Editorial - February 2011
When Tunisian street vendor Mohamed Bouazizi set himself on fire last December to protest his treatment at the hands of government officials, few would have foreseen the ripple effect it would have in the form of massive protests calling for democratic reform and regime change in countries throughout the region. Since the toppling of Tunisian president Zine El Abidine Ben Ali in January, like-minded demonstrations have arisen in Syria, Yemen and Jordan. However, as I write, all eyes are still on Egypt, the most populous country in the Arab world and the linchpin of the region due to its control of the Suez Canal and its peace treaty with neighbouring Isreal.
Not surprisingly, the events of the last couple of months have the alarmist Fox News crowd and their ilk raising the spectre of the 1979 Iranian revolution as the worrisome example of the last successful popular uprising in the region. When the Shah of Iran was overthrown, it resulted in the installation of an Islamic fundamentalist government hostile to Western culture and involvement. However, the current wave of uprisings has been mostly secular in nature. The vast majority of demonstrators have made it clear that they are motivated by poverty, unemployment and rooting out corruption rather than religion or culture. Moreover, any new governments in the region will badly need Western investment. Egypt, for instance, relies heavily on grain imports and would have immediate difficulty feeding a population of 80 million if trade relations were stifled.
Indeed, despite the uprisings, Canadian companies remain bullish on the region. While clashes were raging in Tahrir Square, that most Canadian of companies, Tim Hortons, announced plans to open 120 stores in the Middle East. Likewise, the Canadian-Arab Business Council in co-operation with Export Development Canada and the Department of Foreign Affairs are leading a trade mission to Saudi Arabia and Bahrain in March timed to coincide with the Middle East Oil Show.
Obviously, however, companies that do push ahead with investment in the region are increasing their exposure to a host of risks ranging from business interruption due to supply chain disruption, to terrorism, kidnapping and political interference. For clients with operations in emerging markets (not just the Middle East), now is the time to revisit risk management strategies to make sure they aren’t caught off guard by events that can unfold quickly. Otherwise, they risk getting swept up in the course of history.
Copyright 2011 Rogers Publishing Ltd. This article first appeared in the February 2011 edition of Canadian Insurance Top Broker magazine.