Looking for Partners

Out to Beirut last week flew a cosmopolitan group of businessmen with a daring mission. They were the directors of a new investment company called MIDEC --Middle East Industrial Development Projects Corp.--which represents capital from the U.S. and nine European countries. With field headquarters in Beirut, MIDEC's directors were looking for partners, and the partners they want are Arab businessmen who will set up and run their own enterprises, retaining majority ownership and control but getting help from MIDEC's capital and technical know-how. To old Middle East hands, the idea of Westerners joining in an Arab-controlled enterprise is as dangerous as a camel's kiss, yet MIDEC has received a rousing welcome and thinks it can succeed.

Into the Vacuum. The main obstacle for MIDEC is a longstanding Arab suspicion of Western domination, which has wrecked most other Western attempts at private enterprise. Propagandists rail so effectively against U.S. aid that it is becoming almost a sin to accept it. U.S. Government economic-aid programs are frequently considered politically ineffective, and private Western capital is steadily leaving the Middle East, except for oil companies, whose returns are great enough to justify putting up with the problems. Even Middle Easterners with money to invest generally salt it away abroad, or put it in quick-profit, nonproductive ventures. Only the Russians, who love a vacuum, have been willing to step in with easy credit and technical aid.

To meet the challenge, a short, jolly Dutchman named Paul Rykens, 69, retired board chairman of the giant Unilever, N.V. soap empire, called a meeting of European businessmen last April to explore the idea of investing on a minority basis in Arab business. When Rykens got a favorable reception, he took off on a quick tour to line up more than 80 European and U.S. firms, including such giants as the First Boston Corp., Kaiser Industries and the Rockefellers' International Basic Economy Corp. Rykens carefully avoided both governmental assistance and the oil industry, which might have aroused Arab resentment, then tried his idea on the Middle East last fall. When he received a solid show of interest from businessmen and found no opposition from Arab governments, he decided to go ahead.

Bikes & Business. MIDEC's main function, says Rykens, will be to bring together Arab businessmen with capital to invest and Western outfits with the necessary know-how who will be willing to accept a minority interest. Tentatively. Rykens has set a ceiling of 40% for Western financial participation. MIDEC will concentrate initially on small industrial enterprises such as paper mills, breweries, fertilizer, bicycle, textile and chemical plants. However much Arabs distrust the West, Rykens thinks they still respect Western technological ability enough to make the plan work.

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