GLOBAL RANKINGS: Africa, Middle East - International agency groupsstill have a piecemeal presence in Africa, but the Middle East is acomplex web of opportunities

Against a backdrop of civil war, national debts and HIV/AIDS

gripping Africa south of the Sahara, it's surprising to report that no

less an authority than Howard Paster, CEO of Hill & Knowlton, has

proclaimed Africa the next big thing for PR. Healthcare, certainly, is

tipped to be a key growth sector for PR agencies in the region.



Lucien Vallun, MD of Johannesburg-based Fleishman-Hillard Vallun

Wilkins, says there is a new seriousness in the approach to tackling the

pandemic.



"In the past, there has been a confrontational relationship between the

major pharmaceuticals and government on AIDS and the international

patents issue. A period of rapprochement has been entered. It is a more

constructive environment, and we'll see a lot more communications coming

out of that."



South Africa



The catalyst for much of the change has been South Africa's transfer to

majority rule in 1994, which brought a variety of foreign multinationals

back to the market, as well as PR groups such as GCI, Brunswick and

Citigate challenging the supremacy of local companies like Arcay, TWS

and Baird's.



Attracting foreign investment remains a priority for the ANC government,

with a raft of privatizations planned over the next five years.

Legislation on transparency in corporate governance is also due to come

into play in the first quarter of 2002 and will have a marked impact.

"The emphasis on IR and reputation management will be significant,"

Vallun notes.



The country has avoided much of the fallout from the global "dot-bomb."

Text 100's general manager in Johannesburg, Samantha Watt, says:

"Clients may have cut back on retainers slightly but not completely."

Majors such as Cisco Systems still view it as a growth area. "South

Africa is an early adopter in terms of technology," she adds.



The country is also a logical gateway to the rest of the continent. Text

100 has only managed ad hoc work in other African countries until now

but is putting its muscle behind the development of a regional network,

winning projects in Nigeria, Zimbabwe and Botswana.



There remains a "digital divide" between South Africa and much of the

rest of the continent, however. The Sahara splits Africa into north and

south, with sub-Saharan Africa divided broadly into French and

English-speaking nations. Nigeria, the largest economy outside South

Africa, has developed into a west African PR hub during the last decade,

with Ghana and the Ivory Coast increasingly attractive to outside

investors. But MS&L in Johannesburg remains the only agency to have a

presence throughout regional Africa.



In the east, Kenya has been traditionally strong in PR, with Nairobi a

useful base for campaigns in Uganda and Tanzania. Agencies such as IMC

and Communications Concept offer niche services, but the region's

largest agency, Church Orr, is developing bases in other countries. But

national networks are developing at a snail's pace.



"PR as a discipline has rapidly evolved in South Africa but in (the rest

of) Africa it's still pretty much just a media release-type thing," MS&L

managing director Nicholas Motsatse says. "PR goes hand in hand with how

sophisticated the media is in a country and, traditionally, media has

been state-owned and state-dominated. Developing media also requires

huge investment, especially when you don't have many advertisers."



Middle East



In the north, countries such as Algeria, Morocco and Tunisia have

historically aligned themselves with the Middle East and Gulf states

rather than the rest of Africa. Arabic language, culture and Islam bind

the region - home to 250 million consumers - and the 25 members of the

Middle East PR Association, formed in June, have an estimated combined

fee income of $20 million, which MEPRA predicts will grow at 20

percent annually.



Jock Wilson is regional director for Middle East and North Africa for

Promoseven PR, a Weber Shandwick affiliate based in Dubai, the United

Arab Emirates capital that forms the hub of PR in the Gulf states.

"Community relationships are at the forefront," says Wilson.



The economy of the Gulf states remains oil-based, although Bahrain's

move away from oil dependence to exploit aluminum reserves has given it

status as financial capital of the region.



Moves toward deregulation and privatization are providing PR

opportunities, with even Saudi Arabia freeing itself up for foreign

investment prior to its proposed entry to the World Trade Organization.

"Saudi is our fastest-growing office in the past 12 months," says David

Baker, Gulf Hill & Knowlton UAE country manager. The agency formed a

technology group three years ago and clients such as Epson, IBM and

Philips form a significant chunk of the agency's business. "But PR is

still misunderstood in the Gulf," Baker adds.



Despite this, local business - vital for the continued development of PR

in the region - is increasing. Baker says the proportion of local to

international PR work was five percent to 95 percent even two years

ago.



Now the figure is more 25 to 75. "There is an uptake in regionally based

companies and government departments using PR as a communications tool,"

Wilson agrees.



While it is too early to say how the international rehabilitation of

Libya will affect demand for PR there, another North African country,

Egypt, is on the wish list of many international agencies. It has a

thriving telecoms network, multinationals are demanding government

relations programs and healthcare education is growing, generating

business for agencies such as Spot On and Pro PR.



Meanwhile, Israel - despite its commercial isolation on political

grounds from most of its neighbors - has been one of PR's international

success stories as a thriving arena for technology companies. On the

dot-com wave, in February 2000 Gitam Porter Novelli established a

technology division, which now accounts for half the agency's clients.

Hi-tech business remains strong, insists international consultant Joanne

Frankel.



But the dot-bomb has altered the business landscape, according to Josh

Schuman, head of Ruder Finn Israel's tech group. "A lot of the hi-tech

companies that had been bringing in venture capital now couldn't afford

to hire PR. Local PR firms have had to cut staff dramatically."



Violence between Palestinian and Israeli forces during the past eight

months has not made life more difficult than usual, however, insists

Frankel.



"Security problems are part and parcel. Our business suffered more from

Nasdaq problems and the bust of Internet companies." Schuman agrees:

"The global economic situation is far more influential than anything

going on in Israel."



Even at the height of its success, while international accountants and

advertising agencies have bought companies in Israel as a way into the

market, PR groups have been more reticent, preferring in the main to use

affiliates. During the height of the dot-com boom there were serious

inquiries, Schuman says, but that moment has passed.



With the top two groups, Ruder Finn and Porter Novelli, boasting a

combined fee income just under $4 million - and with local

agencies such as hi-tech specialist Koteret - Israel remains a

significant PR market and steady growth during the 1990s has given it

the base to recover from the rigors of this year. Hi-tech work,

corporate reputation and public affairs are all set to grow.



The prevalence of parochial issues and cultural differences means there

is no substitute for a local PR presence in Africa and the Middle

East.



Cold facts remain, however. Chief among these is that Africa must

achieve economic growth of five percent per year simply in order to

prevent poverty rising. And quite apart from its human cost, the spread

of AIDS threatens to rob the south of the continent of millions of

future consumers.



GLOBAL AGENCIES OPERATING IN AFRICA/MIDDLE EAST

AFRICA/MIDDLE EAST

RANK AGENCY NAME INCOME (dollars) % LOCATION

2000 1999 2000 1999 CHANGE

1 - Hill & Knowlton 2,405,000 - - ME

2 4 Ruder Finn 1,929,000 1,230,000 57 ME

3 2 Porter Novelli

International 1,827,000 2,426,000 25 ME

4 - Text 100 1,450,946 - - SA

5 8 Euro RSCG Corporate

Comms 1,306,000 111,000 1,077 ME

6 6 Ogilvy Public Relations

Worldwide 1,100,000 714,000 54 ME

7 5 Fleishman-Hillard 926,000 882,000 5 SA

8 1 Manning, Selvage & Lee 763,000 3,846,240 80 ME/SA

9 3 Incepta Citigate 271,765 1,561,208 83 ME

10 7 GCI Group/APCO

Associates - 583,000 100 ME

SOURCE: Council of PR Firms Notes: This is a list of global public

relations firms. It does not include local independents.



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