Business | Investment
Talking your book, Gulf-style
Money makes friends, but it also needs stability. With so much invested so liberally, the UAE must, for its own sake, keep an even hand.
- By Oliver Cornock, Special to Gulf News
- Published: 23:47 March 21, 2008
The crisis over the Arab League Summit, scheduled to be held in Damascus at the end of this month, has been simmering for months. Acres of newsprint have been spilled in the many fruitless attempts to predict the outcome: Who will go? Who will stay away? Indeed, will it be held in Damascus at all?
Amid all the harangues though, one interesting question has gone unasked: who have the warring parties turned to as mediator?
In recent weeks, the most diligent shuttle diplomacy appears to have been conducted by the smaller GCC states - the UAE and Kuwait. A visit by Egyptian President Hosni Mubarak to the UAE in mid-February was followed immediately by a trip by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to Tehran and Damascus.
The previous week Kuwaiti Prime Minister Shaikh Nasser Al Mohammad Al Sabah was also in Damascus meeting with President Bashar Al Assad.
It goes without saying that both Kuwait and the UAE have their own agendas for these visits, focusing heavily on the significant investments both states now hold in Syria and, increasingly, Iran.
For example, UAE developer Emaar recently announced a $100 million joint venture with Syrian entrepreneur Rami Makhlouf's Cham Holding. This is alongside a currently stalled $500 million residential complex near Damascus. Across the Gulf, the UAE is Iran's largest trading partner, with bilateral trade of $11.7 billion in 2007.
Similarly, Kuwait is now the third largest investor in Syria after Turkey and Saudi Arabia. Several major Kuwaiti-funded infrastructure projects are under way in the country, including a $3 billion oil refinery by Noor Financial Investment.
It is precisely because of these extensive interests, though, that states like the UAE and Kuwait are coming to play such an important role in mediating between their larger neighbours. GCC investment in the Middle East runs to hundreds of billions of dollars, and is steadily transforming the region. Money makes friends, but it also needs stability. With so much invested so liberally, the UAE must, for its own sake, keep an even hand.
Is this the altruism of the free market? Perhaps. But in a volatile region piled high with decades of empty rhetoric, self-interest at least has the benefit of honesty, and more importantly, transparency. The econ-omic dynamism of the Gulf brings one thing more: respect. Socialism still afflicts many of the region's economies, and the Gulf states have only come so far in their acceptance and adoption of free market thinking. The UAE, Qatar, Kuwait - these are all oil economies that have used their bounty successfully. When a figure such as Shaikh Mohammad travels the region, he commands respect for his achievements.
Whether or not their intercession in the current spat between Saudi Arabia/Egypt and Syria/Iran results in a successful summit, the small petro-states of the Gulf have shown they are becoming an increasingly integral part of the region's politics. If this results in a more stable environment for economic growth, and a decreased tendency toward conflict, then this can only be a positive development.
- The writer is Oxford Business Group's regional editor in the GCC.
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