Milk for export...

With ever increasing graduate opportunities abroad, Will Hodges investigates why this year's milkround is going global.

The word globalisation is thrown around a lot nowadays. We are supposedly part of a global economy in which financial markets are ever more interlinked. The events of the past 12 months have certainly proved that. The sub-prime crisis in the States having a knock on effect which has quickly seeped into European markets and economy, followed by China and Japan. The recent co-ordinated interest rate cut by central banks in the US, Canada Europe and Japan was an unprecedented example of global leaders and economies working together en masse in an effort to ensure the financial well-being of citizens across different countries and continents.

Certainly, given the UK's strong links to the US and its credentials as a leading world financial centre, as citizens or residents in this country we can pride ourselves on existing at the heart beat of the financial world. This is where it's at. The hallowed shores of the British Isles, and specifically, the growth of its financial services industry over the last decade, have attracted the cream of young graduate talent from across Europe and beyond. During this period the Square Mile has overtaken Wall Street as the world's leading financial centre with London Stock Exchange (LSE) raising over £28 billion in 2006 - £10 billion more than its great rival the New York Stock Exchange that year.

That the City can sustain this rate of growth over the next few years, however, looks increasingly unlikely following the losses accrued by many of the UK's leading banks and investment firms. The current stagnancy within the UK banking system has led to the part nationalisation of domestic firms such as HBoS and RBS, besides the US firms who have been forced to downscale their operations in the UK. The traditional global centres of finance are crumbling - the New York, London and Tokyo stock exchanges have all dropped to their lowest levels in five years. Meanwhile, employment numbers in City-based firms are expected to drop significantly over the next year - Bloomberg recently announced that it expects 42,000 job-losses across the capital's financial services industry in 2009. This might yet prove to be a conservative estimate.

To quote the phrase, however, one man's loss is another man's gain, and as the economies and financial services industries of the UK and the US have started to shrink, there has been a measurable contrast in the growth of financial centres hosted by the emerging market economies of Asia and South America. The larger 'BRIC' (Brazil, Russia, India and China) economies have been at the centre of the hype with Beijing, Mumbai, Moscow and Sao Paolo each boasting surging stock markets as their economies have become ever credible rivals to their western counterparts over the last decade. Far from being a safe-haven from the recent financial crisis, however, many emerging market exchanges have posted equally devastating losses. Foreign investors have withdrawn in large numbers, deterred by concerns that these new economies (based largely on the exporting of manufactured goods and commodities such as oil, gas on food stuffs to developed markets) will be vulnerable to a global recession. Meanwhile, whilst the BRICs have begun to stumble after leading the way over the last few years, it is the Middle East states which have been tipped by economists to be the most resilient of the emerging economies in the face of the global slowdown. Backed by large capital reserves and established financial services industries, the region's banks and sovereign wealth funds have begun investing in international markets, a trend which is set to continue as they look to take advantage of the worsening economic climate in the Europe and the US.

How the Middle East is set to lead the graduate brain-drain

Standing at an impressive 819 metres in height, the soon to be completed Barj Dubai tower cuts a formidable figure at the edge of Dubai's main financial centre, imposing itself above the already not insubstantial jungle of cranes and skyscrapers which make up the city's skyline. The fact that the tallest building in the world is here in Dubai is no coincidence, rather a clear statement of intent from a city which views itself as a leading global financial centre. Big buildings speak volumes and generally the message is along the lines of 'this is where you need to be'. This was the aim of the Statue of liberty during New York's days as a magnet for immigrants from Europe and before it, that of the Coliseum in Rome. In Dubai's case the claim might not be as far fetched as it first appears. This city of 1.5 million people, which makes up one of the seven states, or emirates, belonging to the United Arab Emirates, is at the forefront of the boom region of Gulf states competing with the west for a greater share of the world's financial activity, and with it increasing volumes of the world's top graduate talent.

The economic boom in the Gulf region has been spectacular over the last decade - the UAE grew by an average of 7.4% per year in terms of GDP between 1996 and 2006, whilst its neighbour Qatar grew by 11.7%. Even more impressive, however, is the fact that this growth has been achieved not through the sale of oil, which had been the building block of the economies of many of the Gulf States during the post-war era, but rather through the diversification of these economies away from oil and gas and into professional industries like financial services as well as tourism and construction.

The banking boom has transformed Dubai from a state reliant solely on oil exports to a well-positioned centre of global business: the state's total bank assets growing by 16% during the first half of the year, matched by equal growth in the number of deposits places in the city's banks during this period. A similar story can be seen in nearby Abu Dhabi, the Capital city of the UAE and home of the Abu Dhabi Investment Authority, the world's wealthiest sovereign wealth fund, as well as the Abu Dhabi United Group, who recently hit the headlines following their acquisition of Manchester City football club.

Several hundred miles to the west, Qatar, another former oil state turned financial nucleus is in an ongoing competition with the EUA to become the international business centre of the Middle East. The country now boasts the fourth largest GDP per capita in the world at just under $54,000. The growth of the banking and real estate industries in the region has attracted international firms in droves, from top investment banks such as Morgan Stanley and ABN Amro, to real estate firms like Savills and Knight Frank who have offices in Dubai and Bahrain respectively. All are drawn by the frenetic pace of business and booming construction. And with them have come the graduates.

Here come the grads

Foreign workers from around the globe have been flocking to the Gulf States since the start of the boom, allowing Dubai's population to increase from only 670,000 in 1995 to over 1.5 million at last count. The city is now a melting-pot of migrant workers from Asian countries like India and China, and western bankers and businessmen from the US and Europe, drawn by a combination of labour shortages, cheaper living costs and tax-free salaries. Whilst English is the business language of choice, Dubai can stake a claim to be the Babel of the 21st century - 83% of its residents were born outside the UAE. Up until now, however, the vast majority of western migrants have been older workers with several years of experience in their sector, many of them with families who have also made the trip over. But this trend is gradually changing. Air-bused in from the other side of the Med are steadily growing numbers of UK graduates taking part in training schemes offering the opportunity for working abroad. As their operations in the region develop, firms such as Citi, the investment bank, who have operations in the UAE and Bahrain, are beginning to offer entry-level employees the chance to spend all, or at least a sizeable chunk of their training period working in an overseas office. As well as other emerging markets locations like South Africa, Egypt, Turkey and Moscow, where graduate recruits from the UK can be based, Citi have a growing office in Dubai which is expected to increase its proportion of graduate intake in 2009. Brian Hood, the firm's Graduate Recruitment Manager for the EMEA region pointed to the benefit of giving graduates exposure to working aborad at an early stage in their career:

'Gaining international experience is a very valuable addition to an individual's career...locations such as the Middle East, and Dubai specifically, have grown in importance over the past few years. As a result the number of graduates we are hiring for our Dubai office has also increased.'

It's not just in finance, however, where overseas opportunities are arising. Though the demand for legal services in the UK and Europe has not slowed dramatically as a direct result of the credit crunch - historically law firms have been able to profit from the increase litigation activity during a downturn (companies trying to recoup money lent to loss-bearing companies for example) - there is evidence that many city law firms are also hedging their bets by moving operations and staff to locations where there is more commercial activity taking place. Freshfields, for example, who have offices across 16 countries including Bahrain and the UAE, have increased the number of lawyers representing the firm in the Middle East. There is also a trend in graduates making the jump. Whereas trainees would normally have to complete their two years of training in the London office before having the opportunity to spend a stint abroad as qualified lawyers, several firms such as this one are now allowing grads to go abroad for all or part of their training contract.

As activity in traditional business centres such as London is squeezed, increasing numbers of firms within internationally-focussed industries such as finance, law and consulting have adopted this strategy of 'geographical hedging'. Graduates working in these areas can only profit from the growing number of opportunities to cut their teeth in a new and evolving business climate such as the Middle East. But what is the reality of life as a fresh-faced twenty something snatched from the security of a British university campus and thrown into the relative unknown of a Dubai or an Abu Dhabi? Behind the glamour of glass towers and holidaying football stars we were keen to uncover the reality of graduate life in the Gulf. Are the streets really paved with gold or something altogether less pleasant? After a lengthy and much-needed session on Google Earth, The Gateway spoke to three recent grads - two from Oxford, one from Bristol - who have spent time working in the Middle East across different industries. We asked them to explain their motivations for going abroad, describing how they have found the experience and whether they would recommend other graduates to follow in their footsteps. This is what they said:

The Engineer- Engineering graduate - Bristol 2006

I chose to go to Qatar; I had been looking to work abroad. It was a good opportunity to get some good experience on a massive project, build my CV and also to earn some more money.

I am working on a large-scale project to develop a new city in the desert north of Doha. They needed people of all sorts of levels and disciplines on the project and there are several different aspects of the project which I could get involved in. It is a different set up to the UK office, which houses a range of engineering disciplines working on numerous unrelated projects.

One of the main differences of working here is that the hours are tougher. The working week here is 7.5 hours longer than UK, so 20% longer. As I have joined the project mid-way through and due to its size there are a lot of deadlines and work to do. Added responsibility is a plus though. I have been representing my firm at meetings between sub-consultants, project managers and the client, which I would never do back in the UK on a project of this size.

Socially I guess you could say there is not a huge amount going on in Qatar, but if you are out-doorsey then there are things to do, diving, sailing, etc. I have joined the Qatar touch rugby league and the Doha sailing club. There are ex-pat clubs were you can go and get a drink and listen to live music etc. I have not met many other graduates though. Most people are here with their wives/husbands.

It took a couple of weeks to settle in to life in Qatar; it is a lot different from living in the UK, though they have most English shops and you can get hold of most things you can back home. Also everyone speaks English. There are customs and Muslim ways that you have to adhere to but I haven't found these a problem at all, I think that it is worse if you are a women, so female graduates might find it a bit more of a problem.

All things considered, however, I think that it has already been a worthwhile experience. It has been a chance to work on a massive project early on in my career. It has also been interesting culturally to live in another country which is completely different from the UK and experience what that is like to live and work there. I think it depends on the person but it is definitely something I would recommend.

The Banker-PPE graduate Oxford 2008

The investment bank I work for offered me the opportunity to work in a variety of teams and locations and chose to come to Dubai.

This is the first time my company has sent someone so junior out to the Middle East office. They have previously only sent bankers with at least a couple years' experience. The reason why they specifically sent me, a relatively inexperience grad, is part of a new strategy to have full deal execution capabilities on the ground in Dubai rather than having to work in conjunction with bankers based in London. Of course, across the board people who can speak Arabic are more likely to be given the chance to work here.

Given that the team is smaller than most London-based teams, my workload is greater. One annoying thing that goes with a smaller office is that you end up doing much more of the time-consuming work that would ordinarily be done by support functions back in London.

The social life I have out here - to the extent bankers have any - is markedly different to what it is back home. One reason is, there are very few grads - the Middle East tends to recruit and attract people with years of experience and these people often come with their family. I guess It's easy enough to meet other expats as we tend to work in the same locations/industries and live in the same areas. That said, if you're looking to learn about the local culture you'll find it difficult - it's next to impossible to meet local Emiratis.

Beyond minor differences, like the fact that the working week here is Sunday to Thursday (as opposed to Monday to Friday), I haven't experienced a culture shock. My advice to grads thinking about starting off out here is that if you're expecting the streets to be paved with gold you'll be disappointed. Also, the industry consensus is still very much that London and New York are the best places to start and develop your career - nowhere yet is able to compete with the prestige of these financial centres. But if you're interested in working in emerging markets longer term, then it's worth giving working in the Middle East a go.

The Consultant-Economics and Management graduate Oxford 2006

Alot of the projects which come through my firm are for clients based in Abu Dhabi. Though I am not based there full-time I am regularly called upon to work on projects out there and as a result have spent a considerable part of my graduate scheme there. The amount of time I am on the ground in the Middle East varies from 20 days to 2 days at a time.

In terms of the decision to work there I was never really given a choice - a project comes in and unless you really didn't want to go on it, you just would.

When I started working at the firm, initially I was there with a more experienced person who would lead the project, but as time as gone on, I've become the more experienced person! One of the benefits of working out there for me personally, therefore, is that I've been given a lot more experience that would generally be handed to a newish grad back home. On the plus side the locations are certainly more salubrious so to speak. Our clients in the Middle East generally have the most luxurious and oversized work spaces, a change from cramped London offices.

The project work we do in Abu Dhabi is generally tougher than back in London - we are there to do a lot of work and usually in a very short time, so we're under loads of pressure.

As most of our projects are generally quite short-term we don't get much of a chance to enjoy a social life - we just do the airport-office-hotel taxi run, that's all really, and perhaps a few odd trips here and there, but nothing that could be classed as a social life. We don't really get to meet the locals, other than our clients that is, and so we don't really build up a proper understanding of the place or the culture. Saying that, I am pretty familiar now with the ways of doing business out there which is very different to the UK in so many respects.

Overall, whilst I can't say have particularly enjoyed working in the Middle East, the opportunity of working there has certainly been a major plus at this stage of my career and is great for my CV. The more of a variety of experience you gain, the better you are at handling situations and generally add to your knowledge of the world.

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