by SAMIR AITA
The globalisation of Arab economies and the demands of the International Monetary Fund – supported by the European Commission for the Mediterranean countries – tightened the regimes’ hold on the economy, especially after the oil price crash of 1986. The ensuing decline in public investment and weakening of the governmental regulatory role ensured that the major multinationals held monopolies or oligopolies in exchange for sharing revenue with the powers-that-be. The senior management of the global corporations knew exactly where major decisions were taken and who the imposed local partners were for any new investment: the Trabelsi and Materi families in Tunisia, the Ezz and Sawires in Egypt, the Makhlouf in Syria, Hariri in Lebanon. The Sawires sold their shares in Orascom-Mobinil to France Telecom and offloaded their cement holdings before the Egyptian revolution. Najib Mikati, who had sold Investcom to the South African group MTN, is currently in charge of appointing the new government in Lebanon.
Enthralled by the Dubai miracle, all the Arab countries ventured into real estate transactions that allowed them to dissimulate a public/private interest mix. Land was expropriated and then sold cheaply to property developers. Historic city centres were neglected but the local riad (traditional palaces) were renovated by international investors, charmed by the exotic East, and property prices rose on a par with London, Paris or Tokyo. None of this would have been possible without banking, which facilitated the laundering of revenue and found ways to recycle it in real estate and commercial transactions. Banks were also the instruments of governments, providing credit to secure the lasting allegiance of local entrepreneurs.
Le Monde Diplomatique for more