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FYI. Note post
script at the end. kwc Gulf
Business Leaders: Optimistic but Concerned Despite conflicts and
political developments brewing just beyond their borders, Arab business leaders
in the Gulf are confident that their current economic boom is sustainable and
will help accelerate progressive changes taking place within their countries. It's not that they are
unconcerned with Iran's aggressive posture, the dangers posed by instability in
Iraq, or the tension emanating from the continuing Arab-Israeli conflict.
Rather, the optimism of Gulf business leaders appears to be based on the
confluence of several positive developments occurring within their region. In preparation for a
presentation I was invited to make at a McKinsey and Company-sponsored panel at
the recent World Economic Forum meeting in Davos, I surveyed Arab business
leaders to see how they viewed the Gulf's current and future prospects. I found broad
agreement that the region was in the midst of what some termed a
"renaissance," which most attributed to more than the "oil
boom." My respondents pointed
to their region's maturation after decades of social and economic development.
One, for example, termed current advances as the "payoff for past
investments in the economic and social infrastructure." A number of
business leaders also pointed to the liberalization that has opened up many of
the Gulf's economies, creating new opportunities that have empowered and
energized the private sector, fostering, in many countries, a "new
partnership" between government and the business community. As a result of theses
changes, my respondents largely agreed that oil revenues were being used more
wisely than they were in the 1970s and 1980s. But concerns were expressed as
well. Some were troubled
that the region remained too dependent on oil and gas and required greater
diversification. And there was general consensus that liberalization of the
region's economies, more citizen participation, greater efforts to empower
women, and more investments in 21st century education were needed if the
region's promise of a renaissance is to become a reality. Given the Gulf's
longstanding and substantial economic ties with the US, it was not surprising that
there was broad agreement that the US would continue to wield significant
political and economic clout in the region. But some struck a cautionary note.
A few businessmen, for example, noted that policies pursued by the Bush
administration had a negative impact on attitudes in the region and may, if
sustained over the term, affect business decisions in the future. As evidenced by King Abdallah bin Abdul
Aziz's recent successful visit to China, India and Southeast Asia, many Arab
Gulf business leaders are "looking east." This is not to say that Asia is expected
to replace the US as the locus for future Arab investment. But there is broad
agreement that China and India, in particular, will, in the near future,
compete for their share of Arab investment dollars. By far and away, the
single greatest threat to the businessmen I interviewed was the current
situation in Iraq and the instability
in the region
resulting from the US invasion. There is the worry that a destabilized Iraq has
empowered and emboldened Iran. One businessman, for example, noted that, for
decades, the problem posed by Iraq was that of its regime - a short-term
threat. The problem posed by Iran, on the one hand, was that of a long-term
strategic threat compounded by the extremist ideology and its regional
ambitions. There is concern, as
well, for the impact the potential fragmentation of Iraq may have on the region
- with the likelihood of regional conflict continuing for years to come.
Finally, there is the concern that in pursuing this war, the US has further
harmed its position in the region. This has complicated the situation of
America's Gulf Arab allies who have relied on the US for security assistance,
making these governments more vulnerable to extremist anti-Americanism. Some
worry that this may also have a longer-term effect on US-Arab business
partnerships and "selling the American brand in the region." All that being said,
most remain quite optimistic, confident that progressive changes will continue to unfold in their countries and that oil revenues will be wisely invested,
producing still greater social and political benefits. And they are hopeful that the next US
administration will bring a change in policy toward the Arab world, enhancing
stability and reducing
the threats posed by extremists in their region. -------- I
finished this article before Dubai Ports World controversy erupted in the US.
The intensity and harshness of the anti-Arab rhetoric that has characterized a
considerable part of this debate may have an impact on future plans of some
business leaders in the Arab world. Optimism will remain, but the direction of
investments may change. Dr. James Zogby is the president of the Arab
American Institute. His column appears weekly in t r u t h o u t. For comments
or information, contact [EMAIL PROTECTED] or visit www.aaiusa.org. http://www.truthout.org/docs_2006/030706H.shtml |
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