Companies
often include the Arab World in their region of EMEA (Europe, Middle East &
Africa) where it makes up parts of the Middle East and Africa. Dividing the
world into a few regions is easy to cope but hard to succeed in. Especially in
International Human Resources, managers have to understand the characteristics
of their target countries or even differences within these countries.

The Arab
world, as defined by the Arab League and commonly used by the UN, consists of
22 countries (as listed in table
1). Four major regions can be identified in the Arab world, based on
geographical adjacency or political commonalities. Maghreb is the Arabic term for “West” and the meaning of Mashreq is “East”. The GCC is the
abbreviation of the Gulf Cooperation Council, a primarily economic union of six
Arab Gulf states.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Arab World

Maghreb

Mashreq

Arab Peninsula

Sub-Sahara Africa

Levant

GCC

Algeria

Iraq

Egypt

Bahrain

Yemen

Comoros

Libya

Jordan

Kuwait

Djibouti

Mauritania

Lebanon

Oman

Somalia

Morocco

Palestine

Qatar

Sudan

Tunisia

Syria

Saudi Arabia

UAE

Table 1: Member States of the Arab League –
Division as in (Al-Omari, 2008)

The definition by the Arab
League is debatable as the league is mainly a political institution. Countries
such as Somalia, Comoros and Djibouti might be considered as East African
rather than Arab in other sources (Quelle Jammal?). Sometimes the Arab World is
also mistakenly referred to as “Middle East and North Africa”, while the Middle
East is solely a geographical description including Iran and Turkey, two
Islamic but non-Arab countries, as well as Israel that should not be mistaken
for an Arab country, but where almost 21% of its citizens are from an Arab
descent (CBS, 2013). Critics also
question the completeness of the often used criteria to define Arab states,
which are the shared state religion (Islam), the shared language (Arabic) and a
common Arab identity, because the Arab world shows a huge diversity in terms of
religion, languages and cultures (Jammal & Schwegler, 2007).

Despite the
difficulties to completely define today’s Arab world, the following chapters
will follow the definition of the Arab League while clustering regions and keeping
more attention on the economically important countries. When the term “Arab” is
used, it does not necessarily imply a person’s religion or descent but refers
to a person living in one of the defined Arab countries. However, as Islam is
the most dominant religion in all countries, some emphasis is given on its
influence on the Arab culture and business etiquette.

 

3.1 Economic and Human Development

GDP in million USD – 2016
(world rank of 180)

Export of goods and services in million USD  – 2016
(world rank of 154)

Import of goods and services in million USD  – 2016
(world rank of 154)

Export surplus 2016 (export-import) in million USD

Saudi Arabia

646,438

(20)

198,290

(25)

195,108

(24)

3,182

United
Arab Emirates

348,743

(29)

362,069

(15)

353,764

(15)

8,305

Egypt

336,297

(30)

34,818

(53)

65,923

(44)

-31,105

Iraq

171,489

(51)

55,835

(45)

67,321

(43)

-11,486

Algeria

156,079

(52)

37,010

(50)

53,710

(48)

-16,700

Qatar

152,468

(53)

72,397

(41)

63,475

(45)

8,922

Kuwait

114,041
data of 2015

 62,014
data of 2015

 51,618
data of 2015

10,396

Morocco

101,445

(56)

35,206

(52)

45,728

(51)

-10,522

Sudan

95,584

(58)

9,395

(87)

11,974

(84)

-2,579

Oman

66,293

(69)

36,166
data of 2015

36,667
data of 2015

-501

Lebanon

47,536

(76)

25,909

(61)

31,599

(56)

-5,690

Tunisia

42,062

(83)

16,898

(72)

21,462

(66)

-4,564

Syria

40,405
data of 2007

15,614
data of 2007

15,286
data of 2007

328

Jordan

38,654

(84)

13,577

(76)

21,624

(65)

-8,047

Libya

34,699
data of 2011

8,501
data of 2015

31,727
data of 2015

-23,226

Bahrain

31,858

(91)

26,327
data of 2015

22,303
data of 2015

4,024

Yemen

27,317

(94)

897

(134)

6,855

(103)

-5,958

Palestine

13,397

(116)

2,432

(119)

7,603

(98)

-5,171

Somalia

6,217

(141)

924

(133)

3,919

(118)

-2,995

Mauritania

4,634

(143)

1,716

(124)

3,035

(126)

-1,319

Djibouti

1,727
data of 2015

484
data of 2007

654
data of 2007

-170

Comoros

610

(171)

107

(149)

292

(148)

-185

Table
2: Economic Indicators of the Arab World,
2016 or previous (World Bank, 2017)

 (World Bank, 2017)

Table 2 is providing data on the GDPs and export
power of all Arab countries in order to differentiate their economic
development among each other and value their economic strength on the global
stage. As for some
countries only older data was available, the classification of the economies
might not always be accurate, but was tried the best way possible.

The Arab
world can be divided into highly developed, moderate and poorly developed economies.
The main oil exporters Saudi Arabia, United Arab Emirates, Qatar and Kuwait
feature high GDPs and export surpluses. All countries are also characterized by
high wage levels
that are attracting foreign workers, making up more than 88% of the total
population in the United Arab Emirates and Qatar (CIA, 2017b).

Most of the
Arab countries have moderate economies with an import surplus and rely on their
small to medium reserves of natural resources such as phosphates (in Morocco,
Tunisia, Egypt, Jordan) or oil and gas (in Algeria, Bahrain, Libya, Iraq,
Oman). Low wage levels
but a relatively good infrastructure makes Morocco, Algeria, Tunisia and Egypt
a good location for manufacturers. Agriculture is an important sector in Morocco,
Tunisia, Egypt and Sudan. Lebanon’s and Jordan’s economy is dominated by the
service sector. Except the monarchic states Bahrain, Morocco, Oman and Jordan,
all other countries mentioned before suffer from huge political instability and
smaller to large violent conflicts which is a backlash towards the economy. (Quelle zu wage
levels/sectors)

The
remaining poorly developed economies, such as Palestine and Somalia, suffer
from long-term conflicts, the lack of resources and heavy wars. Syria, once a stable
economy, is very likely to be in row which the economically weak countries
nowadays due to the ongoing civil war since 2011. This also applies to Yemen,
where war emerged just recently. Mauritania, Djibouti and Comoros mainly suffer
from the small size of inhabitable land as well as political conflicts, which
makes it unable for them to compete with other economies on a global level. However, the significance of
these data is also limited as they are total economic results per state not
considering their different amounts of population.

According
to the United Nations’ Human Development Index (HDI), which measures not only
economic strength but also the countries’ health and educational development,
Arab countries can also be found in all categories, from very high to low
development, as showed
in table 3.  Qatar was ranked as the most developed Arab
country while Djibouti was the least developed in 2015. (UNDP, 2016, pp.198)

 

Country (world rank out of 188)

very high
human development

Qatar (33), KSA (38), UAE (42), Bahrain (47), Kuwait (51)

high human
development

Oman (52), Lebanon (76),
Algeria (83), Jordan (86), Tunisia (97), Libya (102)

medium human
development

Egypt
(111), Palestine (114), Iraq (121), Morocco (123)

low human
development

Syria
(149), Mauritania (157), Comoros (160), Sudan (165), Yemen (168), Djibouti
(172)

Table
3: Human Development of the Arab World (UNDP, 2016, pp.198) – Somalia not
in statistics  

 

Both tables showed evidently that the Arab
world is very diverse in terms of development, for various reasons which will
be explained briefly on the following pages. However, one can already notice,
that it makes a huge difference whether an expatriate is sent to Qatar, which
is considered as an economically strong and developed Gulf state, or to Djibouti,
a poorly developed country in East Africa.

 

3.2 Country-specific characteristics in brief

 

As the Arab
countries are pretty diverse in economic and human development, so are they in
history and politics. The fact that every country has its own complexities
makes it impossible for the Arab countries to achieve joint solutions on peace
and economic cooperation. Although there is the Arab League there are many
conflicts among the Arab countries and in the countries itself. The following
table outlines the most important country-specific characteristics that need to
be understood when talking about the Arab world.

 

Form
of Government

Ethnicities
(other than Arab) and Religions

Other
languages besides Arabic

Politics,
Arab Spring and Others

Algeria

presidential republic

High percentage of Berber (Amazigh)

Tamazight / Berber (official), French

French colony until 1962; former state-directed
economy; difficult Moroccan-Algerian diplomatic relationship; minor reforms
in 2011

Morocco

Constitu-
tional monarchy

High
percentage of Berber (Amazigh)

Tamazight
/ Berber (official), French

Former
French colony; Western Sahara considered as Moroccan territory (not
recognized by UN); minor reforms in 2011

Tunisia

parlamentary republic

Communities of Jews, minority of Berber

French

Former French colony; ‘Privileged Partner’ of EU,
receiving highest financial support; change to democratic system after fall
of government in 2011

Libya

transitional
government

Minority
of Berber

English,
Italian

Former
Italian colony;  ongoing war for power
after fall of military regime of Muammar Gaddafi in 2011

Mauritania

presidential republic

Groups of indigenous nomads
 

indigenous languages, French

No major effects by the Arab spring: most parts of
Mauritania are within the Sahara

Sudan

presidential
republic

Several
indigenous tribes

English
(official), indigenous languages

In 2011, former
country of Sudan split into (North) Sudan and South Sudan

Egypt

presidential republic

Considerably minority of Christians (Copts)

English, French

Fall of regime by Arab spring, followed by democratic
elections and military coup

Jordan

Constitutional
monarchy

Christian
minority

English

former
British protectorate; peace treaty with Israel, open borders; only minor
reforms in 2011

Palestine

presidential republic

Minority of Christian and Jewish Arabs

English, Hebrew 
(widely understood but not used)

Israeli-Palestinian conflict since 1948 with the
establishment of the Israeli state

Lebanon
 

Parliamentary
republic

Religious
conflicts between the religious groups of Sunni, Shia and over 30% Christians
(Tristam, 2017)

French,
English, Armenian

Ongoing
state of war with Israel (current ceasefire), travelers with visa stamps from
Lebanon are not allowed to enter Israel (vice versa for all Arab states
besides Jordan)

Syria

presidential republic, authoritarian regime

Minorities of Kurds, Arab Christians, Alawis (Shia
Muslims), Yazidis (ancient religion) and other

Kurdish, Armenian, French, English

Ongoing civil war after president Bashar Al-Assad
refused to step down in 2011

Iraq

Parliamentary
republic

Minorities
of Kurds, Arab Christians, Yazidis, and other

Kurdish
(official), Armenian, Turkish

After the
last US troops left Iraq in 2011, civil war spread from Syria

United Arab Emirates

Absolute monarchy

Immigrants make up over 88% of the population

English
(wide-spread due to high amount of foreign workers)

Hindi, Urdu, other Asian languages (used by
immigrants only)

was blacklisted by EU as tax haven along with
Bahrain, Tunisia, 14 other states (Boffey, 2017)

Bahrain

Constitutional
monarchy

Majority
of Shia Muslims, immigrants make up for more than half of population

see UAE

only GCC
country with uprisings in 2011, suppressed by military; royal dynasty of
Bahrain belongs to the Sunni Islamic branch

Kuwait

Constitutional monarchy

69% of immigrants

see UAE

Gulf war, US
Ally?

Oman

Absolute
monarchy

Large
groups of Indian and Pakistani immigrants

see UAE

Oman is considered as sultanate
instead of a kingdom

Qatar

Absolute monarchy

Majority of Sunni Muslims, over 88% immigrants

see UAE

Since 2017: boycott by neighboring countries
(Bahrain, Kuwait, UAE, Oman, KSA) after diplomatic issues

Saudi Arabia

Absolute
monarchy

Majority
of Sunni Muslims

see UAE

Leading
the war on neighboring Yemen; strong ally of the West; the only state where Sharia
is fully applied

Yemen

Transitional government

Majority of Sunni Muslims, considerable minority of
Shia

Armed conflict between Shia rebells (Houthis) and
Sunni government forces, supported by Saudi Arabia and allies

Comoros

presidential
republic

Various
indigenous groups

French
(official), Comorian (official)

Former
French colony; archipelago (islands) in the Indian Ocean

Djibouti

Semi-presidential republic

Majority of Somali origin

French (official)

Former French colony, dependency on French political
and economic support

Somalia

Parliamentary
republic

Somali
tribes, minorities of Christians

Somali
(official), Italian, English

Mission
by African Union tries to end ongoing armed conflicts; piracy in the Gulf of
Aden

Table
4: Brief overview on country-specific issues regarding
political system (CIA, 2017a), ethnicities (CIA, 2017b), spoken
languages (CIA, 2017c) and other
fields (additional
sources specified in table)

 

3.3 Living Standards

 

Cost and Quality of Living

Cost of
living (CoL) indices or rankings compare costs such as for accommodation, groceries or required
consumer goods at locations worldwide. Adaptions on the expatriate’s salary
should be made if the cost of living in the host country exceeds the costs in
the home country. It is common practice to grant an additional CoL-allowance
which is adjusted annually and expires once the assignment has ended. A
negative adjustment is also practiced by some companies (KPMG, 2017, p.55) but can lead to significant
dissatisfaction among expatriates and should therefore be reconsidered from
case to case. (Quelle
für CoL)

Arab cities
rank from very high costs (Dubai, Abu Dhabi) to very low costs of living
(Tunis, Algiers) (Mercer,
2017).  Thus, organizations should calculate
allowances separately for every destination using data of service providers.

An overview
about the cost of living range
in Arab countries is given by table 5, listing the ranks of Arab cities in the Mercer Cost of
Living Index of 2017. The ranks were evaluated by comparing costs of living in
U.S. Dollar in 209 cities. The scores of Munich, London and Zurich serve as
comparison.

Rank

City

Country

4th

Zurich

Switzerland

19th

Dubai

UAE

22nd

Abu Dhabi

UAE

29th

London

Great
Britain

49th

Djibouti

Djibouti

52nd

Beirut

Lebanon

Riyadh

Saudi Arabia

55th

Manama

Bahrain

59th

Amman

Jordan

81st

Doha

Qatar

92nd

Muscat

Oman

98th

Munich

Germany

111th

Kuwait City

Kuwait

117th

Jeddah

Saudi Arabia

130th

Casablanca

Morocco

169th

Rabat

Morocco

183rd

Cairo

Egypt

187th

Algiers

Algeria

189th

Nouakchott

Mauritania

209th

Tunis

Tunisia

Table
5: Arab cities in the Mercer cost of living city ranking 2017 –
out of 209 cities (Mercer, 2017)

(Mercer,
2017)

Furthermore, quality of living (QoL) indices rate
locations by factors such as the availability of consumer goods, housing,
medical care and schools but also the economic and natural environment of the
country  (Mercer, 2017). In the Mercer ranking of 2017,
the cities with the highest quality of living were mainly in Western Europe and
Oceania whereas the best Arab city is Dubai on rank 74 out of 231 (see table 6). The most
Arab cities are in the lower half of the ranking, indicating that the quality
of living in Arab countries is not as high as in most parts of the Western
world. Baghdad had the world’s lowest score of quality of living in 2017 and
other war-torn Arab cities are also among the worst cities to live in.

 

Rank

City

Country

2nd

Zurich

Switzerland

4th

Munich

Germany

40th

London

Great Britain

74th

Dubai

UAE

79nd

Abu Dhabi

UAE

106th

Muscat

Oman

108th

Doha

Qatar

114th

Tunis

Tunisia

117th

Rabat

Morocco

119th

Amman

Jordan

125th

Casablanca

Morocco

126th

Kuwait City

Kuwait

134th

Manama

Bahrain

165th

Cairo

Egypt

166th

Riyadh

Saudi Arabia

169th

Jeddah

Saudi Arabia

180th

Beirut

Lebanon

184th

Algiers

Algeria

189th

Djibouti

Djibouti

218th

Tripoli

Libya

221st

Nouakchott

Mauritania

225th

Damascus

Syria

227th

Khartoum

Sudan

229th

Sana’a

Yemen

231st

Baghdad

Iraq

Table
6: Arab cities in the Mercer quality of living city ranking 2017
– out of 231 cities (Mercer, 2017)

(Mercer, 2017)

Results of
an InterNations survey about the best expatriate destinations to live in are
similar to the Mercer rankings. Expatriates were rating their host countries in
leisure options, travel and transport possibilities, safety, and other
categories. The top ten countries were mainly in Western Europe and
South-East-Asia, while the best Arab country was the UAE on rank 18 of 65. Oman
and Bahrain were still among the top half while Saudi Arabia and Kuwait had
very low scores (InterNations, 2017).  The Global Livability Index by the Economist,
where cities are assessed in terms of stability, infrastructure, education,
health care and environment, values Dubai (UAE) to be the best Arab city in the
ranking with a score of almost 75 out of 100 while cities like Algiers, Tripoli
and Damascus are among the world’s worst livable cities. The overall best cities
were located in Australia, Canada and Europe. (Economist Intelligence Unit, 2017)

None of the
Arab countries scored top positions in any QoL rankings, indicating that even in the
wealthier countries and on an expat salary, a Westerner has to accept lower
quality of living standards. As the UAE stood out as the Arab country with the
highest quality of living, most other countries scored really low in the global
comparison. Reasons for the relatively low scores might be the hot and dry
climate, less freedom due to strict laws and law enforcement, lack of
possibilities for international education, but also problems in the
availability of health care and safety issues in some countries, as described
further in the next sections. Organizations might be able to compensate this to
a certain degree by providing additional CoL-/QoL-allowance.

 

Health Care

According
to the WHO, the region of Middle East and North Africa holds the second lowest
share of government expenditure on health care in the world. In 2013, the
region spent on average 8.7% of their general government expenses on health
care. The world average was 12%. As a result, public health care systems in
most countries are insufficient and individual expenses for health care are
very high in the region. (p.41)  WHO/World Bank Report,
2015

As with the
quality of living, the available health care quality differs from state to
state. While countries like the UAE, Saudi Arabia or Qatar have first-class
medical care, there are countries where public health care is partly
insufficient but private hospitals with European or US standards are available,
such as in Tunisia or Morocco (Quelle?). In mostly war-torn countries, even private health
care is for large parts of the countries insufficient or not available due to
lack of supplies or personnel such as in Somalia (https://intpolicydigest.org/2015/10/18/the-role-of-health-care-in-state-building-for-somalia/)
or Yemen
(http://activityreport2016.msf.org/country/yemen/).

Even though
expatriates are normally given the best worldwide health insurances, it is
recommended to check on a country’s particular health care facilities and availability
of medical supplies, as well as inform the expatriates about the health care possibilities.
In countries with insufficient health care networks or in remote regions, the
use of an international medical service provider is advised to guarantee the
expatriate’s health (e.g. International SOS).

 

Safety
The travel bans or warnings of the German Federal Foreign Office or of other respective
governments can be a help to assess the safety in any particular country.
According to the information issued by November, 2017, the Arab world could be
divided into four safety categories: unsafe countries, countries with unsafe
areas, generally safe and very safe countries (as in table 7).