The Arab is “Superior” and We Lack Institutional Work
Global Economy is headed to Dependency on Services
“Talal Abu-Ghazaleh”….a prominent Arab businessman, with numerous investment activities in various fields. He succeeded in creating a group of companies known as Talal Abu-Ghazaleh International (TAGI) which operates through 32 offices in the Arab world and ten offices in Europe, the USA and Canada. Its activities include legal accounting, financial, economic, engineering and administrative consultations, in addition to projects’ financing, registration of trademarks and patents and translation services.
Mr. Talal Abu-Ghazaleh has acquired many awards from Arab and foreign countries in appreciation of his investment and economic work and actions.
He is of the opinion that the return of Arab immigrated funds to the Arab region is not so much a patriotic decision, as much as it is related to an atmosphere that encourages the investment of Arab money in Arab lands, and puts Arab investors at ease.
On this issue, and his expectations for the global economy and its effect on the Arab economy, the following conversation took place between Mr. Abu-Ghazaleh and Alalam Alyoum:
First, we’d like to know who is Talal Abu-Ghazaleh?
I am a Palestinian with a Jordanian nationality. I was born in Jaffa, Palestine, in 1938 and obtained my Bachelors degree in Business Administration with honors from the American University in Beirut in 1960.
With extreme hard work, patience and continuous effort, I entered the field of investment, and formed numerous companies that became known as “Talal Abu-Ghazaleh International”, which is now collectively one of the largest professional holding companies in the Arab region. I created the first of its firms in 1972, and it now operates throughout 32 offices in the Arab region and ten offices in Europe, the USA and Canada. Its activities are various and its branches include: Aldar for Auditing (i.e. certified accountants), Abu-Ghazaleh Consulting (i.e. administrative consultants), Aldar for Financial, Economic and Engineering Consultations, Talal Abu-Ghazaleh Associates Limited, Talal Abu-Ghazaleh International for Administration (i.e. financial, administrative and industrial consultations), the Arab International Company for Projects (and this includes consultants for the financing and administration of economic projects), TMP Agents for the registration of trademarks, patents and industrial models, in addition to the Arab offices for legal services and the International Center for Translation Services.
I obtained the Jordanian Independence Medal in 1967, the Gold Mercury Award from Bahrain in 1978, the Shield of the Kuwaiti Auditors and Accountants Society in 1982, the Chevalier Award of the French Republic in 1985 and an honorary doctorate of Humane Letters from Canisius College in 1988.
I was elected as Chairman of Price Waterhouse – Abu-Ghazaleh and Partners between 1974 -1980, and I also joined Saba and Partners in Kuwait as an auditor in 1960, occupying various positions there until I became a general partner in 1967, then executive partner and eventually elected chairman in 1972.
But what is your professional title among all these activities?
Chairman of TAGI, which is considered the largest professional group in the Arab world. Its main activities are auditing, registration of trademarks and innovations, and financial and economic consultations. Its activities are launched out of three societies: The Arab Society of Certified Accountants (ASCA), the Arab Society for the Protection of Industrial Property and the Arab Management Society.
The Arab Region - Upcoming Recovery
As a businessman, how do you view the current status of the global economy? What are your expectations about it? And how do you see it affecting the Arab world?
As for the economic recession that has hit the economies of a number of major countries, I expect it to end this year, with the global economy beginning to recover. I think that the Arab region will witness an economic recovery next year for various reasons, one of which is that the nature of the economic national wealth is that it’s exposed to recession, then recovery, then recession…and so on.
Arab economic performance was characterized by slow growth throughout the 1980’s. Also, what is happening internationally will no doubt affect our region since it is an important part of the world, and the expected economic progress –whether in Europe or the USA –must reflect onto our region. Further, the new world order must seek an appropriate formulation for economic stability. I think this feeling is a source of optimism.
The Return of the “Immigrated” Money
Arab money that immigrated in foreign investments, term deposits, banks and projects…how does it return to contribute to Arab growth through economic projects in the Arab world?
We must first realize that economic progress does not depend only on the availability of capital, but also mainly depends on the provision of an atmosphere that puts investors at ease and encourages investment. This requires stability in all aspects including protective, controlling and active laws, which makes the investor confident in where he stands and where he puts his money. This means that Arab and non-Arab funds will come regardless, because investment isn’t a patriotic decision, but rather an economic decision. This economic decision is based on an interest that seeks a benchmark for success and failure and stability regardless of the nation that this investment is headed to.
The USA – A Major Relationship
How do you view the nature of the Arab economic relations with international economic blocs?
The relation with the European Union is a strategic one due to a variety of historical and geographic factors and conditions. There is no doubt that the European Union seeks to play a larger role in the area, yet I think that the main relationship will remain with the USA since it is the strongest economic power. For strategic reasons, this imposes on the Arabs the duty of building bridges of economic interests with the USA. I think these bridges will be effective in all aspects.
Individual Superiority, and Absent Institutional Work
In your opinion, what is the best way to encourage Arab investments to fulfill their role in the field of development?
First and foremost releasing the individual incentive and launching individual initiatives. This is because my experience has taught me that the Arab excels even in comparison with his counterparts in advanced nations. Then providing a better environment that is free of all bonds and limitations so that investments can move freely. This type of environment is coming to fruition in many Arab countries through economic reform programs. What we are lacking up till now is the development of institutional work so that Arab business can succeed as organizations and groups working as a team.
I can confidently say that the three Arab societies I pointed out previously have succeeded in highlighting the value of teamwork at the common Arab level. What helped them in this regard is that they do not have a governmental, political or official character. Rather, these societies work through the efforts of their members, who were able to overcome any political differences and/or considerations, and succeeded in their work with a single objective before them which was serving the Arab economy.
Three Arab Societies
What exactly are the responsibilities of the Arab societies? And how do they conduct their business?
As for ASCA, it is an Arab regional society that was established in London in 1984, and includes the leaders of the accounting profession in the Arab world. It is concerned with qualifying Arab certified accountants through education and technical training via training courses. The society issues a specialized monthly magazine entitled “The Arab Accountant”, and convenes seminars and conferences periodically that specialized international organizations participate in, in addition to Arab accountants and officials in Arab economic institutions. We held two conferences in Tunis and Amman, and will be holding a third one in Bahrain this year. As for the board of directors, it held its 24th meeting in Cairo last week with the attendance of its members from all Arab countries.
As for the Arab Society for the Protection of Industrial Property, it is a special Arab body that was formed in Munich in 1986 and is concerned with developing the level of protection in the fields of industrial and intellectual property (IP) throughout the Arab world. This is related to the field of trademarks and copyrights. It does so by providing advice to governmental apparatuses on commercial laws and systems so that they develop to the levels that are recognized internationally. This society also issues a monthly magazine dedicated to this field called “Industrial Property”. The society participates in international conferences organized by the UN and the World Intellectual Property Organization (WIPO) in Geneva, and other international federations.
The Arab Management Society was created in New York and its board of trustees includes a group of Arab experts in the field of administrative sciences. It is a regional Arab organization that is interested in spreading contemporary administrative principles and issues a monthly magazine called “Administration and Growth.”
The three societies fill a large gap and are propelled in their work by economic activity, as their position is that this activity cannot be exercised in a sound manner that can keep up with the global economic revolution without specialists in all areas related to the economy, and modern administrative sciences in particular. There is no doubt that this will provide a strong push to the Arab economy, especially if the research and studies of these societies are well-utilized.
We Do Not Re-invent the Wheel
What is your view on the future of these three societies and their role in serving the Arab economy?
If we want to judge this based on global experiments, we see that economic development has led to increased dependency on professional services. Therefore the burdens have increased on specialized private institutions that play the role of the three societies. So I think that the role of the societies in the future will be bigger than their current role. We are working in this direction. For example, we are in the process of establishing long-term economic plans to deal with the economic requirements of the Arab region in light of the new world order. What helps us in this regard is that advanced nations have created similar institutions years ago, which provides mechanisms for international cooperation between these organizations and helps in utilizing their experiences.
If we take ASCA as an example, we decided at its onset that it will not re-invent the wheel, and will rather continue where others had left off. We benefited from previous experiences in the crystallization of our programs, and putting exams and curricula in place at the same level of those that exist in Britain. This is because the accounting profession holds a special status. Because of this, ASCA acquired the respect of the world, which led to its membership on the board of the International Accounting Standards Committee and the board of the International Auditing Practices Committee. These are the two largest international bodies concerned with establishing accounting and auditing regulations and developing them. The society has also become a member with observer’s status at the UN, and the ASCA chairman will preside over the committee for developing nations at the international conference for accountants to be convened in Washington next October, where he will deliver a speech in the name of Arab accountants and accountants of developing countries.