US President Barack Obama has pledged to help Lebanon, but have his words been empty?
Economics & Policy

Is the international community failing Lebanon?

by Domhnall O'Sullivan
written by Domhnall O'Sullivan

If acknowledging a problem is the first step to solving it, then the very existence of the International Support Group (ISG) for Lebanon is to be welcomed. Formed on the margins of the UN General Assembly in New York in September 2013, the intergovernmental group met for the third time in Paris in early March to discuss the range of ongoing crises afflicting the country.

And as in its previous get-togethers, in theory the conclusions of the ISG ticked all the right boxes. Lebanon is suffering from profound economic, security and humanitarian challenges, the actors declared. More support is necessary for refugee agencies and the Lebanese Armed Forces (LAF), while the formation of a new government is “warmly welcomed” and the priority is to pave the way towards successful presidential elections in May.

But despite the extremely high level nature of the meeting, few concrete outcomes emerged that would treat the wounds currently ailing the country. Several states — Finland, France and Norway — pledged to contribute extra cash, but figures have not yet been released, according to the World Bank. And as the drama in Crimea escalated, scant media attention was accorded the Paris talks. European Union Ambassador to Lebanon Angelina Eichhorst captured the low-key nature with a tweet on her return to Beirut: “sad conclusion from FR BE NL mtgs [sic] that too few realise magnitude challenges Lebanon is facing since war.”  It was a sentiment she reaffirmed when meeting with Executive (see full interview here). “Back home, we don’t really know what [the crisis in Lebanon] means.”

International powers have always had a hand (whether helping or hidden) in Lebanon’s affairs. Are they now struggling in their efforts to prop it up?

A web of responses

If so, it is not out of paralysis. Despite a slow initial response to the Syrian refugee crisis in 2011, which mirrored the lethargic reaction of the Lebanese government itself, the worsening landscape has spawned several bilateral and multilateral actions.

The UN and its agencies, long permanent residents in Lebanon, have been at the forefront of humanitarian efforts. As Lebanon has received more Syrian refugees than any other country, UNHCR has seen its workload and its budget skyrocket. According to Joelle Eid, a spokeswoman for the agency, the body is planning for 1.6 million registered Syrians by the end of 2014 — up from less than a million now. Its budget has jumped from $13.5 million in 2010 to a projected $370.9 million for 2014 as it struggles to cope.

The EU has also stepped up its efforts. Having pledged over $338 million to date in supporting humanitarian and other efforts in Lebanon, it has attempted to bolster the effort of UN agencies as well as provide direct material aid to refugees. The June 2013 “Comprehensive EU Approach to the Syrian Crisis” built on this by outlining a European vision for a holistic rather than piecemeal strategy for tackling the problems throughout the region. A military expert was deployed to the EU delegation in Beirut, adding to the humanitarian aid and traditional development funding. “Everything is connected”, explains Eichhorst. “The magnitude of the challenges we have implies that Europe looks at the crisis from all angles.”

Bilaterally, the United States has contributed over $340 million in humanitarian assistance to Lebanon since the start of the crisis, including $76.4 million at the February 2014 donor conference for Syria in Kuwait. Individual European states channel aid through the EU or directly via development or UN agencies. To help the security situation, various countries have also offered rhetorical, material and financial support to bolster the LAF, most recently the much-discussed Saudi donation of $3 billion. In this vein, an upcoming Italian-sponsored conference in Rome will address the future of the LAF and drum up further support for its efforts at combatting the teetering security equilibrium.

It is in this particular context of a mishmash of international responses that the ISG emerged. Prompted by a July 2013 Security Council statement urging more international support for Lebanon, the group should act both as a coordinator of these existing efforts and as an advocate for more support. Pledging to tackle the three overlapping problems of security, the humanitarian crisis and economic stagnation, it is meant to give an overarching structure for the efforts of the international community in the country.

Toward greater security

But in both coordinating and providing impetus for more action, it does not have an easy task. In bringing together most of the global community’s big hitters — the five permanent UN Security Council members, the EU, the Arab League and the World Bank — it has at least managed to unite actors with diametrically opposed policies in Syria for the purpose of Lebanese stability. That Russia sits across the table from Saudi Arabia is promising. Yet agreeing that stability is a shared priority is one thing; agreeing on the road leading there is another.

The security dossier is, as usual, sensitive. If a consensus exists within the international community to strengthen the LAF, few details are forthcoming about how this will be achieved. Much aid to date has come in the form of grants and increased firepower. Yet some diplomats and security experts say that a shift towards a more ‘“soft power” approach is necessary. Florence Gaub, a Middle East analyst at the EU Institute for Security Studies in Paris, reckons that what is needed are “large-scale training courses in country, especially at officer and non-commissioned officer level.” “That’s where the military is really suffering,” she says.

A diplomatic source, who did not want to be named, noted that the upcoming conference in Rome dedicated to supporting the LAF, could be the starting point for shifting the discussion in this direction. Preliminary talks started this, but the full conference is currently scheduled for the summer.

One explanation for the lack of coordination is the inherently sovereign nature of security, especially for larger states. International powers have in the past taken a rather unilateral approach in this strategic field, often being reluctant to share information about their priorities and funding. Much action is also grounded in self-interest rather than altruistic notions. According to Lina Khatib, director of the Carnegie Middle East Centre in Beirut, a recent Saudi grant of $3 billion was motivated by regional considerations rather than Lebanese interests: “The grant was more about challenging Hezbollah and Iran.”

The interests and clout of Iran in Lebanon ­­— particularly through the influence of Hezbollah — complicates the efforts of the ISG to present a full global consensus. Although international institutions, Western powers and the Arab League are present at the party, Iran is not. According to Gaub, a Persian shadow hangs over ISG discussions on security. “Iran would certainly not appreciate training and equipping the Lebanese military to the extent necessary [for it to be strong] since it could then become a major antagonist of Hezbollah.”

Yet Eichhorst stressed that with improving global relations with Iran, a delegation from the country would hopefully be part of future negotiations. “I think Iran should always be around the table.”

Streams of aid

Similarly, although politically less sensitive, the coordination of the diverse strands of humanitarian aid for Syrian refugees and economic support for Lebanese state structures are also a challenge. The EU plays an important role in fostering communication between its member states present in Lebanon, while informal donor coordination meetings among networks in Beirut help to keep players somewhat on the same page. But with many donors opting to bypass the Lebanese government completely, it is difficult to keep track of who’s doing what. According to Khatib, NGOs are often “effectively doing the job of the state.” Indeed a new report from Chatham House says many donors perceive government bodies as “too corrupt to manage funds effectively.”

In recent months, however, there has been something of a shift towards reconnecting with government bodies — though often not central state institutions. The United Kingdom recently announced that it would provide additional support to Lebanese municipalities hosting sizeable Syrian refugee populations. In a press release, UK Ambassador in Lebanon Tom Fletcher said, “an increasing proportion of our £600 million [$990 million] contribution to the humanitarian response will go to these communities.” Amanda McLoughlin, Lebanese representative of the British Department for International Development, would not reveal the exact amount that would be pledged to municipalities but said there was an increased focus on supporting host communities. “We are entering the fourth year of the crisis. Year one and year two it was a straightforward humanitarian response — not in terms of complexity, but it was obvious what was needed. We just want to embed ourselves a little bit more in local systems as I think over the longer term — three, four, five years, perhaps even longer — you can’t just do this expensive on-the-spot response.“

Trust in the fund

The major ISG initiative for enhanced coordination of such aid has been to establish a multi-donor trust fund, headed by the World Bank, that will act as a clearing-house for donations to the Lebanese authorities. Elaborated over the course of several months, it was finally announced as “open for business” at the Paris conference. The trust fund will complement humanitarian efforts by supporting the capacity of Lebanese society and infrastructure to receive refugees. Inger Andersen, the World Bank’s representative at the meeting, said, “In managing donor resources, we will underwrite forthcoming development and resilience projects targeting the communities that are bearing the brunt of the refugee crisis.”

Not only will this channel more of the streams through a central reservoir, but the World Bank’s nameplate and expertise should provide the credibility and accountability that the Lebanese government lacks. Having stated that the cumulative total of economic losses in Lebanon as a result of the crisis will be $7.5 billion by the end of the year, the World Bank is also more aware than most as to the acute economic malaise in this country. “Stepping up support to help Lebanon cope with the impact of the Syrian crisis is our collective responsibility,” said Andersen.

Matters of perception

But if the World Bank’s role as coordinator has achieved at least limited progress through joint conclusions and initiatives such as the trust fund, pushing to “step up” support is a challenge.

The trust fund has also had a slow start. Joelle Eid, UNHCR spokesperson, says that only minimal assistance has been pledged to the Lebanese government to date to help it tackle the humanitarian crisis. This is despite the fact that Lebanon has been exemplary in keeping borders open while seeing its population increase by a quarter due to the influx of Syrian refugees.

It is not just a perception of corruption that restricts funding. Syria’s (and by extension Lebanon’s) crisis has fallen down the international order of priorities. Tellingly, the post-conference statement of US Secretary of State John Kerry after the ISG meeting in Paris mentioned the word Lebanon nine times. The combined total of Russia, Ukraine, Crimea and their related adjectives was forty-one.

On a broader level, the wave of suicide attacks which have hit Beirut in recent months have attracted widespread media attention, yet there is minimal public recognition of the day-to-day socio-economic problems currently affecting the country. Ambassador Eichhorst says that a common reaction in some European states when they learn of the refugee figures is one of disbelief.

More action, less talk
In Lebanon, as the refugee issue casts a growing shadow and the LAF are increasingly called upon to combat radical terrorism, a strong and coordinated support from the ISG is paramount. Robust international consensus and more concrete backing for the LAF would be a welcome result of the Rome conference. At the same time, a more enthusiastic buy-in to the multi-donor trust fund would provide Lebanese authorities — watched over by the World Bank — with much-needed funds to deal with the strain on infrastructure. This would help to complement existing international efforts to provide short-term refugee aid with longer-term initiatives to help Lebanese society cope with the influx.

The ISG was established to encourage all of these things. The ideas are there. Yet ultimately, above convening conferences and support groups, the biggest current challenge for the international community is finding the motivation to put its money where its mouth is. Acknowledging a problem is indeed the first step; but action must follow.

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Society

Home technology with style

by Nabila Rahhal
written by Nabila Rahhal

If you dream of a fully automated home environment where you can set the right mood via voice command, Legrand’s new concept store in Beirut’s Ashrafieh region might be a good place to start.

Globally, Legrand provides solutions designed to manage lighting, heating, energy, networks and building access through products ranging from control and command devices to cable management, power distribution and voice-data-image systems.

The group has a global turnover of $6.3 billion with a turnover of around $25 million in Lebanon alone spread over their portfolio of brands in the country which include Arnould, Bticino, Cablofil, Legrand, Vantage and Zucchini.

According to Pascal Decons, Legrand’s Near East regional manager, Lebanon is the group’s strongest market in the region, accounting for 70 percent of its business, despite the country’s comparatively small size when compared to neighboring Jordan or Syria. Decons sees Iraq and the Gulf as potential markets of growth for Legrand in the region.

Legrand has had a representative office in Lebanon since 2007 and a presence in the market through high-end distributors such as Hermes for forty years. Still, the company’s management felt that despite their position as a global leader in electric infrastructures, their products were not as visible in the market as they could be and so the natural next step was to increase their exposure through a concept store which would boost their image, explains Decons.

Equally as important a reason for the concept store is that many architects and interior designers employed for big projects in the region are based in Lebanon and so, according to Decons, Legrand needed to be close to them.

The final reason is a show of support for the country and the region: “We also wanted to send a message to the region that the tense situation in the area does not scare us. We believe in the Middle East and that is why we invested a significant amount to have a concept store here,” says Decons.

Indeed, Legrand invested close to $400,000 in the concept store which was designed by architect Walid Zeidan who, according to Decons, “did a wonderful job in translating the vision we wanted to convey to the public and gave our products their true luxurious value through his work.”

Opened towards the end of January 2014 and located in Ashrafieh, on the road facing Mandaloun Café, Legrand’s concept store is sure to attract a lot of passersby – especially since the showroom is visually striking with crisp white boards displaying artfully arranged light switches that contrast with the dark grey concrete flooring, projecting an urban and clean image.

The unique space showcases the representative products of the My Home, Vantage, Legrand, Arnould and Bticino ranges and is geared toward professionals in the field and end customers looking to redecorate or customize their home. The store’s helpful team provides customers with tailored advice and personalized support with their projects. It is up to the distributor partners to follow up with sales, says Decons.

Legrand hopes to reproduce the same concept store idea in Dubai, United Arab Emirates, or Qatar.

Correction: This article has been updated to note that Legrand’s turnover in Lebanon is roughly $25 million, not the previously reported $2.3 million. 

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Microsoft is trying to encourage Lebanon's government to adopt cloud computing
Business

Cloudy skies ahead

by Benjamin Redd
written by Benjamin Redd

Visiting Microsoft’s glass-walled office — overlooking Beirut to one side and a panoramic Mediterranean to the other — one can easily forget the enormous challenges looming on the company’s horizon. “It’s the nicest Microsoft office anywhere,” boasts Hany Morcos, the company’s public sector cloud technologies director for the MENA region.

But reality jolts quickly back into focus. Morcos, along with Cairo-based corporate affairs manager Ashraf AbdelWahab and Lebanon country manager Hoda Younan, are hoping to sell the Middle East on cloud technology, a key component of Microsoft’s latest corporate strategy.  And of course, they’re hoping the world will buy that technology from Microsoft.

Later in the day that we meet, the three are due to run a workshop on these technologies for Lebanese public sector officials. Their vision is a much more efficient and secure government — and a company-saving strategy for Microsoft.

Sky-high futures

The cloud — shorthand for technologies that allow users to store files, photos and data on third-party servers and download them anywhere in the world — is one of the fiercest battlegrounds for tech companies today. Besides Microsoft, heavy-hitters Google, Apple and Amazon — among a host of smaller companies — are battling for primacy in the market.

For Younan, the future is “all about the cloud.” And the need to own the cloud — or at least be competitive — is paramount in Microsoft’s case. As the world moves from the PC to mobile, the company’s dominant Windows operating system is being gradually challenged by Apple’s iOS and Google’s Android. In effect, Microsoft is ever so slowly being kicked off people’s devices and out of their lives.

In this vein, the company’s emphasis on the cloud is effectively a hedge against declining Windows users — a notion Younan agrees with, even while maintaining the flagship operating system “is still our hero.” “Windows as a product is definitely going the right way … It’s giving life to [new] types of devices,” she claims, alluding to the system’s avant-garde user interface which has received mixed reviews.

Strategically, the emphasis on the cloud reaches all the way to the top. In February the former boss of the company’s private cloud technologies, Satya Nadella, was promoted to become just the third CEO in Microsoft’s history.

On the surface, the new emphasis suggests the company is answering the concerns of some analysts and activist investors who believe Microsoft has two core businesses — enterprise and consumer — and should focus on the former.

But for Younan, this is folly. “The line between consumer and enterprise is blurred and it will disappear,” she says, explaining that “today, customers do not accept working with lesser technology than what they use personally.” More and more, Morcos adds, devices are being used for both work and play — there’s fewer distinctions between company and personal devices.

The logical conclusion is a corporate strategy that focuses on both the cloud and devices. “Because you have this multitude of devices, you need to have your data in the cloud,” says Younan. And conversely, cloud data needs devices to be accessible and useful.

Gags and blindfolds

Under normal circumstances, the fight over cloud dominance would be a ragged battle with the competition. But when the world learned of the United States’  massive electronic espionage program last year, the cloud game became much more difficult for US-based technology firms — many of which, like Microsoft, had allegedly been silently cooperating with the government under secret court orders. One of the key components of a successful cloud strategy — trust — had been snatched from Microsoft’s grasp. “This industry relies on trust, and if this trust is missed we cannot continue,” says AbdelWahab.

On this front, the company is in a bind: it must convince potential customers that it builds secure technologies and is a good steward of data, but it cannot legally show much in the way of evidence.

All AbdelWahab is able to offer is sincere-sounding reassurances. “We do not give our customers’ data to governments, unless there is a court order,” he says. However, those court orders aren’t available to the public. AbdelWahab can only point to the fuzzy ‘transparency reports’ tech firms are now allowed to publish that give very rough estimates of government requests. For instance, in Microsoft’s first such report in February, the public learned that between January and June 2013, somewhere between zero and 999 secret court orders were issued for private content, impacting anywhere from 15,000 to 15,999 accounts.

Under current law, Microsoft can go no further. However, AbdelWahab assures that the company isn’t happy with this level of disclosure — it and several major tech companies are currently taking legal action against US authorities to provide greater details to the public. “Since these rules are affecting our trust in the market, we are suing the US government,” he explains.

A market-driven rationale for greater transparency is compelling, but it cuts both ways. As AbdelWahab points out, “the US government is our biggest customer” — reflecting the tension between establishing transparency and pleasing a major client.

But AbdelWahab ardently denies any collaboration with US authorities beyond that which is legally required. “We do not engineer backdoors in our products … We don’t give them encryption keys,” he claims. These are crucial claims when it comes to private clouds — those sold to companies and governments who then run and own them, often with high security needs.

The company offers certain high-paying private cloud customers access to its source code, allowing the buyer to fully inspect the product for vulnerabilities. However, this may be as much a threat as anything. When asked what incentive a government would have to make public a vulnerability it finds — instead of keeping quiet and exploiting it themselves — the three offered no response, instead pointing to the vibrant hacking industry that, ironically, serves to strengthen security.

New customers wanted

The tangles with the US government complicate the trio’s reason for visiting Lebanon: to educate civil servants and sell them on cloud technology. Morcos envisions a vast, government-owned, government-wide cloud that is able to service multiple ministries’ needs.

“Imagine that the Ministry of Education has a data center that serves test results for hundreds of thousands of students per year,” says Morcos. This would require “a massive data center that you’d turn on for one week and turn it off for the rest of the year.” If, however, there was a central system shared by the entire government, then that capacity could then be reallocated to another ministry saving the country money. “Most data centers have about 20 percent usage,” Morcos adds, but “with a national cloud, this goes up to about 80 percent.”

“So it’s cost effective,” Younan offers. However, she says, there’s even greater benefits: citizens get better services, the gears of government are modernized and national decision-making is simplified because “you have access to this data.”

Indeed, from within Microsoft’s pristine offices, one can imagine a bright future for cloud-based governance — and a bright future for Microsoft’s cloud strategy. But selling a private cloud to the Lebanese government would require trust that Microsoft hasn’t built weaknesses into its system on secret orders from Washington. And to that AbdelWahab can only continue to insist, “we don’t do that.”

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Fady Michel Abouchalache is head of Paris-based Quilvest
Finance

Finally investing in the Middle East

by Maya Sioufi
written by Maya Sioufi

When I met Fady Michel Abouchalache, CEO of the $27 billion Paris-based wealth management and private equity firm Quilvest in 2012, he was pessimistic about the prospects for private equity in the Middle East. Not anymore, however, since he is placing a bet — a large $150 million bet — on a project in the region.

While Abouchalache has always kept an eye on investment opportunities in the region — a natural inclination given that he spent the first 18 years of his life in Lebanon — this year he has decided to pursue one of these investment opportunities, the second time he has ventured in the Middle East.

After unsuccessfully attempting to pioneer private equity in the Middle East in 1998 by launching a Beirut-based private equity firm, Abouchalache quickly landed a job at Quilvest and eventually became the CEO of the investor group. However, he has not given up on the Middle East. According to Abouchalache, it is a region of the world which has “a solid macroeconomic backdrop with positive indicators — from GDP growth to surplus spending to businesses both consolidating and trying to be managed at European and US standards.”

The new direction

But this is the old story. What has changed now? Having studied the market for over a year, Quilvest will not be acquiring stakes in established private companies with the aim of exiting after a couple of years — the typical private equity model — but will instead be building a platform from scratch. The bets will not be on speedy exits or capital markets (not the region’s forte) but instead on consolidating industries, spinning off family businesses and taking companies to a regional level.

Headquartered in Dubai, the first platform that the PE firm is developing will be in the food and beverage (F&B) sector. Headed by a Lebanese CEO whose name was not disclosed, it is ultimately expected to be a $1 billion revenue company with 300 points of sale in up to seven countries throughout the Middle East and North Africa within about ten years.

Abouchalache, who will be chairing the board, was not able to disclose much information on the upcoming platform, which is due to launch in the next few weeks. All that he could share with us at this point was that the venture is being set up in partnership with seven established family offices and groups from the region, which invested two-thirds of the project’s cost. There are four from Saudi Arabia, one from Lebanon, one from the United Arab Emirates and one from a Jordan/US based group. The remaining funds are coming from Quilvest and its team of investment professionals (who own up to 10 percent of the project) as well as a subset of the firm’s global investors.

Abouchalache’s ultimate goal with this company is to consolidate the F&B sector. “The platform we are creating has a mandate to look at companies to buy them,” he says. His confidence in this company’s ultimate success stems from the stellar performance of the Mexican discount retailer BBB.  Established 11 years ago and headed by Lebanese CEO Anthony Hatoum, BBB has received backing from Quilvest to the tune of $50 million since its inception; the retailer now has 550 stores with 4,000 employees in Mexico.  “It is now in a cruising altitude, opening 100 stores per year,” says Abouchalache, adding, “We are trying to replicate our success in Mexico — in a different space but the same adventure.”

More to come

After a successful fundraising round for this Middle Eastern adventure — one and a half times oversubscribed — Quilvest is studying other sectors in the region to deploy its expertise in, by early to mid 2015. The approach will be the same as that of the first one, with the following remaining at its core: build from scratch with a long term perspective, make the business more regional, adopt international standards and consolidate the industry.

The Middle East has always been an important region for Quilvest. Of the $1.3 billion raised last year, one third was sourced from the region. But this time, it is taking on a more pivotal role for the firm, not just as a source of funds but also as a revenue generator with incredible growth potential.

“The Middle East is set for fabulous growth… absent major political shocks,” says Abouchalache. Betting on the lack of political distress in the region calls for a big appetite for risk. Let’s hope Quilvest’s past performance is an indicator of its future results.

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The Buzz

Beautiful video shows all the Gulf’s flights in one day

by Executive Staff
written by Executive Staff

The rise of Dubai International Airport has been rather remarkable. Initially opened in the 1960s, it remained something of a relative backwater until the turn of the century.

Yet in the 16 years since the launching of the second terminal in 1998, the airport’s growth – like the United Arab Emirates’ in general – has been astronomical. Back in 2000, it had little over 12 million passengers a year, but by 2013 that number had reached 66 million, with plans to hit 90 million in the coming years. For the first time, this year Dubai’s airport has so far overtaken London Heathrow as the world’s busiest airport by passenger numbers.

Other Gulf airports have also continued to grow but, as a newly released video shows, Dubai is a long way ahead. The video, made by the UK Air Traffic Management Service Provider Nats, tracks the approximately three thousand flights that take off and arrive in the Arabian Gulf every day. The video, based on one day’s flights between 28 and 29 November 2013, shows Dubai as the leading source of traffic with others, including Abu Dhabi and Doha, also busy.

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Lebanese chefs displaying their dishes
Society

Horeca 2014: The best of Lebanese hospitality

by Greg Demarque & Nabila Rahhal
written by Greg Demarque & Nabila Rahhal

The halls and parking lots of Beirut’s BIEL exhibition center were buzzing with activity from April 1-4 as professionals in the hospitality and food and beverage sectors networked with the latest and greatest in their field.

 

Horeca 2014, Lebanon's largest food and drinks conference, took place last week in Beirut
Horeca 2014, Lebanon's largest food and beverage conference, took place last week in Beirut
Among the attendees were Tourism Minister Michel Pharaon (second left)
Among the attendees were Tourism Minister Michel Pharaon (second from left)
One of the participants in the cooking competition
One of the participants in a cooking competition
Lebanese chefs displaying their dishes
Artistic presentation can be as important as taste
Small details make for a good visual display
Small details make for an appealing visual display
A proud chef displays his skills as a mini-sandwich artist
A proud chef displays his skills as a mini-sandwich artist
Alcohol companies were also in attendance, displaying their goods
Alcohol companies were also in attendance, displaying their goods
There was even live pottery making
There was even live pottery making
The best chef's were awarded prizes
The best chefs were awarded prizes

 

The 21st edition of Horeca, the annual hospitality and food and beverage services trade show organized by Hospitality Services, received around 12,000 trade visitors from hospitality industries including, hotels, restaurants, supermarket and retail chains.

The 300 exhibitors – categorized into either food, beverages or services, and suppliers industries – were mainly from Lebanon but included some from Europe (Italy, France, Spain), the Middle East (Oman, Jordan, UAE) and beyond (Thailand, USA).

Aside from the networking opportunities, the four-day event featured competitions for both professional experts and students. The most popular competition was the Live Cooking Competition, in which more than 30 chefs and junior chefs participated.

Other competitions included the Art of Service Competition which judged table setting, decoration and presentation abilities, the Bartender’s Competition for the best cocktail and for the first time the Barista Competition for the best coffee.

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Comment

Entrepreneurship: Eight ways to boost your productivity

by Tara Nehme
written by Tara Nehme

“How did it get so late so soon? It’s night before it’s afternoon. December is here before it’s June. My goodness how the time has flewn.” As I was reading out the Dr. Seuss lines to my little niece, I couldn’t help but relate. I remember those days — sitting in my cubicle for what consisted of most of my planetary existence, getting home and questioning whether I was as productive as I should have been. Then, I became an entrepreneur and the self-doubt entered a new dimension.

For the average business builder, mastering time management is nothing more than an elusive ideal. I sometimes get asked what skill I think entrepreneurs require most — I always respond “self-discipline.” Especially during the early stages, before the looming responsibility towards investors and a team, anyone planning to become an entrepreneur needs to realize something: you have no boss, there are no working hours and nobody is watching you but yourself.

[pullquote]Deny it all you want and claim you are not a morning person — I’m not a morning person — but learn to become one.[/pullquote]

While that feeling of freedom is initially thrilling (you can secretly watch 10 seasons of anything you want in your room) it soon turns into overwhelming anxiety. You begin wondering how your less daring corporate friends are progressing and whether you simply made a big mistake.

To move forward from the latter feeling towards feelings of elation from creating your own startup, a lot of hard work is involved. To get through this initial hurdle, you will need good time management skills. In my last two years, I’ve experienced many ups and downs, discarded techniques I deemed useless and retained eight that I believe work:

1. List less, observe more. Instead of going straight for the to-do list which doesn’t accomplish much more than scaring you straight into procrastination, try writing something else down. For an entire week, jot down everything you do on a daily basis. Analyze that paper and decide which tasks actually accomplished something and which were an epic waste of your precious time. The next week, make sure more than half your days are spent only on activities you consider productive.

2. Give the day a little structure. When you’re an entrepreneur, and until you’ve reached a more significant stage of development, friends and family tend to assume you’re a free agent. “What do you mean you can’t meet me? I thought you were you own boss.” Ignore these requests: from Monday to Friday, from this hour to this hour, you’re working.

3. Discover your worth. This is the most valuable piece of advice I have ever received. Determining my worth has helped me make all kinds of valuable decisions within seconds. If your time is worth $100 per hour and a task makes you only a fraction of that, don’t waste time doing it.

4. Learn how to say “no”. This is the tip I found the most difficult to apply because I genuinely enjoy helping others, and learn a lot from doing it. However, you can’t always say yes to everything. Find the balance between being firm and being kind.

5. Categorize. Other than the obvious tip of prioritization, you should categorize your tasks. An entrepreneur is an everything person. Until you can afford hires, you are the accountant, HR manager and marketing guru. As an article recently published by Entrepreneur stated: “There are only three ways to spend time: thoughts, conversations and actions.”

6. Rise with the sun. Deny it all you want and claim you are not a morning person — I’m not a morning person — but learn to become one. Your productivity levels will shoot upwards, you’ll discover time for exercise, and you’ll see more of the sun, which is never a bad thing.

7. Make your space beautiful. Don’t work in a messy environment and try to avoid your bedroom. Place some fresh flowers on your desk or re-organize your workspace. Make sure it’s inspiring.

8. Don’t be a superhero. Surprised that you planned to do 1,000 things and only did 10? We all want to conquer the world but remember to do so one step at a time with a sprinkle of realism. Take breaks. Whatever it is you’re working on will still be there after you’ve inhaled some fresh air and finished pondering why on earth you decided to become an entrepreneur in the first place.

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Economics & PolicyPresidential Election 2014

A beginner’s guide to Lebanon’s presidential election

by Domhnall O'Sullivan
written by Domhnall O'Sullivan

The window is open. As evident from the increased political posturing and daily media coverage, the race to replace President Michel Sleiman has begun. In just under two months, Lebanon will – barring exceptional circumstances – see a new face swear the presidential oath, assume the presidential duties, and occupy the Presidential Palace at Baabda.

Conscious of the intricacies of the Lebanese political system – not to mention the frequent occurrence of “exceptional circumstances” – Executive has put together a primer to help readers understand the procedures and horse-trading that are likely to take place in the coming months. Neither predictive nor proscriptive, this guide offers four simple steps to getting to grips with the presidency.

Click on the sections below to start exploring.

 

1. Know thy constitution
2. Know thy politics
3. Know thy candidates
4. Know thy limits

The founding charter of the state, the 1926 Constitution of Lebanon, is at the same time clear and misleading in its stipulations for electing a President.

What is fundamental is that the Parliament – not a popular ballot – determines the head of state. Article 73 states that the Chamber must be convened for this purpose “one month at least and two months at most” before the end of the term of office of the incumbent president. That means May 25 of this year, when Sleiman’s six-year mandate comes to an end. If this date is missed, Parliament will meet “automatically” ten days before the expiration date.

Yet it gets more complicated. The numbers needed for victory are at least precise: a two-thirds majority in the first round of voting, or failing this, a simple majority (65 out of 128 votes) in subsequent rounds. But, unlike with other parliamentary procedures, the Constitution does not stipulate the legal quorum necessary for the vote to be valid.

While it is not clear in the Constitution how many MPs must be in the chamber to render the vote valid, the precedent established by current Speaker Nabih Berri is that two-thirds of deputies must be present before a vote can be called.The process is guaranteed to be a show of constitutional wrangling, differing legal interpretations, and – of course – political bargaining.

The previous election in 2008 is a prime example of how political jousting can manipulate – or foil – the fundamental guidelines of the constitution.

Speaker of the House Nabih Berri called for session after session to elect a successor to Emile Lahoud, yet to no avail. At a time of acute political polarization between March 8 and March 14, and lacking a pre-arranged political agreement, deputies simply boycotted Parliament in order to prevent a quorum becoming possible. This scuttled any attempt to convene from November 2007 – when Lahoud stepped down – until May 2008, when a consensual agreement was finally reached to select Michel Sleiman.

The political climate is key to predicting the outcome of the presidential race. With the result often predetermined by extensive package deals and political concessions (especially in the case of a consensus cabinet without any clear majority) all major stakeholders – within and outside Lebanon – need to be satisfied. Intense consensus building is required for the process to work.

In 2014, most political parties and foreign powers have highlighted the necessity of electing a new president on time in order to avoid another executive vacuum. But recent government wrangling about the appointment of key senior officials, as well as the poor showing last week for Sleiman’s National Dialogue initiative, demonstrate that political differences could still hamper the process. In this case, as during the vacuum following the end of Lahoud’s term, the presidential powers would be co-opted temporarily by the cabinet.

The president of Lebanon must be a Maronite Christian. As with the designation of the other top political roles in the country, this sectarian prerequisite is part of the unwritten National Pact of 1943 and unquestioned. Candidates will only emerge from the Christian parties or communities.

Joining these traditions is a constitutional rule that it is “not possible to elect judges, grade one civil servants or their equivalents in all public institutions” unless they have resigned from this position two years before the election. This means the head of the armed forces, often seen as a potential savior in times of instability, cannot be directly thrown into the role of President. Unless, of course, the constitution is amended to allow it, which is what happened in 2008 and 1998 for Generals Sleiman and Lahoud respectively.

Politically, current potential candidates and previous office-holders offer a various bunch of résumés. Just as Christian parties occupy spaces across the political spectrum, presidents can hail from the March 8 or March 14 political camps or be independent and have had contrasting personalities. Michel Sleiman was a neutral, consensual, and arguably quiet figure. Before him, Emile Lahoud was widely seen as led by Syrian dictates, while his predecessor Elias Hrawi was a tough but pragmatic post-war leader. Strongmen such as Suleiman Frangieh Senior and statesmen such as Amine Gemayel have also held the top job in the past. If there is no obvious silver lining weaving through the list of presidential figures, the necessity in recent decades of installing consensual figures has meant that the past three presidents have been “independent” – at least in name.

Among those in the running for this year’s election are the leaders of the two largest Christian parties – the Free Patriotic Movement’s Michel Aoun and the Lebanese Forces head Samir Geagea, the only candidate to have officially declared. Aoun is allied to the March 8 camp, while Geagea is allied to March 14. As such, the potential for a ‘neutral’ candidate to emerge remains large – with potential candidates including Jean Kawagi, Commander General of the Lebanese Army, and Ziad Baroud, a prominent civil society activist and businessman.

“The President of the Republic is the head of the state and the symbol of the nation’s unity. He shall safeguard the constitution and Lebanon’s independence, unity, and territorial integrity.” These grand words from Article 49 of the Lebanese constitution testify to the importance of the President as the figurehead of the country, while the article also confers upon him the position of Commander-in-Chief of the Armed Forces.

With no explicit mechanism for presidential accountability, this created a position of considerable power, more akin to a presidential democracy than the parliamentary democracy that Lebanon was declared to be. “During the covenant period, strong presidentialism imprinted all aspects of Lebanese political life,” writes Imad Salamey in The Government and Politics of Lebanon.

But this has shifted somewhat, visibly and legally. The amendments of the 1989 Ta’if Agreement not only reduced the Christian representation in Parliament but also the influence of the president. The new formula aimed to transfer executive power from the president towards the Council of Ministers as a body, thus de facto strengthening the position of the prime minister. This led to the current so-called ‘troika’ system of leadership, whereby the president, prime minister and speaker coordinate – or clash – regarding their respective powers.

The president still plays an important role in the designation of the prime minister and cabinet, but he does not have the same day-to-day policymaking clout of his counterparts in countries such as the United States or France. Yet ultimately, politics is about maximizing the hand you have been dealt. Former Prime Minister Rafik Hariri once noted of the differences or conflicts within the troika that they are a matter of “different personal moods.” The president, although bound by written laws, nevertheless has scope to exercise his own constitutional vigor.

 

Correction: A previous version of this article incorrectly stated that Lebanon’s Constitution requires that the president be male. While the official Arabic text does use the word “hua” (“he”) to refer to the president, this is simply the default pronoun, much like the English use of “he” in gender-neutral situations. By comparison, the United States Constitution also uses “he” to refer to its president; yet few would suggest that this rules out a female president.

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Finance

Dubai, Qatar and Saudi exchanges hit new highs

by Thomas Schellen
written by Thomas Schellen

As all Arab equity markets scaled the first quarter of 2014 with some index gains, optimistic share-buying secured a good start to the second quarter for Gulf equities, with new five-year highs in three of the seven securities markets in the Gulf Cooperation Council. Elsewhere, several other Arab markets also had a good week in index terms but the Egyptian and Omani markets suffered.

[pullquote] All GCC securities markets were in positive territory for the year to date [/pullquote]

The good performance of Arab markets coincided with relatively cheery news from developed and emerging stock markets, where the S&P 500 hitting a record high, the Dow Jones narrowly missing, while another global equities index reached a six-year high.

Gulf Markets

The Dubai Financial Market (DFM), Qatar Exchange (QX) and Saudi Tadawul all got up to their highest readings since the recession began in April 2009. Closing the trading week respectively at 4,618.28 points, 11,983.87 points and 9,558.46 points, the benchmark indices of the three, in the year to date, were up 39.25 percent, 20.13 percent and 13.16 percent respectively.

While all three markets moved higher in every single day of week 14, the DFM was the biggest gainer with 5.4 percent between market opening on March 30 and the close of the April 3 session. The markets in Doha and Riyadh saw gains of 4.1 and 1.4 percent, respectively.

Likewise, the Bahrain Bourse also had no single day of drops in week 14 and gained 2 percent on the week. When compared with the other performers, the Abu Dhabi Exchange was a tad sluggish in the second half of the trading week but also achieved a 1.4 percent gain for the period.

The Kuwait Stock Exchange (KSE) Index on the other hand stayed for a second week in sideways motion and dropped 0.2 percent. Only the Muscat Securities Market (MSM) went noticeably south among the GCC seven; its index lost 2.1 percent in five consecutive days of selling.

Despite this, all GCC securities markets were in positive territory for the year to date; the KSE and MSM indices were up 1.49 percent and 2.78 percent respectively. The index gains of the Bahrain Bourse and ADX, at 14.34 percent and 17.96 percent, were in the same pretty range as those of QX and Tadawul.

The Levant

While some Gulf equity market may be booming,the situation in the Levant is more subdued. Both Levant markets were also up for the year to date at the end of week 14, but their growth was less pronounced.

Lebanon’s BLOM Index, albeit in insignificant trading volumes, gained 0.1 percent translating into 5.98 percent year to date. Jordan started week 14 low after some pressure in the previous week but the Amman Stock Exchange Index then recovered for a weekly gain of 1.1 percent. This gave the ASE Index an up of 6.95 percent year to date.

North Africa

North African countries, too, have seen small but significant growth in their stock exchanges so far in 2014.

Tunisia, North Africa’s smallest securities market, rose 0.3 percent on the week and the Tunindex closed the review period 4.93 percent up when compared with the start of 2014. Morocco’s MASI, off an earlier 52-week high reached on March 27, was moving indecisively up and down during week 14 to end the period with a net drop of 0.4 percent. Its year to date gain to April 4 was 4.48 percent.

The Egyptian Exchange saw the selling and profit taking from the end of week 13 continue in week 14 and the EGX 30 Index dropped 6.6 percent between March 30 and April 3. One large share divestment in the period, of 2.6 percent in Egypt’s Commercial International Bank by UK-based private equity firm Actis, was described as “normal transaction” by Cairo-based investment bank EFG-Hermes.

The investors’ response to the presidential candidacy by military head Abdel Fattah el-Sisi was generally spun by Cairo-based analysts into an expected correction. However, the near ten percent index fall between Sisi’s announcement and April 3 represents the largest drop in the Egyptian securities market in more than nine months.

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Leaders

Don’t stop now

by Executive Editors
written by Executive Editors

If Lebanese parliamentarians were school children, they would long ago have been expelled en masse. Far from merely forgetting to do their homework, they have been skipping class for an entire year; prior to this week the last law they passed was back in 2012.

So the very fact that they finally got together to pass a few bills is less a cause for celebration than an acceptance that they needed to catch up with their homework.

Amongst the bouquet of bills were both things to be cheered and measures leaving much room for improvement. Chief among the latter was the controversial domestic violence bill. Campaigners have already criticized it as it was heavily edited during Parliament’s committee stage, with the new version considerably weaker than the original.

Other laws passed included the decision to abandon the old rent law – which kept rents in some buildings artificially low – as well as regular employment for the national energy company’s contract workers.

It is important this newfound efficiency is the beginning of something, rather than a brief anomaly. Parliament must continue to push through urgent legislation.

One important new assignment for our legislators would be to enhance the effectiveness of the laws they just adopted by taking the legislation on urban planning and women’s rights to the next step.

But drafting new laws is not even the first priority. Due to the dysfunctional nature of Lebanon’s politics, dozens of worthy laws have been shelved indefinitely when they reached parliament. Here are just five that Speaker of Parliament Nabih Berri should push through.

Civil marriage: This draft law, referred to cabinet earlier this year, would allow for couples of different sects to marry legally in the country. Yet the hostility of religious authorities means the law faces little chance of getting through parliament, at least not without significant changes.

Competitiveness: This bill, sent to parliament nearly a decade ago, aims to enhance competitive conditions in the economy by reducing government protections in key sectors over a five year period. Who could possibly object to a more streamlined, efficient economy? Sadly, it would directly effect the business interests of many of the country’s leading politicians and so has sat idle in parliament.

Decentralization: The principle of decentralization has been on and off the country’s agenda since the Taif Agreement was signed 25 years ago, with parliamentarians proposing a draft law in the middle of the last decade. Yet it finally appears to be close to going through, with the new cabinet committing to it in their policy statement and Sleiman working hard to push it through.

Freedom of information: Lebanon’s freedom of speech has been severely challenged in recent months, with numerous cases threatening both the media and online activists. One potential route around the problem would be a freedom of information law, as proposed by MP Ghassan Moukheiber in 2009. The law would give Lebanese citizens access to information from the state, a key power in prying open the corruption and inefficiencies that permeate the current system.

Public private partnerships: The country is in desperate need of new infrastructure, but the government is deeply in debt. Using private funding to develop the country could have a major positive effect on the structure and shape of the economy. To do so, the country needs the Public-Private Partnerships law backed by President Michel Sleiman.

These laws are really just the tip of the iceberg – dozens more merit-worthy laws sit in parliament’s drawers. The country’s parliamentarians must not stop now.

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