The Middle East still represents the second-largest source of US oil imports, supplying 1.1 million barrels per day in 2015, which represented 14.3% of US crude imports. Business in energy commodities between the US and the Middle East is as important as ever. However, renewable energies are becoming more mainstream, and there is a shift in oil and natural gas exporting countries toward creating their own sustainable economies. Thus, international business between oil producers and oil consumers is becoming more diversified.
Language service providers (LSPs) dealing with the Middle Eastern energy market should consider these new trends in terms of their own service infrastructure, as well as local and international opportunities to expand their business.
Renewable energy
Some industrialized countries, especially in the European Union, are becoming less dependent on oil due to their increased use of homemade renewable energy, namely solar and wind power. Even countries that are less blessed with plenty of sunshine year-round, such as Germany, are reaping tremendous benefits from solar rooftop installations thanks to many years of government-based incentives. Add onshore and offshore windfarms and the supply of renewable energy outruns the supply and outcompetes conventional (CO2-emitting) and nuclear power plants.
Infrastructure has been improved by increasing highly connected power grids, introducing smart grids and creating solutions for energy storage. These include existing or new reservoir lakes and other types of reservoirs (underground reservoirs in former salt or coal mines); creating gigantic flow-batteries as short-term electric energy storage buffers (such as inside old mines or using connected shipping containers); or storing the heat generated during daytime by a solar-thermal power plant in the desert sand above which the power plant has been built. The possibilities are only limited by imagination.
With emerging economies, the global demand for oil will continue to be strong or even on the rise for some time in the foreseeable future, but an increasing number of countries will become less dependent on imported oil due to their increasing self-reliance on renewable energy.
Traditional oil-exporting countries in the Middle East will take note and must eventually adjust to a lower demand for their exported oil. If we look at Saudi Arabia’s current domestic economic problems, we get an idea of what’s in stock for their future.
Saudi Arabia helped create its own problems by price dumping on its oil output, thereby lowering global oil prices. There were two goals: first, outcompeting the fracking industry in order to reinstate the United States’ dependence on Saudi Arabian oil; second, to keep Iran from recovering and rebuilding its own economy by competing in the international oil markets after most of the embargos had been lifted and Iran was allowed to export its oil again. The strategy backfired and put Saudi Arabia in an economic slump. Ultimately, price dumping meant reducing oil revenues and depleting its own (financial) reserves. The global renewable energy efforts could likewise put a severe dent in the economic prospects of the gulf countries.
Stepping up to counteract this novel economic threat to old-fashioned oil economics, some gulf countries such as the United Arab Emirates (UAE) are developing their own know-how in renewables while at the same time becoming major importers of renewable energy technologies and infrastructure, namely from China. International bids on solar power plant installations in the deserts of Abu Dhabi are driving the costs per generated solar watt to ever new record lows. Abu Dhabi’s Masdar Institute is striving to become an internationally recognized facility spearheading and testing new technologies that enable more efficient uses of energy. Masdar City is a model city housing institutes and residential facilities demonstrating that even in the hot desert climate, it is possible to lead an energy-conscious life and eventually become entirely energy-self-reliant and self-sufficient.
Much further west, on the rim of Northern Africa, another future global player in renewable energy is emerging. With the aid from international investments (World Bank, see also Desertec Initiative), Morocco has constructed what is the world’s largest solar power plant, the Ouarzazate Noor Solar Power station, and additional stages of this system are being built in rapid succession. Morocco does not have its own carbon-based energy resources and hence wants to become quickly less dependent on energy imports. Thanks to its sunshine, open desert spaces and close proximity to the European continent through the Strait of Gibraltar, Morocco aims to become an exporter of electricity, feeding supplies into the European power grid.
Languages
In this new energy economy evolving around the Middle East, its closer and more distant neighbors show an increasingly connected world of globalized business. How does this play out for LSPs? Let us give some thought to the languages that are relevant for the region — both locally and in the international context:
-Arabic — spoken around the gulf region and in practically all of Northern Africa.
-English — the international language of business and science, spoken by many people around the world with a higher level of education.
-Chinese — the soon-to-be top economic power in the world, China is very hungry for resources, oil and minerals from the Middle East and Africa. At the same time, China is a major manufacturer and exporter of renewable energy products, namely solar energy technology.
-Farsi (and other Persian languages) — Iran’s economy has suffered from decades of global embargos, and while it is governed by a conservative regime, the country and its leadership are very eager to drive international business, bringing into the country major investments and, of course, exporting oil from its gigantic reserves.
-French — French is recognized as one of the official languages in Morocco, Algeria and Tunisia; hence, French lends itself well to doing international business within this region.
-Russian — Russia to the north will be eager to extend its political influence in the region, do more business with Iran and maintain its presence and interests in a post-war Syria, should the civil war ever come to an end.
Arabic is spoken by upwards of 400 million people worldwide and is the official language of 27 nations, including many of the dynamic, growing economies in the Middle East and Africa. Six Arabic speaking countries appear among the United Kingdom’s top 50 export market in goods, with a combined value to the economy that surpasses that of Spain, China or Italy. This is just one of the explanations why, according to a 2013 report from the British Council, Arabic ranks as the second most important language “for the future.”
The Gulf economies (with the current exclusion of Saudi Arabia) are booming while they diversify away from oil and gas, open up their economies and bring down barriers to trade and investment. Significant opportunities exist for foreign companies, particularly in supporting the vast infrastructure work planned in the region. Egypt, Saudi Arabia and the United Arab Emirates have all been identified as priority markets by several European States. Arabic has emerged as one of the priority languages for the Foreign and Commonwealth Office. It is their intention to increase the number of diplomats trained in Arabic by 40%. Morocco, Egypt and Tunisia are popular holiday destinations for tourists from all over Europe, though Arabic-speaking countries have not been prioritized for tourist links.
The World Cup will be hosted by Qatar in 2022 and will attract a large numbers of visitors. Dubai, one of the Emirates of the UAE, has evolved into a sought-after shopping destination, especially for wealthy tourists from Eastern Asia. At the same time, the residents represent a fast-growing market of eager consumers. In their international education strategy, private educational institutions from the US and the UK identified Saudi Arabia and the Gulf region as priorities for the development of educational partnerships in response to the region’s economic growth and expanding political influence. Obviously, regional political instability is a concern, but that only adds to the demand for LSPs providing all kinds of content in Arabic to serve in intelligence and diplomacy.
The internet is also rising in the Middle East, and with many Arabs speaking Arabic only, translation of online content is crucial to giving international companies an advantage. Although Arabic has had the problem of being difficult to render on websites, better software has overcome this, so it is likely that more businesses will be translating their content into Arabic soon. Businesses should consider making their product lines easily available to the Arabic-speaking world. This will ensure bright results for businesses, with even more significance in the diplomacy, energy and defense sectors.
The importance of English is obvious to everyone. The language is spoken in 101 countries by approximately 527 million native speakers, and is the official language of the 20 most relevant international organizations. In most countries, it is also the primary foreign language taught in schools and can be understood by one-third of the world’s population. English also retains the number one spot as the most commonly used language among internet users, with 952 million users and as the most used language by 52.3% of websites using various content languages. English is, therefore, crucial for anyone who wants to thrive on the global stage.
With around 1.4 billion native speakers, Chinese accounts for 18% of the world’s population, and it is by far the most widely spoken language in the world. Furthermore, the Chinese economy has experienced astonishing growth in the last few decades, and is currently estimated to overtake the US to become the world’s biggest economy by 2018. Its dominance in the world’s economy makes it a noticeable source of business opportunity. As Chinese businesses are spreading globally and the country presents emerging outsourcing capabilities due to its (still) low costs and high productivity levels, the Chinese language is definitely not to be neglected, particularly as English is not widely spoken inside China. More content will also need to be translated directly between Arabic and Chinese since China’s trade engagement in the Middle East is rising to much higher levels than just a few years ago.
Farsi is the most important of the Persian languages, being that the official language of Iran is spoken by the majority of the country’s 81 million inhabitants. Persian languages are rising fast due to increasing internet adoption pushed by the government, and should soon become relevant for businesses providing marketing content online. As mentioned earlier, most economic embargos against the country have ended, and particularly Germany, France, the UK, Italy, Russia and China are very eager to do business with Iran, importing goods and technology and getting access to the country’s rich oil reserves.
In the past, French played a more significant role in the greater region of the Middle East. It is still a very important language used in trade relations with Morocco, Algeria and Tunisia, which are considered to be part of the Middle East in political rather than in geographical terms. Many of the business negotiations relating to Morocco’s burgeoning renewable energies market are dealt with in the French language, yet still necessitate translation into Arabic, English and Spanish to include its business partners.
Russian, spoken by over 150 million native speakers throughout Central and Eastern Europe, will become more important in the Middle East. Russia is eager to increase its regional influence and create a counterweight to the historical role the United States has been playing in the Gulf and surrounding regions. Already, Syria’s regime has made Russian the number-one foreign language to be taught in schools. Alongside Iran, Russia shares common interests of political and economic influence.
We had started out with an overview of the changing energy market in the greater regions of the Middle East and its older and newer trading partners, using this as an example for the requirements of global communication. Studies for the European Commission have shown that the economic benefits of competence in more than one language are not limited to English. A wide range of languages is needed to exploit the benefits of a common market and keep improving trade between peoples worldwide. Even when others have a high level of proficiency in English, this does not mean that their languages can be ignored. In order to develop relations between countries and individuals based on mutual respect as well as to do business effectively, there is a need for an understanding of the social, political and infrastructural systems of a country, as well as the innumerable aspects of daily life that are important to that country’s identity and culture. To optimize business results with global audiences and gain the first market advantage, the choice of target languages is crucial and not always an easy or obvious decision. LSPs have always been actively engaged in filling the gaps that result in a lack of mutual understanding, thereby closing possible barriers to doing international business and gaining access to the economic partner country’s market.
