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April 2010 - Posts

There was some air traffic in Middle England this past weekend, but sadly only the rather inelegant lifting off by a number of swans from the River Wye. Otherwise the skies were blissfully clear of noise, pollution and vapour trails, replaced by the deafening sound of business and leisure travellers gnashing their collective teeth.

The man at the local cider farm thought it might all be Iceland's fiendish revenge for our dear Prime Minister's cavalier use last year of anti-terrorist legislation to freeze the assets of the failed Icelandic banks. Another conspiracy theory going the Saturday night rounds was the frankly fanciful idea that the Russians had bombed the Eyjafjallajoekull volcano for some unexplained military or economic reason.

But it was an ill wind, or lack of it that was blowing frustrated tourists into hotels all round the ancient kingdom of Mercia, who had been expecting instead to be settling down for some suitable "ooh la la" in Paris and other foreign destinations. Many an extra bottle of wine and sticky toffee puddings were sold this weekend by way of balm for lost foreign travel moments.

Sadly, the idyllic, indeed bucolic joys of an unexpected English staycation could not prevent Blackberries and Wi Fi delivering news and messages of distress from further afield penetrating. An engineer working on an infrastructure project emailed to advise a potential crisis in Copenhagen, where hordes of stranded British tourists were threatening to eat their way through that lovely city's entire supply of herrings.

A distraught Edinburgh lady texted with rising panic from the bus station at Alicante, where she was being told that the next seat on a bus was not until four days later on a charabanc alleged but not certain to be ending up in Brussels. Could my international network of insolvency practitioners somehow spirit her away from this nightmare and home to Scotland, she pleaded?

Then came the saddest question of all, from an aviation sector executive, wondering if they would be eligible for redundancy if the cause could be shown to be an Act of God. This interrupted my final agonizing, which led me to cancel an imminent conference in Cyprus - just in time to prevent several delegates from India, Nigeria and other exotic destinations having to turn round half way to the Aegean. Sales of olives, taramasalata and retsina will surely slump as part of the ripples of collateral financial damage.

Signs that the UK's no-fly zones will be re-opened soon are uncertain, despite apparently successful test-flights and much protest from the industry. When they do eventually clear the long jam and get the air lanes open again, let's hope they stay that way. And let's hope that the economic damage is less serious than we fear. Most important of all, let's hope that Iceland's other nearby and much fiercer volcano remains quiescent.

However, there is a moral to this strange tale, this brief passage of disruption. We should all wonder how we came to take easy air travel so much for granted. How short will our memories be?  Probably too short, but one day it will happen again and it would behove us all to be better prepared next time.

Syria is edgy, isolated and overwhelmed by refugees, says Nick Hood.

Crossing the Jordanian border into Syria’s fertile plains takes the visitor from Western influence and relative affluence into a tense world of political autocracy; a country resolutely rejecting US threats and facing east towards its preferred international partners, Russia and China.  

Cars are old and battered, lorries and buses are reminiscent of rural India and Sri Lanka - although one rusty bus reached out tentatively to the English-speaking world with 'Good Gorney' painted in elegant italics down its side.

Like so many countries in the Holy Land, Syria’s current economic position is inextricably caught up with regional events.  Its implacable rejection of the state of Israel makes it an international pariah, still on the US list of sponsors of terrorism and hence a subject to a slew of US sanctions.  Despite a surplus of citrus fruits of a quality to rival any other Mediterranean producer, it is locked out of European markets.

But much worse is the impact of refugees. Arriving in Damascus in the chaos of rush hour, it is hard not to wonder how a city which relatively recently had a population of only 300,000 will ever cope with the 4m refugees mainly from Iraq and Palestine that now threaten to throttle it. Further north, the second city of Aleppo is somewhat more functional, but it too is swamped with refugees, this time 500,000 Kurds expelled from Turkey. Unsurprisingly, unemployment is estimated to be as high as 40%.

The good news is that the Syrian economy, because of its isolation, escaped the global recession in 2009. GDP growth was a respectable 4% for the year according to the IMF, led by a surging agricultural sector which now accounts for 25% of total output. This is a decline from a figure of 5.2% in 2008, but still a creditable performance, which would have been better still but for a 2.7% reduction in homebound remittances from the large Syrian diaspora, inevitably affected by the economic crisis around the world.

Two key relationships continue to support progress. Firstly, the generosity of the then President Putin in writing off Syria’s sovereign debt to Russia back in 2003 (possibly simply to spite the US but more probably to cement his influence over the young President Bashar al-Assad) has transformed the overall financial position.

More importantly, Syria benefits from substantial religious tourism from Iran. The wondrous Ummayad Mosque in Damascus is overwhelmed each and every day by tens of thousands of pilgrims from Iran, fulfilling their obligation to visit Islam’s holy sites.  These visitors also throng the rather disappointing souks, buying up the wealth of tatty imported goods spilling out from boxes clearly stamped “Made in China”.

Western tourism is also growing, attracted by a wealth of stunning ancient monuments from the amazing crusader castle, the Crac des Chevaliers, Aleppo’s Citadel and the world-renowned remains of the Greco-Roman city at Palmyra which make Rome’s Forum look like Toy Town.  

Business visitors may balk at a country where the lack of a GPRS system makes their Blackberries useless and where internet coverage is still patchy at best. Even cash can be hard to get, as most ATMs are empty outside banking hours.  But the hotels are good and whilst nobody should come for a gourmet experience, decent wines from Lebanon, Jordan & even Syria itself can help smooth away the slightly edgy environment.

What does the future hold for Syria?  Uncertainty for sure, as conservative influences seek to rein in President Assad’s modernising instincts - plus a long wait for acceptance by the US and other Western interests. But as a significant oil and citrus producer, any breakthrough in access to international markets could transform this isolated nation.

Jordan's tourist and phosphate industry is booming. But it still has financial problems, says Nick Hood.

The Middle East is divided into the have-oils and the have-nots. The other delineator is proximity to Palestine and Iraq.  Jordan lacks oil, and has the misfortune to border both the troubled land so viciously disputed by the Israelis and the Palestinians, and the devastated former home turf of Saddam Hussein.

But arriving in Amman is to experience a country with rising affluence, based on a thriving export trade in organic phosphates and a burgeoning tourist trade. There is abundant land, facilitating the development of prosperous suburbs with magnificent family villas - often housing three generations of the same family.
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Travelling is made by easy by good roads, notably the King’s Highway which follows part of the iconic Silk Route. Side turnings take hordes of visitors to exquisite ancient sites - most prominently to the splendour of Petra, truly one of the great travel experiences. Tourism is up 35% from a year ago, despite the persistent attentions of Bedouin urchins with their fake silver coins and trinkets, and herds of sway-backed, braying camels.

The Jordanian economy has seen some impact from the global recession. Growth has slowed from around 6% previously to just 2.8% in 2009. The construction sector has done best of all, surging by 12.8% on the back of a building boom - especially noticeable in Amman itself.

The situation is the result of a fascinating two-way pull between competing externally-imposed influences. The first is the negative drag of an impoverished 400,000-strong Palestinian refugee community, much of it still trapped economically in camps after over 50 years (although the original tents were replaced many years ago by low-grade housing). Much government effort and resource goes into improving the lot of these poor souls.

But ironically, the Iraq wars have brought unexpected financial benefits to Jordan: wealthy Iraqis have been fleeing to this safe haven, bringing with them hundreds of millions of dollars. The only downside has been rampant property inflation, as these non price-sensitive immigrants invested in land and palatial houses. Building land in one developing suburb of Amman has soared in ten years from $10 a square metre to over $250. Set against an average income per capita of only $5,000, this is fast becoming a major issue.

Another focus for the government is educating the Bedouins and improving their living standards - much as the policy is sternly resisted by many, and flies in the face of romantic notions of their nomadic existence. The establishment of fixed borders in the region has restricted free movement, and their herds of sheep and goats are now wreaking havoc with delicate eco-systems, so something has to be done.

Despite the many financial positives - not least a rising stock market up 2.1% last week - unemployment is still stubbornly high at 15%, and general inflation is running at nearly 16%. Another troublesome issue within the region is the paradox that Jordan is very much a Western-facing regime surrounded by militantly Arabic states. This makes for uncomfortable political positioning.

There are many challenges ahead for Jordan. It will decades before the Bedouin finally abandon their tents, camels and Taliban-like motor scooters for houses and cars, or for the 1m refugees to be fully integrated (or returned to their origins if they wish). But if hard work, enthusiasm and commitment can deliver progress, then eventually it will truly become the Promised Land.

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A Traveller's Tales

A blog about business travel - reflections and recommendations about business destinations around the globe. Led by our some-time correspondent Nick Hood, the executive chairman of restructuring specialists Begbies Traynor.

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Bhavesh Nayi

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