Gulf States Struggle to Shift Jobs to Choosy Locals

November 10, 2011 by · Leave a Comment 

By Mahmoud Habboush

ABU DHABI, Nov 2 (Reuters) – Ibrahim Hasanain worked as a tour guide at a Dubai tourism company for four years but quit to study law at the University of Dubai, hoping to land a better-paying government job.

All eight United Arab Emirates nationals who worked for the company eventually quit, not only because of disappointingly low wages but also because of difficulties fitting in with their co-workers, who were mostly South Asian and Western, he said.

“We were all hired because the company had to fill their required quota of Emiratis,” said Ibrahim, 24, as he walked the aisles of a glitzy shopping mall in Dubai.
Across the Gulf, Arab governments are seeking to create more private sector jobs for their citizens while reducing their economies’ reliance on hundreds of thousands of foreign workers, who fill posts in sectors ranging from construction and public transport to tourism, retail and financial services.

The motive is partly economic; finding private sector jobs for citizens cuts the fiscal burden that governments must pay in the form of unemployment benefits or state salaries for workers at government agencies and corporations, which are traditional tools for job creation in the region.

But it is also political — social unrest across the Arab world this year underlined the risks posed by unemployed youths. Even countries which experienced little or no unrest on the streets, such as Saudi Arabia and the UAE, want to reduce unemployment among their citizens to avoid storing up potential trouble for the future.

“We should invest in people, not stones,” said Abdulrahim Naqi, secretary general of the Federation of GCC Chambers, a regional business association, referring to the Gulf-wide obsession with building skyscrapers, swanky hotels and shopping malls — and using foreign labor to do it.

As Ibrahim’s case underlines, though, governments face a tough task trying to change labor market patterns established over decades. Accustomed to social benefits and cushy jobs paid for by oil wealth, many Gulf nationals find employment at private firms unattractive because it involves harder work, longer hours, and in many cases smaller salaries and benefits compared to the state sector.

And the lack of enthusiasm cuts both ways. Many private firms in the region remain reluctant to hire Gulf nationals because of workers’ insufficient training and high salary expectations, said Azfar Khan, a senior migration specialist at the International Labour Organization (ILO) in Geneva.

He said undertrained Gulf nationals even posed problems to governments which wanted to increase the proportion of locals employed in their public sectors.

“There is a funny paradox that the governments want to create jobs for their nationals, but are themselves reluctant to employ them,” he said.


Localising jobs has been a long-term goal of many Gulf governments for years, but efforts are accelerating. At a ceremony in Abu Dhabi last month, labour ministers of the six-member Gulf Cooperation Council (GCC) — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — handed out awards to firms in recognition of their role in employing Gulf nationals.

“When it comes to my number one concern, it’s Emiratisation,” UAE labor minister Saqr Ghobash said on the sidelines of the ceremony, using the local term for giving UAE citizens more of a role in the workforce.

The UAE is a prime example of both the potential for localization and the difficulty of implementing it. The country does not regularly release up-to-date jobless figures; an ILO estimate in 2009 put unemployment among its citizens at 14 percent, but UAE citizens account for under 20 percent of the population of more than 6 million, which is largely made up of South Asians and Southeast Asians.

Like most other government officials in the region, Ghobash said his country had no plans to reduce the number of foreign workers — it was simply trying to provide more access to jobs for qualified locals.

Although the UAE does not operate an official quota system for local employees, it uses incentives to encourage private sector firms to have certain proportions of UAE citizens in their workforces, a labor ministry official, who declined to be named because he was not authorized to speak publicly about the policy, told Reuters.

But if the government presses companies too hard, it could hurt private business and conflict with another plank of the UAE’s economic policy, which is to diversify the economy away from oil and spur the creation of innovative small and medium-sized firms.

So authorities are also planning to subsidize jobs for Emiratis at private firms — a move that would initially cost the government, but would ensure higher salaries and hopefully in the long run help to change the habits of job seekers. Kuwait and Saudi Arabia have already tried similar policies.

“Why do we need subsidies?” said Ghobash. “It’s because the gap between the public salaries and the private sector salaries is quite big. Unless you do these subsidies, there is very little chance to succeed with Emiratisation.”

Another area under study is education. Heavy public investment has created a network of colleges and universities in the UAE; now there is pressure to orient them more closely to teaching job-related skills rather than just producing degrees.

Naqi at the Federation of GCC Chambers said GCC countries should tailor their education systems to cater to their local job markets. This would allow Gulf nationals to fill more technical and managerial positions that are now occupied by highly trained foreigners, he said.

But Khan at the ILO said localization would be hard to achieve in the UAE as 70 to 80 percent of the foreign workforce was employed in the construction sector, the services sector and as domestic servants — mostly jobs that locals would shun.

“Are they taking away the jobs from the nationals?” he said. “Or, to rephrase the question: would any national want to take up these activities? I think no.”


Saudi Arabia, where locals account for just 10 percent of private sector employees and the most recent official estimate for unemployment is 10 percent, launched its latest localization program in June. The scheme codes companies according to the proportion of Saudis on their payrolls — red for the least and green for the most.

Companies in the red zone may face punitive measures, labor minister Adel al-Faqih said. For example, workers in red-zone companies may join firms in the green zone without having to ask their current employers for permission to leave.

“For many coming years, we will still be in need of a large number of foreign laborers to build our home countries in the Gulf region,” Faqih told Reuters. “But the main goal is to have balanced opportunities for our sons and daughters so that they can get jobs.”

Once again, however, Saudi Arabia has to move carefully to avoid damaging growth of the private sector, which is already lagging the oil-fuelled public sector. Pinak Maitra, chief financial officer of Kuwait Projects Co, a big regional conglomerate, said the localization program was a major challenge for business in Saudi Arabia.

“In the region, we have made the mistake of depending on expats. It was easy. We’re focused on trying to grow local talent,” he said.

Yet Saudi Arabia’s local talent has become notoriously choosy about where it works. So-called withdrawals, where employees who have been trained by one firm jump ship for another after a short period, have become endemic.

“The rate of withdrawals is among the highest worldwide. In our company, it has reached 60 percent,” said Abdulmajeed Alhokair, head of Saudi retailer Fawaz Abdulaziz Alhokair Co.

And some measures which the Saudi government is taking to reduce social discontent appear directly opposed to the goal of localizing jobs. Earlier this year, the government announced $130 billion of additional spending on welfare programs, subsidized housing and other social spending.

By strengthening the social safety network, the government may be reducing the incentive for people to join the private workforce. A foreign banker in Saudi Arabia recalls that on the day after social benefits were increased this year, few of the security personnel at his bank’s offices were at their posts — some had evidently decided that the benefits of staying in their jobs were no longer attractive enough.


With unemployment among its citizens low at around 4 percent, gas-rich Qatar has little economic reason to worry about giving more private sector jobs to locals, but officials say limiting foreign workers involves social and security issues. Qataris make up only about 16 percent of the 1.7 million population.

Qatar’s solution may be increasingly imitated across the Gulf: where it is unable to find local citizens to move into jobs, it appears to be encouraging the use of Arab workers from other countries, rather than the South Asians and East Asians who have traditionally done much of the hard labor.

“We have now started to limit foreign labor,” said Hussain Yousuf al-Mulla, undersecretary at Qatar’s labour ministry. “When I say foreign, I mean Asian workers.

“The instructions that have come to us from the government are to stick to Arab laborers. Foreign laborers caused many problems — their number is big, their customs and habits are not similar to ours, besides social and security problems.”

Oman and Bahrain, which have seen street protests this year, also aim to localize jobs, but they may have less room for expensive steps such as job subsidies since they are not as wealthy as bigger oil exporters. Both countries are receiving multibillion dollar aid schemes from other GCC governments.

Oman’s foreign minister said in March that his country planned reforms which could include reducing the number of foreign workers.

Khan of the ILO predicted the GCC states would need years of work to reduce unemployment rates among their citizens and cut their dependence on foreign labor.

“I don’t think the nationals are, at the moment, ready to ‘take over’,” he said. (Additional reporting by Amran Abocar and Asma Alsharif; Editing by Andrew Torchia)


Right to Vote But No Driving

September 29, 2011 by · Leave a Comment 

Saudi monarch grants kingdom’s women right to vote, but driving ban remains in force

By Associated Press


Veiled Saudi women take photos of their children during a ceremony to celebrate Saudi Arabia’s Independence Day in Riyadh in this September 23, 2009 file photograph.

REUTERS/Fahad Shadeed/Files

RIYADH, Saudi Arabia — Saudi Arabia’s King Abdullah, considered a reformer by the standards of his own ultraconservative kingdom, decreed on Sunday that women will for the first time have the right to vote and run in local elections due in 2015.

For the nation’s women, it is a giant leap forward, though they remain unable to serve as Cabinet ministers, drive or travel abroad without permission from a male guardian.

Saudi women bear the brunt of their nation’s deeply conservative values, often finding themselves the target of the unwanted attention of the kingdom’s intrusive religious police, who enforce a rigid interpretation of Islamic Shariah law on the streets and public places like shopping malls and university campuses.

In itself, Sunday’s decision to give the women the right to vote and run in municipal elections may not be enough to satisfy the growing ambition of the kingdom’s women who, after years of lavish state spending on education and vocational training, significantly improved their standing but could not secure the same place in society as that of their male compatriots.

That women must wait four more years to exercise their newly acquired right to vote adds insult to injury since Sunday’s announcement was already a long time coming — and the next local elections are in fact scheduled for this Thursday.

“Why not tomorrow?” asked prominent Saudi feminist Wajeha al-Hawaidar. “I think the king doesn’t want to shake the country, but we look around us and we think it is a shame … when we are still pondering how to meet simple women’s rights.”

The announcement by King Abdullah came in an annual speech before his advisory assembly, or Shura Council. It was made after he consulted with the nation’s top religious clerics, whose advice carries great weight in the kingdom.

It is an attempt at “Saudi style” reform, moves that avoid antagonizing the powerful clergy and a conservative segment of the population. Additionally, it seems to be part of the king’s drive to insulate his vast, oil-rich country from the upheavals sweeping other Arab nations, with popular uprisings toppling regimes that once looked as secure as his own.

Fearing unrest at home, the king in March announced a staggering $93 billion package of incentives, jobs and services to ease the hardships experienced by some Saudis. In the meantime, he sent troops to neighbor and close ally Bahrain to help the tiny nation’s Sunni ruling family crush an uprising by majority Shiites pressing for equal rights and far-reaching reforms.

In contrast, King Abdullah in August withdrew the Saudi ambassador from Syria to protest President Bashar Assad’s brutal crackdown on a seven-month uprising that calls for his ouster and the establishment of a democratic government.

“We didn’t ask for politics, we asked for our basic rights. We demanded that we be treated as equal citizens and lift the male guardianship over us,” said Saudi activist Maha al-Qahtani, an Education Ministry employee who defied the ban on women driving earlier this year. “We have many problems that need to be addressed immediately.”


Saudis Turn Mecca into Vegas

September 29, 2011 by · Leave a Comment 

Historic and culturally important landmarks are being destroyed to make way for luxury hotels and malls, reports Jerome Taylor


A general view is seen of the Grand Mosque during the Muslim month of Ramadan in the holy city of Mecca August 20, 2011.  Saudi Arabia has begun the biggest expansion yet of the Grand Mosque, to raise its capacity to 2 million pilgrims, the state news agency SPA said. 

REUTERS/Hassan Ali

Behind closed doors–in places where the religious police cannot listen in–residents of Mecca are beginning to refer to their city as Las Vegas, and the moniker is not a compliment.

Over the past 10 years the holiest site in Islam has undergone a huge transformation, one that has divided opinion among Muslims all over the world.

Once a dusty desert town struggling to cope with the ever-increasing number of pilgrims arriving for the annual Hajj, the city now soars above its surroundings with a glittering array of skyscrapers, shopping malls and luxury hotels.

To the al-Saud monarchy, Mecca is their vision of the future–a steel and concrete metropolis built on the proceeds of enormous oil wealth that showcases their national pride.

Yet growing numbers of citizens, particularly those living in the two holy cities of Mecca and Medina, have looked on aghast as the nation’s archaeological heritage is trampled under a construction mania backed by hardline clerics who preach against the preservation of their own heritage. Mecca, once a place where the Prophet Muhammad (s) insisted all Muslims would be equal, has become a playground for the rich, critics say, where naked capitalism has usurped spirituality as the city’s raison d’être.

Few are willing to discuss their fears openly because of the risks associated with criticising official policy in the authoritarian kingdom. And, with the exceptions of Turkey and Iran, fellow Muslim nations have largely held their tongues for fear of of a diplomatic fallout and restrictions on their citizens’ pilgrimage visas. Western archaeologists are silent out of fear that the few sites they are allowed access to will be closed to them.

But a number of prominent Saudi archaeologists and historians are speaking up in the belief that the opportunity to save Saudi Arabia’s remaining historical sites is closing fast.

“No one has the balls to stand up and condemn this cultural vandalism,” says Dr Irfan al-Alawi who, as executive director of the Islamic Heritage Research Foundation, has fought in vain to protect his country’s historical sites. “We have already lost 400-500 sites. I just hope it’s not too late to turn things around.”

Sami Angawi, a renowned Saudi expert on the region’s Islamic architecture, is equally concerned. “This is an absolute contradiction to the nature of Mecca and the sacredness of the house of God,” he told the Reuters news agency earlier this year. “Both [Mecca and Medina] are historically almost finished. You do not find anything except skyscrapers.”

Dr Alawi’s most pressing concern is the planned £690m expansion of the Grand Mosque, the most sacred site in Islam which contains the Kaaba–the black stone cube built by Ibrahim (Abraham) that Muslims face when they pray.

Construction officially began earlier this month with the country’s Justice Minister, Mohammed al-Eissa, exclaiming that the project would respect “the sacredness and glory of the location, which calls for the highest care and attention of the servants or Islam and Muslims”.

The 400,000 square metre development is being built to accommodate an extra 1.2 million pilgrims each year and will turn the Grand Mosque into the largest religious structure in the world. But the Islamic Heritage Foundation has compiled a list of key historical sites that they believe are now at risk from the ongoing development of Mecca, including the old Ottoman and Abbasi sections of the Grand Mosque, the house where the Prophet Muhammad (s) was born and the house where his paternal uncle Hamza grew up.

There is little argument that Mecca and Medina desperately need infrastructure development. Twelve million pilgrims visit the cities every year with the numbers expected to increase to 17 million by 2025.

But critics fear that the desire to expand the pilgrimage sites has allowed the authorities to ride roughshod over the area’s cultural heritage. The Washington-based Gulf Institute estimates that 95 per cent of Mecca’s millennium-old buildings have been demolished in the past two decades alone.

The destruction has been aided by Wahabism, the austere interpretation of Islam that has served as the kingdom’s official religion ever since the al-Sauds rose to power across the Arabian Peninsula in the 19th century.

In the eyes of Wahabis, historical sites and shrines encourage “shirk”—the sin of idolatry or polytheism–and should be destroyed. When the al-Saud tribes swept through Mecca in the 1920s, the first thing they did was lay waste to cemeteries holding many of Islam’s important figures. They have been destroying the country’s heritage ever since.

Of the three sites the Saudis have allowed the UN to designate World Heritage Sites, none are related to Islam.

Those circling the Kaaba only need to look skywards to see the latest example of the Saudi monarchy’s insatiable appetite for architectural bling. At 1,972ft, the Royal Mecca Clock Tower, opened earlier this year, soars over the surrounding Grand Mosque, part of an enormous development of skyscrapers that will house five-star hotels for the minority of pilgrims rich enough to afford them.

To build the skyscraper city, the authorities dynamited an entire mountain and the Ottoman era Ajyad Fortress that lay on top of it. At the other end of the Grand Mosque complex, the house of the Prophet’s (s) first wife Khadijah has been turned into a toilet block. The fate of the house he was born in is uncertain. Also planned for demolition are the Grand Mosque’s Ottoman columns which dare to contain the names of the Prophet’s (s) companions, something hardline Wahabis detest.

For ordinary Meccans living in the mainly Ottoman-era town houses that make up much of what remains of the old city, development often means the loss of their family home.

Non-Muslims cannot visit Mecca and Medina, but The Independent was able to interview a number of citizens who expressed discontent over the way their town was changing. One young woman whose father recently had his house bulldozed described how her family was still waiting for compensation. “There was very little warning; they just came and told him that the house had to be bulldozed,” she said.

Another Meccan added: “If a prince of a member of the royal family wants to extend his palace he just does it. No one talks about it in public though. There’s such a climate of fear.”

Dr Alawi hopes the international community will finally begin to wake up to what is happening in the cradle of Islam. “We would never allow someone to destroy the Pyramids, so why are we letting Islam’s history disappear?”

Prophet’s (s) Wife’s House

The house of the Prophet’s (s) wife Khadijah was destroyed and replaced with a public toilet block. After lengthy negotiations the site was briefly excavated with artefacts found dating back to the Prophet’s  (s) time.

Expansion of the Grand Mosque

In order to accommodate the ever growing pilgrim numbers, the authorities have begun a £690m expansion. Houses have been pulled, and it is likely the old Ottoman and Abbasi columns will also go.

The Prophet’s (s) Birth House

The building where the Prophet (s) once lived lies just a few hundred yards  from the Grand Mosque. Currently a library, the fear is that it could suffer the same fate as his wife’s house when the mosque expands.

Royal Mecca Clocktower

In order to build the clock tower and its surrounding skyscrapers–most of which house luxury hotels–the Saudi authorities approved the destruction of an entire mountain and the Ottoman Ajyad Fortress that lay on top.

Also under threat

Bayt al-Mawlid

When the Wahabis took Mecca in the 1920s they destroyed the dome on top of the house where the Prophet Muhammad (s) was born. It was then used as a cattle market before being turned into a library after a campaign by Meccans. There are concerns that the expansion of the Grand Mosque will destroy it once more. The site has never been excavated by archaeologists.

Ottoman and Abasi columns of the Grand Mosque

Slated for demolition as part of the Grand Mosque expansion, these intricately carved columns date back to the 17th century and are the oldest surviving sections of Islam’s holiest site. Much to the chagrin of Wahabis, they are inscribed with the names of the Prophet’s (s) companions. Ottomon Mecca is now rapidly disappearing.

Al-Masjid al-Nawabi

For many years, hardline Wahabi clerics have had their sites set on the 15th century green dome that rests above the tomb holding the Prophet (s), Abu Bakr and Umar in Medina. The mosque is regarded as the second holiest site in Islam. Wahabis, however, believe marked graves are idolatrous. A pamphlet published in 2007 by the Saudi Ministry of Islamic Affairs, endorsed by Abdulaziz Al Sheikh, the Grand Mufti of Saudi Arabia, stated that “the green dome shall be demolished and the three graves flattened in the Prophet’s  (s) Masjid.”

Jabal al-Nour

A mountain outside Mecca where Muhammad (s) received his first Koranic revelations. The Prophet (s) used to spend long spells in a cave called Hira. The cave is particularly popular among South Asian pilgrims who have carved steps up to its entrance and adorned the walls with graffiti. Religious hardliners are keen to dissuade pilgrims from congregating there and have mooted the idea of removing the steps and even destroying the mountain altogether.


Gulf Perfumers Smell Opportunity

September 8, 2011 by · Leave a Comment 

* Increasing global interest in Arab fragrances

* Local manufacturers see opportunities but competition fierce

* Regulation, marketing muscle are obstacles

By Martina Fuchs and Rachna Uppal


Men visit the Ajmal fragrance store in Dubai Mall, August 4, 2011. Saudi Arabia is the Gulf’s largest regional market for fragrances, accounting for $827.5 million last year; the UAE was in second place with $205.8 million. By 2014, it expects fragrance sales to have grown 14.4 percent in Saudi Arabia and 16.5 percent in the UAE. Some predict even faster growth because of tourism and business travel to the region, in addition to rising competition as an increasing number of international players move into the Middle Eastern fragrance market. Picture taken August 4, 2011.

REUTERS/Mosab Omar

DUBAI, Sept 7 (Reuters) – Walk through any of Dubai’s immaculate, air-conditioned shopping malls, and the scent of spicy perfume becomes an integral part of the shopping experience.

From boutiques to sales clerks offering samples, there’s no shortage of fragrances lingering in the air, part of a tradition dating back thousands of years.

“I don’t count the layers my wife puts on every day, but her smell always blows me away,” says Mustafa al-Muhana, a Saudi Arabian visitor to one of the specialist perfume stores.

Per capita consumption of perfumes in the Gulf region is among the highest in the world. Men and women equally enjoy applying layer upon layer of scents which linger long after the wearer has disappeared from sight.

“If a perfume doesn’t leave a trail, it’s not good enough,” says Abdulla Ajmal, deputy general manager at Ajmal Perfumes, a United Arab Emirates-based fragrance manufacturer.

That belief is providing healthy sales for foreign makers of perfumes in the Gulf and also supporting a growing fragrance manufacturing industry within the region, which is struggling to diversify away from its traditional reliance on energy exports.

Saudi Arabia is the Gulf’s largest regional market for fragrances, accounting for $827.5 million last year; the UAE was in second place with $205.8 million, according to consumer research firm Euromonitor International. By 2014, it expects fragrance sales to have grown 14.4 percent in Saudi Arabia and 16.5 percent in the UAE.

Some predict even faster growth because of tourism and business travel to the region, in addition to rising competition as an increasing number of international players move into the Middle Eastern fragrance market, including Giorgio Armani, Yves Saint Laurent and Guerlain.

“The growth of the Gulf perfume industry will be exponential,” says Shazad Haider, chairman of Fragrance Foundation Arabia, the regional outpost of the Fragrance Foundation, a group which represents the industry’s interests globally. “We will see a minimum twofold growth over the next three years.”

The people of the Arabian Peninsula have used oud, a perfume resin from the agarwood tree, as well as sandalwood, amber, musk and roses for over two thousand years; they are still the dominant ingredients in local perfumes.

Perfume is repeatedly mentioned in the Islamic hadiths, which record the actions and words of Prophet Mohammed, and it is reported that he himself never refused perfume, intensifying its significance for all Muslims.

Many perfumers say they have identified a trend in which traditional Arab fragrances are starting to attract broader, global interest.

“We have a strong line that uses other Western notes but the interesting point is that our European, American…customers are looking for the oriental notes, especially the oud oil,” says Shadi Samra, brand manager at Saudi Arabia-based Arabian Oud, which has flagship stores in London and Paris.

In Dubai’s warehouse district, Ajmal Perfumes operates a $10 million, 150,000-square-foot (14,000-square-metre) factory that makes around 50,000 bottles of Arab and French fragrances a day.

Abdulla Ajmal said the turnover of the family-owned business in 2010 was $200 million; sales were dampened by the political unrest in the Arab world this year, but Ajmal said he still aimed for 6 percent growth in 2011.

For now, however, many local manufacturers may struggle to achieve their international ambitions because they do not comply with global industry standards covering restricted ingredients and quality control.

“If you want to export to anywhere else, not just to the West, but also Asia, you are going to have to comply with IFRA standards,” said Stephen Weller of the Brussels-based International Fragrance Association (IFRA). He added that the association currently had no Gulf members.

And while Gulf Arab perfume manufacturers seek growth abroad, they face stiff competition from French and global players on their home ground.

L’Oréal Middle East, the regional arm of the French cosmetics giant, accounted for 9.6 percent of fragrance sales in the UAE in 2009, the biggest share, followed by Ajmal with 9.2 percent, according to Euromonitor International. The three largest domestic makers, Ajmal, Rasasi and Designer Shaik, together accounted for 21 percent.

“Most of the international houses work very closely with consumers here in the region…They adapt and introduce something customised, or they modify some of their product ranges to fit the taste of the region,” said Mohamed al-Fahim, chief executive of Paris Gallery, one of the largest regional fragrance retailers.

At the store’s Dubai Mall branch, Arabian-style glass bottles now carry the names of brands such as Guerlain and Clive Christian. Armani Prive and Tom Ford, among others, have developed ranges specifically for the region, and others plan to follow.

A 50 ml bottle of French brand Kilian’s Arabian Nights collection retails for about 1,500 dirhams ($410). In an ackowledgement of the heavier-than-average use of perfume in the region, a refill sells for half-price.

Global fragrance houses which can adapt to brand-conscious Gulf consumers still enjoy hefty advantages over most local perfumers in the form of bigger marketing budgets, technology and general experience of the industry.

“We still have a way to go to produce something of the same level or even better than what is produced in Europe or the U.S.,” Paris Gallery’s Fahim said.


High-Spending Arab Tourists Flock to Turkey

July 7, 2011 by · Leave a Comment 

By Ece Toksabay

ISTANBUL (Reuters) – Dozens of Gulf Arab women in flowing black veils whisk through one of Istanbul’s most luxurious shopping malls, clutching bags of lingerie, shoes and toys, swarms of children in tow.

The summer tourist season is in full swing in Turkey and Erkan Zengin, a store manager for an upmarket Turkish jewelry company, has reason to be happy.

“Our foreign customers are mostly from Saudi Arabia. They have good taste in jewelry and usually go for the big rocks.”

A similar scene is repeated at a nearby leather shoe and jacket store, where a clerk can barely keep up with high-spending customers from the Middle East.

“They are not like Turks. They like a shoe, ask for their size, try it on, go to the cashier and pay. Turks want to try on 20 pairs of shoes before making up their mind,” the clerk said.

“Our favorite customers are Arabs because of their quick decisions and high purchasing power.”

Muslim but non-Arab Turkey has become a hot destination for Arab tourists and investors in recent years, emerging as a regional power in the Middle East under Prime Minister Tayyip Erdogan’s AK Party.

Arab interest in Turkish culture — from TV soap operas, pop music and food to Turkey’s rehabilitation of its Ottoman history — has helped bring an influx of Arab tourists.

Istanbul, the old imperial capital, has become a popular wedding destination for Arabs.

Escaping blistering desert summers, Arabs can also take advantage of a growing sector in Turkey that caters to devout wealthy Muslims — hotels where men and women have separate swimming pools and beach areas and alcohol is not served.

And with “Arab Spring” turmoil scaring visitors in the Middle East and in North Africa, stable Turkey is counting on its large Mediterranean coast and rich heritage to draw more visitors.

“The Arab Spring is positively affecting our tourism revenues,” Basaran Ulusoy, head of the Association of Turkish Travel Agencies, told Turkish media. “It made a positive contribution to Turkey’s international perception.” Data from the Ministry of Tourism showed the number of tourists visiting Turkey increased by 14.56% in the first five months of this year compared to January-May in 2010.

While Germans, Russians and British tourists continue to top the list — most of them lured to Turkey’s cheaper all-inclusive packages — high-spending tourists from Arab countries have experienced the biggest percentage jump.

The numbers speak for themselves. In May, tourists from Yemen were up 87% from last year, while the rise in tourists from Saudi Arabia and Iraq was 79.3% and 45.84 respectively.

This is a welcome boost to Turkey’s coffers, as the country struggles to plug a widening current account deficit.

Tourism is a crucial foreign currency earner in Turkey and helps to offset the widening current account deficit, which rose 77% year on year to $7.68 billion.

Turkey has sunk huge efforts into improving political and commercial ties with its neighbors in the Middle East, but “Arab Spring” unrest has cost Turkish entrepreneurs billions of dollars in Libya and has delayed infrastructure projects in neighboring Syria.

But turmoil in Tunisia and Egypt has also forced many to rethink travel plans and Turkey is seen benefitting, as tourist destinations in unstable countries suffered a major hit.
“Turkey is about to have a tremendous tourism season this year on the back of problems in MENA countries and new tourism investments in the country,” Ozgur Altug, chief economist at Istanbul-partners BGC Partners, said.

“End-May is the official start of the tourism season in Turkey and in July-August-September the amount of FX in Turkey will reach its peak due to rising tourism revenues.”

Turkey’s tourism revenue exceeded $25 billion in 2010 and officials expect more cash for 2011. More than 30 million tourists are expected by the end of the year, up from 28.6 million last year.

With 48 airports nationwide, 16 of them international, and home to Europe’s fastest growing airlines, Turkish Airlines, Turkey has also become a stepping stone to other destinations.

“We want especially Egypt’s situation to improve soon and gain stability because with Turkey, it is part of a two-step holiday destination for American tourists,” Ulusoy said.

Istanbul, Turkey’s largest city and seat of Ottoman-era palaces and mosques and centuries-old bazaars, receives the most tourists followed by the Mediterranean beach resort of Antalya.

But while more Arabs are coming to Turkey, the number of Israeli tourists visiting Turkey between January and May fell by 59 percent compared to the same period last year.

Ties between the two once-close allies deteriorated sharply when Israeli commandos stormed a Turkish-backed flotilla bound for Gaza last year, killing nine Turkish activists.

About 30,000 tourists from Israel visited Turkey in the first five months of the year, compared to the 72,500 Israeli tourists who came to Turkey during the same period in 2010.

There have been signs of an early thaw in relations between Turkey and Israel, but in May the decrease of Israeli tourists was even sharper — only 6,417 tourists from Israel came to Turkey, compared to 18,295 in the same month last year.

This does not seem to bother Zengin, the jeweller, who is looking forward to more Arab tourists.

“Our Arab A+ customers, who choose the best jewels, have not arrived yet. We can say this crowd here is B or A-, but still, we sell much more to Arabs than Turks. We are looking forward to July, when our richer customers arrive.”

(Editing by Alison Williams)