One year ago, the newly elected US President Barack Obama took to the stage at Cairo University and delivered a highly anticipated foreign policy speech. "I have come here to seek a new beginning between the United States and Muslims around the world," he told the audience before launching into a six-point plan for how the US and the Muslim world - and more accurately, the Middle East - could reconcile their differences.
After covering the flashpoints of terrorism, nuclear proliferation, religious freedom, democracy and the Israeli-Palestinian conflict, Mr Obama ended on a less contentious note. He promised to create more opportunities for bright young Muslims to study or take internships in the US, create a volunteer programme for Americans to work in Muslim countries and host a presidential summit bringing the Islamic world's best entrepreneurs to Washington.
And most importantly for the entrepreneurs of the region, Mr Obama said his administration would launch a new fund to support technological development. A year on from the Cairo speech, it is not surprising that the most universally agreeable and non-contentious issues of the address are the ones on which progress has been made. Although terrorism marches on undeterred, the Israeli-Palestinian conflict sinks deeper into the darkness and support for democratic institutions has taken a back seat, on entrepreneurship, Mr Obama's administration is slowly delivering.
The Presidential Summit on Entrepreneurship, held in April, saw 275 of the region's brightest mingle with the American business and political establishment. Mr Obama singled out the brilliant work of the Kuwaiti cartoonist and media entrepreneur Dr Naif al Mutawa, an act that was followed by the Aramex founder Fadi Ghandour bounding across the stage to give the US president a copy of the Islamic superhero comic The 99, which was created by Dr al Mutawa.
And in the past week, a US$455 million (Dh1.67 billion) investment into the Middle East's venture capital and private equity industry was announced by the US. The cash, which will be provided as loan facilities from the government-owned Overseas Private Investment Corporation (OPIC), will allow major investments into small and growing Middle Eastern companies, particularly those dealing with new technologies.
This injection of cash is as much a part of US foreign policy as any other act undertaken by its diplomatic, military or government agencies. Notably, OPIC's mandate prevents it from doing business in countries such as Syria, Iran or Sudan, nations considered hostile to American interests in the region. While Mr Obama's speech in Cairo was directed towards Muslims around the world, the fruits of his policies are focused on those living within nations that enjoy a good diplomatic relationship with the US.
An entrepreneur in Damascus may aspire towards a Silicon Valley way of life and doing business but until the relationship between his country's leaders and the US improves, he will not have access to the opportunities Mr Obama's administration is now extending to those in Amman or Cairo. Conditions such as these may rub some of the positive shine off of OPIC's historic investment in Arab entrepreneurs. But it also reflects the reality of American public diplomacy and the limits of goodwill.
It is also worth noting that for Mr Obama's administration to extend such a large financial commitment to the region's businesses is in itself an act of political risk-taking. His government is already running budget deficits of historic proportions and faces a growing national backlash over public spending. Committing almost half-a-billion dollars to venture capitalists and private equity groups in a region awash with liquidity is an opposition talking point waiting to happen.
Mr Obama's opponents could easily suggest that, with taxpayer dollars, his administration is doing something that the Arab world's sovereign funds and wealthy rulers have neglected to do themselves. It has really only been in the past two years that locally generated funds began trickling towards venture capitalists and entrepreneurs. That does not diminish from the overall good this act of foreign policy will do for much of the Middle East. By receiving loans at market rates, the region's venture investors will be able to significantly leverage the funds provided by their partners and investors.
As a high-risk, high-return business, venture capital typically has a high cost of funding, with investors looking to recoup large returns on any profitable deal. Those investors will now see their money magnified by what are effectively interest-bearing loans. Few banks are willing to extend such loans to risky borrowers such as emerging-market venture capitalists; OPIC's money will make the funds managed by regional players such as Dubai's Abraaj Capital (through its Jordanian subsidiary Riyada) and Jordan's Accelerator Technology Holding become a far more attractive investment option for regional investors and wealth managers.
More importantly, in choosing to focus these loans towards technology-based enterprises, the US government has paid more than just lip service to what is now a consensus across the Middle East: beyond natural resources, the region's prosperity will depend on its ability to harness the brainpower and creative potential of its people. The great blessings of natural resources, location and cultural history have yet to translate into world-class-universities and scientific research. OPIC's money will do little to change that in the short term but will add to a growing pile of incentives for the region's governments and people to take higher education and research as seriously as they take national security or economic reform.
Such developments would not only be good for the people of the Middle East. They would fit nicely into the broad goals of US foreign policy, creating a generation of young Arabs who focus as much if not more on getting smart and getting rich as they do on the region's conflicts and historic grievances. Mr Obama may prove unable or unwilling to resolve the Israeli-Palestinian conflict and could end up presiding over more war and conflict than any post-Second World War American president.
But if his legacy includes giving a helping hand to the scientists, entrepreneurs and innovators of the Middle East - or at least those living in the countries of his regional allies - then the agenda of his six-point Cairo speech can be considered at least one-sixth complete. tgara@thenational.ae