McDonalds loses for first time in history

By Mustafa Abdel-Halim, IOL Staff

CAIRO, February 8 (IslamOnline) – The American Burger giant McDonald's Corp. announcement of its first ever quarterly loss after a brightly successful history of more than 45 years sparked varied interpretations, especially in the Arab world where a boycott campaign of U.S. and Jewish products in on the up-swing.

The losses amounted to 343.8 million dollars or 27 cents a share, in the three months to December 31, compared with a 271.9 million dollars net profit, or 21 cents a share, a year earlier.

When reporting its losses, McDonalds was keen not to make any mention of the word "boycott" only blaming losses on restructuring process of its 33,000 world-wide franchises.

"Our first priority is to fix our existing business and, in doing so, rebuild our foundation for profitable growth," said the company’s chairman and chief executive Jim Cantalupo.

But others delve into a new storyline for the closure of 719 of the company's restaurants worldwide last year and plans to shut down 600 others in 2003, of which 517 closures had already been announced.

"The losses of American franchise companies can be only traced back to the campaign for the boycott of everything that is American in the Arab and Islamic countries," Amin Iskander of the popular Arab Movement for the Boycott of American and Jewish Products, boasted in an interview with IslamOnline.

Boycott calls stroke a chord in nearly all of Arab and Islamic countries.

In Malaysia, people decided to give up drinking Coca-Cola and Pepsi protesting Western intervention in the internal affairs of Arabs and Muslims, under the pretext of the war on terrorism mantra, said the Consumer Association of in the East Asian country.

Muslims in the southern province of Yala, Thailand, decided to boycott all U.S. products, erecting sign boards and bill boards calling the province “U.S. product free zones”.

In Morocco, boycott calls are gaining momentum, with leading newspapers such as L'Economiste and Assabah launching a campaign against the U.S. dollar, urging Moroccans to stop using the currency in their business dealings.

"Boycott the dollar in your operations for the sake of Palestine. Whenever possible, opt for the euro," read one of the papers' headlines.

Also most of the UAE nationals interviewed by IslamOnline as an example agreed that booting out U.S. forces from the Gulf is difficult, but reducing the military deals will add a legitimacy to Gulf governments and will earn them the respect of Arabs.

Even the Arab countries' imports from the U.S. dropped in 2002 according to the U.S. Census.

"The United States lost in the May-July 2002 period more than 200 million dollars because of decreasing exports to the Arab countries whose peoples interacted with calls for shunning these American-made products" stressed Ahmed Bahaa Shaaban, rapporteur of the Arab Movement for the Boycott of American and Jewish Products.

In Egypt, however, the boycott case is more stronger.

"McDonalds is dying down in Egypt as the company is known for giving large donations to the Jews and is proud of doing that," said Essam Haraz, a former manager of another Egypt-based American franchise.

The company's efforts via press and TV ads to indicate that its staff are all locals and that no aid is being channeled into Israeli or Jewish activities had fallen on deaf ears.

"But other American franchise companies in the country had not been affected by the campaign and their sales have not went down," Haraz said, arguing that most Egyptians eat, drink and wear European and American products.

"It is in everyone's minds that the country depends on the Americans for their wheat that the Egyptians cannot do without and receives some two billion dollars a year from Washington," he said.

Haraz, now a manager of fast-food Mo'men franchise in front of the Cairo University, said most of the machines in the chain restaurants, considered by many boycott campaigners as an appropriate alternative to American outlets, are American-made.

"We cannot give up the high-tech machines for the sake of boycott calls, as we would be less competitive" he told IslamOnline, with a huge Coca-Cola machine clearly standing behind him.

Noticing silent wonder over what seemed to be a weird contradiction, Haraz was quick to add: "We have American and national products, and the audience have to think it over and decide".

Three months ago this restaurant was only a Kentucky Franchised Chicken outlet but was severely damaged by demonstrators trying to vent their wrath at the American brazen biased towards Israel.

However, some were skeptical about this nationalist instinct.

"They are only groups of poor inhabitants of the slum area surrounding the restaurant, and out of their feeling of inferiority and inability to step into such high-class outlet, they stormed into the place and looted it," one former KFC managers claimed.

But the fact remains that sales at most of the 562 fast food restaurants in Egypt dropped 20 percent since Israel's invasion of the West Bank on March 29, on top of the five percent decline just after Intifada erupted on September 28, 2000, said Mahmoud Al-Kaissouni, an executive with an American industry association representing 22 fast food chains, mostly American.

"The number of people going into these restaurants is less and less every day, despite all of that we're doing," admitted Al-Kaissouni, who championed a media campaign to warn of the grave repercussions of the boycott.

He argued that the grassroots campaign is mainly missing the intended target and hitting Arab businesses, as many franchises are Arab-owned with a regional license.

All of the franchises are earmarking 6 percent of net profits for the mother company abroad, IslamOnline learnt from well-informed sources inside Kaissouni's company.

"Americans could close down their franchises here, just saying 'no problem' and invest their money in many other areas" said a manager of a Pizza restaurant in Cairo who repeatedly warned, "take care, the outlet is fully Egyptian."

Iskandar agreed, "I know we are not at economic war with the Americans as the U.S.-Arab trade exchange rate is too modest to make the Americans feel the pinch of boycott."

Still it "is a message of protest through which we can mobilize popular feelings and raise awareness in the streets about the U.S. biased attitude towards Israel," he underlined.

A U.S. report admitted in April that popular campaign to boycott American products has resulted in losses for the U.S. companies reaching up to 40 percent during two months earlier.

The report, issued by the U.S. National Council for U.S.-Arab relations, said the campaign was a direct result of the U.S. support for Israel and its silence regarding its heinous atrocities against the innocent and isolated Palestinians.

The success of the boycott can be also attributed to the religious sermons and civil student organizations which distributed lists of American and Jewish goods through e-mails and cell phone messages.

"Each dinar, dirham used to buy their goods eventually becomes a bullet fired at the hearts of a brother or a child in Palestine," said prominent Muslim scholar Sheikh Youssef Al-Qaradawi.

Qaradawi, who is also the president of the European Council for Fatwa and Research, issued several fatwas (religious edicts) calling on Muslims to boycott Israeli and American goods.

"To buy their goods is to support tyranny and oppression. It's a duty not to do that," the renowned Egyptian-born well-respected cleric said.

“If the U.S gives Israel three billion dollars a year….why should I help it by buying more of American products,” said Ahmed

Mohamed Sayyed Tantawi, Grand Imam of Al-Azhar, Islam’s highest authority, had issued a fatwa calling on all Muslims to boycott Israel and all of its supporters, also dismissing doing other than this “forbidden”.

Fortunately, the religious edicts found a resonance with Arab nationals.

"As long as our religion calls for not helping the enemies to beat our brothers, we should live up to our responsibility and join the boycott," said Khaled Bahaa, an accountant with a Cairo-based bank.

"They are deceiving us. How can they show us an ad that says 'Americana is 100 percent Arab," he added in anger, referring to the counter-campaign portraying U.S. companies in the Arab world as Arab firms.

“If the U.S gives Israel three billion dollars a year in aid and sells it the world’s most sophisticated weapons, why should I help it by buying more of American products,” said Ahmed Ibrahim, a Cairo resident.

“It is ridiculous that Bush called the murderer Sharon ‘Man of peace’ and the Palestinian leader Yasser Arafat a ‘terrorist’ ” Ibrahim stressed.

"Given that the boycott campaign implies growing anti-U.S. sentiments among the Arabs, the Americans began turning their attraction to the repressive 'Sharonist" practices in the Palestinian-ruled areas," said Mohamed Al-Sayyed Al-Said, director of Al-Ahram Center for Political and Strategic Studies.

"This is the first time that Israel is not seen in the eyes of Americans as a tame state" Said, a prominent Egyptian columnist, said, hailing the step as very significant down the road of clarifying the Arabs' stance in a Jewish media-dominated society.

Said, who has been a one-year correspondent in Washington and made several interviews with senior American officials, affirmed that boycott calls served to lower support for the looming U.S.-led war against Iraq.