Sharif Ghalib

In a really big multinational bank—by really big, we mean one which has assets approaching one hundred billion dollars—who decides how safe it is for the bank to lend its money to Middle East institutions?

If you thought we were about to tell you that it is someone like Sharif Ghalib, you would be mistaken. The people who make such decisions in banks are the banking executives—or "line officers," as they are sometimes called. But people like Dr. Ghalib, who fall into the category of support staff, do play an important role in the making of such decisions.

Dr. Ghalib is Vice-President and Middle East Economist for the Chase Manhattan Bank (assets at end of 1983: $82 billion). His primary task is to provide information and analysis on the degree of credit worthiness, at any given time, of the economies of the various countries of the Middle East and North Africa.

Getting the Money Back

"This kind of information is essential not just when the bank is lending to the government of a country," says Dr. Ghalib. "It's also needed when the bank lends to the private sector, since the financial condition of the country can tell a lot about whether or not the bank is going to get its money back."

Dr. Ghalib passes along his findings in the form of written reports to the bank's "country risk committee" in New York—the bank's headquarters—and to key Chase officers in the field.

The risk committee meets regularly to determine whether or not the "country limits"—i.e., the maximum amount of credit which the bank will advance to countries with which it does business—need readjustment in the light of current conditions.

The Chase officers on the ground make use of his reports—along with their own information—when drawing up their marketing strategies for countries where they have management responsibility.

"They can use them to help structure their lending program," says Dr. Ghalib. "For example, if we are quite concerned about a country's ability to repay debt over the medium term, but think that it will do well financially over the short haul, they could focus on shorter loan maturities, and so forth."

Analysis of the political risks involved in lending to foreign countries is handled by other experts at the bank. But Dr. Ghalib says it is often impossible not to take these factors into account in making his own assessments.

"It's not my job to focus on the socio-political aspects of risk," he says. "But in certain cases, the potential impact on the economy of some major social, political, or military disturbance is so great that it has to be included in the economic assessment. Lebanon, of course, is an excellent example of a case where these non-economic factors even predominate when the assessment is made."

The frequency of Dr. Ghalib's reports on a specific country depends upon both the amount of the bank's "exposure" there and the degree of the risk. The more of each, the more often he makes his assessments. "Some countries we do only once a year," he says. "If the economic or political risk is great, a country tends to be reviewed at least twice a year, and Lebanon is now being done four times." He is, of course, available to answer questions from bank executives at any time at all, and is among those who brief the bank's chairman before he travels to the Middle East.

Dr. Ghalib also travels to the Middle East himself about three times a year. "On two of the trips I generally touch base throughout the region, particularly in the Arabian peninsula and North African countries," he says. "The third time is for a visit to what you might call a 'newsworthy' country—where there is a special degree of risk that needs some in-depth analysis."

Surpluses and Presentations

Dr. Ghalib does a lot of other things for the bank, too. He is its expert on OPEC's financial surpluses and investment patterns; makes special presentations to corporate customers; and works closely with Chase Econometrics and with a colleague in London who is also an economist for the Middle East region.

Out of the bank, he is much in demand as a writer of financial articles for such publications as London's Euromoney, and he is a popular figure on the circuit of Mideast-oriented economic seminars.

Dr. Ghalib has now held down the same job at Chase for nine years—probably a longer tour than that of any of his counterparts at the other big American banks. When he joined Chase in 1975, he had expected to go to Beirut to join the new Middle East headquarters that Chase was planning to establish there. But the expansion of the war changed all that—and gave Dr. Ghalib an early lesson on the political risk involved in working out a banking strategy for that country.

Dr. Ghalib, who was Egyptian by birth, lived in Beirut when his father, a former Deputy Foreign Minister of Egypt, was ambassador there. He got a B.A. and M.A. in economics at the American University of Beirut, and later earned his Ph.D. from Pennsylvania State University. Now 41, he is married and has two children.