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Comment

In Yemen, kidnapping is a growing business

by Farea al-Muslimi March 31, 2014
written by Farea al-Muslimi

Whenever we find ourselves strapped for cash, my closest friend in Yemen — an American citizen — and I joke that I should arrange for his kidnapping. We would surreptitiously take him to my village with the aim of eventually ransoming him for enough money to allow us to never have to work another day in our lives. He always responds by stressing that his country won’t pay, but inevitably someone will point out the possibility that the Qataris might.

Such jokes are drawn from an increasing phenomenon in Yemen: a foreigner gets kidnapped, the kidnappers demand a ransom, and then, allegedly, Qatar — via its allies in Sanaa — steps in to pay the ransom, securing the hostages release.

Kidnappings of foreigners in Yemen are far from new; the first incidents took place in the 1990s, in the south of the country. However, in the vast majority of cases, hostages were never harmed and ransoms were never paid. Rather than money, the demand of the kidnappers was usually in kind, such as a new road or the release of a prisoner from their tribe. As soon as the government began to respond to their demands, the hostage would be released, unharmed after something more akin to forced hospitality than a terrifying extended brush with death. Stories of kidnappings fuelled the rise of an odd — and, ultimately, poorly thought out — brand of tourism, as some foreigners travelled to the country with barely concealed hopes of being kidnapped.

Yet this phenomenon has now changed. Since 2011, kidnapping a foreigner has become one of the most lucrative of cash cows. Armed criminals now kidnap foreigners and sell them to Al Qaeda in the Arabian Peninsula (AQAP). No longer motivated by lingering issues with the government, today’s kidnappers have money in mind;  in 2013 alone AQAP made an estimated $20 million plus from kidnappings, ranging from $3-5 million per person depending on their importance and citizenship.

In March 2012, a Swiss English teacher was kidnapped in Yemen for over a year. She was abducted by armed tribesmen and then sold to Al Qaeda. According to Yemeni media at that time, the Qatari government paid the ransom via its local allies in Yemen — funding her release to Doha.

A few months after she was kidnapped, I discussed her case with a prominent southern tribal leader — from a part of Yemen known for AQAP’s presence — who was involved in negotiations aimed at releasing her before giving up out of frustration. The sheikh explained the details of the mediation process at length, stressing the importance of the government’s commitment to not attempt to free hostages while negotiations were ongoing. Another prominent tribal leader actually broadcasts updates on mediations he is involved in via Twitter.

Since Al Qaeda-affiliated militants were forced to abandon their hold on Yemen’s south, their income has decreased; the loss of control has robbed it of the revenues it gained by functioning as the local government. Buying kidnapped foreigners from tribesmen and then negotiating their release for a high ransom has more than made up for the loss. In the process, business opportunities have merged for many new actors, allowing kidnappers, negotiators and sellers to reap the benefits of AQAP’s new fundraising technique.

The new cycle of business is now more firmly established than at any other time in the country’s history. Kidnapping is no longer exclusive to foreigners in Yemen: relatives of rich Yemeni businessmen have been kidnapped by tribesmen to pressure their families on land or financial disputes, albeit garnering far less attention both locally and internationally.

Yemenis are familiar with the old joke: a tribal man asks his son to kidnap a foreigner to pressure the government over his demands. The next day, his son finds a Chinese worker and takes him back to the tribe. While the Chinese worker enjoys the tribal hospitality compared to his poor working conditions, the father worries that no one has come looking. After time passes, the father yells at his son for failing to kidnap a more skittish western European, leading him to release the hostage, who is reluctant to abandon the free food and lodging.

The joke is no longer funny. In its most recent resolution concerning Yemen in late February, the UN Security Council stressed that countries should not pay ransoms to groups who kidnap individuals. The topic has escalated to make the whole world worry about the new habit of making quick cash. Just as counter-terrorism in Yemen is a never ending cash cow, kidnapping is now a real and serious problem. At the end of the day, it’s business.

March 31, 2014 0 comments
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Finance

Egypt’s stock market: Backing the crackdown?

by Thomas Schellen March 31, 2014
written by Thomas Schellen

Political outrage may be good for news ratings but does not necessarily have much of an effect on stock markets. This was the week’s message if one scours the index movements on important global and Arab markets.

After the world’s leading economic powers announced on March 24 that they had given the boot to Russia over its Crimea policy and thus were the G8 no longer, indices such as Japan’s Nikkei and Germany’s Dax went on to have a jolly performance the rest of the week. This implied, according to analysts, that the cancellation of a G8 Summit in Russia was not a big deal because the G7 stepped back from firmer retaliations. The Moscow Exchange’s MICEX likewise continued its recovery from lows it suffered at the outbreak at the crisis.

North Africa

It would have been nice to see sensitivity of Arab markets to domestic decisions that caused outrage in the international community but there was no such luck. Egypt’s ongoing crackdown on political opposition had only a muted effect on its markets. In the week that the country announced that 528 Muslim Brotherhood members were to be executed, it was the worst performing market in North Africa – with the Egyptian Exchange 30 (EGX 30) index dropping over 200 points, or 2.5 percent.

Yet that may not be due to the crackdown on civil liberties at all. In fact, as the world on March 25 cried out in protest against the Egyptian mass death sentences, the market actually had its best day of the week and closed the day up. It was when the country’s new strongman Abdel Fattah Sisi on March 26 announced his presidential candidacy that the EGX 30 fell 2.7 percent on the following day. Market analysts in Cairo attributed the drop to a normal correction as Sisi’s announcement confirmed expectations that had been priced into the market’s recent rally.

Chart of EGX 30, 23-27 Mar 2014

In many ways, this ambivalence towards the dubious state of Egyptian democracy is a continuation of an ongoing trend. Since elected Muslim Brotherhood President Mohammed Morsi was removed from power last summer, the country’s stock exchange has boomed.

There was little movement to report from the other markets in North Africa. On the Casablanca Stock Exchange, the MASI reached its highest reading since December 2012 on March 27 but gave up 60 points the day after and ended the week flat when compared with its opening on March 24. The Tunis Stock Exchange’s Tunindex fell 0.6 percent, and neither of the two markets showed volumes that would hint at great excitement over either political or economic news in the two countries.

The Levant

One easily surmises that politics is always present in the moods on the Levantine exchanges these days. But that observation goes no farther than saying that the Near East’s entrenched political problems are big contributors to the entrenched illiquidity and weak enthusiasm of the Jordanian and Lebanese securities markets. Jordan’s ASE Index fell 0.5 percent in week 13.

Also in Lebanon, if the Beirut Stock Exchange has any energy left to reflect political moods, the Blom Index’s flat performance between March 24 and 28 signals that the world has to wait a bit longer to see a readable market expectation for the Lebanese presidential elections. According to the Lebanese constitution the elections have to be accomplished in two months’ time.

The Gulf

Riding 1.8 percent higher between March 23 and 27 and again best regional gainer of the week was Dubai’s DFM, the Arab securities market where the state’s ambition and participation is focused most directly on the economy and least on being a player in regional politicking. Not far behind, the Abu Dhabi market’s ADX Index advanced 1.5 percent and the QE index in Doha moved up 1 percent.

Two other markets in the Gulf Cooperation Council showed indices that barely moved: the Kuwait Stock Exchange index added a mere 0.4 percent and the Muscat Securities Market index in Oman gave up less than 0.1 percent. Bahrain was the GCC’s only perceptible loser as the Bourse Bahrain Index fell every day of the week for a total 3.2 percent drop. Profit taking seems a reasonable assumption since the BBI retreated from the bourse’s highest close for the year to date, which it achieved on March 20. For believers in higher justice an unrelated note of caution can be added, however, given that the authorities in Manama earned their own black mark on human rights by leveling 10-year prison sentences against 25 persons arrested over 2012 political protests in the tiny kingdom.

Another Arab market with big political news in week 13 was Saudi Arabia where the TASI ended the week 1.3 percent higher. The kingdom was all steeped in politics, with emphasis on royal issues. The two events of note were the visit by US President Barrack Obama and a new succession announcement by King Abdullah.

The American visitor was paying the king a visit to mend fences, some media said; others speculated about the future divergence of the two powers’ paths. Just prior to Obama’s arrival, the king had announced that his half-brother Moqren bin Abdul Aziz would be crown prince if current heir Prince Salman bin Abdul Aziz ascends to the throne, locking in the succession.

In the ever-popular game of guessing future Saudi directions, the royal succession announcement was a sure and immediate trigger for talks about the health of both Abdullah and Salman. If Salman were to pass on the burden, Moqren could be king sooner rather than later according to watchers of the royals.

The succession announcement was made official on the last day of the trading week but those sorts of decisions throw their shadows ahead. This makes it worth noting that investors in Tadawul, the Saudi Stock Exchange, appeared to bet on continuity. While the political news was brewing, trading volumes in week 13 tended to the lower side when compared with the previous three weeks. The TASI was also very calm just ahead of Obama’s arrival as the index accomplished its weekly net gain of around 119 points basically on the week’s first trading day.

March 31, 2014 0 comments
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Leaders

Lebanon’s new government: A focused approach

by Executive Editors March 28, 2014
written by Executive Editors

If five men in a car had only moments to escape a tornado approaching in the rear view mirror, the last thing you would expect them to do would be argue over directions. Yet this is effectively what the Lebanese government spent much of the month doing.

Faced with the realistic possibility of the country returning to civil war as weekly bombs rocked Beirut and other parts of the country, the new ministers spent weeks bickering. This was not a debate over who gets to sit in the front seat — that was the previous eleven months’ work — but instead over what nickname to give the car. Hezbollah and chums favored ‘The Resistance Racer’ while Hariri and company pushed for ‘Ignition Independence.’

[pullquote]It is clear that Lebanon will need a strong government ready to carry out meaningful reforms but this one is not it. Yet pure cynicism is perhaps not justified and certainly not helpful.[/pullquote]

As the dispute over how to refer to Hezbollah’s military might continued, the Kataeb party threatened to walk out. Even by Lebanese standards it was a foolhardy bluff; no serious observer expected a party with three percent of parliamentary seats to leave a government in which they have roughly 12 percent of the ministries.

After all the bluster, the cumulative effect, as so often with Lebanon’s political classes, was a last-minute fudge. In many ways, the compromise government’s cabinet policy statement (see full statement in English) seemed designed to say nothing and everything at the same time.

On the contested issue of the “resistance” to Israel and Hezbollah’s military role in it, the Cabinet committed to focusing on the country’s “national sovereignty” while simultaneously affirming the right of Lebanese citizens to “resist the Israeli occupation.” On the economy it pledged to engage in “dialogue” with employers and unions over wage disputes, but offered no position on the more fundamental issue of the proposed public sector wage hike. And on oil and gas it committed to paying particular attention to two decrees needed to move stalled bids forward, but was careful to avoid saying the government would actually pass them.

There were the usual oddities — the commitment to “redouble efforts” to find Imam Musa al-Sadr despite his disappearance in Libya occurring over 35 years ago. And there were subtle linguistic tricks — referring to Syrians in the country as “displaced” people rather than refugees. While no common usage of displaced refers to people outside their own borders, it necessitates fewer rights than the more evocative term.

Many were deeply cynical about the statement. This government’s mandate only officially lasts until the selection of a new president, due to take place at the end of May. Seeing as they spent a quarter of their mandated time arguing over how to say what they will do, the chances of them doing it are low.

It is clear that in the long run Lebanon will need a strong government ready to carry out meaningful reforms but this one is not it. Yet pure cynicism is perhaps not justified and certainly not helpful.

The Cabinet has rightly identified its top two priorities — the deteriorating security situation and preparing the way for presidential elections.

On the former, there have been small positive signs, though relief at a decrease in the number of car bombs in Beirut has been tempered by an uptick in violence in the northern city of Tripoli. On the latter, the race to succeed President Michel Sleiman is warming up, with the runners and riders starting to jostle for position. The levers in the Grand Serail turn notoriously slowly, so the selection of a replacement by the May 25 deadline would be an achievement. A smooth transition in that pivotal role will help the country avoid further strife, while a more conciliatory and cohesive political atmosphere will also be looked on favorably the next time the country goes to international donors for much-needed support.

Prime Minister Tammam Salam is fully aware of the limits of his own powers. Yet with a clear focus on these two limited goals he could yet prove himself a success.

March 28, 2014 0 comments
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Economics & Policy

Lebanese Cabinet Statement in full

by Executive Editors March 28, 2014
written by Executive Editors

Earlier this month, the new Lebanese government finally agreed upon a cabinet statement which it will seek to enact in the coming months. Nearly two weeks later, the statement has still not been officially translated into English and published on government websites. We believe in a global world this is necessary.

For the record, therefore, we present an unofficial translation of the statement.

 

Your Excellency the President, and honourable representatives,

Despite the exceptional circumstances caused by security and economic concerns, and despite the difficult local and regional pressures, it was vital that the national interest prevailed. The consensus government, which represents the national interest, presents itself to your honourable assembly, hoping to gain your confidence, having gained the confidence of the political forces participating in it. It is the government in which the Lebanese people perceived a glimmer of hope to improve their circumstances, and to strengthen their safety, security and national immunity.

The government has seen the light to prepare the ground for great achievements and follow them up. It does not claim to be able to implement all the aspirations of Lebanese citizens in the short period allocated to it, and we will not promise anything except that which is logical, possible and obtainable, and that which comprises the country’s top priorities. At the forefront of these priorities is, without question, the issue of security and stability. That being the case, our government hopes to form a political safety net, in order to bolster the country’s security and fill the gaps which have been infiltrated by those plotting to sow discord and instability.

Our government stresses the state’s unity, power and exclusive authority in all matters pertaining to the general policy of the country, including the protection of Lebanon and the preservation of its national sovereignty. It likewise stresses its commitment to the principles and precepts of the constitution, the rules of the democratic system, the national pact and the application of the Taif accords.

Our government attaches exceptional importance to the fight against terrorism in all its forms and aims, by all means available to the state. It will continue to boost the capabilities of the army and security forces, so that they can carry out this duty, along with their duties to protect the borders and strengthen security. In this regard, we will accelerate the process of equipping the army through various sources of funding, particularly through the generous Saudi donation to the sum of 3 billion dollars.

We consider the most important challenge facing the government on a local level to be the creation of the appropriate atmosphere for running the presidential elections as scheduled, respecting the constitution and applying the principle of rotation of power required by our democratic system. Likewise, the government pledges to seek a new law for parliamentary elections, and it is working on finalising the administrative decentralisation draft law, and referring it to Parliament to be passed.

This government, in its comprehensive nature and professional conduct, will work on creating a positive atmosphere for the national dialogue, which the President is calling for and overseeing, and on resuming the discussion about national defence strategies. Likewise, the government will follow up on and finalize decisions made in former national dialogue sessions.

Our government will strive towards affirming the principle of the dialogue, maintaining national peace, not resorting to violence or arms, moving away from sectarian and confessional incitement, and preventing the country from sliding towards discord, which will achieve national unity and bolster internal strength in the face of dangers.

All this will be respecting – and further to – the decisions of the national dialogue which emerged from the discussions in Parliament and from the national dialogue committee in the presidential palace in Baabda.

The positive reverberations created by the formation of this government have been echoed in the general mood of the country. We hope that this atmosphere, whose results have been felt in the financial markets, marks an entrance into a new phase that will witness recovery of the national economic cycle, which will be reflected well in the living standards of our citizens.

The government understands the general financial problems of the state, and it will work on addressing them and will take all possible measures to kick-start the main economic sectors, at the forefront of which is tourism, which has suffered a great setback. We will, in parallel, embark upon the matter of improving living standards, through dialogue with employers and unions and using all available means. And it will keep track of two draft laws – one on wage correction, one on retirement and social security for the elderly – that are currently in Parliament.

The government of national interest will give particular attention to the issue of energy, and pledges to continue and accelerate the measures related to issuing licenses for the drilling and extraction of oil. It confirms the total adherence to Lebanon’s right to its waters and its oil and gas riches, and it pledges to speed up the necessary measures in order to secure its maritime borders, particularly in the disputed areas with the Israeli enemy.

For such an endeavour, we have to pump life into state departments through filling the many vacancies in its staff. The government will strive to undertake this rapidly.

With regard to the disappearance of Imam Musa al-Sadr and his companions in Libya, the government will redouble its efforts on all levels, and will support the official follow-up committee with the aim of freeing them and returning them home safely.

Further to the measures that have already been authorised, the government will put in place clear mechanisms to deal with the issue of displaced Syrians. Their number has exceeded Lebanon’s capacity to cope, in terms of the repercussions on the security, political, social and economic situation.

The measures will enable the government to deal with their temporary presence and the multi-layered impact it is having. It will allow both Arab nations and the international community to shoulder their responsibility in this matter and enable Lebanon to undertake its ethical and humanitarian duties, which will facilitate their return – whenever that may be – to their homes.

Our government will seek to implement the conclusions of the International Support Group for Lebanon, held on 25thSeptember 2013, which the Security Council subsequently adopted, and will follow up on the associated meetings in France and Italy, among others. In this regard, the government will initiate projects and programs aimed at stemming the economic and social effects resulting from the Syrian crisis, and its funding mechanism [will come] from pledged donations to the credit fund set up by the World Bank, on the condition that it happens in accordance with the rules of the constitution and the applicable laws.

Our government is keen to strengthen the relationships with brotherly and friendly nations and co-ordinate with them, and affirm the partnership with the European Union in the framework of reciprocal respect for national sovereignty. In the same way, it seeks to set up the most favourable links with bodies of international law; it will respect their decisions and commit to implementing UN Security Council Resolution 1701, to help extend Lebanese sovereignty over all of the country’s territory, and commit to the treaties of the UN and the Arab League.

On the basis of the state’s responsibility and role in preserving Lebanon’s sovereignty, independence, unity and the security of its citizens, the government affirms the duty and efforts of the state to liberate the Shebaa farms and the Kfar Shouba hills and the Lebanese part of the village of al-Ghajr, through all legitimate means. It likewise affirms the right of the Lebanese citizens to resist the Israeli occupation and repel its attacks and recover occupied territory.

Wisdom demands, in these tense times our region is going through, that we strive to reduce our losses as much as possible. Accordingly, we commit to the policy of disassociation, we fortify our country in the best way possible against repercussions from crises in neighbouring countries, and we will not put at risk its civil peace, its safety, or the sustenance of its people.

This is the ‘national interest’ as we understand it. On this basis we approach your esteemed assembly requesting your confidence. Thank you. 

 

Translation by Hannah Abdel-Massih

March 28, 2014 0 comments
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A man stretching
The Buzz

Down on the Corniche

by Greg Demarque March 28, 2014
written by Greg Demarque

On any given weekend, a stroll down Beirut’s Corniche will reveal dozens of people trying to get healthy. With summer around the corner, we went down to see how people are preparing.

 

A man stretching
Beirut's Corniche has long been a place for the city's residents to get into shape
Two men run along the Corniche
On any given weekend, dozens of joggers line the broad street
A woman bicycling
Bikers weave in and out
A man rollerblading
While rollerbladers are also common
Two men playing paddleball
On the private beaches below, some enjoy a bit of sport
Not all are so focused on pushing their bodies to the max
A woman checks her smartphone while exercising
Some even find time to tweet while exercising
March 28, 2014 0 comments
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The Buzz

A map of Mar Mikhael’s bars

by Benjamin Redd & Nabila Rahhal March 27, 2014
written by Benjamin Redd & Nabila Rahhal

The Mar Mikhael district of Beirut is undoubtedly the city’s most fashionable right now. Its rise has been so rapid that it can be a challenge just keeping on top of all the latest bars.

For that reason we present below a map of the bars, restaurants and cafés in the area. You can even print it out and carry it around. Click here or on the image to expand it.

A map of Mar Mikhael

[/media-credit]A map of Mar Mikhael

Correction: A previous version of this map excluded Les Fenetres. Our apologies.

March 27, 2014 1 comment
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Society

Mar Mikhael: Still peaking or overheating?

by Nabila Rahhal March 27, 2014
written by Nabila Rahhal

Toward the end of the year 2010, something strange began happening in the Mar Mikhael neighbourhood. Usually visited when a car was in need of repairs or as an escape from the highway traffic, it saw design bookshops, art spaces and trendy fashion boutiques popping up in its little alleys. They were followed by a couple of restaurants and bistros along with a hotel — all in charming renovated heritage homes.

Today Mar Mikhael is unrecognizable from its former self, with a plethora of eateries, pubs and art spaces amidst the mechanics and industrial venues which are still in operation during the day. Though some applaud this as modern urbanization and progress, others warn that it could be in danger of being another Gemmayze — which saw a significant drop in footfall after it had been a nightlife destination — or worse yet, a gentrified area.

Mukhtar Bshara Ghniem says that Gemmayze and its surrounding upper areas were considered elite back in the day, and had the most beautiful palaces such as the Trad Palace and the Gemmayel Palace. In contrast, Mar Mikhael was considered a lower class industrial area, inhabited by those who had come from the Karentina area below.

The growing interest in Mar Mikhael was fuelled by several factors. First, there was the desire among various Lebanese investors for an authentic neighborhood that retained the charm of 1920s Beirut. This was difficult to find as traditional neighborhoods, such as Hamra or Ashrafieh, were being developed into areas with high rises and modern designs.

Laws of attraction
“When I opened, back in 2009, I had already been living in the area for four years and found it extremely charming. For me, opening there was the only option as I believed Papercup would fit perfectly,” says Rania Naufal, owner of Papercup concept bookstore.

Marie Helene Gougeon, co-owner of Villa Clara Hotel, says she and her husband fell in love with the French Colonial style house and garden — which now houses their hotel and restaurant project — and also with Mar Mikhael itself, which had the “authenticity of the Beirut I remember and love from my childhood.”

The concept of restaurants in traditional homes gained popularity with the Lebanese crowd by the end of 2011, and within a period of two years, ten such venues had opened in Mar Mikhael and its immediate vicinity.

This is in part due to the economics of proximity — where similar concepts exist next to each other and become a destination for those seeking them — and also because heritage homes in other areas were either complicated to acquire or sold to developers. “There is not one traditional home available for commercial use in Hamra anymore; they are either already restaurants, or have residents who refuse to leave them, or they have already been sold to developers,” says Anis Rbeiz, a real estate agent specializing in Hamra.

Another reason behind Mar Mikhael’s hospitality boom, particularly regarding nightlife venues, was the discrepancy in rental fees between Gemmayze and Mar Mikhael. Karl Sarkis, managing director of Blox Real Estate Sevices say, “at the end of 2011, a 30 square meter (sqm) venue in Gemmayze could cost you up to $30,000 per year in rent when the same sized place in Mar Mikhael would cost you $7,000 per year. I recall that many would-be investors were asking me for venues in Gemmayze but those had become ridiculously expensive so they started asking for venues further along, after the Electricité du Liban, and so nightlife started inching towards Mar Mikhael, which was at first somehow seen as an extension of Gemmayze.”

The new hamra?
After the first few bars — such as Radio Beirut, Bar Internazionale and Chaplin — opened on the main road, others mushroomed around them.

Hospitality developments in Mar Mikhael diversified in such a manner that it has become a destination with something for everyone, from the art crowd checking out the galleries to trendy socialites trying out the newest restaurant, or the casual bar hoppers looking for something new.

Mar Mikhael has been compared to Hamra’s bar street in that it also gives a genuine, noncommercial feel and attracts the same people who used to frequent Hamra but who migrated to Mar Mikhael for various reasons. “Mar Mikhael is similar to Hamra Street in its authenticity and the foreign community currently prefers to spend their time here because of the perceived security risks in Hamra,” says Charles Frem, co-partner in Hamra’s Garcia’s and the newly opened Central Station in Mar Mikhael, which caters to a slightly older crowd, adding that Hamra is a very cosmopolitan street that will “never die.”

Among other reasons cited by those interviewed by Executive for Mar Mikhael’s success in the hospitality sector include its relative proximity to the Metn, Downtown and Ras Beirut areas, and its wide road — traffic is both up and down in Mar Mikhael — with many exits causing fewer traffic problems and fewer noise-related issues than those encountered in Gemmayze or Hamra.

However, this growth is not without consequences. Rental fees for ground floor commercial venues, when found, have up to tripled — from $200 per sqm in 2011 to $600 or $700 today, according to Sarkis.  “Mar Mikhael is an emerging market and there is a very high demand on it. When the demand is high, and the supply is low, you get increased prices,” says Frem, admitting they were lucky in finding their large venue when they did — they signed the rental lease in May 2013.

“There are only two venues I know of available on the main street. The others are either in alleys or a bit far from the heart of the action and so it would take a brave person with a solid background to venture into those. It’s not easy anymore,” says Sarkis.

Local color
The developments have also impacted long-term residents of the area, who at one point could park right underneath their homes, but now have to battle with valet parking staff over parking spots. “I try to use my car as rarely as possible because once I move it from its spot, it could take me up to forty minutes to find another upon my return — and don’t get me started on the noise from the drunks!” says one disgruntled Mar Mikhael resident.

Others feel the area is losing the very atmosphere that made it attractive in the first place. “The area has unfortunately lost its charm and is becoming a gentrified area with old houses being replaced by large rising towers and complexes, and worst of all, the invasion of valet parking. The neighborhood identity is shifting,” says Naufal.

Some residents, especially those whose businesses benefitted from the recent activity in their neighborhood, take a kinder view. “Yes there is more noise, but so what?! It’s better this way as it used to feel like a cemetery around here a few years back,” says the shopkeeper in Abu Tony’s supermarket, which was finally able to afford a much needed facelift.

Other businesses that have profited from the new Mar Mikhael include a laundromat that now handles the laundry of five venues in the area and a printing press which prints business cards for seven.

Beneficial to the residents or not, Mar Mikhael continues to attract hospitality minded investors. Facing Central Station is a 200 year old open roofed house with a 400 sqm surrounding garden, which Frem explains they rented from the Tienne family in order to develop it into their summer venue.

Further along, after the Manara gas station facing the Mar Mikhael train yard, Mario Haddad’s group is completing a cluster restaurant concept, and a hotel project is also being contracted in the same area.

Still to be seen is whether Mar Mikhael will fall victim to the fickleness of Lebanese taste like Monot, Gemmayze and Hamra. Each of those areas faced certain circumstances that led to its decline, but what could be Mar Mikhael’s achilles heel?

Frem sees that in order for Mar Mikhael to survive, newcomers should avoid the “copy, paste” approach and create unique concepts that complement the area. “The most important points for the success of a venue are good management, a smart concept and a good product,” says Frem.

March 27, 2014 1 comment
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Real Estate

Disabled access: Building for all

by Tiziana Cauli March 25, 2014
written by Tiziana Cauli

Roula Helou was four when a car accident made her paraplegic, forcing her into a wheelchair. Back then it looked as if she would have little chance of accessing the same opportunities as other children without physical disabilities, but 33 years on, she is the popular presenter of Ma Mnekhtelif (We Don’t Disagree), a TV program on OTV, has published a book of poetry and holds a degree in Arabic language and literature from the Lebanese University.

Of the 10 to 15 percent of the Lebanese population living with disability, only 17 percent are employed, of which Helou is one. Based on statistics from the social affair’s ministry, nearly 86,000 citizens are currently registered as disabled, although this figure does not take into account those who did not apply for government support owing to  lack of awareness or stigma.

“I represent a success story,” Helou admits. “But I have a well-educated family who supported me all the way through and I am very ambitious.” Without the same kind of support and personal strength many others affected by disabilities are struggling to access employment and equal rights.

This is despite the disabled rights law passed by the Parliament 14 years ago. Covering a broad range of issues impacting the lives of disabled citizens, the law remains largely unenforced, with many of its provisions not yet implemented by decrees.

“Every person should be able to participate in all aspects of life but there are societies that make this impossible,” Helou says. Lebanon seems to be one of these, as ensuring disabled people’s full access to work, social and public spaces is not a governmental priority.

“If you want to have an equal society you need to work for that,” Helou says. “There are no excuses and the political situation is not a valid reason not to do it.”

Helou recently announced her intention to sue Middle East Airlines for being denied access to a flight. By law, disabled passengers should not only be admitted on aircrafts but also given a 50 percent discount on MEA tickets.

At the social affairs ministry, Marie El-Hajj, head of the department of handicapped people’s affairs, says her office is overwhelmed with more assistance requests than they can satisfy.

“There is no budget and demand always exceeds our possibilities,” she admits. “This sometimes happens even for children who need special access to schooling.”

Hyam Sakr, who works in the same department, says foreign donors are particularly important in financing inclusion programs, especially in education. “We are currently working on a program supported by the Italian Embassy [to improve] access to education for children with hearing and mental disabilities,” she says. “We need these collaborations and we have to work together with foreign donors.”

Ironically, when Executive visited the ministry, one of the elevators was out of service, forcing a woman with reduced mobility to struggle up the stairs to the second floor where the department is located.

Minimal compliance
The accessibility of public buildings and workplaces is a major issue for people living with disabilities.

According to Sylvana Lakkis, general director of the Lebanese Physical Handicapped Union (LPHU), physical handicaps account for most disabilities in Lebanon, followed by intellectual and sensory challenges.

It was not until December 2011 that the government finally issued decree 7194/15, making it mandatory for new buildings aimed for public use to comply with the minimum criteria of accessibility. This includes reserved parking spaces, accessible entrances, availability of wheelchair ramps, and adequate elevators and toilets.

The decree has been in force for just over two years and only applies to development projects registered after its enforcement, many of which have still not been started. This is why, Lakkis says, there is still no data available on violations and work suspensions ­— required for projects that fall under the decree but do not comply with it.

In the capital, Lakkis says, few buildings comply with the law when it comes to accessibility. Most that do are major hospitality assets in affluent neighborhoods, such as the Crowne Plaza, the Phoenicia and the Holiday Inn hotels. The buildings hosting the municipality and some school premises are also compliant.

“In Beirut we even had complaints from small businesses that did not want to provide accessible toilets on every floor of their venues,” Lakkis says.

No financial penalties have been established for developers who do not comply with accessibility standards, though this does not necessarily make the law weaker.

“If builders only had to pay a penalty, they would rather do that and keep constructing than comply with the law, just as employers do when they don’t want to observe the quota,” says Lakkis, referring to a 3 percent quota in favour of disabled employees imposed on companies with over 100 staff.

The new regulations represent a step forward after the accessibility provisions contained in the 220/2000 law were ignored for several years. “The law stated that all environments should be made accessible in six years time,” Lakkis says. Eight years after that deadline, this still hasn’t happened.

A first attempt to implement the law with a decree failed, as it tried to target both new and existing buildings, causing the LPHU to suggest a change of policy. “We thought that targeting new buildings only would facilitate a response … and make it easier for old buildings to follow the example.”

The current regulations, Lakkis says, were based on a decree influenced by a study on the accessibility of polling stations carried out by the LPHU ahead of the 2009 elections.
“When we say polling stations we are talking about schools,” she says. “And only 5 of a total 1,600 we monitored across the country complied with the minimum accessibility standards.” The public sector, she continues, has been particularly bad at observing these standards in its premises.

Build for all
In the LPHU director’s office, a poster reads “Build for all. Don’t disable my ability,” and depicts an old man with a cane, a person in a wheelchair and a mother pushing a stroller.

“This was part of a campaign we did in 2006, after the Israeli bombings, to make sure that the new buildings which were about to be reconstructed would be accessible to everyone.” The southern Beirut district of Haret Hreik, among the worst hit during the 2006 conflict, was also one of the main target areas of this campaign.

Developers who reconstructed the district were asked to include at least one apartment accessible to disabled residents as well as proper entrances and elevators in buildings with 20 or more residential units.

“This is according to international standards,” Lakkis says. “In other countries developers don’t even think of building houses which are not accessible, as buyers want to be able to live in them even when they grow old. So it is in the developers’ interest to build accessible apartments.”

In 2012, the LPHU took part in a study that influenced a guide on handicapped people’s access to buildings, crafted by Majal, the University of Balamand’s academic urban observatory.

“We based this guide on the idea that accessibility is a basic right,” says Majal’s head Serge Yazigi. According to Yazigi, criteria on making buildings accessible should be revised every few years and enforced by the government. “The solution to this issue is a political decision,” he says. “You need to impose these rules by creating tools to implement and verify compliance.”

Even if a tighter control over buildings’ accessibility was implemented, this may not be sufficient, as real estate developers in Lebanon are confronted with practical issues ranging from material supply to economic support.
“Incentives, like the ones given by the central bank for energy efficiency, may help,” Yazigi says. “But you need to get the private sector involved in the process because, let’s be realistic, this is not a priority for the public sector.”

Yazigi explains that part of the research carried out for the publication of the guide focused on the materials available to developers within the Lebanese market. “We found out that high-quality non-slippery material for horizontal and inclined surfaces, for instance, is not available in the country,” he says. “We need to encourage importers and show them that there is a market here.”

Welcoming customers
Mansour Aziz, who runs the Mezyan restaurant in Hamra, is among entrepreneurs who were not discouraged by the lack of awareness and incentives to make their businesses accessible to disabled clients.

When the owner of the building decided not to renew his lease this year, he had to find another venue in the same area and decided to make changes so that it would be handicapped accessible.

Even though he is only a tenant in the new premises, Aziz knocked down the original bathroom walls in order to make the room accessible to people in wheelchairs. It cost around $1,000, which, he says, was not a huge financial effort, though renovations took some space from the 170 square meter venue.

“I think businesses don’t do it because it eats up space,” he says. “In my case, I knew I was not obliged by laws or by the market, but I felt it was feasible and it was not going to change the outlook of the place so I said why not.”

Aziz said that he thought of building an accessible toilet after seeing clients struggling to get to the restrooms in his restaurant, located upstairs. “I know people who have to use wheelchairs and that has definitely influenced me in my choice,” he explains. “There was a customer in particular who was a regular and he had problems walking. I watched him having to go upstairs every time he needed to use the toilet and that really killed me.”

The standards for accessible restrooms include the height of the sink, the 1.5 meter ‘rotation circle’ required for people on wheelchairs to move from their wheelchair to the toilet, and supporting rails. Aziz said that he called the LPHU to get advice on how to meet these standards.

The LPHU also assists entrepreneurs wanting to employ disabled workers. Based on government data, 18.5 percent of Lebanese with disabilities are aged 19 to 34 and 35.6 percent are between 35 and 65. Although of working age, only a minimum proportion of these people are currently employed.

“Social security should exercise stronger pressure on companies,” says the social affairs ministry’s El-Hajj, referring to the possibility for businesses to simply pay a fine to be exempted from the obligation. “These companies should not be authorized to operate.”

According to Doha Yahfoufi, who coordinates a project on economic and social inclusion at the LPHU, making companies aware of the potential loss they are facing for not being accessible to disabled workers and clients has so far proved more effective than simply relying on advocacy and laws.

“We don’t say to them: please, hire some disabled people, they need a job. We explain to them how much they can benefit … how convenient it is for them to invest in making their premises accessible and how much they would potentially be losing.” After all, Yahfoufi says, employers need to hire “the right people in the right places. And here we are talking about workers with capacities and who can be competitive.”
The LPHU helps companies reform their premises. “We make an assessment, tell them what they need to do and follow up. We also help them find where to buy what they need, be it special handles for the toilets or an electric lift.”

The project coordinator says companies are concerned about the costs they will have to face in order to comply with accessibility standards. “They do ask about costs, but most of the time it is not high and they will benefit from accessibility,” she explains. “They also have a return in terms of image.” Yahfoufi says that 83 percent of Lebanon’s disabled population are unemployed and only indirectly supported by the government. “The government pays different institutions to provide them with services such as education and workshops, but this is not the kind of support we are asking for because it doesn’t help making anyone independent,” she says. “Most people with disabilities have to rely financially on their families and those who try to find a job face many barriers and a widespread stigma.” One institution providing this kind of support is the Lebanese Welfare Association for the Handicapped, an NGO offering rehabilitation services to the disabled.  “You need a lot of strategic planning and lobbying for things to change,” says Zeina Assi, who’s in charge of the organization’s project management and public relations. “But how can we have that when public buildings themselves are not accessible?”

According to Assi, inaccessible environments reinforce a stigma against disabled people, as they appear incapable of living a normal life. “This is not true: disabilities can be overcome,” she says. “We even have a football team of amputees from cluster mines. If there was accessibility, all disabled people would live their lives to the fullest. They have that ability.”

In 2007, Lebanon signed the UN Convention on the Rights of Persons with Disabilities, which covers a broad range of rights such as equal job access, freedom of movement and healthcare.

The convention, however, has still not been ratified by Parliament. This, according to Assi, means that the status of disabled people’s rights in Lebanon is not monitored at an international level and the government may be less interested in enforcing relevant laws. “At least once the treaty is ratified they will have to report to the UN,” she says.

March 25, 2014 0 comments
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Finance

Arab Stock Markets: Week 12 in review

by Thomas Schellen March 24, 2014
written by Thomas Schellen

The largest securities market in the Middle East and North Africa, Saudi Arabia’s Tadawul, offered investors an avenue to take profit or redirect gains into new opportunities in week 12 of 2014 after reaching a peak at the end of week 11. Fitting to this assumption, the TASI retreated ever so slightly to a close of 9305.64 points on March 20, representing a 0.9 percent drop from the March 16 opening. Another Gulf exchange with a downtrend was Oman’s Muscat Securities Market (MSM), whose benchmark index dropped for the second consecutive week. It lost 1.8 percent week-on-week.

Exchanges in Kuwait, Bahrain, Qatar and the United Arab Emirates moved in positive territory. The indices of the Bahrain Bourse and Kuwait Stock Exchange gained 0.9 and 1.4 percent, respectively. The Qatar Exchange was the slowest gainer in the Gulf Cooperation Council this week, inching up 0.5 percent, and the Abu Dhabi Exchange similarly snailed ahead with 0.7 percent growth. So the flag of the highest Gulf and regional increase rose over the towers of Dubai, thanks to a best-in-MENA 8.1 percent index gain.

The Dubai Financial Market’s growth leadership was in no way challenged by index performances in Morocco, where the MASI added less than 0.1 percent between March 17 opening and March 21 close; and Tunisia whose Tunindex gave up a tad more than 0.1 percent in the same period.

In the Levant markets, Jordan’s Amman Stock Exchange index behaved nicer only by comparison with the aforementioned two. It achieved a 0.9 percent weekly gain.

The Lebanese market, where stakeholders witnessed the amazing feat of Parliament discussing and approving the policy statement of the country’s latest-born cabinet on March 19 and 20, seemed not in the least inspired by the political accomplishment. The BLOM Index for the Beirut Stock Exchange slipped to a close of 1219.31 points at the end of March 21, representing a 0.3 percent drop since the start of the trading week.

The only other market in MENA then to give Dubai a run for investor confidence in the past week was the Egyptian Stock Exchange where institutional foreign investors were driving demand, according to local media. With volumes not seen since October 2012, the EGX 30 Index climbed 3.9 percent during week 12 and achieved a five-year peak of 8460.57 points intraday on March 20 before closing at 8459.38.

While the EGX according to Bloomberg is up 66.3 percent from a year ago and now 25.6 percent for the year to date, its one-year growth is still far behind the DFM’s gains of a truly whopping 135.8 percent. With a benchmark index gain of 29.2 percent for the year to date, the DFM is also the best performer in MENA for 2014 thru week 12 and shows the year’s second highest total dollar return in MSCI frontier and emerging markets country indices according to Thomson Reuters.

To appreciate the strength of the Dubai market it is worth taking a look at its real estate stocks and specifically the property sector’s flagship, Emaar. On March 15, just in time for the start of the new trading week, the company handed investors two major pralines by announcing planned distribution of 15 percent cash dividend along with 10 percent bonus shares on the back of its strong 2013 performance, along with stating that it intends to take its shopping mall and retail unit public with an initial public offering of 25 percent in this well performing subsidiary.

From selling the shares Emaar said it expects to raise “between AED 8 to 9 billion (over US$ 2 to 2.4 billion), [which] will be primarily distributed as dividend to the company’s shareholders.” With such a volley of sweet announcements for shareholders (including the Emirate of Dubai as owner of almost a third of Emaar stock), the company might be liable for raising the sugar levels in the minds of its investors to near delirious highs, at least until the two dividend payment events for 2013 and for the flotation of Emaar Malls & Retail. And since Emaar share price movements illustrate the strong impact of the real estate sector’s perceived strength on the Dubai Financial Market, not only in the gains in the year to date but perhaps even more so in the long-term view of the past five years and beyond, hopeful DFM investors will be very observant of this stock in the coming months.

March 24, 2014 0 comments
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Leaders

Public parks, private payment

by Executive Editors March 21, 2014
written by Executive Editors

The coming few months will witness the reopening of Sanayeh Garden, the first green space in Beirut to be renovated through a public-private scheme. In a city overgrown with concrete, more parks are a necessity.

The reason for opening up to the private sector is partly budgetary; the Municipality of Beirut has, like most state institutions, less money to spare than in previous years. But it is also partly ideological — the body reasons that the private sector is more efficient and has more experience in producing rapid quality work than the bloated public sector.

As the municipality explained to this magazine (see article), there are also bureaucratic reasons for shirking away from public financing of parks. The official public route could have taken years, with numerous hoops needing to be jumped through. By accepting donations from the private sector, they have circumvented much of this unnecessary bureaucracy.

There are, the municipality insists, no strings attached to this donation — the park remains the property of the municipality with open access to the public. This is not to say the private sector will not benefit from indirect marketing as they boost their reputation by giving back to their community. The buildup and media campaign for the opening of Sanayeh Garden, scheduled for May 2014, began way back in December.

There is a danger, certainly, in having too much private involvement in public space. The threat of parks becoming commercialized, with private companies potentially restricting usage of the space or pushing an incessant marketing agenda, is real.

But in the absence of a municipality with the time and funds to renovate these parks, having a private company restore our much-needed green spaces is certainly a favorable solution.

March 21, 2014 0 comments
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Since its first edition emerged on the newsstands in 1999, Executive Magazine has been dedicated to providing its readers with the most up-to-date local and regional business news. Executive is a monthly business magazine that offers readers in-depth analyses on the Lebanese world of commerce, covering all the major sectors – from banking, finance, and insurance to technology, tourism, hospitality, media, and retail.

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