When cultures clash and beliefs collide

A Middle Eastern shopper buys Fonterra products

It's a $1.1 billion market for New Zealand. In fact, the Middle East is one of our top 10 sources of trade. So when the Danish cartoons depicting the Prophet Muhammed were reprinted in New Zealand, exporters faced a nightmare. But dozens of officials and businesspeople working independently seem to have managed to avert a crisis.

How?

The political response
Prime Minister Helen Clark flies to the Philippines next week for an inter-faith meeting to discuss growing tensions between Islam and Christianity, as well as other faiths.

It shows the level of official concern at the potential impact of religious anger. It first became clear in Canberra last month, where it moved on to the agenda of the formal annual meeting between Prime Minister Helen Clark and Australian counterpart John Howard.

Clark was anxious at the possible repercussions of the decision by the Dominion-Post and The Press to publish the Danish cartoons lampooning the Prophet Muhammed; Canberra was worried by similar publication by Brisbane's Courier-Mail and an Australian-based website.

Both countries also see wider potential domestic and international implications from growing tensions between Islam, Christianity and other faiths, with significant migrant populations and a volatile neighbouring region.

New Zealand's immediate concerns over the potential effects on trade of local publication of the cartoons was reflected in heightened diplomatic activity.

"Certainly our diplomats are on fulltime watch around the regions where this could cause difficulties, to make it clear that the New Zealand Government is making big efforts to promote interfaith dialogue and greater sensitivity."

Next Monday Clark flies out to an Interfaith Dialogue Meeting co-sponsored by the Philippines, Indonesia, Australia and New Zealand, attended by some Government representatives but also leaders of faith groups. She and Philippines President Gloria Arroyo will give the keynote address.

Helen Clark regards the meeting as crucial.

"This is so important to us that, even before the cartoon controversy had broken, I had made the decision myself to go and speak at the opening session, along with the Philippines president," she said last month.

But for those whose livelihoods depend on trading with Muslim countries, it was Foreign Affairs Minister Winston Peters who hit the nail on the head.

"It is hard enough to conduct your foreign affairs as a small country without New Zealand enterprises deciding to insult people, such as the whole Arab world," he grumped.

In New Zealand, our $70 million-a-year trade with Jordan appeared under threat, when a resolution by most of the members of the Jordanian Parliament demanded official retaliation against us.

New Zealand diplomats were under instructions to make it clear the Government was making big efforts to promote dialogue between different faiths.

It's not just the Middle East that was affected. The world's most populous Islamic nation, Indonesia, is virtually a neighbour, as is Malaysia.

Later this year, the Government will open an embassy in Cairo - an indication of its concern about our wider relationship with Muslim countries. The intention is to capitalise on Egypt's reputation as a moderate voice in the region.

Local reaction
For Javed Khan, a lawyer with New Zealand Post who also happens to be the president of the Federation of Islamic Associations of New Zealand, the counter-offensive started immediately after meeting representatives of media which published the cartoons in a forum organised by Race Relations Commissioner Joris de Bres on February 8.

The meeting came after Khan had contacted de Bres, following protests over publication of the cartoons three days previously.

"I got in touch with de Bres and said, 'This is going too far, what is the best way of dealing with this - we have to defuse this whole thing'."

Khan says that after the meeting he wrote to the embassies of all Muslim countries represented in Wellington and Canberra, and personally phoned the Iranian ambassador to New Zealand, whom he knows well.

"If I hadn't known him personally it would have been very difficult for me to do that."

Khan says he explained that the publication of the cartoons was a result of a misunderstanding by some media and the matter had been resolved.

"It was not fair that because of the ignorance of a few that the whole country should suffer," he says. "So I took it on myself to tell them it would not be right in any manner or form to ask for any sort of ban from their countries."

Khan says he and the Secretary of Foreign Affairs had warned editors before publication that the cartoons would cause deep offence to Muslims.

After publication, he had discussions with Foreign Affairs officials and offered to visit overseas Islamic Government embassies on New Zealand's behalf if they felt it necessary.

While local reaction was more subdued than some of the violence seen overseas, emotions were just as strong. An Auckland parking warden was so incensed by an Arab commentator in Dubai urging people to replace Danish products with New Zealand ones that he wrote to a newspaper in Dubai, where he grew up, calling for a boycott of New Zealand goods.

Local Muslim leaders say the apology that followed the publication and broadcast of the cartoons here probably prevented any official action.

The scale of the market
Figures compiled by Statistics New Zealand show why the Government and business are concerned.

In less than a decade, our exports to the Middle East alone have almost doubled in value, from $752 million in 1997, to more than $1.1 billion last year.

The spectacular growth of places such as Dubai has seen the United Arab Emirates rocket up the trade ranks, and significantly boost its profile here. Their national airline is even the principal sponsor of Team New Zealand's bid for the America's Cup, and the New Zealand Open golf tournament.

In fact, if two-way trade is taken into account, the region ranks up there with Germany and Britain as one of our 10 most important trading partners.

Export New Zealand chief executive Bob Walters says that regrettably, the UAE has been off this country's radar screens because the Government has been preoccupied with deals with China and Asian markets. Exporters have followed its lead, he says.

However, New Zealand businesses are cashing in on the country's infrastructure boom, and other development in the Gulf states, and big population growth offers opportunities for New Zealand food producers, he says.

When markets collapse
Fears that publication of the cartoons could have real consequences for the economy appeared justified. Iran cut trade ties with Denmark, affecting US$280 million ($421 million) of goods.

Arla Foods of Denmark had switched its production of processed cheese to Saudi Arabia to sell more dairy products. Its regional sales had hit US$465 million, giving it the Middle East's best-selling butter.

Now its aims to double sales in the Middle East by 2010 are in tatters.

Across the Middle East its products have been removed from shelves and it was losing US$1.8 million a day at the height of the crisis.

Last month it reported a loss of US$64.09 million from the Middle Eastern boycott of Danish goods.

But managing director Peder Tuborgh told a board of representatives meeting last week that he still saw a future for the company in those markets.

The company ran ads in Saudi newspapers saying Denmark respected all religions as the furore broke, but that failed to stop a boycott.

Last week it attended an industry trade fair in Dubai, covering its stand with posters saying it was against the publication of the cartoons.

One sign that things may be slowly getting back to normal for Arla and other Danish firms was a decision, taken a fortnight ago but overturned two days later, to remove its logo from the Danish soccer team's training strip when it visited Israel.

Other Danish, and European firms, report that the worst of the boycott appears to be over.

Silence
New Zealand businesses and Government officials, though, remain extremely nervous.

A month on, the Ministry of Foreign Affairs and Trade is still refusing to talk about the issue, or even supply up-to-date information about our trade with Muslim countries.

The main stance is to keep your head down, keep quiet and hope no one notices New Zealand.

Export New Zealand's Walters personally believes that the less said, the better.

"We keep our heads down and hope like hell it passes."

The Business contacted many people with business dealings in the Middle East. Few wanted to speak and almost none wanted to go on the record.

Business problems
One big exporter representative, who would only talk to The Business on condition of anonymity, says New Zealand's role in the controversy was definitely noticed in the Middle East.

"We were extraordinarily lucky," says another from the construction industry.

A creeping nervousness that the cartoons might be published here exploded into a run for the phones after publication.

Bob Walters says the export body's Canterbury office received about 90 calls from exporters concerned about the possible damage to their businesses. Walters himself took about 40 calls.

He also received several calls before publication, prompting him to contact newspaper editors to warn that publication would be "unnecessarily provocative" and could pose a risk to trade.

The Herald acknowledged his warning; the Dominion-Post's response to his call was "bullish", he says.

But Walters says at no time did he sense panic in Government circles nor did he feel the need to meet officials. The Government and New Zealand Muslim leaders had shown a lead with their responsible and measured responses, and exporters had taken their cue from them, he says.

Fonterra
By far the biggest New Zealand exporter to the Middle East is giant dairy co-operative Fonterra.

Not surprisingly, it was reluctant to discuss the issue. But its actions spoke louder than words when it published advertisements in Middle East newspapers emphasising that Anchor milk powders were New Zealand made.

However, New Zealand's biggest company also has a joint venture with Danish dairy company Arla Foods, which at the time said the boycott of its products in the Middle East had cost it more than $128 million.

Ironically, Waikato cheese exporter Open Country picked up two new cheddar shipment orders in the Arab backlash.

Chief executive Alan Walters says the customer cancelled the order with another dairy company. While he doesn't know which one, he suspects it was Arla.

Open Country, in its second year of cheese production, exported about 10 per cent of its 6000-tonne production to the Middle East last year.

Walters says he was worried the publication of the cartoons would hurt Open Country's fledgling trade, but there has been no harm so far.

Meat
Whether meat exports suffer remains to be seen. Meat and Wool New Zealand estimates $100 million of sheepmeat is exported each year to Iran, which threatened to review its trade with countries where the cartoons were published.

The meat companies most at risk from a boycott are Alliance, PPCS and Affco.

They also refused to discuss the issue, but commentators believe the industry's 40-year history with the Middle East and its excellent reputation for Islamic halal killing would have helped us off the hook.

Meat Industry Association chief executive Caryl Shailer says New Zealand should follow the European Union's example and hold a post-cartoon debate on introducing a media code of conduct identifying the responsibilities that go with freedom of speech.

Smaller exporters
John Heng, managing director of Palmerston North plastic homewares designer and manufacturer Click Clack, says the region represents big opportunities.

"There's a whole new level of hospitality going in there - six-star hotels. We're dealing in the top end of that market, so, yeah, it's important."

Cross-cultural problems
We simply have to be respectful of boundaries, says an executive with a major Middle East exporter, who would also only speak on condition of anonymity.

"Most of the people we deal with in the business context are very worldly people, but they are deeply committed to their religion and it has a huge impact on their day-to-day life.

"One of the boundaries is never make fun of their religion."

The executive, who has lived and worked in the Middle East, says it is important to understand Muslims would have been "personally injured" by the cartoons.

The sense of personal freedom and individual rights that Kiwis grow up with is an alien concept in the Middle East, he says.

But the executive doesn't believe people doing business in the Middle East need to become experts on Islam.

"We just need to recognise there are people in the world who don't share our perspectives on religion and values."

Muslim business dealings
The Muslim religious culture pervades business dealings - in a positive way, says an anonymous businessman.

"Typically there is a very high level of integrity in dealings. You negotiate hard but once a deal is done it is done. There's an element of honour around performance. If you've made a commitment the spoken word is as important as anything you've written down."

Personal relationships are also very important.

"You don't get many second chances. You see relationships burned up because you've done something you think is totally innocuous but it was seen as a breach of trust. A code of ethics is very important to them."

Walters, who worked in the Middle East in the construction and dairy industries, says "awareness" is the best guard against blundering.

"You are in a different environment and you just need to be conscious of that."

An executive from the construction industry says New Zealand business people are good at getting on with Arabs.

"We're a very non-threatening small country, green and all the rest of it."

A veteran fresh fruit exporter to the Middle East says the rule for doing business in the region is "mind your own business".

"You don't ask a married man if he sleeps with his wife. It's the same with religion - you just don't do it. Religion is something very personal."

IF IT'S NOT GOD IT'S MAMON

It's not just religion that can cause problems when trading with different cultures.

Across the Tasman, the grower-controlled single desk exporter the Australian Wheat Board has lost the Iraq market because of a scandal over kickbacks to Saddam Hussein's regime.

The scandal has touched Tim Goodacre, chief executive of New Zealand's biggest horticultural exporter Zespri International and a former AWB executive.

Zespri will not reveal what Goodacre knows about allegations the AWB knowingly paid kickbacks to Saddam under the United Nations oil-for-food programme, but Goodacre has told his board he will give evidence, if required, to Australia's Cole inquiry.

So are kickbacks an accepted practice in the Middle East, something New Zealand exporters have to expect along with religious sensitivities?

Not surprisingly, no one wanted to discuss this issue on the record.

But one export industry source said it should be understood that the state and the church were one and the same in the Middle East.

"A prime example is Iran, where in theory you elect the Government but then in the constitution the mullahs have complete right of veto on anything the Government wants to do.

"New Zealand companies don't go in for dealing that way [with kickbacks]. If it happens that on occasion that is necessary, they would undoubtedly sell to some third party and probably wouldn't know the details of what went on after that.

"You could probably argue that is where the AWB is at."


* Andrea Fox is a freelance business journalist based on the Coromandel Peninsula and a former senior business reporter for the Dominion and Dominion Post.