Middle East Business chiefs think economic crisis is not their problem.

Last update - 06:22 02/11/2008       
Mideast business leaders see U.S. influence declining in region
By Eytan Avriel

 

ISTANBUL - Ministers, bankers, and businessmen from Turkey, Eastern Europe and the Middle East met over the past three days for a regional meeting of the World Economic Forum in Turkey for the first time.

 

The tone at the meeting was worrying, as the various leaders sounded just like Israeli officials: "We do not have financial problems .... Our banks are stable and have adequate capital reserves ... Our public did not overextend in taking credit ...." and "We have no need for government intervention." These are only some of the statements heard at the conference from senior officials throughout the region - despite the fact that many of their countries are liable to be among the first to collapse as a result of the economic crisis.

 

The explanation? A surprising combination of schadenfreude, a different world-view and a very large dose of denial. The schadenfreude came mostly from Middle Eastern countries, seemingly the result of years of feelings of inferiority to the West and its financial institutions. Of course the Iranian representative hurried to reap the political windfall, saying that the American hegemony over the region had ended and calling for regional cooperation and the creation of new power centers.
 
It seems that in Turkey, as well as in other countries in the region, the atmosphere is the exact opposite of that in the U.S., Europe and Israel's high tech industry. There is no sense of depression or a feeling that the end of the world is nigh here. Businessmen from the region are maintaining a business-as-ususal attitude, and in some cases they even talk about real opportunities. Turkey's businessmen are a good example of this.

 

Despite all these feelings, there is certainly a lot of denial going around. The main unknown is connected the public's level of confidence. Underneath the surface there are lots of doubts. Due to the cheap money available, many of the countries in the region saw their economies grow quickly, but their leaders forgot the need to develop basic infrastructures such as efficient capital markets at the same time. The minute the money stopped flowing from the West - and in some the flow even changed direction - their economies immediately ground to a halt.