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Discuss this article (0 Comments)A new dawn of peaceful business
by This email address is being protected from spam bots, you need Javascript enabled to view it on Sunday, 13 January 2008
Presidents of the free world are like buses: you wait forever for one to arrive, then two turn up at once.
Both US President George Bush, and French President Nicolas Sarkozy, were in the GCC last week, although their paths did not cross.
The president of the US has never visited the GCC while in office before.
The Middle East has never been so vital to the economic interests of the Western world as it is today. With the oil price hovering close to $100 per barrel, and oil-rich states such as the UAE and Saudi Arabia basing their 2008 budgets on a conservative forecast of $40 per barrel for the year, there will be enormous surpluses available to invest both within the Gulf and abroad.
During last year's election, President Sarkozy told voters that he will personally generate business for French companies. On his Middle East tour, he is making good on that promise.
He is expected to sign a $6 billion deal with the UAE for nuclear power generation projects. He is also expected to pitch for multi-billion dollar military contracts during his visit to Saudi Arabia.
President Bush has similar ambitions. He is expected to announce a $20 billion advanced weaponry deal with Saudi Arabia when he arrives there tomorrow (Monday).
That deal will follow on the heals of contracts under negotiation with Egypt, UAE, Qatar, Bahrain and Oman worth a reported $33 billion for similar advanced military equipment.
Presidential charm offensives won't just mean sales of Western goods to the Middle East, warmer relations should also pave the way for further investment of Gulf money in the rapidly slowing economies of the USA and Europe.
Middle Eastern sovereign wealth funds are viewed by city bankers as crucial to shoring up financial institutions that are being squeezed by the credit crunch.
Cash injections from these SWFs could be the difference between the US toppling into recession or not this year.
There is an obvious need to ensure greater stability in the Middle East for these enormous business transactions to be viable.
Progress on issues such as the Israeli/Palestinian peace talks, Iranian sabre rattling and Iraqi governance are not only important for the lives of those living in these volatile countries, but also for the broader economic prospects of the entire region.
Presidents will always act in the interest of their own countries before all others. But circumstances are now favourably aligned so that what is good for the Western world is also good for the security and prosperity of the Middle East.
All the talk may be of negotiated settlements and diplomatic efforts to secure peace, but the presidents of both France and the US know that nothing is more effective at securing peace and security than economic prosperity.
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