As IAB explores accounting industry activity in frontier markets, read a Q&A conducted by Russell Bedford that delves into the heart of the challenges its new member faces in the current eco-political and health environment. Dar Al-Mohassaba positions itself to compete with international audit firms by adopting full-member status at Russell Bedford
Professional services firm, Dar Al-Mohassaba, formed in 1992 when Hassan Al-Dailami and Mohammed Shaiba joined forces. Despite difficult business conditions in Yemen, the firm has gone from strength to strength. Susan Barron, marketing and communications manager at Russell Bedford asked Hassan Hantoosh, a partner at the firm, about the prospects for the Yemeni economy, joining Russell Bedford, and what this means for Dar Al-Mohassaba.
Susan Barron: How do you see the future for the Yemeni economy?
Hassan Hantoosh: “The civil war has, understandably, created an environment where economic prospects are uncertain. The deteriorating business climate caused by the conflict has disrupted business heavily, often resulting in force majeure contractual issues. For many firms, this has presented operational difficulties as well as making any kind of forward strategic planning impossible.
When the war ends, we will need a programme of rapid investment in, and development of, the private sector to create jobs, rebuild infrastructure, and shift the flow of money away from a war economy and into formal markets.
SB: So is there any investment coming into Yemen at present?
HH: The war and continuing civil unrest act as a deterrent to overseas investment and trade. If anything, Yemen is leaking foreign direct investment rather than attracting it as investors look to withdraw. Any remaining foreign investment is targeted mainly at the oil and mineral sectors, although other areas include electricity and water, agriculture, irrigation and fisheries, health and housing, and infrastructure.”
SB: What sort of businesses can succeed in Yemen?
HH: There are examples of businesses succeeding in areas such as telecommunications, food, and pharmaceuticals. Historically, there has been a lot of emphasis on oil and gas, and this is where most foreign investment has been directed. The problem is Yemen’s oil and gas reserves are small and it can’t compete with the oil and gas powerhouses elsewhere in the Middle East, consequently revenues from this sector are declining. However, Yemen does have other natural mineral resources, such as precious metals, and this is generating considerable interest and some investment. With a more stable business climate Yemen’s natural resources will present significant opportunities for foreign direct investment.”
SB: Where do you see your future clients?
HH: Locally we are one of the largest CPA firms and have mainly operated as auditors to SMEs and government entities. Many larger business entities require their audit firm to be a member of a reputable international network. These entities include banks, non-governmental organisations, telecommunications companies, and branches of foreign companies. To meet our growth plans we need to attract this type of client.
SB: Why did you see it as important to upgrade your firm to full membership of Russell Bedford?
HH: A sizeable part of the audit market in Yemen is occupied by international audit firms. As I mentioned, to attract the type of client we need for our future growth and development, we need to meet their need for a firm with international reputability. Membership of Russell Bedford gives us this and it was a major driver in our thinking.
But membership increases our presence in our local market too by enhancing our capabilities in important areas. We now have access to powerful business development tools such as global business databases, business targeting tools, and other marketing resources. Access to the support and expertise of other member firms, as well as technical updates, will enhance our international knowledge, while the ability to bring in expertise from other firms as and when we need it will help us to support projects needing specialist knowledge that we may not possess in house.
Our membership of Russell Bedford makes me optimistic that we will achieve our plans for growth.
In summing up the appointment, Russell Bedford CEO Stephen Hamlet said: At present, Yemen is not especially conducive to business success but, against all the odds, Dar Al-Mohassaba has proved that it is possible to succeed in Yemen. The firm is now embarking on the next stage of its development and becoming full members of Russell Bedford is a key part of this strategy. The support that the Russell Bedford network offers will help them to succeed and I welcome Dar Al-Mohassaba as Russell Bedford’s latest member.”