MIDDLE EAST: The Rise of Athens

As an oasis of tranquillity in the turbulent Middle East, Beirut for years waxed rich, chic and sleek—the region’s undisputed center of international business. Lebanon’s bloody civil war has changed all that. Once-bustling streets in the capital are choked with rubble. Hotels are gutted, eleven banks have been looted and even during the frequent “truces”—24 so far—the killing continues. Beirut, mourns one American businessman, is like “Dodge City with no Wyatt Earp in sight: 3 million people and 8.5 million submachine guns.

When you have that many arms, how can you keep a ceasefire?

How can you do business?” Virtually every multinational corporation has closed its regional offices in Beirut, packed its records and fled.

Surprisingly, the largest number have resettled in a city that is neither Moslem nor even in the Middle East —Athens. Some 70 major U.S. companies have moved their regional headquarters there from Beirut, among them National Cash Register, Caterpillar, Boeing, Control Data, Exxon, Goodyear, Union Carbide, Chase Manhattan Bank and Morgan Guaranty Trust.

Why Athens, which is 1,500 miles from Tehran and 1,800 miles from Riyadh? The competition was weak, for one thing. Cairo does not have enough suitable offices, homes and hotel rooms to accommodate a big foreign business community, and its communications system barely operates. Jordan’s capital, Amman, has better facilities but lacks the essential cosmopolitan ambience.

Athens, on the other hand, has everything. “The bouzouki music, the food,” says an Arab. “You might almost say the Greeks are Arabs wearing pants.” Even Athens’ shops and hotels can compare with Beirut’s. Airline, telephone and telex service is excellent, and there is still a sufficient amount of modern office space. True, prices are high; the rent for much desired villas with swimming pools in suburban Kifissia has doubled recently, to about $1,000 a month. Even so, points out one recent corporate settler, Edwin P. Hoffman, senior vice president of Citibank, “Athens has the schools and housing that we require. It’s a pleasant city.”

The Caramanlis government wants to make Greece the bridge between Europe and the Middle East. It thus has not given full diplomatic recognition to Israel and enjoys friendly relations with all the Arab countries. The result, says Americo Silvera, vice president of recently relocated Carrier International Corp.: “An African or Arab can come to Athens and feel at ease here.” As an added inducement, the Greeks extend generous tax breaks to foreign corporations that have headquarters in Greece but do not do business there.

Still, Athens’ physical distance poses problems. Some companies plan to maintain their presence in the Middle East by regularly sending executives on prolonged trips through the area. Others will eventually open small branch offices in Amman, Cairo or other cities.

The Lebanese maintain that Beirut will have a renaissance. Munir Abu Fadil, a leading Lebanese businessman-politician, predicts: “Once we get a political settlement, within a month we will be rebuilding and within six months we will be booming.” Perhaps so, but many U.S. corporations seem permanently impressed by Athens’ charm. Citibank’s Hoffman says that the bank plans to set up a big “symbolic” office somewhere in the Middle East before long. But, he adds, “the major portion of our operation will remain in Athens.”