WHAT LOCALE IS BUSINESS HELL FOR YOU?

John Carver is executive director of the multimodal services group of Colliers International. He’s based in L.A.

Well, there is that little matter of a war, so it’s not surprising that the Middle East took top honors as business Hell for 39% of the respondents to last week’s Feedback Poll. Latin America and Asia tied for a distant second with 19% of the vote. Eastern Europe fourth (13%); Canada fifth (7%); and Western Europe brought up the rear with 3%. Commentator Carver takes a slightly different view–except of course for the part about the Middle East–and he explains why below:

“We’ve worked in Western and Eastern Europe, South America and Asia. While we haven’t worked in the Middle East, I can imagine it would be tough, given the volatility of the war and the state of security.

“But I can tell you some of the challenges and opportunities we face in Asia, Latin America and Europe. Of all of those, Eastern Europe is probably the most difficult for us to penetrate. Projects in Asia come in response to real demand that we know is there. There’s empirical data suggesting that the port of Shanghai is number three in the world and is destined to be number one, and the infrastructure that’s needed to make that happen is well understood. In Latin America, there’s an awareness of the evolution of the distribution chain and the interests of companies like UPS and FedEx to set up their operations there.

“In Eastern Europe, however, there’s much more uncertainty about where the pockets of opportunity will be. And there’s not a lot of evidence to suggest that the returns are going to be there at the end of the day. It’s a zero-sum game, where if one country gains, it’s at the expense of another. So it’s challenging for us in the industry to determine whether a particular project is a viable opportunity or not.

“In North and South America and in Asia, it’s not a zero-sum game. Shanghai won’t do well at the expense of Shenzhen, for instance. Forecasters suggest that all of these areas are going to experience growth as a result of continuing globalization.

“The second part is that in Eastern Europe there’s also a much shorter track record and a much lower level of relationship and history with the stakeholders involved. In Asia there are long-established relationships that can be tapped into, as there are in North America and South America, even in India. In Eastern Europe it’s all very new and there’s real uncertainty about who can perform and who’s in a position of authority.

“The areas where we like to work best are Asia and Latin America. There’s a real embrace of American involvement in their projects. In Western Europe, there’s less of that, although in the Eastern Europe, that’s probably not the case because they’re just trying to bring attention to their infrastructure and real estate system, so there’s a real desire. Then, as I said, the problem becomes where to hitch your wagon.”

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