Tag Archives: Q&A

Q&A: Egyptian trader and 20-year China veteran

October 22nd, 2009

I recently met with Mohammed, an Egyptian trader and a 20-year veteran of China. He studied Chinese in Ein Shams University in the early 1980s, before finally settling in China permanently. It was that or become a policeman. Mohammed made a few comments that are worth noting.

First, trade between China and the Middle East has yet to seriously recover from the economic crisis.

Second, Arab traders haven’t suffered from visa restrictions. This is an important point. The fact Arab traders have been able to apply successfully for visas to China, in contrast to Europe and the United States, is one reason why China’s trade with the Middle East has grown so rapidly. But visa restrictions had anecdotally tightened for all nationalities ahead of China’s October anniversary celebrations. It seems there is less to worry about than I had thought.

Third, he claims Yemenis make up the largest Arab community in China, and that many first arrived as students. I understand that Chinese medicine is popular.

Fourth, much of the trade in Yiwu, a coastal Chinese city with a large Arab community, is conducted in Chinese yuan as most retailers don’t have licenses to export. And, consequently, Yiwu would struggle to compete with traders in the southern city of Guangzhou if the government was to check licenses more closely.

Q&A: Ameen Talib on Singapore’s Hadrami community

August 31st, 2009

I spoke with Ameen Talib in Singapore recently. Ameen is Singaporean, but also an ethnic-Hadrami. The Hadramis originate from Yemen, on the southern tip of the Arabian Peninsula, and rank among the world’s great traders. I first encountered Hadrami traders in China buying goods for export to Saudi Arabia. Ameen is a fascinating individual and a major figure in Singapore’s Hadrami community. He is also responsible for the revitalization of the city’s Arab quarter having opened a number of Arabic restaurants in the Sultan Mosque area. We met at his first restaurant Café Le Caire and talked about Singapore’s Hadrami community and the importance of ethnic networks.

What is the status of the Hadrami community?

As a community we are trying to rebuild. Let me give you an example. I opened this restaurant in 2001. It was like a ghost town around here [in the Sultan Mosque area]. So I opened the restaurant with the objective of reestablishing an Arab quarter. As soon as we have an Arab quarter, then there is recognition that an ethnic group exists. In the 1980s and 1990s a lot of the younger generation didn’t even know of the existence of an Arab community in Singapore. So, we have had some success in getting recognition at a mass level.

Are the Hadramis still migrating to Singapore?

It is slow now. The migration that takes place is mainly for family purposes. Occasionally a cousin might join his family. But it’s not mass migration. It’s not like the olden days. It’s basically because of the 60s, after South Yemen became Communist and Hadramis were not allowed to travel. Very few Hadramis travelled abroad as a result of the restrictions. And very few Hadramis travelled to Yemen from Singapore.

How important are ethnic networks to trade?

Ethnic networks are such strong networks. But governments are not capitalizing on them. Let me give you the example of Singapore. A few years ago, when the government first wanted to engage with the Middle East, it didn’t look at the fact there had already been a long engagement between the Middle East and Singapore’s Arab community. In the 1980s, a lot of Saudis used to come down to Singapore and do business. In fact, a lot of Hadrami traders enjoyed their boom period in the 1980s while trading with the Saudis. It isn’t the only example. Singapore is also still considered the centre of the Aoud business. [Aoud is a fragrant wood]. Ok, it’s a small business. But the network is established and we are not capitalizing on.

So what are your views on globalization?

Today’s globalization, I call it transient globalization. Because of technology and speed of travel, we are global, but global from home. In the olden days, we were genuinely global. There was real interaction between different groups.

Q&A: Eckart Woertz on the Gulf’s agricultural investments

July 22nd, 2009

The Gulf’s purchases of foreign agricultural land have grabbed media headlines. And rightly so. The Middle East is the world’s largest regional importer of food. (It’s a little known fact that Egypt imports more wheat than China every year). Eckart Woertz is head of the economics department at the Gulf Research Centre in Dubai, a fellow at Princeton, and produced one of the first comprehensive reports on the issue. He recently attended a conference in New York to speak on the Gulf’s agricultural investments. I was keen to hear his post-conference views.

How realistic are the Gulf’s agricultural investment policies?

At this stage they are mostly announcements, on the ground only little has happened thus far. It takes a while to build a farm and successfully produce food. It is not just securing the land lease, one needs to overcome technological challenges of implementation and one needs to have the logistics in place for actual export (roads, ports etc.). Finally one needs to find equitable solutions with holders of customary land rights and give the local population a fair share in the deal.  With the decline of oil and food prices from all time highs the urge and ability of Gulf countries to engage in such overseas investments has also declined a bit, but the basic rationale for agro-investments by Gulf countries is intact: they will need to import more and more of their food requirements as the population is growing and domestic agriculture is declining for lack of water. Thus, I would not expect it to remain a media phenomenon but gather pace over time.

How does the rest of the world view the Gulf’s agricultural investments?

For the fact that we largely speak about a media phenomenon, opinions are already pretty pronounced. Some economists see an innocent win-win situation with Africa providing the land and the Gulf the capital. Some advocacy groups on the other hand see a neo-colonialist landgrabbing going on, not only by Gulf investors but also by China and western financial investors. The topic is a difficult one and as always the truth lies somewhere in the middle.

What was the biggest surprise from the conference?

The huge potential of Russia and the Ukraine. Russia is now a more important supplier of grain to Egypt than the US, and in both countries there are large areas of fallow land and sufficient water resources. We have already argued a year ago that Gulf countries should also take a look at such more developed markets where less volatile harvests can be expected than let’s say in Sudan or Pakistan. Compared to South America or Australia there are also logistical advantages as the distance to the Gulf countries is smaller and export via the Black Sea is possible.

How serious a threat are rising food prices to the Middle East?

Affordable food is a necessity for any society and its absence a serious security threat. The Gulf countries already need to import about 60 percent of their food requirements. Even before the food price hikes, food contributed 15 percent to Saudi Arabia’s import bill for example. Thus, rising food prices are at best a severe financial loss for Gulf countries; at worse they could have a destabilizing effect. Affordable food prices are part of the social contract. There is also a large blue collar segment in the labor force from foreign countries, they work hard and of course expect to make a living. Especially affordable Basmati rice is important for them as it is their major diet. In the UAE the share of foreigners in the overall population is over 80 percent. Also mind you that some exporter nations like Argentine or Vietnam implemented export restrictions in the wake of the food price hikes last year. So in a global food crisis you may find it difficult to secure food supplies at any price no matter how many oil revenues you have. That’s why bilateral relations and direct investments are so important.