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U.S. firms in gulf area fear war fallout

DUBAI, United Arab Emirates - With the Iraq war in its fourth week and anti-American sentiment running high in the Arab world, U.S. companies in the region are anxious about the war's effects on their earnings and their employees' security.

During the 1991 gulf war, there was an exodus of Western employees. But this time, most American firms and workers in the region - including in Egypt, Jordan and Saudi Arabia - have stayed put. Lebanon was an exception, after several bombings there.

As the gulf's financial and commercial hub, Dubai is home to dozens of American and multinational companies. Thousands of Westerners travel here for business and pleasure. Ford, General Motors, Citibank, Federal Express, Pepsi-Cola International, Microsoft, IBM and Motorola are just a few of the 80 Fortune 500 companies that operate in the gulf.

Only a few small companies have sent expatriate staff home, said Paul DeBenedictis, head of the American Business Council in Dubai.

But war-related tension has made consumers hesitant to spend and companies to invest, said Raymond Hamden, a council board member.

"The longer the war lasts, the less activity there is, and the higher the chance for departure becomes," Hamden said.

Dubai is known as liberal, cosmopolitan and friendly to Westerners. But even here, there are signs of the anger at U.S. policy that is evident across the region.

Just before the war, the U.S. Embassy in the Emirates warned it had received "indications of a possible terrorist attack against nightclubs in Dubai."

The U.S. State Department also authorized the departure of dependents and non-emergency workers at its embassies in the region and advised private American citizens in most Arab countries - Egypt was an exception - to consider leaving.

In Jordan, American firms are blaming the war on Iraq, the country's eastern neighbor, for an unspecified drop in sales and a sagging economy.

"What we're facing is part of what's happening to any American business in this country," said Amman-based McDonald's marketing manager Nadia ed-Darry. "But it's too early to determine the extent of the loss."

In October, American diplomat Laurence Foley was shot and killed in front of his home in the Jordanian capital, Amman. Police arrested two alleged al-Qaida members in the killing.

Since the Iraq war began, there have been few anti-American incidents in the region.

On Tuesday, however, an American working for the U.S. Embassy in Jordan was shot and slightly wounded, according to the embassy, which said it was a random act and there were no terrorism links. Jordanian authorities did not confirm the shooting.

In Lebanon, there have been several attacks targeting perceived U.S. and British interests, as well as pro-Iraq demonstrations in front of the U.S. and British embassies.

Many foreigners working in multinational companies in Lebanon discreetly left the country shortly after the war started, and then in larger numbers following those attacks.

On March 24, a small bomb went off at a British cultural center in Beirut but caused no injuries. A few days later, a man stormed a British bank in Beirut with explosives strapped to his body threatening to detonate himself. He surrendered to police.

On April 5, a small bomb exploded in a McDonald's restaurant in Lebanon, wounding five people, including a child. Police later discovered a car in the restaurant's parking lot filled with 120 pounds of TNT.

In Egypt, Donald C. Stewart, chief executive of Ridgewood Water Management Middle East, said the war has made U.S. investors more wary about business in the Middle East.

"The war is making people hold their breath and wait, and the economic effect of when people hold their breath is disastrous," he told The Associated Press.

Ridgewood is a power generation and water supply company based in Ridgewood, N.J. Five percent of its assets lie in the Middle East.

Back in Dubai, Ford Middle East said the number of people coming into showrooms to look at cars has slowed since the beginning of the war, "but it's too early to judge to what extent this would impact our sales," said Sue Nigoghossian, Ford Middle East's public relations manager.

Calls to boycott American products since the war began have been sporadic and disorganized. A boycott of U.S. products in the Arab world that reached its climax in 2002 was linked to Washington's perceived support for Israel against the Palestinians.

Copyright © 2015, The Baltimore Sun
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