8/7/09 -- Interview on Emerites Business 24/7: http://www.business24-7.ae/Articles/2009/8/Pages/06082009/08072009_fed06048952d4f29899605e69f9384ae.aspx

'SMEs need more assistance from the Obama administration'

By Sean Davidson
Friday, August 07, 2009

Aformer aide to US President Bill Clinton's administration, Morris Reid joined lobbyist and investment banking firm BGR Group as MD last year through its acquisition of his consulting and media relations firm, Westin Rinehart.

He has worked as a lobbyist with high profile individuals, government officials and corporate executives in the successful resolution of complex and high-level political and corporate issues for more than 15 years.

Adept at fostering business development programmes and launching partnerships that combine brand building, coalition advocacy and effective public affairs/issue management, Reid spends a great deal of his time scoping the Middle East for investment opportunities. Here, he tells Emirates Business it was Clinton's deregulation of financial systems that triggered the current crisis.

Which sectors in the UAE are you bringing American investments to?

All sectors, especially financial services, green and education. I'm interested in the money-transfer business, in the informal business market and the solar business. I feel the Middle East and the UAE should be ahead on their green technology with all that sun. It also has a young vibrant population, so the agro-business is another area of interest. I have a couple of opportunities that we're pursuing in education.

How receptive or eager are American companies to starting operations in the UAE/Middle East? Are you happy with the current number? Where would you like to take it?

They're curious. Once you get them over here and they see some of the cities are much more modern than American cities, they become very keen. Since the beginning of this year I've brought five to six businesses over and hopefully we'll have three to five deals completed by the end of the year.

However, I'm not happy and no one in the Middle East should be happy either with the current numbers. The Middle East shouldn't simply be a cash register that gets back nothing in return. People in the Middle East need jobs just like anywhere else in the world.

Which American sectors would you advise people from the region to invest in and why?

I would say invest in real estate, green and financial services. We should always be forward looking and currently in these sectors you can buy things at lower prices. For example, as long as the world is spinning New York is going to have great real estate. It will turn around, so buying low today works as a fantastic long-term investment. Today, there are many opportunities you can get on the cheap.

Having said that, I feel they should look everywhere and not only in America. I tell people that we have to look for the best opportunities globally. Right now a lot of the great opportunities in the investment market are in Africa. I like Ghana, South Africa and Angola, which are still giving 20 to 30 per cent returns.

During your time with the Clinton administration, did any one predict or foresee the financial crisis and credit crunch?

No, because during the Clinton years there was unparalleled expansion and millions of new jobs were created.

Was there any thought of banks needing greater regulation, that leverage ratios were getting out of hand?

Under the Clinton presidency, there was deregulation and expansion and America had historic economic growth. But, yes, the financial institutions got too big. If we had known that deregulation of financial institutions would have caused these problems now, no one would have gone ahead with it. In hindsight the vision is 20-20, but there was no crystal ball back then. The biggest bill passed was the Gramm-Leach-Bliley Act that deregulated the banking system. This fuelled the sub prime market and created a lot of the exotic finance products that we see today.

How co-ordinated are businesses and political leaders, especially on issues such as economic development?

Businesses and political leaders are not co-ordinated at all. They are speaking two different languages. Government does not understand what businesses need. Instead, government and business talk over each other's heads and are not on the same page. Government and business need to be better able to understand how to work together so that issues and problems in our current economic climate can be resolved.

What is your perspective on attitudes to the financial crisis?

The US government has not done enough. Government has not done what has been needed. The government is propping up banks, but what about small businesses that need capital? The central government has the opportunity to become a direct lender. It can repair and build schools, roads and bridges. That is the appropriate role of government. It is not its role to get into the business of picking winners and losers in the corporate world.

There are 25 million small and medium enterprises [SMEs] as opposed to the Fortune 1,000 companies. I can submit to you that SMEs have a much larger role in stabilising the economy that those Fortune 1,000 companies. The reason SMEs haven't been able to get the stimulus they need is because they are not an organised lobby and they don't have the money to lobby because costs outrun their business. The importance of SMEs is clear from [the example of] Los Angeles, which does not have a single Fortune 1,000 company headquartered there and yet is a vital centre of business.

What is your take on what has happened and where do you think we are headed?

The process got out of whack. There was no accountability. People are more focussed on making a quick buck rather than focusing on the solutions in our current financial situation.

As a lobbyist, do you identify the issues and then find supporting sides or do you bring people together who want to deal with the same subjects like trade and economic growth?

The marketplace creates the issues. We respond to the marketplace, as any other business would.

Morris Reid MD, BGR Group

In his current role, Reid has consulted and provided counsel to the leaders of scores of Fortune 500 companies. He also served as a Clinton administration senior staff aide to the late Commerce Secretary Ronald Brown and Housing Secretary Andrew Cuomo.

Reid was the director of Vice-President Al Gore's office at the 1996 Democratic Convention and Deputy Director of Vice-Presidential Operations for Clinton/Gore in the same year.

Reid is frequently called on as an expert political and business marketing commentator on television networks such as Fox News, ABC News, CNN, CNBC and MSNBC, and in leading newspapers and magazines including the New York Times, USA Today, and Details and Forbes magazines.

A native of the state of Ohio, Reid is a graduate of Akron University and, prior to establishing the Westin Rinehart Group, served as a Principal at Dewey Square Group. He serves on the boards of The Washington Ballet, VH1 Save the Music Foundation and New York University's Robert F Wagner Graduate School of Public Service.