John Elkhair

This dominant position extends to the Middle East. Here JP Morgan Chase is a No1 player in government finance, financial services to institutions, investment banking, syndicated loans and servicing high net worth individuals. Indeed, in almost any payment flow involving US dollars the chances are that this bank will be involved.

'The Gulf governments are serious about privatization, but are cautious in their approach,' says John Elkhair, managing director for the Gulf region. 'There are many lessons to be learnt from previous privatizations, such as the UK railways and Californian power companies, and they do not want to do something that will come back to haunt them.

'We understand this position, and see that the governments have to balance tariff structures against the need to guarantee a service and act as a social agent.'

For example, JP Morgan is advising the Saudi Government on finding a strategic investor for the Saudi Telecommunications Corporation on its road towards privatization. This clearly requires a careful juggling act between the commercial requirements of a foreign investor and the responsibilities of the Saudi Government to its people.

Mr Elkhair has nothing but praise for the way that Gulf Governments have handled their windfall oil revenues over the past eighteen months.

'The money is financing earlier deficits', he says. 'It is rebuilding reserves and paying down arrears owed to contractors and others. The Governments have acted very wisely in realising that they had to manage a smoother line, and not have a boom and bust economic cycle.

'Also they now want to achieve their plans through privatisation and not public spending, and the authorities realise that this needs a different approach. It is a very positive trend for the region'.

From the JP Morgan perspective, this is clearly a break from the past for the Middle East. Rather than the crude approach to oil spending seen in previous oil price booms - with boom followed quickly by bust - regional governments are smoothing out the business cycle while attracting foreign investment and business practice to improve their economies.

It is hard to pin down exactly why this change has come about. Mr Elkhair highlights the arrival of a new generation of business and political leaders in the Middle East, and the pressures of globalisation on policymakers through the World Trade Organisation.

These phenomena are manifest in developments as diverse as Bahrain's referendum this month supporting the establishment of a constitutional monarchy, and the new foreign investment laws for Saudi Arabia.

When European Governments moved to embrace privatization in the last decade, they called in US investment banks such as JP Morgan, which now has a huge European operation. Perhaps in the first decade of the 21st century it is the turn of the Middle East to turn to this bank for advice on economic reform.