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LETTER FROM THE EDITOR

Business not quite as usual

When the messenger handed me the fax – “Orascom Telecom Holding Company Announces Second-Quarter 2001 Results” – I tossed it into the recycling bin with more disdain than I usually have for even the most trivial of press releases. No disrespect to Orascom Telecom – corporate results are essential for what we do here at Business Monthly, and we are strongly in favor of full and open disclosure (even if we also like to save paper).

But the date was September 11, and the time was around 6:15pm, just an hour after I’d heard that two planes had hit the World Trade Center in New York, and minutes after I’d seen the image of the first tower collapsing on the TV in my boss’s office downstairs. These events made “business” seem like a fairly trivial thing.

For more than a century, historians have been fond of saying that economics is the primary catalytic force in the world. However, there’s also a tendency to see Business (that vague collection of cigar-smoking, conspiracy-hatching Big Businessmen), rather than class struggles or national economic aspirations, as the prime mover behind political and social trends. This angle can be very appealing when you’re looking at the railroads and canals of the 19th century, or the pipelines and dams of the 20th, with all their accompanying protests, wars and displacements.

The model breaks down a little with massive, ideologically charged and seemingly irrational events like the Second World War or the Cold War. But within these gigantic bundles of history, clear economic interests can still be discerned, and the winners and losers don’t always match up with those of the battlefield.

The model also seemed to break down in the face of last month’s events. However, it’s just as the smoke clears and we wait to see the American response that we must begin to put the World Trade Center incident into a wider, and – if we so choose – mainly economic context.

Did the tremendous economic disparities between different groups of people around the world – as well as those within the Arab world – in some way fuel the rage behind the attacks on the United States? Almost certainly. Will the attacks have economic repercussions for Arab countries? No doubt whatsoever.

Egypt is now left in the same place it was before September 11 – with a sagging economy and a stalled privatization program – but will now have to overcome heavier handicaps to address these issues. One of the country’s great, reliable hard-currency earners has been damaged yet again. Tourism will eventually recover, but in the meantime, badly needed foreign money will be coming in that much less. And while Egypt’s ideological commitment to selling state assets was hazy in any case, now – thanks to the renewal of the Middle East stigma – the government will have that much more trouble attracting buyers.

Clearly this is not the Egyptian economy’s finest hour. Oh well, at least we’re not in Pakistan. Unless you’re Orascom, of course.

As I later noticed, those second-quarter results that I’d so hastily thrown away were deemed “disappointing” by brokerage analysts, who were uneasy about Orascom Telecom’s huge outlays for rapid expansion into new markets. But now the company has been whacked especially hard, what with having bought into a Pakistani mobile-phone network just weeks before the country turned into a potential staging zone for US-led retaliatory strikes against Afghanistan.

Maybe Orascom shareholders can feel good they weren’t holding US airline stocks instead. But if airlines have been the biggest losers on the post-attack New York Stock Exchange, parts of the aerospace industry – those with military contracts – are doing just fine. Economic causes are a hard thing to pin down. Economic consequences are easier.

NEIL MACDONALD

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