By Andrew Torchia and Suleiman Al-Khalidi
A protester stands in front of a burning barricade during a demonstration in Cairo …
AMMAN/CAIRO (Reuters) – Mazen Dajani, chief executive of Jordan’s CTI Group, says the Arab Spring accomplished what the global financial crisis of 2008-9 did not: it pushed his company, one of the world’s largest shippers of cement, into the red.
CTI’s shipments to Egypt plunged during the uprising against Hosni Mubarak early last year and have yet to recover, he says, while deliveries to Yemen were disrupted by unrest there. Trade with Libya is still suspended despite the end of last year’s civil war. The company is projecting only about 12 to 14 percent of its business will come from the Arab world in 2012, compared with at least 30 percent in normal times.
“The Arab Spring turned the company from profit to loss for the first time in almost 10 years,” saidDajani, 46, a member of an influential Jordanian-Palestinian merchant family.
Dajani’s frustration is felt across the region. A year after the ouster of Tunisian ruler Zine al-Abidine Ben Ali triggered pro-democracy protests in more than a dozen Arab countries, trading links remain damaged, billions of dollars in investments are frozen, and tens of thousands of people have lost their jobs. That risks compounding the economic problems that helped spur the uprisings.
But the gloom is far from universal. Many Arab businessmen are convinced the turmoil has unlocked new opportunities for private companies, overturning entrenched interests and opening the field for new entrants. Thomas Mirow, president of the European Bank for Reconstruction and Development (EBRD), has compared the Arab Spring to the fall of Communism in the former Soviet bloc two decades ago, saying it could help bring North African economies into the global supply chain. That could set the Arab world up for unprecedented growth.
“The Arab Spring accelerated a trend which was already happening: the leveling of the landscape in a very dramatic way,” says Mustafa Abdel-Wadood, chief executive of Dubai-based Abraaj Capital, the Middle East’s largest private equity firm with over $6 billion under management. “It triggered a sense of accountability. People don’t accept the use of political influence as they used to.”
‘BREEZE OF CHANGE’
Adnan Ahmed Yousif agrees. The chief executive of Bahrain-based Al Baraka Banking Group, an Islamic banking conglomerate with operations across North Africa, says the Arab Spring had only a “marginal” impact on his firm’s earnings last year. He detects a new dynamism in many economies in the Arab world, where about 60 percent of the 350 million people are under 25.
“I see it and feel the breeze of change when I talk to fellow bankers and businessmen,” said Yousif, also chairman of the Beirut-based Union of Arab Banks, a regional association.
In Tunisia, a new government elected in October is spending to create jobs and opening areas of the economy to fresh investment, Yousif said. Last month, Tunisia’s parliament approved a 7.5 percent rise in spending in the government’s 2012 budget from the previous year. Ben Ali’s extended family owned big interests in sectors such as telecoms, news media and banking, crowding out potential competitors; that network is now being dismantled, which may create new opportunities.
Yousif said Baraka has applied to open two new branches in Tunisia, which would bring its total number of branches there to 12.
In Egypt and other countries, bankers have become freer to lend without political interference, Yousif said. Libya is moving towards easing curbs on privately owned banks, after years of tight restrictions. New opportunities for Islamic banking are opening up in countries including Morocco and Oman.
“I expect the role of a private sector which was once stifled by governments to grow in the years to come, as change brings more competition and openness,” Yousif said.
