A retired general advises companies to look again to the Middle East and recognise the business opportunities rather than focus on the cultural differences. Emily Moore reports
WHAT do you think of when someone mentions the Middle East? Do the words summon up images of the long-running dispute between Israel and Palestine? Perhaps you see images from the devastating earthquake in Turkey and Syria? Or maybe it is a newspaper report of a car bomb going off in Egypt which comes to mind?
Whatever your first thought, it is likely that it is linked in some way to the volatility which has long plagued this region of 18 countries.
But while this area may be indelibly associated with conflict, it is also, according to a retired Lieutenant-General, a region rich in both a key resource and investment opportunities for British and Jersey firms to explore.
During his visit to the Island last week, at the invitation of Rathbones Investment Management International, Sir Simon Mayall spoke of his long personal and professional association with the region and highlighted the potential that its more stable areas, such as the Gulf states, represented for local businesses.
During Rathbones’ Decoding the Middle East speaker breakfast last Wednesday, Sir Simon – who followed a 40-year career in the British Army with advisory roles at the Ministry of Defence, Coutt’s and Greenhills & Co investment bank – said that while the region was ‘undoubtedly very volatile’, it was also ‘rather lazy’ to talk about the Middle East as one area.
‘While the region may be predominantly Muslim, there is a huge difference between, say, Egypt, Turkey, Iran and the Gulf states,’ he said. ‘Each country has to be looked at individually and the diversity across the region recognised. While many Middle Eastern countries may be plagued by political, economic, social and religious instability, if you look at the Gulf, you have a relatively stable and very wealthy region where there are tremendous opportunities to build on factors such as the British monarchy, armed forces and education establishments to develop both cultural and financial relationships.’
To achieve this, says Sir Simon, it is critical to accept that ‘cultures are different’ and to allow the population of each country to drive change at ‘its own pace and time’.
‘There is no doubt that, when it comes to matter such as LGBTQ, women’s emancipation and workers’ rights, the culture is very different from that of the western world,’ he said.
‘However, you have to put this into context and recognise that the people living in these countries are not idiots. There is a young population in these countries – 60% of residents are under 25 and, of those 60%, half of them are women.
‘These people know which way the world is going but they also recognise that they are better off under their autocrat governments than they would be under the regimes seen in Iraq, Syria or Libya, for example. They have security and stability and, because of that, they will drive reform at their own pace and time. If they try to do this too quickly and incite a revolution – as we have seen in Afghanistan and Iraq – then the stability they currently enjoy could disappear.’
And while British media may focus on ‘ideas spun up by dissidents’, Sir Simon says that it is important to look at the wider picture when it comes to issues such as migrant workers, a topic which was propelled into the spotlight in the build-up to last year’s FIFA World Cup in Qatar.
‘While I do not deny that there may be some abuse of migrant workers, and that employment conditions may fall below the ideal standard, we cannot ignore the fact that the Gulf states are the most extraordinary generator and recycler of global wealth,’ he said.
‘Millions and millions of workers from countries such as Bangladesh, Sri Lanka and The Philippines voluntarily travel to the Gulf and spend 11 months of the year working there and sending their wages back to their families at home, giving them a lifestyle which they couldn’t afford if the Gulf didn’t provide this employment opportunity.
‘As an example, 25% of Bangladeshi money comes from the Gulf and, as a result of that, the children of these migrant workers are able to go to school. Standards are improving – and could improve further – but this is a complex area and, if the Gulf states fell, a lot of other countries would feel the impact of that.’
And it is not just through its employment opportunities that the region has the potential to impact other countries.
‘While Russia’s invasion of Ukraine has accelerated our desire to move away from fossil fuels, we cannot forget that the populations of China and India are expected to grow by one billion in the next 20 years and there is nothing in the technology of renewable energy that will allow these people to have a decent standard of living or manufacture items to export to other countries,’ said Sir Simon.
‘Therefore, while some countries may be able to stop using fossil fuels more quickly than others, many parts of the world will need oil and gas for a long time to come and, if we stop investing in fossil fuels, we will condemn people in those countries to poverty.’
With around 20% of all energy coming from the Strait of Hormuz, the role that countries such as Qatar and Saudi Arabia have to play in the global energy equation is, says Sir Simon, ‘extraordinarily critical’.
And it is because of this critical export, he adds, that the Gulf states have the wealth which makes them attractive to British firms.
‘These states are generating huge amounts of money which, combined with their stability, attracts increasingly sophisticated investors and builds increasingly sophisticated economies,’ he reflected. ‘Assuming that they remain stable, they will want people to invest in them and they will have money to invest elsewhere and we want that money to come to Britain rather than Beijing, New York or somewhere in Europe.
‘Jersey finance companies should be getting out there and talking about the stability that the Island offers and they should be selling the benefits of holding money with Jersey- or British-based banks and highlighting the reasons that people in the Gulf states should be taking advantage of our service industry to help develop their own.
‘These states are diversifying; they are investing in fintech, publishing, banking and healthcare. Britain has an extraordinary historical connection with the Gulf states and is therefore largely pushing on an open door. As a result, there is a huge happy hunting ground for people going out there with the Union or Jersey flag. But it is not a part of the world for the tidy-minded. It requires patience and it requires you to give people respect and show an interest in them. If you go out with a level of arrogance, wanting to impose Western values on them, you will not get very far.’
Indeed, it is a failure to understand this which Sir Simon – whose book Soldier In The Sand: A Personal History of the Modern Middle East recounts his military and diplomatic experiences in the region – says has contributed to many allied failures.
‘History and religion hang very heavily in the Middle East and many of our failures in Iraq and Afghanistan have stemmed from the arrogance that comes from not liking the nature of these patriarchal societies,’ he reflected.
‘For example, about ten days before the fall of Kabul in 2021, every US embassy in the world was told to fly the LGBTQ flag. It was an action which fed into the Taliban narrative. It was a similar story with Afghanistan. We should have thrown out al-Qaeda, which we did, and then paid off the tribes and got out of there. However, we went in with an agenda to change Afghan society, which was never the right approach.
‘Now, though, there is an opportunity for Britain to do some of the heavy lifting in the area. One of my great legacies was getting a permanent British military base established in Bahrain, a country where there is a square named after me.
‘That base demonstrates that we have made a stake in their security and gives us the leverage to turn that contribution to their security into their contribution to our prosperity. We are poor and militarily capable while they are rich and very insecure. It’s a realistic trade-off and, where Britain leans in politically and militarily, it is easier for business to capitalise on that.
‘And we should be focusing on this area. The Middle East will not go away. It is a key component of the energy equation and it is not in our interests to step away from it because where the energy supplies are – and will be for several decades – money will follow and that money needs to find a home. Jersey should have a share of that.’