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Many Factors Contribute to Stronger Middle East Economies

Booz Allen Hamilton Vice President Donald Pressley moderated a panel titled “Developing a Sustainable, Diverse Economy in the Middle East” on July 3, 2009, at the Aspen Institute’s Aspen Ideas Festival. Pressley, who leads the firm’s diplomacy and international development business, appeared alongside Shephard Hill, president of Boeing International; Karim Kawar, president of the Kawar Group and Jordan’s former ambassador to the United States and Mexico; and Aziz Mekouar, ambassador of His Majesty the King of Morocco to the U.S. Following the panel, Pressley shared these additional insights.

Shephard Hill mentioned a Booz Allen study about economic diversification in the Middle East. What did it find?

There is opportunity for diversification in the Middle East. It’s obviously at a very small base right now, but as they increase their infrastructure, particularly in telecommunications and IT, people are looking to invest there.

What happened in the Bethlehem Investment Conference you took part in?

The Palestinians wanted to demonstrate that you could hold a conference inside Palestine and have companies come and say they’re willing to invest. Booz Allen Hamilton supported that conference on a pro bono basis. We weren’t too sure it was going to work. More than 1,500 people attended the conference, and over $1.5 billion of new investment was pledged.

Today’s panelists emphasized that education and investment in human capital is critical in the Middle East, but is that enough?

Education clearly is an underpinning, but you have to have jobs or you get well-educated youth who have no place to go. That’s the critical step they need to think about.

Also, we have a methodology that we’ve used in over 40 countries to assess all the steps countries are taking to promote business growth. We look at the legal system, the institutional system, the supporting institutions, the attitudes of the people themselves.  It’s not just about the legal structure or foreign investment. It is the attitude of the people and institutions and their ability to really move in the right direction.

You see a big connection between jobs and combating extremism.

If you look at the situation of the Palestinian refugees, they have no jobs. They have no productive way to spend their time. They become ripe for extremists to come in and tell a story of despair, that violent overthrow is going to be required instead of more productive change.  If you have a job, you’re less likely to be attracted to extremism.

What role do women play?

We have seen around the world that women are entrepreneurial. They’re half the workforce. They’d like to be more engaged. They have to be given the opportunity, though.  If a religious leader says letting a woman be in the workforce is something that could be allowed within their religion, it could really open up opportunities they haven’t been able to tap into in the past.

Ambassador Mekouar described the emergence of a diverse economy in Morocco, including everything from textiles to call centers to aerospace. Is that a model for the Middle East?

Morroco’s diversified economy is still fairly small, but it’s moving in the right direction. It’s going to take what we call a megacommunity™: the government, the private sector, and the public themselves working toward a common goal.

What about Abu Dhabi’s  green energy initiative, the Masdar project?

Abu Dhabi has been in the forefront of thinking about where they want to take their economy. They are investing in technology. They are investing in the opportunity for change. I think that’s a good thing. There is some criticism of the Masdar, but I believe we’re going to see some breakthroughs there.

Can you have a sustainable economy in the Middle East before you have peace there?

It’s going to be difficult to have a sustainable economy across the Middle East, but countries like Abu Dhabi, Morocco, and Jordan are creating hope that you can move in the right direction. The conflicts, not only between Palestine and Israel but Iraq and Iran, are taking a huge toll on opportunity costs and will until things settle down.

For people like the Palestinian refugees and women and the ones who have been engaged in religious fighting, its’ not only about sustainability. It’s going to create a different mindset. That’s going to be critical for the future.

Watch a Clip from the Panel Discussion

Watch a clip from the “Developing a Sustainable, Diverse Economy in the Middle East” panel.

Read an article by Don Pressley titled "Promoting Entrepreneurship in the West Bank," which appeared in the Summer 2009 issue of strategy+business magazine.

Learn more about Booz Allen's participation in the 2009 Aspen Ideas Festival.

story posted July 6, 2009