What are Middle East business opportunities?

              Recently two men esteemed in the business world pointed up one of the issues mentioned in
Ian Bell's article on page 11. Should multinational corporations be controlled by the countries in which
they do business, and if so, how? George W. Ball, former Assistant Secretary of State, spoke at the
Harvard Business School Club of New York. Herbert C. Knortz addressed a symposium at the
University of Virginia School of Law. The following are excerpted from their talks.
that present political institutions are too narrow. There
are indications that a universal world needs an economic
agency which reaches beyond the rule of individual coun­tries.
Other structures of society are internationalizing,
and perhaps it is time that there be a world organization
which will regularize operating discipline and encourage
high moral standards in international business.
Various procedures currently exist for the investigatory
review of many facets of international business. The exist­ing
system of reviews might be expanded to cover such
things as publication of financial statements, disclosure of
interlocking directorates or agreements, public reporting
of imports and exports, existence of monetary guarantees
As the western world talks about the potential impact of
a recession, the nations of the Middle East are experienc­ing
a business boom. Surplus funds accumulating from the
huge oil revenues are creating an Arab renaissance in trade
and commerce. The Arab states that will benefit are
Lebanon, Syria, Jordan, Egypt, Iraq, Kuwait, Bahrain, Qatar,
Oman, the United Arab Emirates, and Saudi Arabia. The
latter seven states and Iran are the oil producers.
With such revenues available to develop the area, these
nations have won the interest of business people through­out
the world. In putting an additional $65 billion a year
to work, the Arab countries are giving top priority to in­dustrial
and agricultural projects on a massive scale.
In this boom, both industry and agriculture will be
bottlenecked by shortages of skilled people. The Arab
business community will need the services of consultants,
personnel training firms, and middle managers.
Number one in the Middle East as far as requiring a
business infra-structure is Saudi Arabia. Because of its in­ability
to absorb the expenses of its annual budget, it
would welcome, at a price, any services offered to it by
the international business community.
The second country which is of great promise in the
Middle East is Iraq. It has a well-balanced and structured
economy. It has oil, water, vast areas of fertile agricultural
land and is rich in mineral resources.
The third country of promise is the United Arab Emi­rates,
which is a federation of several emirates: Abu Dhabi,
Sharjah, Ras El Khaimah, El Fujarah, Ajmam, and Um El
for continuity of employment, registration of patents and
licenses, and the nature of various funds for pension, train­ing,
and medical benefits. In general, such "openers"
would not be opposed by the multinationals.
An international consulate service staffed by knowledge­able
internationalists has been suggested. It could review
and subsequently intercede with national governments to
protect or comment on the business rights of the multina­tional
trader. The multinational corporation customarily
accepts responsibility for maintaining high standards of
moral conduct and of economic efficiency. It asks only that
it may proceed in a disciplined and effective manner to
accomplish its mission in the worldwide community. &
Quaiwam. United Arab Emirates recently has been ex­panding
its oil explorations, and its discoveries are at a
rate which would render the other countries envious.
This country will need to import manpower, and even
residents, to utilize its enormous wealth.
Lebanon, which has no oil resources, is one of the Arab
countries which has enjoyed political stability. Its econ­omy
is run by the free enterprise system. It has an effective
bank secrecy law and is becoming the financial and busi­ness
center of the Arab world.
These countries of the Middle East, which are financially
wealthy and materially poor, need to translate their oil and
paper wealth into capital and consumer goods and proj­ects.
All this, together with either a very moderate taxation
in some countries or no taxation at all in others, makes
business opportunities in the area unlimited in scope and
diversification. Moreover, the Arab government's attitude
to private business varies from virtual non-intervention, as
in Lebanon and Dubai, to moderate centralized planning,
as in Syria and Egypt.
It is up to the industrial nations to offer the Arabs items
that they would be willing to accept. Offers of genuine
basic industrial projects, technology, export-oriented in­dustry,
and agricultural development projects would cer­tainly
be attractive to them. Foreigners planning to enter
and do business in the area should be advised to enter the
market with a local partner to be totally secure. The local
partner offers markets, cheap labor, and capital, while the
contribution of the foreign partner is technology. &
WHAT ARE MIDDLE EAST BUSINESS OPPORTUNITIES?
By ADIB Y. KHOURY, Director, Touche Ross International, Lebanon
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