DUBAI, 22 May 2005: Global business heads were told yesterday that the Middle East is only a few crucial steps away from being able to reposition itself to become a significant long term player in the global economy or slipping behind in the race for competitiveness.
Speaking at the opening plenary session of the World Economic Forum (WEF) meeting in Jordan Mohammad Al Gergawi, Chief Executive of Dubai Holding, told a gathering of political and corporate leaders the time was right for local businesses and global investors alike to transform the region. He said: "The opportunity is there.
"The strong oil price, unprecedented levels of economic growth and financial liquidity, a booming corporate and commercial sector, willing, growing and increasingly able workforce, well established infrastructure and location provide the ingredients for a winning formula for the region. Now these have to be weighed and mixed by the right hands.
"These belong to our young Arab talent. I can envision the opportunity of seizing the moment but it has to be by these new hands."
Mr. Gergawi, who is also Chairman of the Dubai Development and Investment Authority, shared the opening full session with the likes of Peter Brabeck-Letmathe, Chairman and Chief Executive Officer of Nestlé, Lubna Olayan, Chief Executive of Saudi firm Olayan financing, John Studzinski, Chief Executive of HSBC's corporate banking and other chairmen and chief executives of global corporations.
In a strong call for a root and branch change to business leadership in the region, Mr. Gergawi said: "Our region has missed a generation of opportunities. How often in the past 20 years have people talked about there being a moment ready to be seized?
"How many 'moments' and opportunities have this region failed to grasp even in a single generation? In the Seventies the Arab world failed to invest its petrodollars wisely. The region should have invested in infrastructure and industry. In the Eighties it failed to use the oil crisis to justify badly needed cuts to government spending and to oversized administrations.
"Since the beginning of this millennium the region has failed to create jobs on the back of globalisation and to benefit from global markets
"The incentives have been there in the past to take the right decisions but they were ignored. Now the opportunity is there again and this region cannot afford to let it slip away this time. Just imagine the cost to us all if we fail to seize this opportunity for change."
His call for change takes place against a background in which the Arab world has the highest population growth rates in the world and more than 25 per cent of the earth's total unemployed young people between 15 and 24. He said: "If the region repeats the weak performance of the 1990s in this decade, unemployment rates will raise from15 per cent to 25 per cent by 2013.
"The region's current framework is unsustainable and it has missed the globalisation train. So reform is no longer a comfortable choice, it is a must. The Middle East's demographic and economic challenges have already been spelled out. It simply cannot afford to wait.
"The future is in a new Arab corporation; in an Arab, young, open and responsible corporate culture. Of course we need expertise and experience but more than anything else we need creativity and imagination."
He added: "Unless business takes the leadership in generating employment and sustainable economic growth, there is no hope, no future for this region. Business must lead by demanding a better investment climate and the advance of an agenda of better governance.
"It must lead the discussions to shrink the size of government and redefine it to the market, strengthen regulatory institutions, deepen the financial sector, and increase private sector investment beyond real estate and housing."
He was scathing about Arab business leaders who attach themselves to political leadership, believing that with the added clout of power, they will be able to drive forward business decisions regardless of the sustainability of their business models. He said: "This has encouraged many of them to believe they can get away with making poor decisions based on political pull rather than business sense.
"These Arab business leaders represent an elite that erodes competition. They have a tendency to play it safe and to stick to traditionally closed markets; keeping control of business on the basis of personal contacts with government or other business leaders.