Corporations Lend a Hand

Despite a certain Lebanese tendency to believe in the uniqueness of everything Lebanese, the Unity Week festival jointly organized by Nora Jumblatt and Bahiya Hariri April 9-13, as well as the various acts of corporate giving over the past two and a half months have certainly had their predecessors around the world.
Indeed, in the months after 9/11, New York City officials teamed up with local businesses and multi-national corporations to sponsor an “Open for Business” campaign that sought to bring tourists back to the Big Apple and revitalize the beleaguered economy. In Madrid too, after the train bombings that killed 191 people, local officials solicited and received enthusiastic support from the tourist sector to show the world that their city was both safe and welcoming.
In both cases, the efforts were met by widespread public and corporate support, with public events and demonstrations that signified unity in the face of terror and a determination to take direct ownership of what had become, seemingly overnight, a fragile and deeply troubling situation for all.
Of course, Unity Week was different from these and other events because it also marked the 30th anniversary of the beginning of Lebanon’s Civil War.
However, the major reason for holding the event was the assassination of Premier Rafic Hariri and the four subsequent bombings in New Jdeideh, Kaslik, Sid el Boushrieh and Broummana – events which, according to a recent UPI report, cost the Lebanese economy more than $800 million and which, perhaps more importantly, ignited widespread fear that the country might again slip back into the abyss of violent conflict.
And yet, while other post-terror revival efforts have generally seen direct corporate giving, with concerts and promotional campaigns, in particular, sponsored by various businesses, one recent act of corporate solidarity seems unique to Lebanon – mainly, the various efforts coordinated by Lebanon’s six major trade associations that will provide millions of dollars of direct support to dozens of businesses damaged in the five bombings.
Indeed, it was shortly after the first bombing in New Jdeideh that the private sector swung into action, much as it has sporadically over the past decade and a half when vital infrastructure was destroyed by Israeli attacks.
As it became apparent that the bombings would continue, and after the Sid el Boushrieh attack which devastated several industrial buildings, the Association of Lebanese Industrialists, led by Fadi Abboud, teamed up with the other five major associations in Lebanon to establish a financial support fund.
Simultaneous to this effort, Alfa, one of Lebanon’s two cellular management companies, launched a SMS campaign that allowed people to contribute to the fund by “donating” units [as Executive went to press, Alfa was not able to provide data of the campaign’s effort].
By mid-April, Abboud told Executive that the fund had raised almost $3 million, with two separate contributions from BLOM and Bank Audi of $1 million each and an additional $1 million already raised from individual and corporate contributors.
“We have not event started yet,” said Abboud in a recent interview. “There will be a publicity campaign beginning [at the end of April] where we will launch a homepage for donations so that the Diaspora can also help.”
According to Nadim Assi, the chairman of the Beirut Traders’ Association, the fund has received 62 applications from affected businesses – a number that Abboud believes may grow to 150 by the summer. In all, it is expected that almost $10 million may be needed to compensate business for their losses from the attacks – an amount mitigated by the announcement that the Al Waleed bin Talal Foundation will fully rehabilitate buildings and compensate affected businesses in the area
Of course, the uniqueness of these acts of corporate generosity rest more on the failure of the Lebanese government to provide the kinds of loans and grants offered by many governments after such attacks. However, according to some observers, the efforts should nevertheless be viewed as a part and parcel of an emerging Corporate Social Responsibility (CSR) consciousnesses in Lebanon – one that did not just simply coalesce out of thin air on February 14 and one which dovetails with an overall feeling of social responsibility amongst the Lebanese themselves.
“There are a lot of Lebanese companies that have well established CSR programs, banks especially,” noted Lubna Forzley, Public-Private Partnership Team Leader at the UNDP in Lebanon. “But, especially since few companies produce annual reports, CSR in Lebanon is rarely a written part of a company’s strategy.”
It is this fact, perhaps, among others that often makes corporate citizenship seem more ad hoc in Lebanon than a part of an ongoing, dedicated effort.
“Over the past four years, companies are making CSR more a part of their overall strategy, Forzley added. “But, especially lately, we have seen an increase in efforts.”
Forzley was quick to sound a note of caution though in looking only at one aspect of CSR when viewing corporate actions over the past two and a half months.
“CSR includes a lot of different components. Part of it is also defined as a way the business deals with a community and this includes its human resources.” Pointing to some recently published reports of companies who have engaged in mass layoffs or wage cuts, she added that, “in addition to everything that has been done, the many positive things, we also have to think that HR includes forced vacations that may have been asked for and forced layoffs, the health and safety of their workers, and compensation. The community needs to think about these parts of CSR.”
For Farid Chehab, Chairman and CEO of Leo Burnett Middle East and North Africa, recent acts of CSR in Lebanon, while commendable, should be judged relative to the amount of work that remains for the private sector.
“I think that doing such things [are being] understood by all corporations,” said Chehab, whose company donated their expertise to the design and publicity campaign for the wildly successful 5km Beirut “marathon”. “But, we need to do more,” he added. “The private sector should be less selfish and understand and have the vision that, through promoting Brand Lebanon, he is the first to profit from it.”
Of course, contributing to promoting “Brand Lebanon” has often been easier said than done – a fact of life in the country that, unfortunately, has become even more apparent at precisely the time when Lebanon most needs a tourism campaign.
According to one source at the Ministry of Tourism, no substantial allocations for promoting Lebanon have been made over the past seven months because of both the upcoming elections (which became the focus of many in government at the end of last year) and the bombings.
“You know how many times we are on hold?” asked the official sarcastically.
Indeed, because of the recent failure to form a government, right when promotion was vital, the ministry was unable to move ahead with its forthcoming multi-million dollar tourism plan – a plan that needs the approval of the Cabinet. In the process, companies have also been put off from becoming involved because of the gridlock and the perceived inability of the ministry to get its own house in order.
While Chehab believes that a strong streak of individuality also has prevented the private sector from becoming more involved in tourism promotion and other efforts, Saad Azhari, Vice Chairman of BLOM bank and also a key leader of the Banker’s Association, strongly disagreed, saying that many CSR efforts simply don’t get publicized.
“The actual fact is that some efforts are not declared,” he said. “Some companies outside [of Lebanon] do it just for publicity, but here it is more engrained, more a normal part of operating” in the relatively unique socio-economic and political environment that is Lebanon.
Thus, although CSR efforts in Lebanon may seem opportunistic at worst and ad hoc as a norm, the truth of the matter often lies outside of both these poles, as perhaps the outpouring of donations proved during Unity Week.
As Randa Armanazi, PR manager for Solidere, noted, the outpouring of resources for the events was simply astounding by any standard. Middle East Airlines, Lebanon’s national carrier, offered discounts of 30-50% on flights during the month of April. Hotels offered deep discounts. All artists also performed for free – a not unsubstantial cost. And more than 30 leading figures from the business world, legal professions, trade unions and civil society lent a hand. When something was needed, it was asked for and usually received, free of charge.
“We want to show them that our will for life cannot be defeated,” Hariri told journalists in announcing the festival. “We want our streets and our squares to be filled with joy and people and not left abandoned for chaos.”
Armanazi pointed out that it would be impossible to put a dollar figure on the amount of donations or even the costs of the celebration because so many different sectors contributed in-kind.
Among these, she included the substantial number of merchants and restaurants who slashed prices by as much as 75% to help lure people back to shopping and entertainment districts.
While hard to quantify both Paul Ariss, head of the Restaurant Association, and Assi, used words like “a miracle” and “a tsunami” to describe the effect that Unity Week had on stores and restaurants’ bottom line. Assi said that business had been down by as much as 90% in the weeks after the bombing and that, after Unity Week, had recovered somewhat to a 50% less-than-normal level. “Everywhere people are moving again,” he said hopefully. “It is slow but life is getting back slowly and surely.”
“It was a miracle,” said Ariss. “From 14 February to April 9 it was a nightmare – for all of Lebanon. During Unity Week everything changed, sales went beyond normal in the BCD and partially for all of Beirut. Now things are moving back to normal across Lebanon, in Tripoli, Sidon, all over.”
Unfortunately though, despite published reports that banks may loosen interest rate terms and extend loans generally in order to stem the severe ripple effect of economic damage since the assassination, some companies who are not receiving direct help through the bomb fund say that they may not be able to hold on for much longer. They are, said Abdullah Bitar, president of the Nabatieh traders association, in need of some civic and corporate solidarity.
“Banks need to take it easier on us,” said Bitar. “Many do not have money to pay for inventory and are being squeezed on their loans as well… the bank’s simply won’t help us.
Although loan terms are a sticky subject, Makram Sader, the director of the Banker’s Association, noted that Lebanese Banks had indeed played a hugely unprofitable role in helping the overall economy get through these difficult times. While not thought of as CSR generally, the hit that Banks have taken in concert with the Central Bank contribute to the necessity of viewing Lebanon’s entire commercial sector, including its oft-maligned banks, as key actors in the effort to re-emerge from the destruction and provocation that broke to the surface on February 14.
“We should have increased lending rates as deposit rates rose,” said Sader, who noted that 60% of Lebanese bank loans renew their interest rates every two to three months. “We should have, but we wanted to help… we are trying to give a little bit of time for the political situation.”
Of course, even keeping interest rates momentarily low may not do the job. Nor may the CSR efforts that seem to be gathering speed. Indeed, the Economist Intelligence Unit recently reported that real gross domestic product growth would most likely come in at a lackluster 2% rather than the 4.5% estimated earlier and that the crushing public debt could explode should a global downturn occur.
Of course, one thing in particular that Lebanon demonstrated during and before Unity Week was the power of its citizens to overcome hurdles – an attribute often cited by people across the political spectrum.
“They came out not because of discounts,” said Ariss. “In fact many did not even ask. People were stuck and they wanted to go out and also to share in the national economy. The Lebanese mentality is that they want to live – and eating out is one small part of that mentality.”
For Chehab, the matter is even more at the heart of the Lebanese character – just as Beirut became the undisputed heart of Lebanon during Unity Week. “They came to display physical energy in the name of Lebanese unity, they came to offer physical contribution to their commitment. They came because they were blessed with political maturity and they came because the communication they saw and heard during two weeks of preparation persuaded them to do so.”