Arab banks in the United States are gearing up for a Middle East peace dividend.
Bankers working for institutions that do business with that part of the world say they expect a hefty increase in business and investments there if a peace agreement between Israel and the Palestinians takes hold.
"We're excited about the prospects," says Munir Barakat, president of the Arab Bankers Association of North America and managing director of Intercap Investments Inc., a New York merchant banking firm.
Increase in Trade Expected
"If you look at the resources -- oil, education, and business acumen -- that are available, it makes you wonder why we waited 40 years to have peace."
"Chances are that trade will increase between the U.S. and Arab countries," said Fakhruddin Khalil, president and chief executive of Arab-American Bank, a New York State-chartered commercial bank. "That will spill over to our business."
Bankers said trade, finance, correspondent banking, and private banking are among the areas that would benefit from a peace agreement.
Rebuilding Lebanon
"There will be definitely be an increase in trade with the U.S. -- if for no other reason than because many resources directed to buying arms will be redirected toward foodstuffs, capital goods, and other items needed for economic growth," Mr. Khalil said.
Bankers added that much of the banking-related business with the Middle East will also revolve around investments in infrastructure projects.
First and foremost is the rebuilding of Lebanon. Billions of dollars are likely to be invested in housing constructions, roads, telecommunications, and other infrastructure sectors.
In addition, Arab bankers in the United States are eyeing opportunities for developing light industries, tourist projects that will profit from peace, and increased trade with the region.
They add that peace between Israel and the Palestinians will also open up opportunities for business and investments.
Infrastructure Needed
"We expect the U.S. will be in the middle of an economic deal in the Middle East and that there will be more trade between the U.S. and the Arab world," Mr. Barakat said.
"Our role will be to organize, supervise, fund, and manage investments."
Bankers, however, warn that there will have to be a financial infrastructure in a Palestinian state before economic development can begin.
That, they speculate, will likely entail the create of a central bank, commercial banks, finance ministry, and currency.
But they add there will also have to be massive investments in order for the peace agreement to work.
"If this thing doesn't take off economically, the whole agreement will collapse," Mr. Khalil predicted.
Established a little over 10 years, ago, the Arab Bankers Association of North America has 35 institutional members and 250 individual members who are either of Middle Eastern origin or have close business links to the Middle East.
