To get a sense of the challenges facing a company entering a new market, think for a moment of the place where you grew up. You probably know everything there is to know about it – the people, the history, the local customs and legends. Now consider a newcomer arriving for the first time and trying to make sense of all that. Add a different language, nationality and culture into the mix and the complexities and potential problems are compounded.
Today one of the hottest emerging markets is Iraq where the oil industry is finally hitting full stride after decades of neglect and decline due to war, international sanctions and civil disturbances. The most recent proof of that thriving market is the entry of major international banks into Iraq’s oil regions – the capital city of Baghdad, Basra in the South and Erbil in the Kurdistan region.
With a planned $1 trillion program of infrastructure building, including new oil pipelines and storage terminals, the Iraq oil industry needs a vigorous banking industry to support and fund that growth. Iraq is the second largest oil exporter in the Arab world with the world’s fifth largest oil reserve. The International Monetary Fund (IMF) estimates that the $150 billion Iraqi economy will grow by nine percent over 2013 (it grew 8.4 percent in 2012).
With the market entry to several U.S. banks that specialize in serving the oil industry, the Iraqi banking market now includes 15 international banks, seven state banks, 23 private lenders and nine banks that operate under Islamic law, according to Wealth Daily.
“We have been operating in Iraq since 2003,” says GardaWorld Senior Vice President Pete Dordal, “and we are currently assisting several banking clients as they establish operations in Iraq. We like to tell our clients ‘just give us your passport and we’ll take care of everything else – visas, assistance with work permits, business licenses – whatever is required to do business effectively in the country. We call it “being in the bubble – it’s our total approach to providing everything that is needed – and our clients love it.
“We provide a turn-key solution for clients,” Pete explains. “That includes finding and vetting key local nationals as employees, locating and vetting business partners and suppliers, making introductions to government and business officials and arranging for meetings with embassy personnel whom we know well. It also might require finding secure working and living quarters, life support and communications services.”
In Iraq GardaWorld provides services to clients in the oil and gas, diplomatic and infrastructure sectors, offering mobile and static security, security management, low-profile executive protection, medical and life support services and sophisticated information and threat reporting. With more than 2,000 staff throughout the country, the company currently provides comprehensive site security for five major oil and gas exploration and production projects spanning 3,400 square kilometers.
“One of the major concerns our clients have in international markets is avoiding corruption and violations of the Foreign Corrupt Practices Act,” Pete notes. “They realize that it is essential to find trusted business partners with whom they can do business honestly and reliably. With our deep and long-standing ties to the local communities, we can help them quickly integrate local staff and partners into their operations. Our services free them to focus on getting their business operations established and successful.”
Those relationships come from GardaWorld’s approach of “local engagement,” a practice wherein the company recruits and trains local nationals for its workforce in country, providing excellent careers for local staff drawn from all ethnic, religious and tribal groups.
“We extend that local engagement approach to finding qualified personnel for our clients as well,” Pete says. “This also gives us ‘ground truth’ understanding and information about the areas where we operate because our people live and work in those areas. We are an integral part of the communities we serve.”
According to a recent report in Barron’s, emerging markets are expected to drive 60 percent of the world’s economic activity by 2030. For companies making plans to enter those emerging markets, GardaWorld’s established and proven methodology can enable them to do so confidently and securely.