Executive Magazine

Business briefing: 20 Sept 2013

by Executive Staff September 20, 2013

written by Executive Staff

Economics and Policy

Oman’s plans for a $15.5bn railway network across the Sultanate will be a boon to business in the region, according to the shipping industry.

More from Arabian Business

European football chiefs have given their support to plans to move the 2022 World Cup in Qatar to the winter.

More from Arabian Business

Lebanon's insurance industry is due to see little or no growth in 2013, the head of the Lebanese Insurance Association has said.

More from The Daily Star

Companies and Business

The Turkish government does not plan at present to sell a further stake in state-run Turkish Airlines, Finance Minister Mehmet Simsek has said.

More from Reuters

The developer of the much-delayed Dubai resort Palazzo Versace has confirmed the opening date has been pushed back another 12 months.

More from Arabian Business

Dubai’s bourse led a regional uptrend on Thursday after the surprise decision by U.S. Federal Reserve to maintain its bond-buying program.

More from Reuters

September 20, 2013 0 comments

Pierre Achkar

by Thomas Schellen September 19, 2013

written by Thomas Schellen

Year after year, hotelier Pierre Achkar has been the voice highlighting the concerns, needs and demands of local hotel operators and their occasional ideas for new strategies to market destination Lebanon. Executive visited the president of the Association of Hotel Owners at his office in his Printania Palace hotel in Broumana to find out where brighter spells prevail in the tourism gloom of 2013.

We would like to understand the positive things, if any, that are happening in the Lebanese hotel industry this year.

A hotel is an operation and a real estate investment. The only positive thing [at this time] is that the real estate is retaining its value. The property gains about 5 to 6 percent value each year. This is the minimum added value and the only positive thing that you see financially. The other factor to note is that the airports in Syria are closed and everybody is going through Beirut airport. This is giving us a few overnighters. In terms of the business community, Beirut is the place to meet for the Syrians, especially with their contractors or partners from Europe. The business community is the only group that is giving us the occupancy that we have at this moment, especially in Beirut.

How do operators fare outside Beirut?

Outside of Beirut, we used to have a very big problem because people have not been coming to Lebanon for holidays [in the first part of 2013]. But just after Ramadan, we feel that Syrians are giving us added occupancy and the hotels outside Beirut are running now between 30 and 35 percent occupancy.

What is the main operational concern for the hotel owners?

The disadvantage at this moment is that intense competition has lowered the prices 50 to 60 percent below the prices that we used to have, especially in the summer. If we take our income, we are 36 percent less than in 2012 and 54 percent less than in 2010.

Do you have a view of how many hotels are under threat of closure?

All hotels are partially closed. You have hotels that didn’t open [this summer] because they know that if they open, they are going to lose money. They might take a board decision to keep the property closed because it is better not to lose. It does not mean that they have a very big financial problem or are going into bankruptcy.

How many hotels are members of the association?

Around 250.

How many hotels are there, which are not members of the association?

Around 200. But in Beirut and Mount Lebanon we represent 85 percent of all hotels.

When you refer to the hotel as a real estate value, it appears that we are talking more about an underlying asset value than a hotel business. How large is the operational value in comparison with the real estate value?

Especially in seasonal hotels, 95 percent of the value is the property and the added value on the property. That is why we are looking at a new concept of merged financial operation between hotel and real estate. It is called condo hotels. The concept is based on selling the rooms and the apartments and when you sell an apartment, people are looking to real estate value, not return on investment.

This is a business model that you see as a possible way forward for some of the renowned mountain hotels in Lebanon?

Yes.

And the association is proposing legislation that makes this possible?

Yes.

What is required there?

We need a law but the problem is that we don’t have a government.

From your perspective on the industry, what needs to be done right now?

Nothing. I cannot do anything.

What can the hotel owners’ association do to prepare for better business in the time after the crisis?

Recovery in Lebanon is very quick. After the 2006 war, within ten days we were fully booked and in 2008 after they signed in Qatar, they were fully booked after 10 days. Give us stability and security and we don’t need anything.

Is there any significant activity that the association is planning for the coming months?

We are discussing a lot of things, especially for the mountain hotels to have a 5-year tax holiday.

You are not planning activities such as employee training during the downtime?
We have no money for that. All hotels are partially closed and we are managing a crisis, looking at items such as switching off the lights in rooms that are not used.

September 19, 2013 0 comments

The Buzz

Business briefing: 19 Sept 2013

by Executive Staff September 19, 2013

written by Executive Staff

Economics and Policy

President Bashar Al Assad has said it would cost about $1 billion to get rid of Syria's chemical weapons under a US-Russian deal reached last week.

More from Reuters

The Beirut Stock Exchange continues to tumble both in volume and value as many Lebanese investors look into more promising and stable markets abroad.

More from The Daily Star

The Palestinian Authority has warned that its economy cannot grow under Israeli occupation and restrictions, echoing the findings of an International Monetary Fund report.

More from Reuters

Football world governing body FIFA has said there is no chance of compensation being paid to countries that lost the bid to host the 2022 World Cup – awarded to Qatar – as well as broadcasters, professional leagues or sponsors, even if the schedule is changed to winter.

More from Arabian Business

September 19, 2013 0 comments

Economics & Policy

Leveling the playing field

by Nicole Purin September 18, 2013

written by Nicole Purin

Economic development and betterment are at the forefront of countries’ goals on a global scale. Governments’ desire to create stability within countries allow them to explore different archetypes. Some have argued that the level of a country’s progression and economic development is measurable by the level of advancement of women in society. Such advancement is inextricably linked to a society’s evolution and has produced great result on all levels — the developments of families, communities and countries — the systemic core.

The Council of Europe’s Secretary General Thorbjorn Jagland, a Norwegian politician, has described women’s role in society as the “strongest transformative force in the world today”, a view held by many politicians. Gender equality is imperative to ensure economic opportunity and development. One of the key objectives is the creation of gender equality in employment. It is believed that this will have great implications for the world’s economy as a whole — for the better. Swedish Prime Minister Frederik Reinfeldt said in his address at the 66th meeting of the United Nations General Assembly in 2011 that “equality between men and women in employment would boost American GDP [gross domestic product] by as much as 9 percent, the euro zone by 13 percent and Japanese GDP by 16 percent.”

These statistics are significant and they evidence a political theme that has been trending for the last few years. Some have referred to this movement as “an investment for the future generations”. Statistics have demonstrated that the greater women’s role is in society, the greater the improvements in the public good and reduction in corruption. Yet the question remains how accurate is this elevation in practice and whether governments and legislative bodies are truly supporting this new social structure at the very core.

Pillars of equality

It is undeniable that the European Union position on gender equality is advanced. The European Commission’s policies have been prioritized through several action plans and strategies such as economic independence, equality in decision making, dignity and integrity to name a few. From a legislative perspective, the Treaty of Rome (1957) describes gender equality as a fundamental pillar of the EU and various directives namely.

Legislation has been very important in women’s empowerment but it is not the only significant factor. The increase in the women’s workforce has been a catalyst and promoter of a remarkable societal transformation, which has worked hand in hand with economic growth. Recognition of the increase of the number of women in the workforce has encouraged the public and private sectors to develop retention strategies as well as maximization on progression within the relevant organization. Maternity and parenting policies have become key elements in the outlook of companies to ensure a balanced approach between working mothers and the work environment.

Specifically, the issue of diversity at the board level has been a point of discussion among politicians, shareholders and regulators. Legislative proposals to augment the participation of women at senior level, especially at board level, have been introduced and have turned into reality in countries such as Norway, France, Belgium, Spain, Italy and Iceland.

Diversity at board level has been a widely debated topic and there are diverging views on how to achieve this most effectively. Supporters believe that companies should be forced to introduce quotas of women’s representation on boards throughout the European Union and specifically in the United Kingdom. Countries such as Norway and France have implemented this approach successfully and can be viewed as model countries.

Yet opponents argue that quotas are counterproductive as they focus on ‘filling numbers’ rather than on a qualitative approach. They argue that the focus should be on how women should create value via merit, and business leaders should drive the diversity approach through affirmative action. Another fundamental question is whether greater women’s representation at board level does increase “performance”. The statistical data is currently being compiled but it does appear that “at the global level, larger companies are found to have more women on their boards, probably due to their high visibility and consequently outside pressure for greater diversity”, according to the Lord Davies Progress Report, a UK government backed report that set a target for a minimum of 25 percent female board representation in FTSE-100 companies by 2015.

Overall, a lot of impetus has been made at EU level on gender equality. The debate of greater diversity at the board level is emphasizing the challenges that are still being faced and how a better gender balance can be achieved at all organizational levels.

Transition in progress

One of the most influential business women in the Gulf Cooperation Council, Raja al-Gurg, based in Dubai, UAE, has upon the author’s request summarized the position of women in the Gulf as follows: “Women across the GCC have been making rapid strides in the political, social, economic and business domains over the last few decades, thanks mainly to the increasing focus on women empowerment by the governments and organizations in the region. We are fortunate to have several illustrious women in the GCC who have demonstrated remarkable leadership qualities. They have shown that opportunities for leadership in every sphere are growing across the region and can be capitalized on by women with enough motivation, dedication and vision. We should follow the lead of admirable people and avoid setting limits to what we can dream and achieve.“

Dubai, in particular, is being very active in promoting Arab women’s leadership and progress. The appointment of women ministers such as Sheikha Lubna al-Qasimi, the United Arab Emirates’ first female minister, and Reem al-Hashimy, minister of state in the UAE Cabinet since 2008, are renowned examples of the achievements of Emirati women.

The progress cited in Gurg’s powerful statement also extends to the public administration and corporate realm. In a similar fashion to Europe, Sheikh Mohammed bin Rashid, ruler of Dubai and vice president of the UAE made it mandatory for government agencies and corporations to include women at board level across the country. This was a landmark decision and a first of its kind in the Arab world. Such a legislative measure has consolidated the position of Emirati women and is encouraging their substantial contribution to the economy.

The rise of women in the UAE professional environment has been incremental and should serve as a model for the region as a whole. The female literacy rate in the UAE is 91 percent and female labor force participation is 43 percent. Of those working as ministers in the UAE, 17 percent are women. In short, UAE women have become a force to be reckoned with.

Other countries in the GCC are moving in their own ways to empower women. Notably, Saudi King Abdullah Bin Abdul Aziz Al Saud appointed 30 women to the Majlis Shura, the kingdom’s consultative council. This is a revolutionary step signaling recognition of the importance of women in Saudi society and evidencing the desire for change. This decision is also clearly linked to the country’s drive to transform Saudi Arabia into a world class economy. This jump cannot be achieved unless the full potential of the Saudi women’s work force is recognized and even more reforms are introduced.

In the past 80 years, the role of women has undergone a radical transformation. “If women and girls everywhere were treated as equal to men in rights, dignity, and opportunity, we would see political and economic progress everywhere,” as Hillary Clinton said in her farewell speech as the Secretary of State of the United States earlier this year. She added that “promoting equal rights for women and girls around the world is not only a moral issue but an economic issue and a security issue.”While gender equality is largely in its infant stages across the GCC and elsewhere, the progress of women in these past decades has arguably become unstoppable.

Nicole Purin is senior legal counsel at Standard Chartered Bank in the UAE. The views in the article represent those of the author, not of Standard Chartered.

September 18, 2013 0 comments

The Buzz

Business briefing: 18 Sept 2013

by Executive Staff September 18, 2013

written by Executive Staff

Economics and Policy

Lebanon’s budget deficit in the first six months of this year continued to rise amid falling revenues and increasing expenditures, the Finance Ministry has announced.

More from The Daily Star

Islamic trade finance, a tiny part of global banking business, is starting to attract interest among big Western banks because of rapid growth of trade involving wealthy Gulf economies.

More from Reuters

Companies and Business

Two years of double-digit declines in tourism and persistently weaker domestic demand are pushing operators of several international food and beverage franchises to downsize their operations and reconsider store portfolios in Lebanon.

More from The Daily Star

Just Falafel, the United Arab Emirates fast-food chain planning 720 new outlets in 19 nations, is weighing the sale of a 25 percent stake in an initial public offering, two people with knowledge of the matter said.

More from Bloomberg

French energy firm Alstom announced that it has won a contract worth around $227 million in Saudi Arabia to supply steam turbine generators for the Shuqaiq power plant.

Reeling them in

by George Atalla & Antoine Nasr September 17, 2013

written by George Atalla & Antoine Nasr

In recent years, tourist arrivals to Gulf Cooperation Council (GCC) countries have increased from 23.5 million in 2006 to 29.7 million in 2011, representing a an average annual growth rate of around 5 percent. The Gulf region, as well as the Middle East overall, are clearly part of a global trend that has made tourism as important to the world economy as the automotive sector. But governments in the GCC have to do much more if their countries are to participate extensively in the global growth of hospitality and benefit from the 70 percent increase in global tourist arrivals over the next 20 years that is predicted by the sector’s main international organizations, the UN World Tourism Organization (UNWTO) and the World Travel and Tourism Council (WTTC). If accurate, that will mean a whopping 1.8 billion global tourists a year.

While the six GCC states have considerable tourism potential, none has made tourism a national priority. As a result, the direct contributions of tourism to gross domestic product in Kuwait, Qatar, Oman and Saudi Arabia range from 4.5 to 7 percent, while countries such as Spain and Hong Kong achieve 15.2 and 18.5 percent contributions according to WTTC and Euromonitor. Until they invest in tourism strategies and better plan their hospitality offerings, GCC countries cannot fully benefit from a sector that accounts for 9.3 percent of world output.

Enhancing the experience

Three factors currently prevent the GCC tourism sector from reaching its full potential: a subpar mix of tourism products, insufficiently developed sector enablers and systems that discourage tourism.

First, most GCC states have a below-average assortment of tourism products because of limited variety, undifferentiated product quality and sporadic marketing. Examples of the narrow range of offerings include Saudi Arabia’s focus on religious tourism, Bahrain and Qatar’s stress on business offerings and Oman’s concentration on beaches.

In terms of quality, the GCC could obtain globally recognized quality certifications. Only the United Arab Emirates has beaches with “Blue Flag” certifications, a mark of water safety and good environmental practices. Similarly, there are too few attractions designated as UNESCO World Heritage sites despite the region’s considerable historical endowment. GCC countries also tend to market and promote their tourism products unsystematically. They participate infrequently in international tourism fairs and do not take advantage of digital promotion channels.

Second, most GCC countries have not fully developed the enablers that support and boost the sector. For example, they lack a long-term strategic plan for tourism and do not consistently develop human capital for the sector. The governments do not invest substantial amounts into tourism and there is not enough done to encourage private sector investment.

Third, there are systems that discourage tourism. These include stringent visa requirements and environmental sustainability standards that are lower than they should be. An area where change is happening in this regard is public transportation. Although it is underdeveloped, the region is undertaking significant investments in rail and metro systems worth around $70 billion.

This analysis applies primarily to the GCC states with nascent tourism sectors but not fully to the UAE and specifically Dubai, which embarked on planning, building and marketing its tourism sector years ago and consequently is one step ahead when compared to other GCC states or fellow Emirates.

The GCC’s tourism sector also has six competitive advantages. First, GCC countries are in generally strong economic health, allowing them to invest in tourism products. Second, the region has ample airport capacity to handle large volumes of visitors, with convenient connections to countries that are major generators of tourists. Third, GCC states have great appeal as business tourism destinations given their infrastructure for meetings and conventions. Fourth, the region’s cultural amenities are improving, with ancient sites being restored and important new museums in Kuwait and Qatar promoting the contemporary arts. Fifth, the GCC has good weather for a significant part of the year when top tourism markets for beach leisure activities are in low demand. This allows the GCC to be a “sun and beach” destination when competing markets are off-season. Sixth, the GCC’s reputation for safety and stability can attract security conscious travelers.

To build on these advantages, GCC states have to treat tourism as a multilayered ecosystem. Understanding the sector in this way allows them to address shortcomings in the ecosystem through three sequential steps that yield a national tourism sector strategy.

The first step is to define the ecosystem. Its major components are tourism products and services, attractions such as beaches and culture; sector enablers that build up the sector, such as marketing and promotion; and system enablers, such as infrastructure, safety and security which influence tourists’ perceptions of a country.

Building their tourism ecosystem requires GCC countries to understand what tourism products and services they offer at present and then concentrate on a few core product areas. That requires them to define and take inventory of all offerings including those related to culture, sun and beach, nature, sports, lodging and food. GCC countries also have to examine sector enablers.

These typically fall into five categories: planning, promotion, marketing, human capital development, and research and statistics. Generally, a central tourism planning entity (CTPE) oversees these activities with a mandate to diversify tourism offerings and increase tourism-related investments.

Finally, countries must examine their system enablers — such as infrastructure, health and safety — to see where more attention is needed.

The second step is to choose a strategic position and value proposition. This involves selecting the main sources of tourists, which are preferably large and close. Countries then need to narrow the potential sources of tourists by segment, such as business or budget travelers, families or retirees, which has implications for the average spend of these tourists and the anticipated growth in their numbers. This allows GCC countries to decide which products to prioritize, bearing in mind whether the product is inherently in demand, is ready to be offered, and can compete.

GCC countries will benefit from focusing initially on a clear and well-articulated value proposition that differentiates them from competing destinations. For instance, GCC countries may offer their tourism products to the broader Arab market; they may become business and conference hubs, or adventure holiday destinations. Lacking the maturity of established tourist destinations, we recommend that countries refrain from hasty pursuit of multiple value propositions.

Offering one product, such as beaches for anybody to sit on, is different than having a value proposition. An example for a focused value proposition would be culture holidays for high net-worth visitors from Europe, where a CTPE has identified an activity, a geographic source of tourists and a segment of that source market, and where supporting parts of the ecosystem are put in place.

As opposed to multiple propositions that would scatter efforts and prevent GCC countries from developing a well-defined brand, we see the best practice in focusing on a clear value proposition formulated around few products but with a variety of quality offerings.

The third step is to set up an appropriate institutional framework. This allows the CTPE, which is at the heart of the framework, to obtain the maximum impact from tourism initiatives and integrate tourism into the national development program. The CTPE is typically responsible for setting policy and drafting and enforcing regulations. In some countries, the CTPE develops and executes projects.

By developing a tourism strategy, GCC countries can help in diversifying their economies, increase the skills of their workforce and create jobs in complementary sectors such as retail and construction.

September 17, 2013 0 comments

The Buzz

Business briefing: 17 Sept 2013

by Executive Staff September 17, 2013

written by Executive Staff

Economics and Policy

Lebanon’s central bank plans a further boost next year to an economy hit by war in neighboring Syria and domestic turmoil, but the package will be smaller than this year’s $1.46 billion, its governor said Monday.

More from Reuters

Lebanon's Caretaker Prime Minister Najib Mikati signed a decree Monday to authorize the advance payment of $800 million to pay the salaries of public sector employees.

More from The Daily Star

Oman's plans for a national railway project will be fast-tracked and completed in a single phase instead of three as proposed earlier.

More from Arabian Business

Iraq’s oil exports were cut sharply by a pipeline leak and work at southern ports, industry sources said, raising concern among buyers of prolonged outages despite Iraqi assurances.

More from Reuters

Companies and Business

Dubai real estate developer DAMAC Properties has handed Saudi Binladin Group a $96m to construct a luxury housing project in Riyadh.

More from Arabian Business

Barclays has been branded reckless by a British watchdog for failing to disclose payments of $511 million in advisory fees to Qatari investors who helped bail it out during the financial crisis.

More from Reuters

September 17, 2013 0 comments

The Buzz

Business briefing: 16 Sept 2013

by Executive Staff September 16, 2013

written by Executive Staff

Economics and Policy

Regional markets rose sharply on news of a US-Russia deal over Syria.

More from Arabian Business

Attacks across Iraq took more than 46 lives on Sunday and 25 on Satruday.

More from Iraq Oil Report

60 percent of Lebanese say their savings accounts are smaller than they were a year ago.

More from Arabian Business

September 16, 2013 0 comments

The Buzz

Fouling out

by Peter Speetjens September 16, 2013

written by Peter Speetjens

Sport can heal and unify a nation, as shown by Lebanese basketball club Sagesse (Hekmeh) in the late 1990s. Their green and white colors waved across the country when the club was crowned Asian Club Champion for the first (and second) time in Lebanon’s history. But sport can also have the exact opposite effect, and such is the case for Lebanese basketball today.

Rattled by feuds and infighting, the 2012-2013 season was halted several times and eventually ended without a winner, and on July 18 the International Basketball Federation (FIBA) suspended the Lebanese Basketball Federation (LBF) from international competition. Consequently, the national basketball team — already in Manila — was not allowed to take part in the FIBA Asian Championships. Replaced by Iraq’s national side, the Lebanese flew back to Beirut on July 21, not having made a single basket.

Rodrigue Akl, the national team’s point guard and captain of Sagesse, was on his way to morning practice when he heard the news. “I passed by the doctor’s room, which is always the players’ hangout on international trips,” says the 25-year-old star. “The manager was there. He told me, though his face said it all, really. We were all very sad and angry, yet the biggest shock had come earlier, in Taiwan, when FIBA had first warned the LBF.”

The national team left Beirut on July 4 to play the Taiwan William Jones Cup in preparation for the all-important Asian Championship. Three-time finalist Lebanon was not a favorite for the Asian title, but there was a lot at stake. A top three spot meant qualification for the 2014 FIBA World Championship in Spain.

“We had a very good chance of qualifying,” says Akl. “Iran was the favorite for the Asian title [and won], but countries like China and Jordan didn’t have such a strong team this year, while we had [former NBA player] Loren Woods.”

“I was at the 2010 World Championship,” saysAkl. “But I was the youngest on the team, so I only played for one and a half minutes. Today, I’m one of the senior players and I had high hopes to play a major role this time. But, well, ‘they’ killed my dream.”

Champville vs. Amchit

To understand who ‘they’ are and the reason for the LBF’s suspension, we must go back to last May, to the league’s quarterfinal playoff games between Champville and Amchit, two of the main protagonists in this tragic tale. Based in Dick El Mehdi in Metn, Champville was Lebanon’s reigning champion. The money trail behind both teams evidence the role that politics have played beyond the sidelines.

Most of Champville’s annual budget of $1.7 million stems from four main investors, Wadih al Absi, Elias Bou Saab, Jozef Hgoussoub and Ghassan Rizk, each investing $300,000. “Four different people, yet all with the same political color,” laughed Champville board member and press attaché Jad Deaibess. The orange on Champville’s jerseys reflects the color of the Free Patriotic Movement’s (FPM) flag.

The game planThere are some 400 to 500 basketball teams in Lebanon. Most of them are quite small and play on an amateur level. There are ten professional outfits that compete in LBF or BankMed League. They have a combined budget of over $11 million. Less than the budget is generated through the sales of tickets, advertisement and broadcasting rights. One of the main grievances between Lebanon’s professional teams, their sponsors and the LBF is that the latter is largely run by representatives of the amateur clubs.

Basketball is so far the only sport in Lebanon to be broadcast live on prime time television. The rights to the 2012- 2013 season were sold for $350,000, which is evenly divided over the clubs, after the LBF takes its cut. The latter moreover takes a cut on ticket sales, while every club member pays a federation membership fee. Finally, the LBF receives an annual contribution from the Ministry of Youth and Sports, which this year amounted to some $300,000, as the Lebanese national team was set to play the FIBA Asian Championship.

The main part of the clubs’ budgets stems from individual sponsors and political parties. As basketball is broadcast live, many politicians perceive it as an excellent platform for exposure. Basketball is arguably the only Lebanese sport in which an athlete is able to make a decent living, and more. Average salaries amount to some $3,000 to $4,000 a month, while the league’s top players may earn up to $20,000 a month. According to Robert Paoli, who played basketball on a national level before the game entered the professional era, the LBF League cannot be considered healthy. “All professional clubs depend on an external financial source for their survival, while there is no tangible return on investment,” he says. “That makes them vulnerable.” Take what happened to Zahle-based club Anibal. Backed by Wadih al Absi, the team in the 2011-2012 season ended as runners-up in the league, while it won the Lebanese Cup. Following a disagreement with the club’s management, Absi withdrew his money for the 2012-2013 season and took star player Rodrigue Akl with him to Sagesse. Anibal promptly ended last in the league and were relegated.

Absi is a reoccurring name in Lebanese basketball. He is the owner of the First Lebanese and First Kuwaiti construction firms that, among other projects, helped build the $750 million American embassy complex in Baghdad. Two years ago, Absi sponsored Anibal Zahleh, which promptly finished second in the season and won the Lebanese and Asian Cups.

In the 2011-2012 season, however, Absi withdrew from Anibal and put his money into Champville. In the 2012-2013 season, Absi not only bankrolled Champville but also Sagesse with almost $1 million, until the Lebanese Forces took over in early 2013. In addition, Absi also paid part of the annual budget of Beijeh and Antranik, and even coughed up the national team’s budget to travel to the Philippines. Absi was not available to comment on the reasons for his generosity, but it is widely believed among those with whom Executive spoke to be related to the planned (but postponed) 2013 parliamentary elections, with either Absi or a close ally of his expected to run.

While Champville, presided over by Jad Kahwaji, the son of the Lebanese Armed Forces commander Jean Kahwaji, is linked to the FPM, newly promoted Amchit is closely connected to President Michel Sleiman, whose son acts as the club’s honorary president. Its annual budget of an estimated $1.3 million is provided by a group of local businessmen and, reportedly, one Gulf investor. As every Lebanese person knows, the FPM’s founding father, Michel Aoun, and Sleiman can hardly be called best friends.

26 seconds

On May 5, Champville won the third playoff game and led the best-of-five series by 2 to 1. Hence, Amchit had to win the upcoming fourth match to stay in the race. It was scheduled for the next day, May 6, at 10:30 pm. Two hours before the match, however, Interior Minister Marwan Charbel, who is linked to President Michel Sleiman, asked LBF President Robert Abdallah to postpone the game due to “security issues.”

“It is strange there could be any security issues, as Champville supporters were not allowed to enter the Amchit stadium,” says Jihad Salameh. Salameh is not a LBF board member, yet as Secretary General of the Mont LaSalle Sports Club he is regarded as one of the main power brokers in Lebanese basketball and sports in general. Salameh also heads the FPM’s Youth and Sports program.

“I don’t know what security concerns the minister referred to,” says Dany Hakim, Amchit’s director of basketball. “You should ask him.” The 32-year-old is one of the sponsors behind Amchit, the club he has supported since childhood. He was also an LBF board member, but resigned earlier this year following the alleged embezzlement of $131,250 by LBF President Robert Abu Abdallah. The latter denied the accusations and appointed an auditor.

“I did send the LBF an official protest regarding the third game, as it ended in a brawl, while the Champville supporters used abusive language,” says Hakim who, prior to the playoffs, had requested the LBF, in vain, to appoint international referees. “The LBF board should have had a meeting and responded to my protest, but never did.”

With 26 seconds to go in the third game and Champville leading by five points, there was indeed some agitation between the players and staff during the third playoff, while the crowd chanted. Yet, looking at the images, it is clear nothing major happened. It was a matter of words, not fists, and as such not an unusual scene in basketball anywhere in the world. Interestingly, Hakim himself appeared to be one of the most agitated people on court.

Many insiders believe Charbel acted on “special request” from Sleiman when he called the LBF to postpone the fourth game. It is thought that Amchit aimed to buy time to prepare for their must-win game. Some even whisper Amchit aimed to play the game only after Champville returned from playing in the West-Asian club championship (WABA Cup) which took place from May 11 till May 18 in Iraq.

Unfair game

Following the minister’s interference on May 6, the LBF postponed the game until May 7 at 4:45 pm. “We arrived early afternoon, but the Amchit stadium was closed,” says Champville’s Jad Deaibess. “The game was then again postponed till 10 pm. We waited in the bus for about two hours, surrounded by Amchit fans, but the stadium remained closed.”

“The LBF had told us the fourth game would be played on May 7, but not at what time,” Hakim says. “On May 7, they only told us at 1:00 pm that we had to play at 4:45 pm, but we could not prepare the team on such short notice! We suggested [we] play on May 8. Instead the LBF postponed it till 10 pm that same evening, yet failed to inform us in a proper manner. They should have called, faxed or emailed us. Instead, we were told by [Lebanese Broadcasting Corporation]. So, we decided not to play.”

Conforming to the rules, the LBF handed Amchit a 20-0 loss for failing to appear. Consequently, Champville won the series 3-1 and, following its win in the WABA Cup on May 18, went on to play the semifinals against Sporting. However, Amchit had not yet given up the fight just yet. It sued the LBF over the 20-0 loss, arguing the club had not been properly informed.

“Amchit had a point,” says sports journalist Tony Khalil. “On May 7, there had been a meeting with all parties involved at the Ministry of Interior, including LBF President Robert Abdallah. There it was decided that the game would be played on May 8. Later that day, however, the LBF changed its mind and failed to properly inform Amchit.”

“One main problem of Lebanese basketball is that the federation is run by absolute amateurs,” he continued. “Another one is that, because of the politics involved, everything is polarized and no one is willing to compromise. It’s a sad story.”

Against the clock

Following a judicial decision to temporarily freeze the semifinal series between Champville and Sporting, which then stood at 1-1, the LBF on May 30 announced the league would be halted until the court’s final decision. “The situation is very dangerous with all the interference, which could lead to the banning of Lebanon from international competitions,” said LBF President Abdallah at a press conference. “While we were trying to find a way to finish the league quickly, the situation has now become critical for the national team in their bid to qualify for the fourth time to the World Championship.”

On June 6, the court decided in Amchit’s favor. As the club had not been properly informed, it said, not only should the disputed fourth game between Champville and Amchit be played again, but so should the two semifinal matches that had already been played between Champville and Sporting. The LBF appealed.

The national team returns from Manila following their disqualification (Photo: Daily Star)

Although Amchit reportedly offered Champville a win without playing so that the league could run its course, the LBF on June 16 sent a complaint to FIBA. Some people have asked themselves why did the LBF turn to FIBA? They include Hakim and national team coach Ghassan Sarkis.

“Couldn’t they have waited until August 12 [the end of the Asian Championship] to address the issue with FIBA?” Sarkis says upon his return from the Philippines. “It wasn’t innocent at all to raise the issue, and although the clubs [Amchit and Mouttahed] made a huge mistake by filing a lawsuit… it wasn’t the first time in our sports history. I’m deeply sorry because we have lost a golden chance to qualify [for the FIBA World Championship.]”

Perhaps the LBF, who couldn’t be reached for a reaction, wanted to play hardball and finish the issue once and for all. On June 28, FIBA replied. It offered the LBF a one-week grace period and demanded that all court cases be withdrawn and its decisions annulled, while also stipulating that all professional clubs sign a memorandum of understanding (MoU) aimed at establishing an appeal commission within the LBF to avoid future court cases.

“We refused to sign the MoU,” says Hakim. “We don’t have a problem with Champville. We have a problem with the LBF. If we trusted them, we would have signed. Now we told them: ‘first show us an appeals court, then we’ll sign.”

Four clubs (Amchit, Byblos, Sporting and Mouttahed) refused to sign the MoU. They are the same four clubs that contested the LBF elections, which were overwhelmingly won in November 2012 by FPM-backed candidates. It is not a coincidence either that all these clubs are supported by political powers opposed to the FPM.

One week after the FIBA deadline passed, a Lebanese appeals court decided the Amchit case in favor of the LBF. Yet this was not enough for FIBA. It seems FIBA wanted to end the lawsuitphenomenon once and for all. It gave the Lebanese clubs one last chance to sign the proposed MoU within 24 hours, yet to no avail.

The FIBA’s final letter, dated July 18, emphasized the LBF’s suspension had not been taken lightly. “It was indeed approved by the FIBA Central Board due to events of the utmost gravity whereby one club has been able, with external political support, to disrupt entirely the smooth running of the Lebanese National Championship. It has also been able to obtain a decision by a state civil court cancelling technical and sporting decisions taken by your federation…Your federation was not and still is not properly armed to face political interferences and solve sporting disputes within its own structures.”

“We suspended the LBF, because we cannot accept political interference in sports,” says FIBA Secretary General Hagop Khajirian. “That’s not just the case for basketball, but for all sports. We had previously heard about political interference, mainly by Lebanon’s minister of interior, but the reason to suspend the LBF was the court case. A sports federation needs to be strictly autonomous. Decisions can be questioned at an appeals commission within the federation and, ultimately, at the Court of Arbitration for Sport in Lausanne. We trust the LBF to change its statute, which should happen in early September. As soon as that is done, we are ready to lift the suspension.”

“Every revolution is for the better,” says Hakim with a wry smile. “Of course, it is sad for the national team, but now we have the chance to create a proper appeal commission and a truly professional league. In the end, the national team will profit from that too.”

It remains to be seen if the national players share his optimism. Sure, an appeal commission will be an improvement for a smoothly running league. And normally, it should not be too hard to find three or five wise heads, who can cut the knot in case of conflict. But this is Lebanon. Appointing those arbiters could very well become the next arena for yet another endless fight over sect and political color.

“You often hear older people in Lebanon complain about the country, but I always stayed positive,” says Rodrigue Akl. “But, I must say, this time I was hugely disappointed and I actually looked into playing elsewhere — Brazil maybe, as I have a Brazilian passport. But, well, for now I have a four-year contract with Sagesse, so I’m not going anywhere. Let’s just hope the problem gets fixed and serves as a lesson so that it will not happen again.”

September 16, 2013 1 comment

The Buzz

Business briefing: 13 Sept 2013

by Executive Staff September 13, 2013

written by Executive Staff

Economics and Policy

The Gulf Arab state of Kuwait will deposit $2 billion in aid in Egypt’s central bank next week, the Egyptian central bank governor has said.

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An extension by Lebanon of a key deadline for its first oil and gas licensing round may be a setback but will not end the plans, experts have said.

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Lebanon’s merchants and traders are contemplating not paying the value added tax in November in order to press politicians to speed up the formation of a Cabinet.

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Palestinians are in a precarious economic position and may struggle to keep financing their budgets over time, the International Monetary Fund has warned.

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Companies and Strategies

Major Saudi construction firm Abdullah A. M. Al-Khodari Sons Co expects the impact on its bottom line of a government levy on foreign workers to last a few more quarters.

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Lebanese banks have assured the US ambassador to Lebanon David Hale they were strengthening measures to combat all forms of money laundering, terrorist funding and tax evasion.

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September 13, 2013 0 comments