Middle Eastern sovereign wealth funds must leverage the region’s fledgling PR talents to dispel mistrust over their continued investment in Western financial institutions, experts said.
Speaking on the sidelines of the PR Measurement Summit in Dubai, Mazen Nahawi, from research firm Media Watch, told Emirates Business the Middle East’s PR sector had witnessed exponential growth over the last 20 years and had become a $80 million (Dh293m) a year industry, with a potential to hit $500m within
He said it was vital sovereign funds facing hostility over their interests in US and European banks be proactive in the use of this burgeoning tool to allay any fears of their investment intentions.
“PR is critical to defusing this situation. You have a major reputational problem, one in which the major financial institutions in our region are being looked down on, mistrusted and being openly and aggressively attacked whether it’s in the media or by politicians and that’s unacceptable,” said Nahawi.
He said sovereign funds should organise a global summit on sovereign wealth funds in London and New York and invite representatives from the World Bank, the IMF and investment banks to ease fears.
A lot of reservations have been expressed about sovereign funds’ possible political agendas in acquisitions of substantial stakes in major Western financial institutions such as Citigroup. The Abu Dhabi Government recently issued a letter to the US Government outlining its strategies behind such investments.
Media Watch estimates that the Middle East’s PR industry has grown from $500,000 in 1980 to its current $80m, and it expects a 30 per cent growth rate in the coming years.
There are more than 100 PR agencies currently operating in the UAE, compared to just 20 years ago.
Media Watch, which is based in Dubai’s Media City, monitors global press and media outlets and provides an extensive search and find tool for businesses. Nahawi said Dubai was leading the charge for quality PR practice and a sophisticated PR machine would propel regional economies to even stronger global success.
“I see the economies of the Arab world hitting the $3 trillion mark in the next 10 years. A mature PR industry can build the reputation of their regulatory and legal environments, which means people will be more willing to invest their money here. PR can build the reputation of the big corporations, the mid-sized companies, the innovator and exporters.”
He added: “Dubai is the clear leader in the Middle East of building reputation and building relationships on a governmental and corporate level.”
Nahawi said Emaar, Emirates, Nahkeel and Jumeriah were strong examples of successful international brand-building.
Jonas Rodny, Communications Manager for Nordic Marketplaces at OMX, which recently completed a complex $6.5bn deal with Nasdaq Stock Markets and Borse Dubai, said a successful PR strategy would cement the intentions of Middle East investors in the receiving financial institutions in the US or Europe.
“There’s a big debate going on with sovereign wealth funds in the United States and Europe.
“It’s important for these funds to differentiate from each other and to make what they’re doing more transparent,” he said.
“The deal we did was one of the most highly recognised deals done last year in terms of media coverage. OMX got the chance to get our messages across to the Middle East region, as well as the US, the Nordics and other parts of Europe. And it was important for Borse Dubai to establish itself in the Western European and US context.”
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