Cairo University Faculty of Economics & Political Science PhD Euro- Med Program

1. Cairo University Faculty of Economics & Political Science PhD Euro- Med Program Negotiation theories & PracticesProfessor: Dr. Hassan WagihTen Questions People Ask About Getting to YESCase Study: The Nile BasinPrepared by:MariamMoussa Marwa MahgoubOctober 2010

2. Contents • Theoretical background: I. Questions about fairness and "principled" Negotiation. II. Questions About Dealing With People. III. Questions About Tactics. IV. Questions About Power. • A case study: Nile Basin I. General information. II. Application on the Nile Basin issue.

3. I. Questions about fairness and "principled" Negotiation Question no.1: Does Positional Bargaining ever make sense? Question no.2 What if the other side believes in a different standard of fairness? Question no.3 Should I be fair even if I do not have to be? 2

4. 1-Does Positional Bargaining ever make sense? • Easy, requires no preparation, universally understood. • Arbitrary outcome is risky especially in critical issues plus it might turn to be an index for future transactions. • The more complex the issue the more unwise to engage in positional bargaining, complexity needs careful analysis. • Avoid threats that might damage good working relationships, positional bargaining is fine if the two parties are strangers, protected by competitive opportunities. • If there is a long history of fighting positional bargaining between two parties, avoid it by establishing a joint problem solving, realistic time table, brainstorming. • Positional bargaining tends to stop joint gains (it ends up by leaving a lot of gold on the table). 3

5. 2- What if the other side believes in a different standard of fairness? In most negotiations people see different standards of fairness. Best solution is to use external standards: • Even conflict standards are better than arbitrary results. • Reduces costs of backing down. • Some standards are more persuasive. Do not try to agree on which is the best it is just a tool. 4

6. 3- Should I be fair even if I do not have to be? Important rule: Get what you are entitled to while keeping good working relationship with the other side. Weight possible benefits against possible costs: • How important is the excess to you. • May be the other party see themselves doing you a favor. • Do not assume you are cleverer than the other side. • Unfair results are un-durable, when the other side discovers unfairness, he will not be willing to carry it out, so consider the cost of enforcing the agreement. • May lead to revenge from the other party in the future. • Cost you your reputation (building reputation is much more difficult than destroying it) plus reputation opens a large realm of creative agreements in the future. • Finally will your conscious bother you, remember the tourist and the Kashmir rug. 5

7. II. Questions About Dealing With People Question no.4 What do I do if people are the problem? Question no.5 Should I negotiate even with terrorists or someone like Hitler? When does it make sense not to negotiate? Question no.6 How should I adjust my negotiating approach to account for differences of personality- gender – culture and so on? 6

8. 4- What do I do if people are the problem? Important rule: Care about building working relationship with the other party independent of the agreement or disagreement. Working relationships are not bought by making concessions instead cope with differences. • There is no trade off between pursuing good substantive outcome and pursuing a good working relationship. • Good relationship tends to make it easier to get good substantive outcome and vice versa. • Negotiate the relationship: Your behavior should not be a respond in kind to the other's party behavior. Rather your behavior should be designed to a model that encourage the behavior you prefer not the behavior you dislike 7

9. 5- Should I negotiate even with terrorists or someone like Hitler? When does it make sense not to negotiate? Question is How rather than Whether or not. a) How - Concerning Terrorists: • Establish dialogue when there are hostages or threatening. • Negotiation does not mean giving in (paying ransom will encourage more kidnapping). • Through negotiations convince terrorists and possible future ones that they will not receive ransom and also learn some of their legitimate interests. Example: the settlement of the seizure of U.S. embassy in Iran. • High governmental officials meeting with political terrorists might well appear to enhance their importance, But contact at the professional level is quite different. Example: Kuwait airways flight 422. b) How - concerning someone like Hitler: • Depends on alternatives. • Some interests worth negotiating fighting and even dying for (in case of genocide for example) • In wars if you can achieve a substantial measure of your interests through nonviolent means then give that option serious consideration. • Even when people act out of religious conviction, negotiation may influence their actions (sometimes religion serves as a handy boundary). • If your BATNA is fine and negotiations looks unpromising no reason to waste time in negotiation (war is not a BATNA). 8

10. 6- How should I adjust my negotiating approach to account for differences of personality- gender – culture and so on? • Get in step: Be sensitive to values, concerns, mood of people and then adapt your behavior accordingly. • Pay attention to differences of believe and custom respect them but avoid making assumptions about people. • Question your assumptions, through listening actively. 9

11. III. Questions About Tactics Question no.7 How do I decide things like "where should we meet”. "who should make the first order”. "How high should I start"? Question no.8 Concretely how do I move from inventing options to making commitments? Question no.9 How do I try out these ideas without taking too much risk? 10

12. 7 - How do I decide things like "where should we meet" "who should make the first order" "How high should I start"? • Where should we meet? Depends on the circumstances. • Who should make the first order? Do not offer too soon - Be well prepared with external measure of value. • How high should I start? Do not be so firm in opening figures. • Strategy depends on preparation A clever strategy cannot make up for lack of preparation 11

13. 8- Concretely how do I move from inventing options to making commitments? • Think about closure from the beginning. • Sketch a framework agreement. • Move towards commitment gradually, but be clear that this is a draft with no commitments until the final package is made. • Be persistent in pursuing your interests but not rigid in pursuing any particular solution. • Make an offer not as surprise but natural out growth of the discussion. • Be generous at the end. 12

14. 9 - How do I try out these ideas without taking too much risk? • Start small: start with ideas that are built on your current skills. • Then try out new ideas one at a time as you gain experience. • Make an investment in new approaches. • Review your performance. • Hard Work Preparation ) planning -good working relationships -interests - ask professionals) 13

15. IV. Questions About Power 10: Can the way I negotiate really make a difference if the other side is more powerful? And How do I enhance my negotiating power? • How you negotiate and (prepare to negotiate) make an enormous difference. • Resources are different from negotiation power (ability to persuade). • Trying to estimate who is more powerful is risky. If you estimate you are more powerful you will relax and if the opposite you will be discouraged to make effort. • Sources of negotiation power - developing good BATNA. - developing good working relationship . - good communication and good listening. - understanding concerns of the other party. - brainstorming. - using external standards. - making careful commitments (what you will do – what you will not do – what you want the other side to do). - use each of the previous sources of power in harmony with other sources. 14

16. General Information- Length of the River Nile: 6695 Km (4184 miles).- Name: comes from the Greek word “Nelios”, which means the River Valley.- It has three main sources: 1. Blue Nile. 2. White Nile. 3.Atbara.- Nile Basin countries (10): Burundi, DRC, Egypt, Eritrea, Ethiopia, Kenya, Rwanda, Sudan, Tanzania and Uganda.- Number of population in NBC: 300 million.- There are Two main agreements governing the distribution of waters of the Nile:1. 1929 agreement: Between Egypt and the UK (which was the colonial power in Kenya, Sudan, Tanzania and Uganda).2. 1959 agreement: between Egypt & Sudan. 15

17. I. Questions about fairness and "principled" Negotiation. Does potential bargaining ever make sense? It doesn’t make any sense to bargain over positions regarding the Nile Basin issue.1. How complex the issue is?It is complex situation, due to several reasons, out of which: - Historical aspects; - Climate aspects; - Economic aspects; - Cultural aspects.2. How important is it to maintain a good working relationship?It is important to maintain good relationships between Egypt and the rest of Nile Basin countries:- Nile of a strategic importance to Egypt, hence it needs to deepen relations with its neighbors. - Egypt is a down stream country; - Investment opportunities.3. What are the other side’s expectations, and how hard they might change? - Negative perception;- Negative historical background;- Zero- Sum game. 16

18. I. Questions about fairness and "principled" Negotiation, cont’d What if the other side believes in a different standard of fairness? • Nile Basin countries • National sovereignty over territorial waters. • Increasing population, and rising needs. • Questioning legitimacy of 1929, and 1959 agreements. • Egypt • -Historical right. • International binding agreements. 17

19. I. Questions about fairness and "principled" Negotiation, cont’d Should I be fair if I don’t have to? -One has to be fair, even if he doesn’t have to be ,as it reduces very much of his creditability and threatens the deal when the other party discovers he was abused.- In the case of the Nile Basin issue, if Nile Basin countries have taken part in 1929 and 1959 agreements, they wouldn’t have tried to renegotiate now, as they perceive it was unfair for them not to consider their needs when the two agreements were formulated. 1. How much is the difference worth to you?- Egypt is now in a situation that it has to renegotiate its share of the Nile waters, due to insistence of other Nile Basin countries to open the file again. It could have been avoided if other parties participated in the agreements from the very beginning.2. Will the unfair result be durable?- In general, it is difficult to insure the durability of such agreements, and the Nile Basin issue is an obvious case. 18

20. II. Questions About Dealing With People How should I adjust my negotiating approach to account for differences of personality, gender, culture & so on? - In any negotiation, it is highly desirable to be sensitive to the values , perceptions, concerns, and mood of those with whom you are dealing. - The more successfully you can get in step with that person’s way of thinking, the more likely you are able to work out an agreement.1. Is it the case for Egypt with its Nile Basin neighbors?!!- Unfortunately, on the contrary. Announcement of the Egyptian Minister of irrigation:a. “Egypt will not sign any deal before its conditions are met”.(Arrogant, stubborn, unwilling to even admit the necessity of conversation). b. “ If the upstream countries insist on signing a unilateral agreement, Egypt will not abide by it”.(This tone opens the door for an equivalent aggressive tone from the other side, which could refuse to abide by Nile Basin agreements as well).2. Pay attention to differences of belief and custom. But avoid stereotyping individuals.- Egypt should consider the other side needs and point of view. 19

21. III. Questions About Tactics Concretely how do I move from inventing options to making commitments? • Think about closure from the beginning, and what issues would need to be resolved. • The ecological side of the story, • rising needs of upstream countries versus limited resources, • to resolve misunderstandings. • Consider crafting a framework agreement: • - Egyptian officials may bring 1929 agreement , along with 1959 agreement, and requirements. • - Be persistent in pursuing your interests, but not rigid in pursuing any particular solution. • Define constants and variables, i.e. what Egypt will not to be able to let go (to secure a considerable share of water, a continues and ongoing dialogue with Nile Basin countries, by which Egypt makes sure to be always aware of their development plans regarding the Nile,…). • - Make an offer: • Egypt will participate in development plans of Nile Basin countries, • will have investment projects in NB countries, 20

22. IV. Questions About Power Can the way I negotiate really make a difference if the other side is more powerful? And How do I enhance my negotiating power? • How you negotiate and (prepare to negotiate) make an enormous difference. • In the Egyptian case: • - For years, Egyptian ministers of irrigation denied the existence of any problems with Nile Basin countries, and real efforts to reach solutions were not made. • Egypt depended on its historical influence in Africa, which is eroding, at the time when Israel and other foreign powers are entering heavily and influentially in Africa, specially the Nile Basin countries. • Therefore: No preparation at all. 21

23. Can the way I negotiate really make a difference if the other side is more powerful? And How do I enhance my negotiating power? IV. Questions About Power, cont’d • Sources of negotiation power: - developing good BATNA.(Absent). Egyptian officials lack a best alternative to the 1929 and 1959 agreements, which could be: to create a formula for the share of Egypt in the Nile waters, to be function of: Egypt population+ joint development projects to be held in upstream countries (specially in generating electricity and food processing)+ … - developing good working relationship . (Absent). good working relationship could be developed through: a) diplomatic channel, b) enhancement of the role of Egyptian private sector in Nile Basin countries, c) establishing communication with Nile Basin think tanks, as well as public opinion to create a supportive opinion in favor of the Egyptian point of view. d) Use media channels. 22

24. Can the way I negotiate really make a difference if the other side is more powerful? And How do I enhance my negotiating power? IV. Questions About Power, cont’d • Sources of negotiation power - good communication and good listening. (Absent). Ex: - The Egyptian side considers that Nile waters are not on the same level of importance to upstream countries, which is not the case, as there are 100s of people die due to hunger due to absence of food). - understanding concerns of the other party. The concerns of the other party (Uri Mousifiny, president of Uganda, Al-Ahram, 23rd of October, 2010): 1. Absence of development of Nile resources at the Upstream countries, for instance: due to scarcity of electricity, farmers tend to cut the trees to get the required energy, which in return, negatively affects the environmental balance at this area (rain fall, which constitutes around 60% of Nile resources at Uganda). 2. The wide spread of underdeveloped traditional agricultural activities, which irrationally uses the Nile waters, and at the same time gives low productivity. 23