It’s easy to do well in a boom, when the money runs almost as freely as champagne, and when investors feather their nests with the profits of successful speculation. This was never more so the case than in the GCC, where oil money transformed the local capital markets into the biggest bull on the Arabian block.
After the booming bull has come the bear of bust. It is a bitter pill to swallow, especially when it has not been our fault. The inescapable truth is that business cards from the world’s blue chip banks and finance houses have lost their luster — rogue hedge fund investor Bernard Madoff saw to that when his $50 billion scam wiped out the asset portfolios of some of America’s most powerful investors. A well-cut suit, a Harvard MBA and a Manhattan employer are no longer enough to get people to part with their money.
For the time being at least.
All of this means that in 2009, a year in which we can expect the champagne to dry up, CEOs will have to prove their mettle by showing their respective boards that they can step up to the plate and deliver real solutions in this era of change — for there will be massive change and we are not just talking about the global recession. The whole financial dynamic has shifted, as has the flow of global investment.
We were once told that every dollar would return to the US, but now the dollar is leaving America and taking up extended residence in China, in Russia, in India and in Brazil. No one saw it coming, but the flaws in the US free trade agreement are coming back to haunt the architects of its design.
The implications of all this need to be taken on board. CEOs will have to reacquaint themselves with the basics of macroeconomics and devise micro-strategies to maintain their companies’ competitive edge. And they must do this within the parameters of good corporate governance, sticking to their mission and managing ethically.
