Question
After the GCC reconciliation, the six gulf countries consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates decided to initiate a
After the GCC reconciliation, the six gulf countries consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates decided to initiate a customs union similar to the European Union. The Gulf Customs Union is intended to facilitate trade and assimilate customs and taxes procedures. A standardized 10% value added tax (VAT) will be adopted across the GCC. Nonresidents can claim their tax back on products purchased anywhere in the GCC on the port of departure of any city in the GCC. Products imported to the GCC will be charged an import duty. Products made in the GCC can move freely within the GCC while non-GCC made products will have to pay taxes. It is expected that the GCC aggregate GDP will grow by 1% as a result of the customs union. Another important benefit of the union is self-sustainability of the GCC.
The customs authorities of all six countries are involved in the project. The ministries of transport and communications, trade, finance and economics are also involved. Moreover, all six countries have their own consulting firms providing directions to the project. Consulting firms involved in the technological development are Deloitte, EY, KPMG, IBM, and Microsoft. The legislative teams from the ministries of trade of all six countries are also involved.
A GCC Customs Union committee was established to plan the project. The main scope of the project includes defining a legal framework to facilitate the flow of free trade amongst the 6 countries while protecting the GCC countries from unfair or government-subsidized trade practices. Combating money laundry and financial terrorism are also principles that must be promoted as part of the trade union legal framework. Once the legal requirements are defined, they must be translated into a seamless integrated system that maintain all transactions of cross-GCC trade movement. The system design and implementation will be dependent on the shape of the legal framework that will be agreed upon. In case the legal framework is not approved by all the GCC countries, the software project implementation will not proceed.
Another complication to be resolved is the establishment of a joint data privacy agreement. All six countries are at different maturity levels of data privacy policy development within their own territories. How private consumer data can be protected is a crucial point to be addressed. The management of the integrated system also needs approval and access rights and administrative roles must be integrated within the system as system features. Hosting is potentially with Microsoft Azure since all six counties agreed to host the integrated application on the cloud. At the outset of the project, the six countries agreed to outsource system design and implementation completely to IBM and Microsoft because of their high technical human capital. The customs department of all six countries are skilled in their customs related operations.
All six countries are not in a rush to complete the project before a certain date. A rough order of magnitude estimate of the budget is approved with a possibility of 75% variance, providing flexibility in scheduling and budgetary constraints.
- Every Potential Project Requires a Clear and Validated Business Case. As a skilled project manager, Do you believe that the business case is rational and should be acted on? Identify the benefits of the project and any concerns you may have regarding its feasibility?
- Identify the risks you believe apply to the GCC Customs Union Technology Project.
- Analyze the risks identified in question 2 using a probability/impact matrix.
- Based on your risk assessment, use your knowledge of the 10 knowledge management areas to define a strategy to manage your top 3 risk categories.
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