A Fish Stinks from the Head

The Middle East region, and the Arab world in particular, is way behind on the economic curve of progress and is settling nicely into the backseat of globalization. On the world stage (and at WEF gatherings) the region’s grandees talk a big talk but walk in midget steps. To put things into perspective, the total market capitalization of Alphabet Inc. (formerly Google) is circa $659.2bln whereas the total market cap of the Saudi stock market stands at circa $431bln.

The erstwhile oil-rich Middle East is running out of options and out of revenue sources. Oil has been trading at below $50 for a good part of 2017, and no cuts –whether actual or threatened- have made a dent in such price. OPEC no longer carries the weight it used to, and the US shale gas revolution was hardly stopped by the concerted efforts of the world’s oil exporters. Add to that, the alternative energy resources (solar, wind, water) and the ultimate energy source (civilian nuclear power), and oil becomes an affordable commodity, not the ‘black gold’ it used to be.

On industrial output, the entire Arab region trails by far each of the Asian, European, and North American economic blocs. There are no industries germane to this region, except fossil fuels. Absolutely none. We know what the region imports and consumes by the tons, but what does it produce? What does the region create, patent, export, sell, or offer in an ever-globalized world? These are legitimate questions yet they are seldom posed with seriousness by any civil servant or business leader, including at the WEF closed-door meetings.

What went wrong? The answer is not straightforward, but few threads could be assembled to weave a plausible and almost convincing reply. Surely, one cannot blame the woes of the Middle East region on the desert’s weather. There are warmer spots in the world. One could not simply accuse the authoritarian nature of the prevailing regimes in Arabia. China and Taiwan are no democracies, and still they enjoy commercial success beyond norms. Could outdated traditions and customs or strict religious dogmas, be the reasons for such poor state of affairs? No. India, a role model for emerging markets, is riddled with communal taboos, religious discrimination, cast systems, and more modern-slaves (sexual, domestic, child labor) than the population of the Netherlands. Even Israel which has, on a pro rata basis, as many religious zealots as Saudi Arabia and where ‘God, Country and Army’ remains a strong trilogy, was not hindered in its quest to become a true Start-Up nation. Could it be geography?  History? What else can one conjure up in justifications or excuses for the failure of the Middle East to emerge from its stupor?

We posit that the failure of the region to join the road to modernity is the lack of true leadership (not dictatorship – there is plenty of that). Leadership does not necessarily spring from the womb of liberty or democracy or modernity. Ancient, past and recent histories are riddled with authoritarian leaders who overstepped rules and challenged the status quo from Caesar, to Robespierre, and from John Adams to FDR. Few were true consensus builders or overly democratic in all of their actions. However, they have pursued noble ideals and higher motives.

Political leadership stems from a sense of greater purpose, not entitlement. Such leadership reposes on the pedestal of far-reaching goals, not short-term gains. Few examples in the recent past of Arabia could be inspirational for the young generation of leaders, which is emerging.

Ibn Saud, founded modern Saudi Arabia with a greater sense of purpose, a sword, and a countrywide mission, way before oil was discovered. Sheik Zayed, the founder of the U.A.E. had a grand vision for his tiny country that transcended tribal rivalries and disputed territory. In the early part of the 20th century the founding fathers of young republics such as Lebanon and Tunisia, had civic principles –not personal agendas- as the...

The Middle East region, and the Arab world in particular, is way behind on the economic curve of progress and is settling nicely into the backseat of globalization. On the world stage (and at WEF gatherings) the region’s grandees talk a big talk but walk in midget steps. To put things into perspective, the total market capitalization of Alphabet Inc. (formerly Google) is circa $659.2bln whereas the total market cap of the Saudi stock market stands at circa $431bln.

The erstwhile oil-rich Middle East is running out of options and out of revenue sources. Oil has been trading at below $50 for a good part of 2017, and no cuts –whether actual or threatened- have made a dent in such price. OPEC no longer carries the weight it used to, and the US shale gas revolution was hardly stopped by the concerted efforts of the world’s oil exporters. Add to that, the alternative energy resources (solar, wind, water) and the ultimate energy source (civilian nuclear power), and oil becomes an affordable commodity, not the ‘black gold’ it used to be.

On industrial output, the entire Arab region trails by far each of the Asian, European, and North American economic blocs. There are no industries germane to this region, except fossil fuels. Absolutely none. We know what the region imports and consumes by the tons, but what does it produce? What does the region create, patent, export, sell, or offer in an ever-globalized world? These are legitimate questions yet they are seldom posed with seriousness by any civil servant or business leader, including at the WEF closed-door meetings.

What went wrong? The answer is not straightforward, but few threads could be assembled to weave a plausible and almost convincing reply. Surely, one cannot blame the woes of the Middle East region on the desert’s weather. There are warmer spots in the world. One could not simply accuse the authoritarian nature of the prevailing regimes in Arabia. China and Taiwan are no democracies, and still they enjoy commercial success beyond norms. Could outdated traditions and customs or strict religious dogmas, be the reasons for such poor state of affairs? No. India, a role model for emerging markets, is riddled with communal taboos, religious discrimination, cast systems, and more modern-slaves (sexual, domestic, child labor) than the population of the Netherlands. Even Israel which has, on a pro rata basis, as many religious zealots as Saudi Arabia and where ‘God, Country and Army’ remains a strong trilogy, was not hindered in its quest to become a true Start-Up nation. Could it be geography?  History? What else can one conjure up in justifications or excuses for the failure of the Middle East to emerge from its stupor?

We posit that the failure of the region to join the road to modernity is the lack of true leadership (not dictatorship – there is plenty of that). Leadership does not necessarily spring from the womb of liberty or democracy or modernity. Ancient, past and recent histories are riddled with authoritarian leaders who overstepped rules and challenged the status quo from Caesar, to Robespierre, and from John Adams to FDR. Few were true consensus builders or overly democratic in all of their actions. However, they have pursued noble ideals and higher motives.

Political leadership stems from a sense of greater purpose, not entitlement. Such leadership reposes on the pedestal of far-reaching goals, not short-term gains. Few examples in the recent past of Arabia could be inspirational for the young generation of leaders, which is emerging.

Ibn Saud, founded modern Saudi Arabia with a greater sense of purpose, a sword, and a countrywide mission, way before oil was discovered. Sheik Zayed, the founder of the U.A.E. had a grand vision for his tiny country that transcended tribal rivalries and disputed territory. In the early part of the 20th century the founding fathers of young republics such as Lebanon and Tunisia, had civic principles –not personal agendas- as their guide when laying the foundations of said fledgling states. These were genuine, often authoritarian, national leaders whose drive to build for the long-term outweighed immediate rewards. Colonialism did not dampen their leadership spirit, it awoken it. Lack of resources did not discourage them, it emboldened them instead. Religious dogmas did not erect obstacles to advancement but rather a source of higher purpose and inspiration.

In the final analysis, it is personal –not natural- energy that helps nations define their role in these times as in any other time. The region has at the helm, presently, a unique generation of young leaders. One should remind them of this quote from Thomas Jefferson:” Do you want to know who you are? Don’t ask. Act! Action will delineate and define you”.

One can only add the old adage that one often hears in the fish markets of the coastal cities of Arabia “A Fish Stinks from the Head”. Change starts from the top down. Let’s hope it does.