Good morning. What’s it like doing business in the Middle East right now? The Strait of Hormuz has closed again, a lasting U.S.-Iran peace deal remains elusive, and global airline profits have been cut in half this year, according to IATA, which blames high fuel costs and war-related disruptions in the Middle East. Visitor arrivals to the region dropped 14% in the first quarter. You could be forgiven for thinking things look dire.
But that’s not the case, argues Johannes Hummer, the Dubai-based CEO of Freedom Telecom International, an arm of Freedom Holding Corp., which helps telecom operators embed fintech services into their platforms, primarily across emerging markets. He’s spent more than a decade operating out of the region and previously ran Vodafone’s Middle East and Africa business. His message to Western executives watching from a distance: the companies showing up right now are the ones that will own the next chapter of Gulf growth.
Hummer points out that while the UAE reported 13 deaths from the fallout of drone attacks early on, there have been no fatalities reported since late March. He says local companies are using the war-related downturn to improve their operations and infrastructure. “Hotels are closing down for innovation, doing long-overdue maintenance and getting ready for autumn when the season comes back up,” he told me recently, pointing to the government’s rollout of a range of new infrastructure projects, too. “Traffic was getting out of control because too many people came in and the infrastructure couldn’t keep up. Now, they’re focusing on getting it right.”
Moreover, he notes that companies like Revolut and Nubank have recently moved headquarters to Dubai. In addition to being a good base for sourcing multicultural talent and expanding into Asia or Africa, Hummer argues that the U.S. is trailing the UAE when it comes to going digital. “I have all my stuff on one app—my car license renewal, insurance, bills, electricity, visa stuff. If your car is up for renewal, you can do it all in two minutes,” he said.
Every country expects companies to establish a physical presence in order to tap its 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 shifting business climate, subscribe to our new Fortune Gulf Brief newsletter, written by veteran journalist Melissa Hancock and edited out of London by Kamal Ahmed.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
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A new trade war is brewing
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The markets
S&P 500 futures are down 0.12% this morning. The last session closed up 1.08%. The STOXX Europe 600 was down 0.13% in early trading. The U.K.’s FTSE 100 was down 0.04% in early trading. Japan’s Nikkei 225 was up 1.55%. South Korea’s KOSPI was up 0.69% today. China’s CSI 300 was up 2.39%. Hong Kong’s Hang Seng was down 0.65%. India’s NIFTY 50 was up 0.51%. Bitcoin was at $64K.
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If you’re surprised by how well the stock market is doing, so is Jamie Dimon—he says there’s a ‘little tsunami’ heading for the economy by Eleanor Pringle
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CEO Daily is curated and edited by Joseph Abrams, Jason Ma, Claire Zillman, and Lee Clifford.
