David Hamod, president and CEO of the National U.S.-Arab Chamber of Commerce, views his organization as a bridge for business between Arab countries and the United States.
Despite news reports that often portray an Arab landscape in chaos, Hamod says business is brisk. In fact, the Iowa-born businessman who is of Lebanese, Irish and Norwegian descent described economic ties between Arab countries and the United States as stronger than ever.
Founded almost 50 years ago, the National U.S.-Arab Chamber of Commerce (NUSACC) is the only business entity in the United States recognized and accredited by the League of Arab States and the General Union of Arab Chambers.
“That’s important because it is effectively the Good Housekeeping Seal of approval and gives us a quasi-official position,” Hamod told The Diplomat. “There are many chambers of commerce in the U.S., just as there are in many parts of the world, but we are recognized as the U.S.-Arab Chamber by the authorities in the Arab world.”
NUSACC maintains connections with more than 20,000 companies interested in trade between the 22 countries of the Arab world and the United States — most of them small- and medium-size businesses based in the U.S. At the same time, the fastest-growing segment of the chamber is Fortune 500 companies.
“We have five offices around the United States serving our clients — predominantly U.S companies — and we do commercial certification for many U.S. companies who are exporting to the Arab world,” Hamod said.
Hamod has been a prominent member of the U.S. business community for more than two decades. In 1988, he founded Intercom International Consultants, a Washington‐based consulting firm that has served as an advisor to numerous business groups, including more than 30 U.S. companies. As president of Intercom, Hamod served on the International Policy Committee of the U.S. Chamber of Commerce for more than a decade. Prior to founding Intercom, Hamod worked for the Brookings Institution, IBM Corp., Overseas Private Investment Corp. and the New York Times, among other organizations.
He is frequently called to testify before Congress on business and trade issues. Hamod also hopscotches around the globe and across America on numerous trade missions to drum up business. Exports of U.S. goods to the Middle East and North Africa (MENA) region stood at $67.4 billion in 2015, though that was a dip from $71.4 billion the year prior.
The NUSACC wants to see those numbers climb back up. To do that, the group supports an array of events. It regularly honors ambassadors from nations such as Lebanon and Tunisia and hosts prime ministers and foreign ministers. It also participates in events ranging from a Saudi Stock Exchange road show in New York City and the first-ever Kuwait Investment Forum, to a Morocco Trade and Investment Forum in Atlanta and a Dubai Silicon Oasis Authority visit to California.
The Diplomat recently caught up with Hamod to speak to him about the chamber, the effect of depressed oil prices on Arab economies, anti-Islamic rhetoric in American politics and more.
*This interview has been edited for space and clarity.
The Washington Diplomat: It might surprise people to hear that business between the U.S. and Arab countries is so robust given the state of affairs and ongoing conflict in much of the Arab world.
David Hamod: There is a perception that the whole Arab world is on fire. Certainly, there is some turmoil in certain pockets of the Arab world, but it is not correct to portray it as a region on fire. In fact, it continues to be one of the best places in the world for the United States to do business.
In a nutshell, U.S. exports to the Arab world have been doubling every four years and to my knowledge that is unprecedented in the world. With the current economic slowdown worldwide, U.S. exports have dipped about 5 percent in the past year to just under $70 billion for the year 2015. Some of that is the drop in oil prices and some of that is the result of the global slowdown.
The drop in oil prices is a two-edged sword. Some projects are being put on hold and those will wait until the oil prices rise again, but when the chips are down, that is the perfect time to implement economic reforms that may be overdue. That’s part of what we’re seeing in the Arab world right now — new initiatives that are focused on reforms to the economy that will better position the Arab world when the current slowdown ends. One sees that in Saudi Arabia today with the new leadership there, but it is also very apparent in many other countries, as well.
Eventually prices will go back again. I’m not saying they’ll go back up to $130 a barrel, but I believe they will rise.
TWD: Tell us more about how the drop in oil prices is forcing the Arab region to rethink their economies and how that fits into what you do here at the U.S.-Arab Chamber.
Hamod: Historically, the Arab world writ-large has been based on hydrocarbons. Either countries produce the hydrocarbons themselves or through their largesse they have helped to support other countries that aren’t blessed with oil and gas resources. What we are seeing today is a historic shift away from dependence on hydrocarbons, a greater diversification and a focus on knowledge-based economies. That creates new opportunities for U.S. companies because the Arab world is looking for companies that will provide greater value. It’s a great scenario for American companies which, in my opinion, provide the best value of any companies in the world. That transition to knowledge-based economies that emphasize U.S. services — university, health care systems, legal advice, finance — is expertise that the Arab world is drawing on increasingly.
Many governments are standardizing or rationalizing their economies and seeking greater accountability from their citizens. In the past, some people got a free ride from cradle to the grave. Part of the message coming out of the Arab world right now is we need you to support the economy, as well. In the aftermath of the Arab Spring, any Arab leader who does not listen to his people, particularly the youth, does so at his own peril.
We’re seeing sweeping changes across the Arab world — ones that will have economic implications for decades to come. The UAE and Saudi Arabia … have been very thoughtful, very progressive in some of the changes they have helped to bring about on the ground.
TWD: Are most your members Arab businesses? How would you characterize your membership?
Hamod: We’re not representative of the Arab community in the U.S. The vast majority of the 25,000 stakeholder companies we serve are not Arab-American, but they are interested in doing business with the Arab world because it’s a great market.
Very often companies and also governments will ask our advice under the circumstances because they know we have one foot in other cultures. We can direct them to the most reputable entities in the U.S. This job requires a very high degree of trust. In the course of our nearly 50 years, the chamber has earned the trust of many leaders throughout the Arab world at that high level. Our trust and confidence are extremely important because so much of what is done in the Middle East is based upon relationships.
TWD: Does violent conflict in the Arab world, or at least the perception of violent conflict, negatively affect the business climate here in the U.S.?
Hamod: To a certain extent, yes, although most of the conflict we see in the Arab world today has been lingering for several years. It’s hard to pin the conflict on the drop in U.S. exports, although I guess one could argue that. With more resources going to tackle turmoil, those parts of the Arab world that are facing challenges [have] less money available for other projects, so they have to be put on hold.
TWD: What is the U.S. regulatory environment like for doing business with the Arab world?
Hamod: In terms of most regulations, the Arab world has done a really good job of consulting with the United States on how we do it here. In many instances they have adopted regulations suggested or offered by the U.S. I think there is recognition in the Arab world that says U.S. standards and regulations are some of the most stringent in the world, and there is a keen desire to help standardize some of the processes throughout the Arab world because at the end of the day, that will be better for their economies.
TWD: Let’s talk about U.S. exports to Arab countries. What is the state of the U.S.-Arab export market?
Hamod: Historically, there have been four main economic drivers for U.S. exports to the Arab world: oil and gas, defense, infrastructure and consumerism — basically U.S. brands. While oil and gas might be suffering right now, the other three drivers are doing very well, particularly infrastructure because of the huge infrastructure build-out we’re seeing across the Arab world right now. I’d like to add a fifth: education and training.
We are looking at unprecedented levels of interest in the Arab world in U.S. schools, whether that is establishing American schools on the ground across the Arab world [or] partnering with American colleges and universities…. We’re also seeing greater numbers of Arab students coming to the United States, led by Saudi Arabia, which has to the best of my knowledge more than 100,000 students in the U.S. right now. That has implications for the U.S. business community
TWD: Tell us about the Professional Development Initiative (PDI), which offers Kuwaiti students on F-1 visas in the United States a chance to work with a U.S. institution before returning home.
Hamod: The PDI is administered by three program partners: the Embassy of the State of Kuwait, the Kuwait Foundation for the Advancement of Sciences and the National U.S.-Arab Chamber of Commerce. It’s a very select group — the crème-de-la-crème of Kuwaiti graduates. It’s enabling these young people to gain experience that will serve them well back home in Kuwait. It’s also giving American companies an opportunity to gain an understanding of these graduates’ capabilities in case they would like to hire them to work for their companies in the region. It’s a great program and I think we’re the only ones doing anything like that. To gain this kind of hands-on knowledge is essential for the Arab world and our chamber is a leader in that trend.
TWD: What is the state of tourism — Americans to Arab states and vice versa? Obviously, conflicts would seem to put a damper on tourism going both ways.
Hamod: There are now more than 400 nonstop flights per week between the United States and the Arab world. That is a significant change and it is bringing Americans and Arabs in direct contact with each other without having to go through Europe and the rest of the world.
There are certain countries in the region that are a big draw — Dubai is doing very well, part of the United Arab Emirates. Tourists are coming from all over the world. Morocco is doing very well. I think other tourist markets are coming back. Egypt, for example, which has historically been an important market, [has] faced some challenges but it’s on the road to recovery. U.S. tourists going to Arab markets are recognizing there are some exotic opportunities, including things like medical tourism and ecotourism. Some of these are the last frontiers in tourism.
Also, more than ever before, the Arab world is hosting signature events that will help to drive tourism, commerce and cultural exchange, such as the 2022 FIFA World Cup in Qatar and Expo 2020, to be held in the UAE.
TWD: And what about Arab people coming to the U.S.?
Hamod: Things dropped off precipitously after 9/11 and now many years after, in part because of the availability of more airlines, there are more Arab tourists coming to the United States than I can ever remember. They are not only exploring the major cities but some of the smaller cities across the United States. All things being equal, the Arab world looks to the United States as its number-one partner.
That includes vacationing in the U.S., health care, they’re sending their kids to American universities and working with Americans as business partners because what they see is what they get. We have rules to fight the corruption that some of these countries don’t have.
TWD: We’re obviously in an election year. What do you make of the fact that Islam has become a talking point for Republican presidential nominee Donald Trump?
Hamod: We don’t pick favorites for any office. I think it’s very unhelpful to talk about keeping Muslims out of the United States or driving Muslims out of the United States. Muslims are part of the very fabric of America. They contribute just like people of all other faiths in this country. Careless talk about profiling certain ethnic or religious communities can be very dangerous. In our own case, this year we have had to put some projects on hold because people from the Arab world said we understand the United States does not want Muslims, so we’re going to take our business somewhere else … and that is clearly a step in the wrong direction.
It has financial implications but it also has implications for how we’re perceived in the world as an honest broker and as a country that welcomes people of all backgrounds regardless of faith. As someone of Lebanese, Norwegian and Irish descent, that’s part of what makes America great. It’s a country that gives everybody a second chance.
About the Author
Michael Coleman (@michaelcoleman) is a contributing writer for The Washington Diplomat