E-Commerce in the Middle East

Published February 7th, 2000 - 02:00 GMT

Events in the Middle East during the last six months indicate that regional e-commerce is about to blossom.  


Governments, particularly in the Gulf, are rushing to develop their high-tech infrastructures and to position themselves as regional leaders. Egypt, for example, is seeking to be the region's leading software developer; Jordan, the Internet capital. And there is particularly strong competition between the UAE (primarily Dubai), Bahrain and Saudi Arabia to be the regional e-commerce hub. 


To date, however, Dubai has led the way, increasingly transplanting its traditional commerce with electronic commerce and digital technology. The emirate recently announced that it was spending $200 million to build an e-commerce free trade zone. This comes shortly after Dubai announced that it was spending the same amount to build a high-tech wonderland. Dubbed the ''Dubai Internet City (DIC),'' this center plans to offer lucrative incentives such as 100 percent foreign ownership, corporate and income tax exemptions, and a streamlined bureaucracy for foreign investors. DIC will also be offering international-standard courses covering areas such as e-business, e-finance, e-marketing, multimedia, e-design, and e-management. 


Additionally, the steps taken by Dubai government reflect the growing pervasiveness of the Internet and e-commerce to day-to-day life of all UAE citizens. In 1995, there were only 2,503 users in the UAE. Last year, that number had grown to roughly 200,000, or about 14 percent of the population. That number is expected to leap to 64 percent by 2002. Likewise, UAE e-commerce is projected to explode from $26 million in 1999 to more than $1 billion in 2004. 


The rapid developments in the UAE have roused their electronically slumbering neighbors, spurring competition with countries such as Bahrain and Saudi Arabia. The Bahraini government, for instance, hopes that an online marketplace for the logistics community will position the country on the cutting edge of e-commerce. The project -- undertaken by GulfTradaNet and Arabian Network Information Services, a leading Web developer - is anticipated to revolutionize the Gulf's cargo industry by creating a business environment without boundaries. The project will be operational soon and will support the electronic handling of cargo documentation, reservation, airway bill transfer and consignment tracking services for both inbound and outbound cargo. Furthermore, the project will dramatically increase productivity by reducing operational times, cutting paperwork and slashing business costs.  


Saudi Arabia is also trying to follow in its neighbors' footsteps. The launch of wireless Internet connection is predicted to boost the kingdom's e-commerce, currently estimated at $10 - $15 million annually. Cisco Systems, which launched this new state-of -the-art technology, inaugurated its headquarters in the Kingdom. The company has invested millions of dollars in opening three new service centers and enhancing the kingdom's IT environment and infrastructure. Cisco in Saudi Arabia is headquartered in the building that houses Microsoft, Motorola, Compaq and other American computer and telecommunications companies.  


Cisco's inauguration in the Kingdom signals a rising interest by international companies in participating in developing the region's IT and infrastructure. In short, a number of experts are forecasting a bright future for the region's IT industry as governments strive to build the basic communication infrastructure and to liberalize its trading laws. The goal is to be able to accommodate more and more international IT companies as well as the huge anticipated increase in the number of Internet users in the near future.  

© 2000 Al Bawaba (www.albawaba.com)

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