Businessmen rue lack of 'soft features'

President George W Bush came to Egypt on Sunday and lectured the Middle East on his usual topics of freedom, democracy and freedom again. He needn't have bothered. If he had hung around long enough to talk to some of the business and political leaders attending the World Economic Forum in Sharm El Sheikh over the past three days, he would have realised that a rigorous debate is already taking place.

Corporate and government elites have been engaged in some remarkable [and public] discussions at the WEF. Take, for example, Saad Al Barrak, CEO of Zain, the Kuwaiti mobile phone operator. Only occasionally do I meet a businessman who truly impresses. It is rare to meet someone in the corporate world with intelligence, energy and, most importantly, an opinion of his (or her) own. The sad truth is that most investors do not want visionaries running their companies, they want a safe pair of hands. So, it was refreshing to hear the head of a major Middle Eastern corporation offering opinions and showing real concern about the future of the region.

Al Barrak outlined with humour and clarity the failings of Middle Eastern states from a businessman's point of view, specifically the failure to give the private sector sufficient room to thrive and the failure to invest in "soft infrastructure".

Oil revenue and rapid economic development have led to massive investment in hard infrastructure such as roads, buildings, hospitals and universities but without the "soft" features – corporate transparency and guaranteed ownership of assets – further development will be constrained.

Dubai has been repeatedly highlighted as a model of economic development during the three days of talks at the WEF and Al Barrak pointed out that Bahrain is going further to develop its corporate legal system.

He told delegates that when Zain, which is one of the fastest growing companies in the Middle East, was considering a new home base it rated Bahrain higher for this issue alone. Without the rule of law, open markets and fairness, businesses cannot operate at their full potential.

He said: "We are building roads but we also need the rule of law, transparency and the power of the ballot as these things will anchor our future."

However, Al Barrak saved his most withering criticism for the government of his own country, Kuwait.

He joked: "We are the three Ks of socialism: Kuwait, Cuba and Korea. The state owns 90 per cent of wealth generation in the country. There is not much room for the private sector. Kuwait has one million people but 190,000 work for the government, you would think the government is running a country the size of China." As the conversation moved on to the impact of sovereign wealth funds, Al Barrak returned to his theme and again encouraged Middle Eastern governments to get out of the way of the private sector. He said: "I don't trust governments to get quality investments." Al Barrak was by no means the only business leader raising these issues and he seemed to strike a chord of agreement from many government officials at the Forum.

  - David Robertson is Business Correspondent for The Times of London.

Follow Emirates 24|7 on Google News.