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Middle Eastern economies may be expanding, but growing pains are showing when it comes to treasurers' ability to manage working capital and unlock trapped cash. By JR Brandstrader
Corporate treasurers in the Middle East are just like their cohorts elsewhere, except for their threeday workweek. They have to locate the money, make it work harder and come up with an easy-to-understand financial report for their bosses. But they have only a narrow window within which to do that. Needless to say, they are very busy individuals and are more accountable than ever for overall corporate results.
Alexandra Ellison, director of treasury and governance, risk and compliance solutions, at enterprise resource planning vendor SAP, works with many Middle East corporations who partner with foreign firms doing business in the region. "There is no common weekend in the Middle East," she explains. "Most international corporations work Monday through Friday. But the work week in the Middle East varies."
Friday is a holy day for Muslims. Some countries take Thursday and Friday off while others take Friday and Saturday. During Ramadan, hardly anyone is to be found round the office in the afternoon. Vive la différence? Well, not so much.
Getting a counterparty to sign off on anything (a deposit, a trade or a swap, which is the favored available insurance against default) in a timely way is challenging when you are not working at the same time or even on the same day.
The complexity of the region keeps some investors away. London-based Thomas Clarke, an associate with William Blair, a global investment banking and asset management firm, is one of them. "The Middle East is very complicated. The region will probably remain unstable, so we are not in that market," he says.
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