CONFIDENTIAL BRITISH RESIDENCY BAHRAIN. CONFIDENTIAL (1120) February 7, 1961 Please refer to your letter CRE 52/61 rf January 13 in which you asked me to consider turning my coni idential paper on commercial representation in the Sruthern Gulf into an article for the Brard of Trađe Journal. 2. I enclose a redraft of my confidential paper but have had coubts about the wiasom of publishing it. I have therefore consulted the Political Resident who, while approving the confidential paper and the rearaft, does not much like the idea of the latter being published as an article in the Board of Traue Journal. The Prlitical Resident considers that we are treading on delicate ground and that such an article might ao us more harm than guod. Hot. has suggested that the reüraft might be circulated confidentially to interested firms and associations rather than brought cut in the full light of day. 3. I have borne in mind, when redrafting my paper, the comments made by Bill Cranston in his letter (112113/61) I January 25 but have not been able to relate them entirely to circumstances in the Southern Gulf. We agree that airect representatiun in each Gull territory is now essential but I cannot agree, as Bill Cranston suggests in paragraph 2 of his letter, that the local merchants' desire to control all the business of their own territories follows upon their acquiring the ability to assume such control; nor can I agree that we should discriminate against British trading houses. 4. The local merchants are ariven mainly by greed for profits and their demand for direct agencies arose (and still arises) long before they were able to handle them efficiently. We have at present in Dubai the case of local contractors agitating against foreign contractors, whose work they cannot match. It is true, of course, as my paper and arafts say, that many of the local merchants are now as competent as foreigners; but it is not true to say that only now that they are competent are they demanding direct business relationships with foreign principals. Only this morning I received a visit from Abdul Jalil bin Mohamed of Abu Dhabi, who is almost totally lacking in commercial experience, demanding that agencies should be given to Abu Dhabi nationals and not to foreigners (in which term he included the merchants oſ Dubai). 5. As for the British trading houses, we are bound to promote their interests - as long as these are not out of step with Her Majesty's Government's local interests. Nor should we be more royalist than the King': once a local Ruler has iven permission for a British trading house to operate in his territory. we must accept it as a possible local agent for United Kingdom principals. That local partnerships coula be beneficial is admitted, except by Gray, Mackenzie whose decided policy is to go W.N.Darling, ARIBORT.D.. CONFIDENTIAL.
