February 2, 2001

COMMENTARY

FOREIGN AFFAIRS

The Fast Eat the Slow

By THOMAS L. FRIEDMAN


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DOHA, Qatar -- There's an interesting new trend in the Arab world that is easily detectable from here in Qatar, the small Persian Gulf emirate off the east coast of Saudi Arabia. It's this: Almost all the innovation happening in the Arab world today ó politically, economically and technologically ó is happening in the small states on the periphery, while the least innovation is happening in the big traditional Arab powers ó Iraq, Egypt, Syria and Saudi Arabia ó that always dominated this region.

Just go around the crescent: Morocco and Tunisia have taken the lead among Arab states in joining the global economy by forging free-trade agreements with the European Union. Over the next decade both countries will become associate members of the E.U., which will force them to raise their competitiveness in industrial goods and harmonize their laws, standards and regulations with the organization. This will gradually take them out of the Arab world. At the same time, little Jordan just became the first Arab state to sign a a free- trade accord with the U.S.

Qatar's al-Jazeera satellite TV station, which is the freest in the Arab world, has stolen Arab TV audiences from every one of the big powers in the region with its freewheeling debates, uncensored news and, lately, online polling ó which is a total no-no in the Arab world, where people are never asked what they actually think about specific governments or policies. Kuwait's big National Bank of Kuwait is by far the best private bank in the Arab world, and Bahrain's service sector ó lawyering, insurance and consulting ó is the most globally competitive in the region.

Meanwhile, the new Internet City in Dubai, also in the Persian Gulf, has attracted Oracle, Microsoft, I.B.M. and 200 other tech firms for their regional headquarters, because Dubai's combo of low taxes and good governance is so much better than the old power centers of Damascus, Cairo or Baghdad. Where is the World Trade Organization holding its summit next year? In Riyadh? No, in Qatar. Where will the I.M.F. and World Bank hold their 2003 summit? In Damascus? No, in Dubai.

And where are the freest elections? In Jordan, Morocco and in the gulf. Bahrain will hold a referendum on becoming a constitutional monarchy next month, as will Qatar in 2002. In March 1999 Qatar held the first free municipal elections in the region, in which women were allowed to vote and run for office. The only known political prisoner in Qatar is a man jailed for denouncing Qatar's progressive emir, Sheik Hamad, because he let women vote.

By contrast, the big boys ó Egypt, Saudi Arabia, Iraq and Syria ó have been much slower to bring their non- energy industries into the global economy, get wired and reform politically. Why is this? To begin with, globalization. With globalization, the big don't eat the small, the fast eat the slow. And the little Arab countries, many of which are now led by young new kings, can see what's happening in the world and are much quicker to adapt than big bureaucratic countries such as Egypt or police states such as Iraq and Syria.

Second, the farther an Arab state is from the Palestinian-Israeli conflict, the more its leaders do not have their energies, focus and economies diverted and distorted by it.

Third, many of the smaller Arab states were not cursed with large amounts of oil, so they have had to live more by their wits and by learning to trade with the rest of the world. "We diversified out of oil early, because we had to," said Bahrain's innovative Crown Prince Salman. "We really concentrated on developing our human capital."

Fourth, in the Arab world today almost all the small, peripheral states are led by kings who are progressive and relatively close to their people, while the big central states ó Syria, Egypt and Iraq ó are led by army officers who are autocrats and afraid of their people. Generally speaking, the Arab states on the periphery, with their small populations, are also much more open to foreign influences. "I have 26 different nationalities working for me in Kuwait," remarked a Kuwaiti banker. "That would not be possible in a lot of other Arab countries."

For decades it was the big, central Arab powers that set the tone for the Arab world and led innovation. But today the region is being led from the outer edges. It's the little guys that are doing the most interesting stuff, and it's the big guys that will be left behind if they don't wake up.


Copyright 2001 The New York Times Company