Inside the minds of Middle East CEOs
PwC's 21st CEO Survey
This is the 21st time we have collated the views of business leaders across the world in our Annual Global CEO survey.
From the results of over 1,200 international CEOs, including over 50 in the Middle East, it’s clear that the past year has demanded an immense balancing act from regional CEOs. This group of business leaders has contended with lacklustre oil prices, looming local and regional geopolitical threats, and the urgent need for regional corporate reform.
The region is also rapidly evolving in the wake of shifting global trends, including the march towards clean energy and the rise of competitively priced US shale oil. In particular, it has been a landmark year of change for the Arabian Gulf’s largest economy, Saudi Arabia. Also, businesses operating across the region have had to face the challenges created from the Qatar political crisis and economic situation. What’s more, the ongoing international mega trends of globalisation and technological advances are transforming lives and businesses in the region, there is a marked rise in terrorism and cyber crime, and the entire world is facing the mega challenge of carefully priming its corporates for tech and automation developments that are evolving at breakneck speed.
Given this mixed bag, it comes as no surprise that our survey responses are often paradoxical. Our regional CEOs are positive about global and regional growth, yet they are often hesitant about their own corporate growth;
they welcome technology but at the same time fear cyber crime; they are rapidly working towards transparent workplaces, yet they are still weaning themselves off inflexible and strict work patterns.
Most of all, this survey proves that the region is at a critical juncture as it surveys the enormous opportunities and risks inherent in globalisation and technology. The plunging oil price – while now improved at around $60 per barrel – placed considerable strain on public purses and company profits in recent times. This brought into sharp relief the potential future of the region when demand for fossil fuels eventually dwindles. And it is this fact, among others, that has caused CEOs and governments to get philosophical about their own growth. How to prepare for a future where companies are fully accountable? How to run a cost-effective and efficient business that can stand on its own two feet come what may?
While it is an unsettling period, it could also, if managed effectively, be the prelude to a new and more sustainable golden age for the Middle East.
Middle Eastern companies have weathered many a storm, including the 2009 crash, the Arab Spring and ongoing regional conflict, now CEOs say it’s time to take this proven resilience and determination and fast-track the region to the future.
In this report we focus specifically on the results from the Middle East, to explore the issues that concern its business leaders, and canvass their views about what comes next.
The region’s social and economic reform agenda is moving at an unprecedented pace. There has been more change afoot in the last year than in the entire previous decade. Sweeping reforms across the board have potential to make the Middle East a better place to do business and attract foreign investment. The boom days are over and it’s now time to adjust to the new normal, where oil prices are balanced and managers are accountable for company performance and managing cost pressures.
While the survey results suggest CEO confidence is down in the short term, it’s a logical reaction to seismic change and a new pressure on accountability.
The region is now pushing hard to cement its organisational values and there remains an unrelenting focus on ethics and corporate governance. It is this growing appetite for forming accountable and transparent structures from the ground up that will prime the region for global success as it embarks on a new post-oil era.