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Business was not on our minds when we launched the Middle East Quarterly two years ago. The Editor's Introduction that opened the journal's first issue mentions several intended audiences -- policymakers, journalists, academic specialists, undergraduates -- but not business executives. And, indeed, the first two volumes do not address the concerns of those having to make business decisions.

Much has changed in the intervening period. Shimon Peres's dream of a New Middle East now has some reality, as major conferences in Casablanca, Jerusalem, and Amman attest. Visionaries such as Jordan's Crown Prince Hasan are no longer alone in their worry that the Middle East will be left behind. A significant number of Americans have come to the conclusion that the Middle East does in fact offer attractive trade and investment opportunities; as one banker of Arab origins puts it, only half in jest, "The whole purpose of peace is business." Ziad Abdelnour: NYAB 4 Dec 95 Those who seek not only to do good but also to do well offer the Middle East a way to transcend the repression, terrorism, and wars that have characterized the last half century.

We are responding to this new spirit by broadening the Middle East Quarterly to address topics of interest to business and drawing conclusions with business in mind. In symbolic terms, when drawing policy implications, we now have New York as well as Washington in mind.

At the same time, we fully recognize that the New Middle East faces major obstacles, and three in particular. First, the region's economy has been shrinking. The exceptions have been the most democratic of America's friends: Israel has grown at 5 percent a year since 1985 (and 2.6 percent per person), Econ 18 Nov 95 #194 the fastest rate in the industrial world. Turkey, Tunisia, and Morrocco have also had generally good, if uneven, growth. For the Arab countries as a whole, however, the numbers are terrible. According to the most recent Unified Arab Economic Report, the total Arab gross national product in 1980 was $440 billion; in 1992 (the most recent year for which statistics are available), the nominal GNP came to $479 billion.1 These figures point to the economy of the Arab world having stagnated for over a decade. The Arab economy in its entirety is smaller than that of Spain; and Iran, the apple of many a commercial eye, imports about as much as Hungary. The cause of these negative trendlines is not hard to explain: the oil boom was a motor force of economic growth but it ended ten years ago and nothing has replaced it.

Secondly, business alone cannot transform the region, turning it from old to new Middle East. Memories and dreams, hatreds and enthusiasms do not stem from poverty, so prosperity cannot be the salve that soothes them. On its own, business does not solve the Middle East's political problems; the magic of the market does not extend to ending political enmities. Shimon Peres may be assuming too much when he declares that "a higher standard of living means a lower standard of violence."2

Thirdly, the old Middle East, what The Jerusalem Report calls that "ugly and grizzled old fighter,"3 is very much alive. The region hosts most of the world's rogue states and the fewest of its democracies. Even as other regions disarm, it is militarizing, notably with weapons of mass destruction. Very few borders have been mutually agreed upon. Counterfeiting and drug-trafficking have reached epidemic proportions. Fundamentalist Islam, perhaps the most vibrant ideology extant today, threatens to upend the region.

The obstacles, then, are very real. But they need not prevent us from joining forces with those who, seized by a new spirit, are seeking to make advances. The possibility does now exists that Middle Easterners will find in the marketplace a substitute for oil wealth, and that they will pay less attention to politics than to economics. We, in our modest way, seek to do what we can to encourage these trends.

1 Quoted in Rami Khouri, The Jordan Times, 17 January 1995. MEQ Mar'95 51
2 Jordan television, 30 October 1995. #1
3 The Jerusalem Report, 14 December 1995. #194