Washington Report on Middle East Affairs, November 2002, page 62

Special Report

 

Arab Boycotts, Both Formal and Informal, Well Under Way

 

By Richard H.Curtiss

“Blue and white, all the way, to keep Israel in the pink,” one Jewish American buyer proposed. The message of the Jewish press—which knows what it wants to say and when it wants to say it—is to help Israel by buying Israeli products whenever possible. The messages drum on, saying that Jews in Israel are carrying the burden for Jews all over the world, and that the best way American Jews can help is to provide more money and spend more time visiting Israel—every year if possible.

Is there a similar sense of volunteerism in the Arab world? You bet there is. Increasingly, young Arab men and women are doing their part to help the Palestinians. Here are some examples.

In Saudi Arabia there has long been a boycott mechanism. Since the Oslo negotiations began, however, the boycott has been largely quiescent. Now it has become active, although not really mandatory. Saudi entrepreneurs who have had the bad luck to invest in Starbucks Coffee, for example, have made a valiant effort to halt the inevitable. They point out that coffee bars have become part of a social pattern and that employees would suffer if the rituals were changed.

Unfortunately for them, it isn’t going to work. Starbucks Coffee very soon will be a thing of the past in the Arab world, and those who are smart already are finding substitute coffees, not on the boycott list, for that American brand name. For those still reluctant there are dozens of anecdotes heralding the inevitable. The daughter of one prominent Saudi reproached her father for congregating daily with his friends at a Starbucks. She reminded him why he and his friends should support the Palestinians by not patronizing a store whose major stockholder is an outspoken American Zionist. Within a day or two the entire daily coffee klatch had moved to a new venue.

In Egypt there is consumer reluctance to buy anything American. Along with Jordan and far-away Mauritania, Egypt does not have an official boycott because the country doesn’t want to lose its U.S. aid. Voluntary compliance is at least as strong there as it is in Saudi Arabia, however. As a result, six Starbucks outlets already have been pared down to four, and the others also are closing down, one by one, in Jordan.

The Pharmacists’Association of Egypt has called for boycotting all American goods as the first step on the road to supporting the Palestinians. Dr. Zakareya Gad, the association’s chairman, described the U.S. as “‘the axis of evil’ that supports Israeli terror and aggression against the Arabs.”

In tiny Bahrain, a consumer boycott is well under way. In yet another Arab country a supermarket has pointed out that it can replace every American product with an equally good substitute. Whether voluntarily or involuntarily, American products are becoming largely passé in the Arab world.

 

American products are becoming largely passé in the Arab world.

One might expect that the Palestine problem is of little concern in the more distant parts of the Arab world. If so, doing something to support the Palestinians may take a little longer from such distant places as Morocco and Algeria, but the sense of urgency remains.

Another subject of which most Arabs are unaware is the significance of two tiny symbols, “U” or “K.” Arabs visiting other countries can look for those letters. They indicate that a product is kosher-approved—and that a certain percentage of the profit of those kosher-endorsed foods goes back to fund pro-Israel activities. These include lobbying the U.S. Congress to support sanctions against Syria, for example, and to express solidarity with Israel.

While the complexities of boycotts multiply, some are very simple. Everyone in the Middle East knows, for example, that Starbucks chairman Howard Schultz is Jewish, and a major supporter of Israel. The damage to Starbucks, therefore, has been done. Not the best merchandising campaign in the world can halt its decline.

On the other hand, there is the case of Caribou Coffee, based in Minneapolis, Minnesota. It is 85 percent Arab-owned and will probably survive a similar boycott of American chains.

The first thing to be asked regarding boycotts is how much money Starbucks, McDonald's, Kentucky Fried Chicken and other potential targets receive from their franchises. A typical franchise fee for fast-food outlets is about 4 percent of the revenues. Where there is high volume traffic, however, that can end up being a large piece of change for the franchise company. Those who get hurt by a boycott are the local suppliers, such as those who provide cream for coffee, beef for McDonald's and chicken for KFC, as well as the local people who work behind the counters.

Historically speaking, on Dec. 2, 1945 the newly formed Arab League Council formally declared a boycott of Israel. The boycott as it evolved after 1948 is divided into three components. The primary boycott prohibits direct trade between Israel and Arab nations. The secondary boycott is directed at companies that do business with Israel. The tertiary boycott involves the blacklisting of firms that trade with other companies that do business in Israel.

According to Saudi Arabia’s Al-Watan newspaper, in the past 10 months Saudi authorities have blacklisted about 190 Arab and Western companies for importing Israeli goods into the domestic market. Among them were 72 Jordanian and 70 Cypriot companies. Others were based in Egypt (23), Turkey (11), Germany (6) and the United States (3). Britain, Singapore, Taiwan, Poland and Portugal were also cited.

 

An Unlikely Scenario

Many fast-food companies have made it clear that they are not on the boycott list. Others are desperately hoping that, before their businesses dry up entirely, U.S. President George W. Bush will indicate that he will do something to help the Palestinians. Unfortunately that seems increasingly unlikely, as Bush seems to have cast his lot unreservedly with the Israelis.

“Our sales are suffering but I am not concerned,” said Sheikh Wahib Binzagr, the patriarch of a major Jeddah merchant family. He was astounded to learn, however, that his own clan’s name was on the boycott list. “I laugh from desperation because I can’t do anything about it,” he said. “There is damage, and I think efforts should be mobilized to rectify the bad relationship, and then the other things will correct themselves.”

Unfortunately for the United States, however, things are going from bad to worse. The continued boycott of Starbucks and other U.S.-based chains will make a difference. Washington could also receive a wake-up call if some major U.S. defense contractors lose big contracts. If, for example, Arab contracts for U.S. helicopters or F-16 fighters or American tanks are awarded instead to German or French companies, American policymakers and workers may begin to pay more attention to the opinion of the Arab world. Once established clients are gone, moreover, it will be many years before any of them return. Americans may have to rethink their pro-Israel policies more quickly than most realize.

Richard H. Curtiss is executive editor of the Washington Report on Middle East Affairs.

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