Tag Archives: Syria

A few things I heard in Kuwait and Qatar

December 13th, 2009

I’ve spent the past few days in Kuwait and Qatar, speaking with bankers, lawyers, and academics, as well as participating in the Arab Thought Foundation’s annual conference. Below are a few points of interest:

- Industrial Commercial Bank of China has around 30 staff at their Doha office. The branch had a spectacular opening in 2008, but apparently has been relatively quiet in 2009. The branch is reportedly keen to lend to gas and government-related projects.

- I later spoke with the Chinese Ambassador in Kuwait. No surprise, but China’s commercial relations with Kuwait are characterized by Chinese construction firms funded by Chinese banks. As an aside, the Ambassador, a multi-decade veteran of the Middle East, said his English was deteriorating because he uses only Arabic and Chinese.

- I hear that the Kuwait’s Emir recently purchased a jet that could transport his helicopter to Mongolia. Why? The Emir is a big fan of falconry, and Mongolia is one of the better places to participate in the sport. This confirms what I heard earlier from a lawyer based in Ulaanbaatar that Arab royalty are indeed regular visitors to the country.

- I’m still yet to meet Arab investors ready to plunge into China. There’s a lot of interest, but limited experience. Moreover, I’m left with the impression that Arab investors are spoilt for choice. Many are comfortable investing in Africa, the Middle East, South East Asia, not to mention Europe and the United States. For now, investing China seems too difficult, and I’m not expecting that to change in the next few years to judge by the slow pace of liberalization in China’s investment regime.

- What’s up with Turkish businessmen? Friends in Cairo tell me of influx. And now I’m hearing of much the same in the Gulf. I’ve earlier blogged on this phenomenon, and there seems to have been a real improvement in commercial relations between Turkey and the rest of the Middle East over the past year.

- I also hear that Kuwaiti businessmen are talking of Syria as the next big thing. Chinese businessmen think much the same. Let’s hope Syria’s economic reform momentum doesn’t fade.

Time To Rethink Policy

September 15th, 2009

I am in the U.S. this week, speaking at the State Department, Columbia University and CSIS. I intend to use the opportunity to test drive one of my favourite themes.

In a globalized world it is time to view China and the Middle East as part of the same policy challenge, rather than two distinct challenges.

How so? The growing commercial relations between the two mean that a change in one affects the other. I am thinking specifically about jobs. The rise of China has resulted in a historic shift of manufacturing from the industrialized to the industrializing world. It is a shift that is unlikely to reverse.

However, the consequences have been mixed for the Middle East. A flood of cheap imports to the region has meant factory closures in low-cost countries, such as Egypt and Syria. And that’s a problem given that two-thirds of the region’s population is under the age of thirty. And many are unemployed.

But it could all change, and for the better.

The Silent Crisis

September 5th, 2009

It is easy to feel giddy about the rise of the Silk Road. But the outcome is far from guaranteed. One threat in particular might yet bring the region to its knees.

Water.

There is no escaping the Silk Road’s water shortages. The region is one of the driest parts of the planet. Yet, water is needed to run everything from textile factories in China, five-star hotels in Dubai, to washing- machines in Cairo.

Let’s start with a few figures. The Silk Road has an average of 2,260 cubic meters of internal renewable water per person. The equivalent figure is 9,300 in the United States. In fact, an abundance of water is an important, but often overlooked, reason why the United States might defy its critics and remain the world’s major power through the end of this century.

China, Iran, and Syria go head-to-head

July 6th, 2009

Two foreign parties have designs on a Middle East country. One of the parties is Iranian and is already well entrenched in the country.

Sound familiar?

Maybe. But this story has a twist. China’s Geely and Iran’s Khodro are car companies. They both produce low-cost cars, and they both have ambitions to capture a share of the Syrian car market and use the country as an export base.

Khodro has a head start. It owns 45% of Siamco, a joint-venture with the Syrian government. Its first model, “Sham”, rolled of the factory line in 2008. The project was hailed by both sides as symbolizing the strength of the relationship between the two countries. But like many agreements, the devil is in the details. And, according to an Al Hayat article published last week, Syria has demanded that Iran reduce the price of the car’s Iranian-made component parts to make the car more affordable. (It’s priced at a not cheap $12,000).

So, I was interested to read that China’s Geely is in discussions to build a factory near Aleppo, according to an article published by Syria’s state news agency, Sana, last week. Geely wants to sell to the domestic market and for export. Now, this isn’t the first time I’ve heard of a Chinese car company wanting to build a factory in China. Indeed, Chinese car companies have been targeting Syria’s domestic market for at least five years now. But it’s certainly the first time I’ve found any hard evidence of their investment plans in the country.

Whether Geely will be successful is less certain. I was speaking with a senior executive at a Chinese car company last week. He wasn’t convinced that Chinese car companies have the experience yet to invest abroad. (The executive previously worked for an American car company). So, I’ll be watching developments closely.

Hong Kong targets Syria as a manufacturing zone

June 17th, 2009

I’ve been arguing for a while that we will start to see more Chinese investment in the Middle East. However, the evidence so far is limited.  For instance, I met last week with the Beijing Furniture Manufacturers Association. Their director, Yu Xiusu, had just returned from a trip to the Middle East. But mainly to look for potential buyers. She wasn’t so keen on investing, worried about the lack of raw materials. (Fair enough, there’s not so many pine plantations in Egypt).

So I was pleased to read that Gatoson, a Hong Kong holding company, will develop an economic zone near the Syrian city of Hama, according to the Syria Economic Report. The company has apparently signed a land development contract with Salim Altoun, CEO of the Altoun Group and head of the Syrian-Chinese Businessmen Council. Importantly, the economic zone is pitched towards Chinese investors and targets eight sectors, raw building materials, decorative building materials, petrochemicals, heavy industries, food processing, information technology and mass media.

Now, a contract signed isn’t an economic zone built. But it’s a start. I’ll be chasing up Gatoson in the coming weeks to find out more details.

What’s Syria up to in China’s central provinces of Hubei and Hunan?

April 1st, 2009

Syria has strong links with a number of China’s coastal cities. But the central provinces?

I noticed an article last week advertising a Syrian Film Festival in Wuhan, the capital of Hubei province. Now, Wuhan isn’t small―it has a population of 7 million. But it’s still almost a 2-flight from Beijing and an odd choice for a film festival. I can’t see the connection, although Wuhan University does have a decent Middle East studies department.

I’ve also since noticed that Mohammad Dawood Al Sattam, a member of the Syrian Baath Party Central Committee, visited Changsha, the capital of Hunan province, in late March. Hunan is a major agricultural hub and famous for exporting labor to the country’s coastal cities. But it’s a political backwater in all other respects. What’s the explanation? It might be because Al Sattam is governor of Al Hasakah, a relatively poor province in Syria’s northeast. He certainly was there on a study trip and had lots of praise for China’s economic reform.

The two stories are a great example of how you won’t always read about the rise of the new Silk Road in the Western media.

Forget “Nationalism”. Think “Blocism”

February 21st, 2009

“Nationalism” is on the rise and it is bad news for the Silk Road.

I’m reminded of the risks by events in Syria. I recall Syrian friends praising China a few years ago―the arrival of “Made-in-China” goods to the streets of Damascus meant the middle-class could afford to buy the type of high-end consumer goods, such as digital cameras, which were once unaffordable.

But the tone has since changed. Mohammed Sharabti, the head of the Aleppo Chamber of Industry, alleged earlier this year that Chinese clothing imports have flooded the market. A number of textile manufacturers in Aleppo, the country’s second largest city, have closed. (You can’t afford to buy “Made-in-China goods if you don’t have a job). The Syrian government has responded by imposing tariffs on Chinese textile imports.

‘Fatih’. The Silk Road’s secret glue

November 8th, 2008

I was recently buying lunch in Damascus when two Iraqi immigrants entered the shop. It was an elderly mother and her daughter. The daughter asked a small boy working in the shop to find a chair for her mother. The heat outside was suffocating.

‘There’s so many of us in Syria’, the mother addressed the shop owner with a smile on face. ‘You must be tired of Iraqis by now’.

‘Of course, not’, the shopkeeper replied. ‘Syria is fatih’, he replied. He used the Arabic word for ‘open’.