When Will the Arabs Separate Politics from Economics?
Lina al-Rahbani Al-Hayat - 05/12/06//
In a televised interview, during his participation in a political discussion program on a well-known Lebanese channel, Jacques Sarraf (former head of the Association of Lebanese Industrialists) surprised his interviewer and the viewers with his position on how political relations in the Arab World are reflected in the fluctuation of the interests of the private sector, manufacturing, and commercial exchange between the Arab countries. He pointed out that while the French government has taken an international position opposed to Iran's nuclear activity, a French business delegation went to Iran to discuss industrial and commercial cooperation agreements.
Saraf proposed an important idea regarding the extent to which Arab economies are damaged by politics, and the push-and-pull between these countries that is hardly rare these days, for reasons known to all.
In this context, a Danish diplomat clarified for me, in a chance meeting, that the butter and milk sales of the Lurpak company in the Arab countries is only 3% of its total sales. Thus, the damage to its sales did not affect the mother company so much as it harmed its local agents, on account of the boycott of Danish goods.
If we take a comparative approach with major industrial countries, we will also find that the interests of the private sector are affected by the worsening of political relations between countries. But, at the same time, the private sector there succeeds in presenting their views and defending their interests before the authorities in some cases, especially if the field they work in is important for national security. For example, the Chairman of the French Total oil company, Thierry Demarez, said in an interview with the British 'Financial Times' that the group intends to continue its activities in Iran, despite the desire of the American authorities to prevent foreign companies from investing in the country. He explained: "To ensure adequate energy supply [oil and gas] at the global level, we cannot abandon Iran," considering that the restrictions placed by the US "are binding only to American companies".
The same is the case with the recent announcement made by the "Association of Retail Traders and Exporters" in Germany that the imposition of any sanctions on Iran (because of its nuclear program) could harm the German economy. (Germany is one of Iran's chief exporters. The value of its exports reached $4.6 billion last year, but decreased by about 10% in the first half of the current year compared to the same period last year.) It is expected that Germany's economic growth will slow down in the coming year. The Association said in a statement that "one of the potential consequences in the medium and long term will be that we will lose this important market to the benefit of our Asian rivals [China and India], if unilateral measures are imposed by the US and the EU".
Therefore, it may be concluded that the relationship between the political and economic interests of States is somewhat similar to the scientific theory that asks: what came first, the chicken or the egg? While science consistently tries to solve this dilemma through research, made feasible with the advancement of genetic research, informed sources indicate that in the developped countries, economic interests overcome their political equivalents most of the time. This is because the health of the economy and the consent of citizens and companies are in the interest of politicians and their electoral programs.
A study on the decline in sales of French cheese in the US between 2001 and 2003, because of the decision on the Iraq war, said that "what led to the loss of revenue from American importers (and French exporters) in the American market estimated at millions of dollars was a result of the Americans boycott of French goods". Moreover, the American National Bureau of Economic Research (an independent research institute) concluded that the 'external sources of corporate profits can be affected by the foreign policy of their governments', wondering to what extent 'governments are concerned to take these economic results into account when formulating their foreign policies'. Something else that caught my attention is that "some opinions indicate that governments hesitate to implement foreign policies that harm important economic partners."
All that remains is to wait and see to what extent this theory is adequate in the Middle East during these times.
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