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Arab Spring: What effect on UK plc?

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A new study reveals that one in five businesses has been negatively affected by the political unrest in the Middle East and North Africa (MENA) region.

The Grant Thornton International Business Report, a survey of 2,700 medium to large privately-held businesses across the world, shows the consequences of the uprisings on business.

Within Europe, UK businesses are behind Denmark and Spain in claiming to have been the most affected. 

While 24 per cent of UK businesses have reported a negative impact on business as a direct result of the conflict, only six per cent say this will prevent them from doing business with the MENA region in the future. This is lower than the worldwide average of ten per cent.

“Given historic growth rates and how well the MENA region recovered from the recession pre-Arab Spring, it’s clearly an important place for British businesses to be. But businesses shouldn’t expect significant returns in the short-term,” warns Scott Barnes, CEO of Grant Thornton UK.

Barnes’ advice for UK businesses looking to invest in the region for the first time is to “carefully consider which market they choose as a launch pad”.

He says: “Focussing on the stable states in the Gulf is a good place to start, but for those prepared to take calculated risks, there are many attractive pricing options in areas still affected by political unrest.

“A large majority of the Gulf states have committed to improving social welfare and as such are planning increased investment in infrastructure. Healthcare in particular is a key focus, though the regulatory environment is still a challenge.”

Earlier this week, Mothercare took the retail market by surprise by announcing it would be moving into Iraq this summer

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