American companies feeling the impact of Muslim boycotts

Developing Just Leadership

Waseem Shehzad

Dhu al-Qa'dah 29, 1423 2003-02-01


by Waseem Shehzad (World, Crescent International Vol. 31, No. 23, Dhu al-Qa'dah, 1423)

Companies that were once proof of American entrepreneurial skill are having to retreat in the face of a boycott by Muslims of US products in protest against the US’s support for Israel. Although it is not sanctioned by Muslim governments, which are fearful of American reprisals, the boycott has hit such American giants as McDonald’s, Burger King, Kentucky Fried Chicken, Starbucks, Coke and Pepsi. The boycott is not confined to the Middle East, where some company sales have dropped by as much as 65 percent; even in the US there has been an adverse effect.

McDonald’s announced in December that it will close 300 stores worldwide; its profits have fallen for the first time in 26 years. Similarly, K-Mart announced the closure of 300 stores last month that will result in 25,000 layoffs. AT&T announced at the beginning of January that it will lay off 1,700 employees. The biggest blow has been dealt to the airline industry: pilots, cabin-crews and ground staff have been forced to take drastic cuts in salary, yet even that has not prevented airline income from nose-diving. This has happened despite the injection of some US$11 billion by the US government into the airline industry since September 2001.

The boycott has not merely had adverse results; there is also a consequent effort to produce and consume locally-produced goods instead. The biggest success-story has been Iran’s Zam Zam Cola, whose sales have skyrocketed. The manufacturers cannot keep pace with demand from customers in Saudi Arabia, Kuwait and other Gulf states. In the United Arab Emirates Star Cola is doing brisk business, while an enterprising Muslim in France has come up with the brand name "Mecca Cola". The fact that Muslims are beginning to make products to replace American ones is a good sign. This shows that they are finally becoming creative.

The boycott campaign started unofficially on university and college campuses, especially in Egypt, where the student body is both active and aware. It then spread to mosques, with many imams joining the call to boycott American products. Leaflets and internet messages have helped to boost the campaign, which is inflamed further by the brutalities continually inflicted on Palestinians by the Israelis, encouraged by financial and political support from Washington. The images of Palestinians being killed and humiliated that are broadcast daily on al-Jazeera television have shaken even the most lethargic Muslims out of their complacency; the reality of Israeli crimes and the magnitude of Palestinian suffering has been a traumatic experience for most people in the Middle East. Unable to prevent such brutalities physically, people see the boycott as a way to express their abhorrence of crimes underwritten by the US. It is also a way of shaming their own governments, which pay only lip-service to the Palestinian cause, while remaining subservient to the US.

From Morocco to Indonesia, people are expressing their anger by boycott. Two of the six McDonald’s franchises in Jordan have closed for lack of business, and KFC and McDonald’s branches in Muscat, the capital of Oman, report that sales have fallen by up to 65 percent. Ulama have blessed the boycott, transcending ethnic, sectarian and nationalistic boundaries. Shaikh Seyyed Hussain Fadlallah of Lebanon has said that Arabs and Muslims should replace US products with European or Asian goods.

The Egyptian scholar Shaikh Yusuf al-Qardawi, who runs a regular programme on al-Jazeera, has also supported the boycott campaign. In Saudi Arabia, Shaikh Omar bin Saeed al-Badna has said that the boycott will also be good for the country’s local economy. In Beirut, students have protested outside the city’s four Starbucks shops, with leaflets that describe in detail the pro-Israeli sentiments of Howard Shultz, its chief executive, who has made no secret of being an "active zionist".

Two newspapers in Morocco, L’Economiste and Assabah have launched a campaign against the US dollar, urging Moroccans to avoid using the currency in their business dealings, and to choose the euro instead wherever possible. Others have suggested that Muslims develop either a common currency of their own, or use a basket of Muslim currencies for trading with each other. Given that there are 56 Muslim countries, with a combined population of some 1.2 billion people, the initiativbe could bring about economic development in the Muslim world as a result of a grassroots movement.

In any case, given the shakiness of the US’s economy and the fall in the dollar’s value, Muslims would be well advised to secure their investments. The estimated US$1.2 trillion invested by Muslims in the US are in danger. Some of this money has now found its way into Europe and Asia, but not enough has been transferred elsewhere.

In fact, Middle Eastern investors should seriously consider putting the bulk of their money in defence and manufacturing industries in Muslim countries. It would have an immense impact on the economies of these countries, and boost their exports considerably. There is no better way for the time being for Muslims to help themselves materially and financially than to invest their money in Muslim countries. It should be clear, given the precarious nature of the US economy, that Washington will be tempted to freeze these moneys in American banks. The only recourse the investors would then have would be to US courts, where the constipated American legal system takes years to do its work. Even if they ultimately recover their funds, the investors will have lost billions in fees to American lawyers. That would be money down the drain, avoidably and unnecessarily.

Prevention is definitely better than cure; and it is generally better to be safe than sorry.

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