Economics and Policy
Twelve billion dollars in aid from Egypt’s wealthy Gulf allies have bought Cairo a window of several months to try and stabilize its politics and repair its state finances – or face fresh economic turmoil.
A high-end watch is today the unequaled symbol of your status. It really represents who you are and what you stand for. It defines you.” So says Paul Kupelian, chief operations officer of retail operations at Holdal, part of the Abou Adal Group, which represents such luxury watch names as Patek Philippe, A. Lange & Söhne and Vacheron Constantin.
Watches are big business. Just pick up any print media — from the International Herald Tribune to the Financial Times to the glossies — and you will notice just how much ad space is devoted to luxury — and even the not-so-luxury — timepieces. Indeed, three years ago, Rolex, arguably the most famous watch brand on the planet, bought the front page of the Herald Tribune to advertise its new GMT Master II. Go figure.
These ads sell many ideas. There is heritage: the father-son bonding narrative that tells us we never actually own a Patek Philippe. Or endeavor: the sporting achievement ads from Rolex, TAG Heuer and Longines that equate success to privilege. Finally, there is glamour: Omega’s dreamy celebrity shots of George Clooney in Venice and Nicole Kidman wrapped in diamond watches. There are things for all of us to buy into.
Global activity
And we do it with gusto. According to the latest figures, in 2012, the Swiss watch industry exported around 28 million finished timepieces with a value of SF21.4 billion ($23.5 billion) — 10.9 percent growth year-on-year.
While Europe showed the highest growth in demand, China for the first time surpassed the United States as the leading market for luxury watches. “Blancpain almost doubled its turnover in China along with Longines and Omega,” says Mher Atamian of Atamian Freres, a Lebanese agent for all three marques.
In the global battle of the brands, Omega, once a mid-range market player with a huge heritage, is now the world’s best selling luxury watch brand. In response, Rolex has come out fighting, strengthening its position in Europe and launching new models of its timeless classics.
Meanwhile, brands that were not so mainstream but are watch royalty nonetheless, such as Patek Philippe, Vacheron Constantine and Jaeger-LeCoultre (JLC), have all picked up in popularity as customers recognize the high level of craftsmanship and the fact that these watches by and large retain their value and can become genuine heirlooms for future generations. “Patek Philippe is today the most admired and respected watch brand in the world,” says Kupelian. “Consumers understand the high quality, the craftsmanship, the complications and the exclusivity behind every Patek Philippe creation.”
They are also among the most expensive — the most affordable is a ladies’ Twenty-4 that costs around SF11,800 ($12,600). Opinions differ, but the basement entry into luxury watch ownership cannot realistically be lower than $1,000, with the main battle being fought in the $5,000 to $30,000 range.
According to World Watch Report, Omega’s Seamaster, Rolex’s Submariner and Daytona hold the position of the most popular men’s status symbol watches across the globe. Not far behind are TAG Heuer’s Carrera, Jaeger-LeCoultre’s Reverso, Audemars Piguet’s Royal Oak and Cartier’s Tank.
Basle 2013
Basle in Switzerland plays host to the world’s most prestigious annual watch fair, an event where the watch industry’s big hitters unveil their latest creations and set the trend for the next 12 months.
“This year we saw a lot of navy and in some brands denim was used, as well as a lot of other innovations in colors and color mix,” says Simone Tamer from Tamer Freres’ agent for Audemars Piguet, Breitling, Montblanc, Omega and Swatch.
“There has also been a move toward black carbon and black PVD. We are [also] seeing a lot of two-tone on the dial with customizations in pink and yellow gold. This not only adds a nice retro aesthetic but makes the watch more affordable and understated, keeping the gold effect on the watch.”
Tamer also said that innovation has played a big part in many of the brands’ latest offerings. “When it comes to advances in calibers, movements, power reserves and complications, 2013 is the year in which a lot of the research and development is paying off.”
Kupelian agrees, confirming a move toward slimmer watches as well as complications such as tourbillons, perpetual calendars, chronos and craftsmanship. “The new trends are for more complicated watches for men and women and much thinner cases. Most of the big watch brands are showcasing their inherited craftsmanship such as diamond setting, enameling and guillochage engraving.”
But what of the new models? Among the highlights of this year’s show was the unveiling by Rolex of a blue face and brown bezel platinum Daytona Cosmograph to commemorate the 50th birthday of the iconic chrono. Rolex fans will also have welcomed the new Yachtmaster II with a blue Cerachrom bezel and the GMT Master II with one-piece, two-tone black and blue bezel, a first using Cerachrom.
Rolex also has a new range of unfussy day-dates in six colors. “I think ever since the recession we have seen consumers more aware of what they buy and how they flaunt it,” explains Ziad Annan, Rolex’s agent for Lebanon and Cyprus. “In these tough times, it is perhaps better to wear something a bit understated.”
Tudor, the brand that was once seen as Rolex’s poor cousin, has had another good year with most demand from the Asian markets, especially China, where there is a waiting list for the Pelagos and Black Bay Heritage models. The star of Basle was the dramatic Black Shield, a nod not only at Tudor’s logo but also a pointer in the creative direction in which the brand is heading.
Overall, the buzzwords appear to be modernization and improvement. “The manufacturers have made a big effort to produce unique pieces,” believes Atamian.
“You only have to look at Breguet’s Hora Mundi and the JLC Gyrotourbillon. IWC has upgraded its Ingenieur, while TAG Heuer has added to the Carrera range on the occasion of the watch’s 50th birthday. Omega is putting the coaxial movement in more watches, while Glashütte and Blancpain have strengthened their ladies’ lines. A lot of manufacturers are using ceramics, IWC especially — a move into an area that was generally reserved for ladies watches. Finally, it is good to see JLC making more noise.”
Meanwhile,on the home front
Back in Lebanon, a country that is never out of the top five Middle East markets for luxury watches, a man’s watch is almost, if not more, important than the cut of his suit and all the major watch importers in Lebanon recognize the discernment of the Lebanese consumer, who they feel is now moving away from traditional comfort zones.
“The knowledge and expertise of some [Lebanese] collectors or [the] watch-passionate is really amazing,” says Kupelian, who has noticed that, while traditionally it is the male consumer who opts for the complications, the limited series or innovations, more and more women are becoming watch collectors, appreciating more complicated watches.
“Consumers are more discerning,” agrees Tamer. “They know what they want. Now, we are seeing greater openness and interest in movements and complications. Take Audemars Piguet. We have clients who are on long waiting lists to receive their limited editions, which are a separate and very distinguished niche. I must say that the Lebanese consumer has good taste.”
Atamian agrees. “We have a lot of collectors who know and appreciate watches. They go on forums and read the blogs. They often know more than I do.”
But with such discernment comes greater demand for an all-encompassing retail experience. This is a factor that is not lost on Lebanon’s watch agents. In a local market that has seen tourism affected by political instability and confidence over security, Rolex’s Annan believes now more than ever the priority is to focus on customer care and improve service both in the showroom and with after sales maintenance. “Integrity has to surround everything we do,” he says.
Every clock face tells a story
So let’s assume you have earned a decent bonus and want to blow part of it on a luxury watch, one that will hold its own in almost all situations. This was a simpler choice 20 to 30 years ago. A man would own one watch — which the vast majority still do — and wear it on all occasions, whether it be formal, smart or casual, and if it weren’t waterproof to 1,000 fathoms, he would take it off before swimming or showering.
Now all bets are off. “Each brand has its own image that is reflected in the lifestyle of the client buying it,” explains Tamer, adding, “Breitling for example has always been the watch for professionals, such as deep sea divers and especially aviators.”
The appropriate size of a watch has also increased. There was a time when a 34mm to 36mm diameter was considered a perfectly manly size. Not any more. “Today, 39mm to 42mm is the ideal size. Forty-four mm is the maximum,” says Atamian.
Size is not the only concern. Does one choose steel or gold in all its various shades? Does one go for a simple plain face or a busy Chronometer or a GMT function? Does your watch need to be waterproof to a weedy 300 meters or a skull-crushing 1,000 meters? Will it have an “exhibition” back in which you can see all the parts whirr pleasingly as one? And then there is the issue of movements. Is it in-house or is it a generic movement made by the Swiss giant ETA? There is a lot to consider.
Which brings us nicely to the subject of those hugely popular watches that are nonetheless sniffed at by watch snobs, because they either don’t have the heritage or are too closely associated with jewelry or fashion. Well, they too are adapting to the demands of the market and greater consumer awareness. Panerai, Cartier and Hermes have all developed in-house movements, one of the benchmarks of being taken seriously. Panerai, the Italian sports watch, knew it had to back up soaring popularity with credibility and now has its own hand-wound and automatic movements, while Cartier with its Calibre de Cartier and Hermes with its Caliber H1837 have also gone down a similar path.
“There is no right and wrong,” advises Kupelian. “The right watch is the one you like; the one that makes you feel good, authentic and tasteful. The rest is left to each person’s personal taste and preferences. The best thing is to take the time to learn about each and every brand and understand their respective values and then choose.”
All that glitters
Meanwhile, gold watches accounted for more than 6 percent of total Swiss watch exports by units. In revenues, gold watches accounted for SF7.3 billion ($7.81 billion), an increase of 20.5 percent compared to 2011. But the question we all might ask is what happens to the price of gold watches if the price of gold drops dramatically as it did earlier this year from a January high of around $1,700 an ounce to the current price of around $1,300? The answer is not a lot, so anyone who thinks that a Patek Philippe Calatrava or a Vacheron Constantin Patrimony will be that much more affordable is going to be disappointed.
“I can’t see a manufacturer leveraging this situation,” says Annan. “Certainly Rolex, which is the only manufacturer to have its own smelter and lab to develop its own formulas, would never do it. We never want to make the customer feel he is being squeezed by market pressures.”
In fact, according to Kupelian, the real force behind rising prices is the commitment to value and innovation, such as increasingly complicated mechanisms and more artwork. So now you know.
Buying wisely
And what about all this talk of watches holding or in some cases appreciating in value? Like with art one should buy what one likes, not what one assumes will appreciate in value. When it comes to watches, the right brands, especially certain models by Rolex, Patek Philippe, Jaeger-LeCoultre, Vacheron Constantin and in particular Panerai, which produces lots of limited editions, can do well.
“As consumers become more aware of the value of a ‘real watch’, they are willing to spend higher budgets, especially when it comes to brands and models that increase [in] value with time,” says Kupelian. “These are perceived as an investment and a heritage for future generations.”
For example, a well-maintained Rolex GMT from the early 1970s, which probably cost around $600 at the time, could easily fetch $5,000 at a specialist auction.
Look out for updates of iconic models and try to buy an original before a re-release. The most famous price spike in recent years was experienced by the original 1970s version of the Tudor Heritage Chrono, of which relatively few were made, soaring from $3,000 to almost $15,000 overnight after its updated model was released in 2010.
And for those who are buying with an eye to the future, keep everything — bag, outer box, inner box tags and especially the receipt. To collectors, provenance is everything… and time, these days, really is money, in more ways than one.
A carefully chosen watch can be an investment and a pleasure. Here are Executive's top 10 men's watches for 2013:
10 Girard Perregaux 1966
Oozing “Mad Men” martini style! One of the most elegant dress watches on the market.
Related article: How to pick the perfect watch
9 A. Lange & Söhne Lange 1
Just one of a host of unique designs from one of the world’s most low-profile yet prestigious watchmakers.
8 Blancpain Fifty Fathoms
A dive watch for the yacht owner. Dripping in affluence and luxury.
7 Tag Heuer Monaco
The first square chronometer. What’s not to like? A genuine icon in the watch hall of fame.
6 Audemars Piguet Royal Oak
A classic, groundbreaking design that has remained popular due to its versatility.
5 Breitling Super Heritage Ocean
Clean and understated. The mesh bracelet gives this dive watch a 1960s vibe.
4 IWC Portuguese Power Reserve
Everything that IWC is about – elegance and substance – is summed up in this beautiful yet functional watch.
3 Tudor Heritage Chrono
Racy and vibrant and with a nod to a considerable pedigree, this is the watch that finally announced that Tudor has stepped out of Rolex’s shadow.
2 Rolex Explorer
Arguably one of the coolest and most unpretentious watches ever made. It scaled Everest with Hilary and still reeks of Cold War intrigue.
1 Panerai Radiomir
A watch with a ton of attitude, the Radiomir is less celebrated but much more grown up and understated than its Luminor stablemate.
Elias Chabtini is a remarkably confident man. The chief executive officer of Shawarmanji, the increasingly ubiquitous shawarma chain which began in Beirut in November 2012, has an incredibly aggressive strategy for the coming years. In a little more than six months, the company has established six branches in Lebanon and one in the United Arab Emirates, while by the end of the year Chabtini says they will have a minimum of 16 across the two countries. And with plans agreed to head into Qatar, other Gulf states and beyond, shawarma could join falafel — with franchiser Just Falafel’s rapid expansion last year — as another taste of the Middle East on the global palate.
“We would like to hit between 50 to 70 shops by the end of 2014. We will be the first concept ever that has opened so many stores in such a short period of time, definitely in our region,” Chabtini says. The company is certainly well-backed — it raised more than $8 million before it launched and the Building Block Equity Fund recently bought a 5 percent stake for $400,000. In Lebanon, Chabtini says, they will open 25-30 shops by the end of 2015, adding that he has few concerns about growing too large. “You can never saturate shawarma. Can you saturate hamburger, can you saturate pizza? Today you have over 80 hamburger brands alone, between the guy who has his own store to McDonald’s, and they are all doing well. Where is the saturation?”
An appetite for growth
This confidence is further reflected in the company’s worldwide strategy. For while Chabtini expects Lebanon and the Middle East to be the basis for the company’s support, he has now set his sights on taking his concept of shawarma global. He says the company has had over 180 entrepreneurs express interest in establishing franchises including in the United States, Germany, France and Canada.
But their first step outside the Middle East will be to the United Kingdom, with a franchise due to open in the coming months. Chabtini was a little hazy on the details, many of which are still being negotiated, but says the initial focus is on central London. “We want to test in London and then from there we will do the expansion of Europe.”
Perhaps the biggest cultural challenge the company may face will be the concept of shawarma. In the UK, the spinning stick of meat is synonymous with Turkish ‘donor kebab’ and — perhaps more worrying for the company that is trying to market itself as the clean alternative to grimy street shawarma — is closely affiliated with drunken nights. But Chabtini, ever the optimist, believes he can change British attitudes.
“People will always relate to shawarma as donor kebab. We have studied the market in London and one of the [points] was ‘Shawarmanji’ might be a name difficult to pronounce. People might not understand shawarma,” he says. “So we said ‘…Why is Häagen-Dazs easier to pronounce than Shawarmanji? Because Häagen-Dazs paid billions of dollars for you to get used to the name’… so it depends how we would market the brand.” Among the other plans to appeal to a European market is a new menu, with lamb being added to the beef and chicken options. As with the launch in Lebanon, which the company preceded by spending more than $180,000 on market research, they are carrying out extensive analysis on London’s incredibly competitive food and drink market. “We are not worried about the concept not working; we just want to make sure that the operation in London is going to be smooth for us to grow.”
But among the positivity is a note of caution as Chabtini says he is not yet willing to give any numbers about revenues. Perhaps this is understandable, since the company is still in its infancy, but it does stir up doubts. “We have very good numbers,” he says. But, he adds, “I prefer to reveal something when I am at least one year old, rather than giving figures that are just six months or eight months old.” He is, however, willing to stand by his previous prediction of $50 million in revenues by the end of 2015. “I think it is going to be doable with our franchises. It is very easy. If we have 50 shops by end of 2015, that’s $50 million,” he says.
Fast food, fast profits?
Franchised or stand-alone, not every fast food outlet turns over $80,000 a month, otherwise Europe and the Middle East would have many more millionaires. With no numbers yet released, it is difficult to assess Chabtini’s claims, but if he even gets close to his optimistic predictions then Shawarmanji will be very big indeed. “We believe Shawarmanji is going to be what sushi was in the early 1990s, which was the fastest growing food [business] ever.”
Economics and Policy
Lebanon's March 8 political coalition has collapsed, Parliamentary Speaker Nabih Berri has said.
Saudi Arabia has approved $5 billion in aid to Egypt and the United Arab Emirates has offered $3 billion in desperately needed support for the economy after the army ousted the Islamist president last week.
While private equity firms saw a reduction in the level of new funds raised in 2012, the investment sector has shown strong signs of recovery, with the overall pool of funding available to SMEs, technology and media companies attracted significant interest throughout the region last year.
When Ramzi Traboulsi got his first pack of basketball cards at the age of 10, he knew he was hooked. It started a collection of a lifetime, and soon became an addiction. As a Lebanese living in Canada, he became obsessed with the United States’ National Basketball Association (NBA) and the memorabilia associated with it. The thrill of buying a pack of basketball cards, eagerly hoping for a rare one to appear among the usual stack, was to him far more exciting than playing the game itself. “It is a different hobby,” he said. “I was a kid and I liked the concept of it, and as I grew it became an investment.”
See also: Shawarma goes global
Nowadays his collection is a much more serious matter, including cards, jerseys, shoes and figurines. Among the collection are items linked to Michael Jordan, Traboulsi’s favorite player and widely considered the greatest ever to play, as well as other giants of the game including Scottie Pippen, Kobe Bryant and the NBA’s current Most Valuable Player Lebron James.
And while Traboulsi has been “hiding [his items] for 24 years,” he recently decided to share and sell his possessions in his first exhibition at Geek Express, a new concept store in Beirut’s Bachoura district.
Around 500 items are being exhibited, including trainers, signed basketballs and other goods, but, he says, he has “thousands”. About 95 percent of the items displayed are signed by NBA stars, and each item has a certificate of authenticity and is registered online with a serial number. Since they are all limited edition or very rare, the prices start at about $500.
Traboulsi’s most expensive items are so rare that they no longer have a set value. A 1997 card signed by Michael Jordan in his collection is believed to be the only one of its kind globally. Its value of which depends on how much a buyer is willing to pay, according to Traboulsi. He also has a jersey signed by Jordan which Traboulsi believes could fetch over $10,000, “depending on the highest bidder”.
Traboulsi says he was interested in exhibiting his collection to discover whether he was really the biggest basketball fan in Lebanon. “[I wanted] to see if people would like it, if there is an interest, if there is a market for it, and to share it, because no one has done anything like this,” he says. Traboulsi explains that in the US, “there is a huge market” for NBA items.
But after many years of expanding his collection, it is becoming difficult for Traboulsi to keep growing because the items he is currently looking for are rare and expensive. Despite this, he is still increasing his collection through companies that sign with individual players. One of these companies, the Upper Deck Company, asked Traboulsi to be their sub-agent, since he is one of the largest collectors of NBA items outside of the US.
Traboulsi is eager to find out people’s reaction to his collection and is hopeful of displaying his items further abroad. “If I see a response from people, I would definitely be interested in making more exhibitions in the region and outside of Lebanon,” he said. The exhibition is open until August 4 at Geek Express.
The vistas around Beirut’s northern gates are changing. For years, the expanse of seaside development in the Dbayeh township was an empty promise of a coming suburbia.
Although much of the area remains as vacant as ever — equipped with just an upscale marina and convention hall — the land-filled seafront district has started to bustle over the past three months with excavators, cranes and concrete pumps. Last month, road construction equipment got busy on some of the district’s long-neglected interior streets.
The activity is all related to the Waterfront City project, whose first phase of construction commenced this spring under the partnership of United Arab Emirates-based conglomerate Majid Al Futtaim (MAF) and Lebanese company Joseph G. Khoury et Fils.
Hailed by a massive marketing onslaught with emphasis on the new residential offerings’ entry-level prices — advertised at $250,000 — the implementation of Waterfront City’s initial batch represents a $226 million project value for 348 units. In terms of project value, the phase one undertaking will bring the largest single bulk delivery of apartments to the suburban Beirut housing market when the handover of units starts in early 2015.
Samer Bissat, the senior project director of MAF Properties, says Waterfront City will entail 1,700 units when it is completed and represent a value of $1.5 billion to $2 billion.
There is no fixed deadline for the entire project, Bissat says, but progress is in line with the speed that the developers have been planning for. “A lot will depend on the absorption rate. My prediction is that within five years, all of Waterfront City will have started.”
The project has a noteworthy aspect on the contracting side as the executing company, ACC-Matta, is a joint-venture between Arabian Construction Company (ACC), a Lebanon-based construction firm with mainly regional business, and Joseph Matta, a firm that is focused on the domestic building market.
By collaborating, the two family firms could combine Matta’s local knowhow with the experience of ACC with international projects to give the joint venture the scope required for developments that go beyond project sizes commonly found in Lebanon, says Maher Merhebi, chief executive of ACC. “Few companies in Lebanon will be able to carry out a project of this type on such a large scale.”
The awarding of the contract to ACC-Matta sealed at the end of last year, was by a highly competitive tender, he says, and the contracting joint venture is dead-set on winning the contracts for phases two and three of Waterfront City.
Lowered expectations
The talk about Waterfront City is as old as reconstruction. Ever since the first drawings and models for master-planned developments in post-conflict Lebanon surfaced about 20 years ago at investment shows and development fairs for metropolitan Beirut, the Khoury Marina and surrounding land was featured as an upcoming magnet for urbanites in the Lebanese capital.
In June 2012, when the project was finally turning real with a groundbreaking ceremony, huge slogans pledged to prospective buyers that they would “own their horizons”. Later in the summer of 2012, the MAF-led project-owning partnership announced that sales of phase one “have soared up to 60 percent in one month” and added sales “are anticipated to ascend”.
In talking with Executive, MAF’s Bissat admits the undeniable, saying that sales have slowed as the regional situation has turned harsher. He claims that lowered expectations are being met and deflects questions on the hard numbers in sales performance in the first quarter of 2013.
“We are realistic and expected a slowdown on account of the regional situation. In Q1 2013, sales performed as expected on those terms and are slightly better than expected. I can’t give precise numbers but sales performance is as per the business plan,” he says before finally disclosing that the venture booked $330 million in signed sales contracts and important milestones such as deposit commitments have been met in May 2013.
What Waterfront City officials would not answer questions on either in 2012 or today was why this development was held up so repeatedly in the past. Water under the bridge, so to speak, is how they want to treat this story. Bissat turns instead to elaborating on what he markets as the project’s future.
“We are looking at a bright future with parks [and a] very easy and relaxed environment in terms of spacing,” he says, and emphasizes that Waterfront City will not be a gated community. “The correct terminology is that [the residential areas] are communities but they are definitely not gated. They may give such a feeling because they are contained in a specific area but [Waterfront City] is a community which is supposed to be self-sufficient.”
MAF will retain stakes in the community. According to Bissat, “a lot” of the project is to stay with the conglomerate as it will own and operate an upcoming mall and hold onto retail and hospitality properties. “We have major interest in the mall as MAF Properties; we also have joint ventures where we will retain restaurants and lease them out.”
In terms of communal living spaces and public areas, Bissat tells of imbuing the development with quality markers such as piazzas, an art scene and a farmers’ market. “We are contributing to society at a cultural level, at a socioeconomic level [and] at an educational level. We have been working on the components for a couple of months and Waterfront City will become a community that comes to life,” he enthuses.
Asked about the distribution of the cost burdens for creating and maintaining these communal elements and whether part of these costs are injected into the unit prices, Bissat cools the rhetoric to say, “This requires a multifaceted answer.” While Waterfront City will invest its own financial resources into the quality of life infrastructure, investment components are also part of the sales price calculation and in the long term the community will also have to pay into these structures.
New foundations
At present, the project venue still feels a good distance away from any state of community or identity. The sales center is located at the Khoury Marina, accessible only by passing two control booths. On the public side of those gates lies a leisurely 20-minute walk along the concrete breakwater to the Antelias intersection on the coastal highway.
The walk affords me with views of Beirut and an impression of the informal uses that have penetrated the land-filled area during the many years of commercial hiatus; I pass a cement truck whose driver took it here for his lunch break, a melancholic biker with a ponytail contemplating the sight of the city across the bay and young couples sitting on the seafront barrier and holding hands in the area’s relative privacy.
From a construction point of view, the main challenge of pouring the foundations for Waterfront City arises from the soil composition. The soil composition has to be examined thoroughly in order to determine the piling solutions in every portion of the project’s first phase, Merhebi says. “The primary aspect is to improve the soil characteristics and [the ground’s] behavioral qualities. Liquefaction is a major factor to consider in the piling and foundation works.”
The big challenge is that Lebanon has a high impact risk to earthquakes, he explains, and the varying soil characteristics found in the reclaimed land must be taken into account to counter the risk of dangerous earth movements in case of a tremor.
For Bissat, the development will bring a new social environment where the ills of the things spoiling the nighttime will vanish and whose horizons have no room for problems. “The offering and added value that this environment will bring do not exist elsewhere today. I can only see positives going forward.”
Economics and Policy
The Holy Islamic month of Ramadan will start in most of the Middle East on Wednesday, after an official announcement by the Moon Sighting Committee.
Lebanon's President and caretaker Prime Minister are expected to hold an urgent Cabinet session to approve two key decrees needed to proceed with oil and gas exploration in Lebanon, according to Energy Minister Gebran Bassil.
The White House has said it is not in the best interests of the United States to immediately change its aid program to Egypt, where President Mohamed Morsi was removed from office by the military last week.
Elsewhere, however, Egypt's stock index saw its steepest drop in over a month after clashes continued in Cairo and other cities.
The Syrian government is cracking down on black-market currency exchange businesses and individuals who transfer local or foreign money out of the country in order to stabilize the pound.
The Turkish lira rebounded from a record low against the dollar as the central bank offered $500 million at currency auctions and said it would start “strong” monetary tightening.
Economics and Policy
Lebanon is suceeding in its bid to limit increases in prices during Ramadan, government officials have said.
The ouster of President Mohammed Morsi may give Egypt’s economy its best chance since the 2011 revolution to escape a downward spiral of currency weakness, capital flight and crumbling state finances
Dubai, facing debt repayments of about $50 billion over the next three years, is finally getting serious about selling off assets to raise money – a key component of its repayment strategy.
Companies and Business
Abu Dhabi Islamic Bank (ADIB) has closed a $360m syndicated Islamic facility for one of the largest operator's and owner of jack-up barges in the region.
Almarai, Saudi Arabia's largest food producer, posted a 5 per cent increase in second-quarter profit as its dairy, juice and bakery business grew.
There is a lot to be said about the ways humor can keep you going in times of hardship. Yemenis, who are all too familiar with adversity, have recently adopted a new favorite joke about their Ministry of Electricity. The ministry, people say, has tasked itself with supporting population growth, given that it is delivering less electricity to homes and sending Yemenis to bed that much earlier and often.
Electricity cuts are nothing new in the country, as Yemen produces around 1,000 megawatts, just a third of what is needed to power the country. Tribal attacks on the power grid in protest against unequal electricity provision have been common for years, but the problem has escalated: the state-owned power grid was hit on 59 different occasions between May 1, 2012 and March 15, 2013, according to Yemen’s Al Masdar media outlet, and in recent months the attacks seem to occur every other week. On June 19, a day after one such attack, Yemeni activists held a candlelit protest outside of President Abdu Mansour Hadi’s home in the hopes of pushing the government to be more accountable.
More from his author: The drone that brought it home
Yemen's chaotic national dialogue
The new government attributes these attacks to tribes in the Marib governorate, which are using them to communicate financial and political grievances and demands, such as the release of prisoners, or even demands for electricity deliveries to tribal areas. A significant portion of Yemen’s electrical capacity has been generated in the Marib governorate since 2010. Even before capacity was added back then, inequities in national power distribution were the cause of disputes and protests, but things have gone downhill since. In 2011, the government of President Ali Abdallah Saleh in Sanaa was alleged to have created artificial power shortages to fend off calls for his resignation. Nowadays, opposition figures from the left and Islamist camps accuse Saleh and his cronies of staging the attacks to discredit their successors.
Regardless of the identity of perpetrators, the ramifications are devastating, in both political and economic terms. The loss of power has undermined trust in President Hadi’s government. This was exemplified at the end of May, when Hadi gave a speech saying that he would deal with the attackers with an “iron hand” — a threat left looking empty when just a few hours later, electricity wires were again sabotaged.
These attacks have repercussions on everyday living conditions, which are felt most strongly in coastal governorates, where summer heat can reach up to 50 degrees. This makes the issue much more serious than a simple dispute between tribes and the government, because most coastal governorates are in the south, where there is already a strong movement for secession. Prolonged, severe power cuts will play into the hands of separatists and worsen Yemen’s divide. Separatists already use the electricity cuts as a way to discredit the central government, buttressing the traditional claim that the north — where the attacks are actually happening — cannot co-exist with the south.
The economic repercussions of the power outages — which lasted for 48 hours on one occasion in Sanaa and could go on for 20 hours a day during the period of frequent power line attacks — are grim even in the mountainous and more moderate climate areas around the capital. Prices of everyday goods rise, and perishables wither much faster. Productivity at work decreases and repetitive, short power cuts damage all sorts of electrical appliances. There were even reports that life support machines in some hospitals stopped working.
Yemen is a country that is seriously struggling to match its population growth and developing economy with an adequate power supply. The recent crisis comes with several twists. It shows that the people of Sanaa are more vulnerable today than they may have been before, simply because their lives and businesses have become more electricity dependent. Wealthy people, who can afford private generators, are the least affected, while the poor are left without. The tribes that are attacking the power lines are also doing so out of frustration that these lines transport electricity generated in their home areas to which they are given no access, yet their attacks mostly affect those who are already disadvantaged.
Even more ironically, in the heart of Sanaa’s urban midnight darkness, one building always remains lit. The Al Saleh Mosque, built by former President Saleh, which houses his own personal museum in its basement, stays illuminated throughout the night by its own generators. Even with his fall from power, President Saleh’s memory stays brighter than the average Yemeni home.
Farea al-Muslimi is Executive’s correspondent in Yemen