Australian companies in Middle East claim business as usual, but keeping an eye on protests

Businesses operating in the Middle East claim they are unaffected by the civil unrest but say they are keeping a close eye on the situation to ensure their companies are not affected if it spreads.

The comments come as the Egyptian military has confirmed it will allow protestors to continue their demonstrations in Cairo, saying in a statement that it acknowledges “the legitimate rights of the people”.

Ian Murray, executive director of the Australian Institute of Export, says while any damage done to the Australian economy will be quite small because of the Egyptian protests, instability in the general region could be a threat to business.

“The big issue is the region. That region is very important to use, and no one wants any sort of instability in the Arab world because it’s too important for a whole range of things.”

Australia exports a significant amount of wheat to the Middle East, but businesses in a range of industries have both offices and franchises located in countries including Israel, Jordan and the United Arab Emirates.

“Not only from matters like exports, and oil imports, but we also have to consider what’s happening to Egypt as well. About 14-15% of the business there comes from tourism, so any problems they are having there will likely upset that sector and impact the standard of living.”

Jim Cornish, chief executive of car cleaning franchise Ecowash, says his franchises in Israel and other nations are continuing to operate – although he does admit some business plans have been put on hold due to the protests.

“I was on the phone to our general manager in the Middle East, and we have a lot of potential master franchise opportunities in Egypt, but they’re on hold right now.”

However, Cornish points out that because the Middle East is subject to more terrorist attacks and other forms of violence more often than other first world nations, the business often finds itself subject to these types of situations from time to time.

“I’m not downplaying what’s happening in Egypt, because it’s horrible, but we’re not there right now. We have been through the Israeli-Lebanon war, we’ve been through terrorist alerts there. We’ve found that with the countries we’re in, Middle Eastern nations tend to continue functioning.”

“I’ve had times where I’ve said I’m not going to travel there, but they all say, ‘we’re fine’, and continue operating. It really is business as usual if you’re not in the spot that’s being affected directly.”

A manager at construction software firm Aconex, which operates in several nations in the Middle East including Libya and Dubai, says the protests don’t directly affect the company as it has no staff there.

“We don’t actually have any business in Egypt itself, but we have a number of offices in the Middle East. Right now, it’s not something that we are directly affected by.”

The manager points out that when entering an area such as the Middle East, it is important to ensure the markets where companies operate are stable and business-friendly.

“The markets we are involved in are fairly stable, they are good business environments. That’s one of the attractive features we look for when entering new markets… and that’s something that applies to all markets as well, not just the Middle East. It puts those countries in our favour.”

Meanwhile, the Egyptian military has confirmed that it will stand by as thousands of protestors continue their demonstrations against president Hosni Mubarak.

‘To the great people of Egypt, your armed forces, acknowledging the legitimate rights of the people… have not used and will not use force against the Egyptian people,’ the military said in a statement.

International pressure has also escalated, with US secretary of state Hilary Clinton saying there should be an “orderly transition” to a new regime.