Marketplace Middle East - Blog
6/4/09
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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3/5/09
Horrific Traffic
Our television production team entered the three room apartment in Manama, Bahrain with plans to see an empty shelter for the victims of labor abuse. What we found was quite different and heart wrenching.

Forty year old Suryavathi Rao fled the home of her employer that morning shoeless with only a nightgown and bible to her name. The years of domestic labor have taken their toll. She could easily pass for 60 if not a few years older. After working 16 hours a day, seven days a week for a year and a half, Suryavathi could not take it anymore. She said through a translator that her meagre salary of $108 a month had not been paid for six months. She complained about not being fed meals and surviving on the generosity of her neighbor another domestic worker who pulled together leftovers to get by.

Suryavathi could not get through three sentences without breaking into tears. As a result of her fleeing for protection, she has become a runaway worker with no rights. Her employer holds her passport. The best she can hope for is to get the passport back and hope that the shelter can give her enough money to buy a ticket and fly home to Southern India. It is not that simple of course, since back home Suryavathi fears she won’t be welcomed back due to her “failure” to send back money and keep a job.

This is the life of a forced labourer and the complex world of human trafficking. Technically, Suryavathi was not trafficked. She had a sponsor agency that she paid $1100 to back in India and is still charging here 5 percent a month interest on the balance. But she certainly did not expect slave like conditions when she arrived.

It is hard to think of a worst crime then the trafficking of humans. I was introduced to the cause by the First Lady of Egypt Suzanne Mubarak three years ago who heard of cases of child kidnapping, the trading of human organs and the sex trade involving teenage women.

In an exclusive interview this week in Bahrain, the First Lady explained that the more she learned, the more involved she became, “Whether it is regarded as a country of origin, transit or destination, it exists in all societies. Personally I came to realise what an insidious crime this was and how it was just really built on profit and on not only low morals, but no morals at all.”

Human trafficking and forced labor are big business. According to the United Nations International Labor Organization (ILO) 12.3 million people are a product of forced labor. Of that total, more than 2.4 million have been trafficked across borders. Total profits from this illicit trade add up to $36 billion a year according to the U.N., ranking third behind the illegal drugs and arms trade.

In large part as a result of the End Human Trafficking Now campaign of Mrs. Mubarak the last few years, more than 150 countries have signed onto protocols to combat the crime. Legislation has been passed; the next big hurdle according to the First Lady is enforcement.

“Oh definitely we have a long, long way to go yet, because the traffickers are not caught. This is an organised crime that is working you know, underground”. When reminded that for every 800 people trafficked only one is prosecuted, she admits “We need still to amend our laws; we need to draft new anti-trafficking laws.”

Having chaired two panels at this week’s “Human Trafficking at the Crossroads” conference in Manama, the other stark reality is the challenge of changing not only the laws on the books, but the mindset of the people who exploit innocent victims, either those who employ them or the middlemen who trade them.

In the Gulf of Arabia, the biggest problem according to labor officials is the treatment of domestic and construction workers. 250,000 have officially reported cases of abuse according to U.N. officials.

The fact that Bahrain hosted this conference speaks volumes of getting the subject off the taboo list. Government officials want to open up to discuss why things need to change. A year ago, the Crown Prince of Bahrain Shaikh Salman Bin Hamad Bin Isa Al-Khalifa created the Labor Market Regulatory Authority (LMRA) to consolidate a handful of ministries, get every migrant worker registered and give them the freedom to move from one employer to another if ill treated.

The effort, structure and technology are impressive – Bahraini officials admit the growing pains are daunting.

"It makes me very uncomfortable,” said the American educated Crown Prince during an interview last summer, “And what I think is the greatest protection for workers is the elimination of the sponsorship system. Sponsorship in this region is similar to servitude in the United States 400 years ago."

What is promising is that people at the very top and bottom of the “supply chain” of human trafficking are out fighting the cause. Mrs. Mubarak has targeted top business leaders to sign on the dotted line to insure that no one in their operations or within their supplier community are employing trafficked laborers. 12,000 companies have signed on in three short years.

The First Lady’s strategy was to make inroads as quick as possible. “Rather than repeating what has been done, that we should start working from the top, working with the business community, who have the resources, who have the expertise, who have the technical capabilities of helping us to do something about this scourge of human trafficking.”

There is a concern that during this global downturn the treatment of workers will become less of a priority. Right now, companies are concerned about delivering profits, but hopefully doing the “right thing” does not fall by the wayside.

In the trenches you find real heroes providing advice, food and shelter to the victims. The Migrant Workers Protection Society in Bahrain is under funded and under staffed, but three women of Indian origin have served as pillars of the operation have looked after 380 people who were desperate for help. It seems they don’t have enough fingers to plug all the leaks or loopholes while the system gets built in Bahrain.

Meanwhile, more than 200 participants at conference are looking for new strategies like a global phone hotline to make sure victims do not fall through the cracks. They are also trying to coordinate legislation and police investigations to put more perpetrators behind bars.

It is no small challenge when governments are working against organized crime rings, which are not only making big money, but to date have paid a very small price for their actions.

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ABOUT THIS BLOG
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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