The Middle East has a history of breeding amazing entrepreneurs the world over. One thing though that remains in short supply, in my personal opinion, is the buildout of a Team Spirit. I strongly believe in the fact that there’s still plenty of money and private equity capital available around the globe. Yet currency alone may be inapt to cultivate great entrepreneurs gelling to form great teams. A company’s biggest challenge and biggest advantage is and has indeed always been the team behind it – The right people with the right talent backing opportunities as they emerge, continually win. There is no secret sauce. The “cult of the personality” has clearly taught us all a lesson we are not about to forget anytime soon.

The Birth and Growth of Private Equity in MENA Unlike the United States, where the seeds of a fledging and flourishing PE industry were planted as far back as 1946, the Middle East has a short and tumultuous history. The emergence of PE in the MENA region made its ostentatious debut in the 1990’s.

The asset class was well-received, gaining the attention and interest of local – primarily GCC based – limited partners (LPs) which led to the establishment of many first-time funds successfully raising sizable pools of capital in a relatively short time period. By 2007, the funds raised for regional investments reached $6 billion. They unfortunately fell dramatically after a stable period between 2013-2016 to around $2 billion today according to Bloomberg.

One of the major setbacks to the industry was the recent saga of the Abraaj Group which collapsed in Dubai and left a dry deal landscape for regional-based PE firms. The saga though didn’t keep foreign private equity money away from the United Arab Emirates entirely.

Let’s be honest, the challenges, a bumpy evolution and such scandal is not limited to the region, as the US and Europe have had their fair share of capital chaos. Due to the asset class in the region being fairly nascent with few players, these events tend to be accentuated and overpublicized. In fact, foreign investors are as active as ever in the region.

This year alone, New York-based KKR & Co. and BlackRock Inc. agreed to invest $4 billion in Abu Dhabi’s oil pipelines, while London-based CVC Capital Partners agreed to buy a 3 percent stake in private schools’ operator GEMS Education. Prior, Carlyle Group’s $51.3 million investment in Jordan’s frozen food producer – Al Nabil Food Industries – posted a 40 percent cumulative gain. Not to mention the largest exits in the region’s history – famed acquisitions of Maktoob, Careem and Souq by Yahoo!, Uber and Amazon respectively.

Current State of Affairs Overall though, it is a fact that the downfall of Abraaj Group didn’t just kill the private equity firm Arif Naqvi built in Dubai. It crippled the entire market.

Since Abraaj’s swift and spectacular demise was set in motion almost two years ago, funds went from flourishing to finite in which there was virtually no money raised by private equity firms based in the Gulf Cooperation Council despite strong performance by PE firms almost everywhere else, according to Seattle-based data provider PitchBook and London-based Preqin. Although Jordan, the UAE and Lebanon are still the centers of influence for PE and VC in the MENA region, some drastic policy measures and recommendations are in order with some underway in these countries and others as well to turn the tide and create a MENA powerhouse.

A close look at the private equity industry in MENA shows us indeed that it has faced a succession of setbacks over the last 15 years – which few players are still ready to accept – and some thorny geopolitical issues may be creating new uncertainties despite the fact that the current roster of firms active in the region still consist of seasoned professionals who have negotiated previous waves of political and economic volatility and created value in the process.

Also, despite the industry’s small size, reported deal performance on both a gross IRR and cash multiple basis is good, proving that in spite of all the headwinds, private equity firms focused on the MENA region have been able to both source high-quality investments and generate returns.

One should hence take confidence from the past experience that the region’s fund managers will be able to navigate the next wave of challenges. But there is more to the story.

While the rapidly growing youth population is a potential boon for firms focused on consumer goods, services, healthcare and education, it’s requiring governments to achieve levels of economic growth capable of putting all of these young people to work.

The region still suffers from a dearth of finance available for businesses, particularly small-and medium-sized enterprises, as well as insufficient management expertise to take companies to their next stage of development. Private capital can bridge these gaps by providing expansion capital, by helping businesses grow in line with international standards, by connecting these companies to new markets, and ultimately by creating licit opportunities for the region’s youth to earn a living in the formal economy. Government though has to play its part too. Regional policy and practices unfolding in the region at large to address this gap are promising, particularly among the influential hubs for PE and VC (Jordan, UAE and Lebanon). However, there is still ample room for advancements where acknowledgement and meaningful action prove vital.

As governments across the Middle East and North Africa increasingly appreciate this connection, they should start much more aggressively to actively engage private sector partners. Nearly all regional governments have come to realize that youth employment is critical to stability, and that they alone cannot employ the waves of young people coming into the workforce. Unless leaders get the private sector side of the equation correct-and allow the private sector to develop and drive job growth-a world of turbulence will likely ensue.

Bottom Line: Private equity remains grossly underutilized, with private equity investment as a percentage of GDP weighing in at just 0.2% for the MENA region in 2018. In an environment where newsfeeds carry more headlines of destruction than construction, private capital can be a substantial positive agent of change. By partnering with local entrepreneurs and building better businesses, the private equity industry can also help the region build a much brighter future.

Capital Access Recommendations

Recommendations for policymakers:

1.  Design policies and programs to fit the “reality” of business: It is a fact that government policies at large are not well understood or utilized by businesses and fail to provide the competitive price, accessibility, and certainty that businesses look for when seeking capital. For these policies and programs to achieve their stated goals, policymakers should structure them to meet the specific needs of business or consider enhancing and expanding collaboration with private-sector capital providers to leverage those providers’ expertise and capabilities. This may necessitate agility and better integration to streamline efforts across, often dispersed, programs.
2.  Expand entrepreneurial education of capital options: Even if a source of capital is a good match for the needs of business, it won’t be utilized without substantial awareness among target enterprises. Policymakers should encourage educational programs that help inform businesses, nonprofits, and government agencies of all sizes of the different capital access options, as well as their costs, benefits, and requirements. This could be a direct government effort, but it may be more effective and efficient to partner with nonprofits, global institutions and business organizations focused on improving capital access.

Recommendations for capital providers:

1. Develop a relationship with clients: A positive relationship is a major driver of clients. It behooves one to get to know them and develop a positive relationship. This will not only help make the relationship “sticky” but will also help in understanding the needs and trends in the market, positioning providers to better adjust as the market changes.
2.  Consider strategic partnerships: Leaders may not be able or willing to provide capital to all companies; however, even if it’s not possible to deliver on all the necessary services, through the use of strategic partnerships they can preserve the presence of a company within their respective relationship umbrella. Financial technology alone has little meaning unless there is underlying value. In order to create jobs and real prosperity, financial technology must act on other factors; and none is more important than human capital. Once again, “Human Capital” and the burgeoning of “Team Spirit” is the essence of all.

* Zana Nesheiwat is CEO of BrandZA, Inc., Partner at Blackhawk Partners, Inc.and wealth-curator charged with building valuable brand assets, originating and optimizing strong partnerships, and advancing investment opportunities that benefit all stakeholders.

Ask your neighbors and coworkers whether it’s a privilege to be an American, and nearly all of them will answer with a resounding “yes.” But the rising new leaders of today’s Democratic Party see American privilege as a mass delusion standing in the way of their political ambitions. This was painfully evident last week during President Trump’s State of the Union address (SOTU).

SOTUs have traditionally been positive affairs. American exceptionalism is so everlasting that most presidents can find something in the national condition worth boasting about, and even their political opponents find something in the boasts worth applauding.

Not so this year. Having presided over the strongest economic expansion in generations, President Trump’s speech had no shortage of achievements, and the response of ordinary Americans was electrifying. According to a CBS News poll, 76 percent of Americans who saw the speech approved of it.

However, the response of Democratic lawmakers who attended the speech flew in the face of our political traditions, particularly that of a bloc of congresswomen wearing white from head to toe to commemorate the 100th anniversary of women winning the right to vote.

The “women in white” leered with contempt at the president throughout his speech. They ignored his call for unity and bipartisanship. About half, including newly elected loudmouth Alexandria Ocasio-Cortez, refused to join the rest of the chamber for a standing ovation when President Trump called upon the American people to “embrace the boundless potential of cooperation, compromise, and the common good.”

They sat stone-faced when the president touted the lowest ever unemployment among minorities and the disabled. They ignored his praise of new “right to try” legislation giving terminally ill patients access to experimental medicines. Same thing with America becoming a net exporter of energy for the first time in 65 years.

They remained somber even when President Trump announced his new Women Entrepreneurs Finance Initiative, which promotes the economic empowerment of women in developing countries.

Only when President Trump specifically hailed the achievements of American women — filling 58 percent of new jobs last year and being elected to Congress in record numbers — did members of the group feel obliged to stand en masse, essentially to applaud themselves.

The refusal of Ocasio-Cortez and other “progressive” Democrats to celebrate, or even acknowledge, the success and good works of other Americans, irrespective of ideology or creed, on this time-honored occasion is shameful and unbecoming of servants in public office.

But it’s politically astute. Proponents of the socialist Green New Deal — which now has the support of 70 Democrats in the House, 12 in the Senate, and six presidential candidates — know it’s impossible to get Americans to accept a one-size-fits-all blueprint for centralized planning of their lives and livelihood so long as they think of themselves as privileged.

For all of their divisive rhetoric and mainstream media adoration, Ocasio-Cortez and her ilk aren’t likely to convince a majority of the U.S. public that the American dream is a lie, at least not in time for the 2020 election. But they may convince enough people to enflame the social chaos and division we have been experiencing lately, and that might set a prelude one day for realization of their socialist fantasies.

President Trump is right that the state of our union is strong, at least economically and militarily, and a majority of Americans embrace his call to “step boldly and bravely into the next chapter” of this country’s glorious history. We must not let the ideological radicalism and hunger for power of a few destroy this future.

Zana Nesheiwat is the founder of Brand ZA, Inc., an integrated business solutions and impact-branding firm specializing in financial services, public policy, and technology, and an associate partner with Blackhawk Partners, Inc. a private equity firm based in New York City.