai and the United Arab Emirates.
The world has changed in the past few months, perhaps forever. Uncertainty and a financial collapse have forced most governments to intervene in markets and companies, doling out money to the needy and nearly nationalising private companies. Big government is everywhere, watching, questioning, demanding, and interfering. Is socialism (that dreaded word) taking roots in capitalistic societies, I ask Reid.
“The answer is yes, but a government has to always act in an appropriate way. When the very stability of the global markets is hanging in the balance, the government must step in. And that is what they are doing,” Reid says, adding that a government must also know when to stop.
Is that always possible? “No,” he says. “It is the people who have to be vigilant and make sure the government does not over-step. One thing we always say is that it is hard to get it back once you give it up. That is a real concern now.”
However, the new administration has taken care of the one big concern he had in the past about America’s global image. “It is a whole new game… America is ready to re-engage the world. The good news is that with President Barack Obama, America is a welcoming society again. By and large, people, particularly from this region, felt that they were not welcome. Clearly, under President Obama, the welcome mat is open.” But there are internal issues that America faces as it battles recession and works to extricate itself from its financial mess.
“In the short term, America is looking inward because it is in lot of pain. The reason why we are in pain is because we are not long-term planners. We are short-term planners. We are more of a reactor society than a strategic one. We generally don’t plan for the long term, whereas the Chinese and some of the Asian societies are much better at planning,” Reid says. He cites the example of a ravaged US automobile industry that was once the world leader but lost out due to its lack of innovation. He also blames American entrepreneurs who lacked a global perspective, unlike their counterparts from other parts of the world.
“Long term, America is going to have a more open outlook because we are becoming more diverse. We still have three exports that people of the world want,” he tells me, counting education, health care and entertainment on his fingers.
Obama, according to him, has two and half years to fix things. “In 30 months, if the average American does not feel that we have turned a corner on the economic crisis... that cripples the President’s political posturing. So he has 30 months to turn this page, because if the will of the people [is] not with him, politicians will act differently with Barack Obama. Right now, politicians generally want to give him the benefit of doubt, as he has got public sentiment on his side. In 30 months, these politicians will be fighting for their own survival.”
The Gulf region, Reid says, needs to focus more on the small and medium-sized businesses in America in its attempt to diversify their economies beyond energy. Then he returns to his mother and her vegetables. “In a lot of ways, they (this region) didn’t eat vegetables. They went for the sizzle. The real trick for the region is how to sustain it when oil is below $40” per barrel, he says, urging governments here to engage with different US companies than they have in the past. Instead of trying to do deals with the 1,000 largest companies in the United States, firms in the Gulf should pursue America’s 23 million small businesses, he says, donning his analyst’s hat.
Dubai, he says, needs to identify its core customer to jump quickly out of its crisis. “The core customer is the family that wants to come and have a great experience, maybe look for a second home. There is a super-high end of the market, and there is the middle tier of the market. This is where they need to focus,” he says, giving the example of Las Vegas, which retooled its marketing efforts once it figured out that it needed to send out welcome notes to families and not just gamblers.