Marketplace Middle East - Blog
A Fresh Start For Business
Chalk one up for the new guy.

The 44th President is fighting more hot blazes than the whole state of California during peak fire fighting season. From bank rescue packages and auto-maker bailouts to challenges on the Korean Peninsula, the priority list is long and patience amongst his electorate is not a bottomless well.

Against that backdrop, Barack Obama visited the Middle East for the first time since taking the oath of office. He wisely laid down the foundation for the visit by welcoming leaders from Jordan, Israel and the Palestinian Authority to the White House before leaving for the Middle East.

The tone was serious but collaborative: In Cairo, the President said he brought the “goodwill of the American people,” with warm gestures in Arabic. The message: the Middle East is a priority for his administration and will not be left to the sunset of his Presidency -- a mistake repeated by his two immediate predecessors, Bush and Clinton.

A year ago I was sitting in the audience of the World Economic Forum meeting in Sharm el Sheikh with a Middle Eastern colleague taking in the speech of George W. Bush. Participants remained in awe of the trappings of the White House entourage and respectful of the office itself, but they leaned back in their seats after absorbing the tenor of the address. At the peak of daily bombings in Iraq and unrest in the Palestinian Territories, it was seen as a lesson in democracy that rang hollow.

The U.S. economic downturn was just beginning to take hold when President Bush visited Egypt but the region was in the sweet spot of economic expansion. After five years of economic reforms (encouraged by the U.S. I might add), regional leaders were enjoying average growth of six percent, $100 oil and growing surpluses. They were not expecting a tutorial on political reforms.

We are witnessing an unusual by-product of that approach. Support is high for the 44th President, but the bar has been set incredibly low. The unusual mix offers an opportunity to surprise people on the upside -- and Obama knows it. As he outlined to the people of Egypt and the rest of the Middle East, the countries will make a “sustained effort to listen to each other and learn from each other.”

President Obama admitted it is early days in the conversation. Don’t expect miracles but don’t expect inaction. Early in my career in Washington, they used to say on Capitol Hill “politics is business.” Business cannot prosper without the right political conditions and politicians cannot survive without the support of the business community.

The business community in the region is yearning for a peace dividend. A unified Arab front at peace with Israel could focus attention on rebuilding the Palestinian territories. Money has been pledged, but political risk has held back disbursement of funds. Arab leaders could re-direct energies spent on Israel to addressing the most pressing issue of their time, creating at least 100 million jobs in the next 10 years for the next generation.

President Obama said the region should not be fearful of globalization: “There is no contradiction between development and tradition.” He singled out the progress of both Malaysia and Dubai as examples of modern Islamic economies which have embraced the 21st century.

While it is certain that meetings in Riyadh included in-depth discussions about the recent recovery in oil prices and sustaining ample supplies during the early stages of economic recovery, the U.S. President encouraged the region to look beyond energy, noting that “education and innovation will be the currency of the future.”

This is where the President sees a role for American businessmen and educators -- as agents of change to support entrepreneurs, to encourage student exchanges and to build goodwill at the same time.

While the president spent ample time on the region’s long history and the cultural roots of Islam, he elected to leave the audience of three thousand students and dignitaries with a simple phrase in an effort to put recent history behind us, “if we are bound to the past, we cannot move forward.”

Perhaps the fresh start really is underway.

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John Defterios’ blog accompanies the weekly business program, Marketplace Middle East (MME) that is dedicated to the latest financial news from the Middle East. As MME anchor, John Defterios talks to the people in the know, finding out their opinions on the big business moves in the region, he provides his views via this weekly blog. We hope you will join the discussion around the issues raised.
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