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The Buzz

Morning briefing: 11 Jan 2013

by Executive Staff January 11, 2013
written by Executive Staff

Economy

In a push to assert its authority over Iraq's fractious oil sector, the federal Oil Ministry has stated its intention to seize crude, natural gas and fuel shipped outside the country without its approval and to prosecute offending companies.

More from Iraq Oil Report

 

Egypt’s central bank said Thursday that a $2 billion loan from Qatar arrived in December, suggesting that the money had already been eaten up defending the currency before the foreign reserves crisis became public late last year.

More from Reuters

 

Lebanon's Telecommunications Minister Nicolas Sehnaoui has announced that the Cabinet had finally agreed to release the $1.2 billion of cash to the municipalities to help them carry out crucial development projects.

More from The Daily Star

 

Saudi Arabia has cut oil production substantially, moving to fend off a growing overhang in world oil supply and defend prices well above $100 a barrel.

More from Reuters

 

Companies

French President Francois Hollande will lead a charm offensive in the UAE next week to try and help oil major Total win a $10bn deal to operate the strategically important Bab sour gas field.

More from Reuters

 

French-based hotelier Accor has signed a management contract to develop the first Novotel hotel in Jeddah, Saudi Arabia.

More from Arabian Business

 

Etihad Cargo, the freight division of Etihad Airways, will inaugurate a new direct weekly operation from Abu Dhabi to the southern Chinese city of Guangzhou from January 17.

More from Arabian Business

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The Lebanese empire

by Executive Staff January 11, 2013
written by Executive Staff

Earlier this week the Lebanese were struck by the news that only 6,733 members of the country’s estimated 15 million diaspora had registered to vote in the general elections, scheduled to take place this summer.

For many this was a genuine surprise — long had we assumed that those Lebanese outside the country felt close ties to their homeland but were simply waiting for the opportunity to rebuild the country. The thought that the invitation to vote would be snubbed barely crossed our minds.

The government reacted by blaming everyone but themselves, with Foreign Minister Adnan Mansour criticizing the “sluggishness” of the expats. But perhaps the problem is more fundamental – a growing disconnect between Lebanon and its diaspora.

As the years have passed and the country has bounced from crisis to crisis, maybe the country’s sons and daughters have become frustrated with Lebanon. Perhaps they visited the country and no longer felt at home, aliens in the land of their ancestors. Maybe, just maybe, they have given up on Lebanon.

But that does not mean that we should give up on them. The people of Lebanon long ago outgrew the small stretch of land that bears its name. Those in Sao Paulo, Toronto or Boston are no less Lebanese than those in Saida, Tripoli or Beirut.

As we go through 2013, Executive will seek out Lebanon’s merchants all over the world. Whether it be farmers in Latin America, diamond traders in West Africa or financial experts in London and New York – the Lebanese have left lasting impressions across the world, and we intend to show them to you.

Such a process has two aims. Firstly we want to inspire Lebanon’s youth by showing them the successes of their people – how hard work, ingenuity and a sense of adventure have always been the Lebanese toolkit.

Secondly, and more optimistically, we want to start the process of building a Global Lebanon – a community based on the recognition of worldwide success. Then perhaps they will want to vote.

 

January 11, 2013 0 comments
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Economics & Policy

Rebuilding Nokia

by Nicole Walter January 10, 2013
written by Nicole Walter

Handset fortunes of global phone maker Nokia have been tested severely in the smartphone era, and the third quarter in 2012 meant another drop; a report by information technology research firm Gartner put Nokia’s global sales of mobiles at 82.3 million in Q3, down 21.9 percent year-on-year, but still better than expected. In a new push to promote its latest high-end handset, the Lumia, Nokia has chosen the Middle East as one of the markets where it wants to fight its way back into the hearts of smartphone lovers. Executive sat down with Tom Farrell, vice-president of Nokia Corporation Middle East, to find out how. 

 

 

According to IDC Mobile Phone Tracker, Nokia has dropped out of the top five mobile phone manufacturers in the third quarter. Gartner said Nokia dropped to seventh place among global smartphone producers quarter-on-quarter and your overall market share for mobiles slumped to 19.2 percent, down from 23.9 percent in the third quarter of 2011. Can you comment?

 

I can’t talk about market share right now. We’re in transition and have been very open about that. What I can say is that Nokia is 147 years old and this is not the first time Nokia has started a new journey. We’ve had about six different journeys. The current one started in February 2011, the day we announced to the world that Nokia decided to team up with Microsoft to regain market share and ultimately leadership in the smartphone market.

 

How do you intend to catch up with your competition in the region?  

 

In our industry a lot of people would say, “okay it’s over — Android, iPhone or whatever is the way the smartphone is going to be.” But we beg to differ. Innovation in smartphones is just starting and we have not forgotten how to make beautiful products people want to have on the table and touch. 

 

We’ve launched the [new Lumia Smartphone] in seven markets globally: France, Germany, Russia, the United States, [United Kingdom] and in the Middle East here in the [United Arab Emirates] and Saudi Arabia. We are one of the few markets where the new Lumia with Windows 8 has launched, which is a measure of the massive priority this market has for us in terms of smartphones. 

 

Why did you choose Microsoft as partner and provider of the operating platform?

 

We think Microsoft is the best opportunity for differentiation. It’s a partnership in which both parties have a lot at stake. There are 1.3 billion Windows machines installed today and over time they will migrate to Windows 8; it is the biggest launch for Microsoft since 1995. Even a modest number of that upgrading is a huge opportunity for applications. 

 

Anyone can build on a Windows platform and the more [applications that] are based on the Windows eco-system, the better. There is a profound shift that has happened in our industry. Instead of it being product against product or company versus company, the glorious word now is ‘eco-system’, which means operating system, software, hardware etc. Arguably, the Android eco-system has had a lot of growth, Apple has its own eco-system and in our mind the industry wants a third — Nokia-Microsoft. 

 

You’ve launched the Lumia 920 here in the UAE and ran out of stock. How many phones were on sale?

 

We don’t share numbers at this point. We are ramping up the factory lines for new supply in December.

 

So why in your opinion would I want to have one or switch from the competition?

 

Because it is the world’s most innovative smartphone — a pretty bold statement to make for three reasons: Firstly, we have the best camera with super mega pixels and multiple frame shooting, allowing for someone to be deleted from a photo for example, optical image stabilization, no blur in the video and the biggest aperture for low light in the market. The fact is that 50 percent of all photos are taken when people are out and about at night. 

 

Secondly, it is the only device with a convenient wireless charging pad and third, we have the best mapping technology in the world because we acquired Navtech about six years ago. We launched an application on this platform called Cityland, which functions as an electronic ‘travel’ guide and pedestrian and car navigator.

 

Why is mapping so important? 

 

There is a lot of talk in the industry about maps right now. Google created a whole topic around searching. The ‘what’ was the first huge innovation that drew people to the web 10 years ago. Then Facebook created the ‘who’ social networking and it is our belief that the ‘where’, [that is] the location, will drive the next wave of innovation on the web. We pack them with more and more sensors and data [for] where you are going; the opportunity to create amazing applications around this are just fantastic. 

 

What is your marketing strategy for Lumia in the Middle East?

 

It is a global brand with consistency but sprinkles of localization. We tailored our message to multi-cultural feedback: camera, Cityland and no scratching. The phone is great value on par with the starting price for high-end smartphones in the market. 

 

People here love to personalize and we believe bringing color back, [when] most smartphones these days are black, will do well here. And of course we have full support for Arabic with 5,000 free applications. Social connectivity is what defines this region. 

 

The Lumia was doing well for Nokia but sales have not overwhelmed the competition. How do you aim to maintain your market share and stem further slides or even turn the growth back on?

 

The great thing about this industry is the pace, the things we already have in the lab that don’t exist, its non-stop innovation. People will copy but by that time we already have something else. Planning up to five years in advance to develop the leading edge of innovation is normal; location, social media and sensors are the next big thing in innovation. Pack the phone with sensors and create a platform in the cloud, pull it all together and they will come. 

 

Are you betting on research and development? Bernstein Research data from last year says you spent $3.9 billion on R&D.

 

Yes, it is in the billions. Patents are a great indicator of investment [and] in the first half of this year we have filed more patents as a company than since 2007. That gives you an idea of Nokia’s innovation machine. Over the last 20 years we developed and today manage an [Intellectual Property Rights] portfolio of 10,000 patent families.   

 

One patent family is an individual invention, for which we may file patents in more than one country. Our portfolio holds around 30,000 granted patents and patent applications, meaning that on average, we file three patent applications for    each invention.

 

What are your growth expectations for the Middle East and Africa, and why focus on a region where many countries are regarded internationally as developing or poorly developed?

 

We’ve been here for 20 years. The investment in the Middle East region as one of seven markets for the most sophisticated smartphone tells you something, whilst Africa is our last frontier. Our affordable Asha brand — everyone deserves a smartphone — leads there.  

 

We have the miscorrelation in our heads that income equals your technological mobility. Frankly, some of the most savvy consumers and services are in Africa, as there are few fixed lines. Kenya’s mobile payment system is more advanced than [any such system in] Europe. 

January 10, 2013 0 comments
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The Buzz

Chemical overreaction

by Benjamin Redd January 10, 2013
written by Benjamin Redd

Last month, a key American legislator again sounded the alarm over Syria’s chemical weapons. These so-called ‘weapons of mass destruction’ “could be used at a moment’s notice,” House Intelligence Committee Chair Mike Rogers told Reuters. Rogers’ claim came hot on the heels of escalating warnings over the weapons by international leaders, including United States President Barack Obama and United Nations Secretary-General Ban Ki-moon.

The flurry of admonitions has accompanied American media reports, citing anonymous US government officials, that the Syrian government recently prepared part of its chemical agent stockpile for use on the battlefield. If true, the development would be worrying, however the practical challenges and limitations of actually using chemical weapons are many and complex.

See also: The quick guide to chemical weapons

Interactive map of Weapons of Mass Destruction in the Middle East

Alarmist pronouncements such as Rogers’ often ignore the steep technical barriers to the use of chemical weapons, their limited effectiveness in urban combat and the high political costs of such a move. Because of these hurdles, experts Executive spoke to said the likelihood of the Syrian government using chemical weapons remains small, with the same holding true for the rebels should they acquire chemical weapons capacities.

Syria’s chemical romance

Until this point in the Syrian uprising, Washington and its allies have appeared to prefer that President Bashar al-Assad’s forces continue to secure the nation’s chemical weapons, despite losing control over large parts of the country. However, with dozens of suspected chemical weapons-related facilities scattered across Syria, losing territory will inevitably mean losing control of chemical weapons facilities.

This was the case in December when Jubhat Al Nusra, a jihadist rebel group ideologically similar to Al Qaeda, took over a chlorine factory near Aleppo. Chlorine is one of the oldest but least effective chemical warfare agents; during World War I, chlorine and other early agents (including mustard gas) caused just 4 percent of casualties, only 3 percent of which resulted in death.  Because of chlorine’s quick dispersal, and thus limited usefulness on the battlefield, Jubhat Al Nusra’s move in itself may not be overly significant; however, it raised concerns due to the factory’s proximity to a suspected major chemical weapons production and storage facility at Safira.

The Safira site is allegedly a key part of Syria’s chemical warfare infrastructure. Due to Syrian government opacity, the extent of its chemical weapons program has been impossible for outsiders to confirm. Experts Executive spoke to said that while there are generally believed to be four large production sites in the country — at Safira and near Homs, Hama and Latakia — there could be dozens of storage facilities, which are more difficult to identify.

These facilities are thought to produce and store mustard, sarin and possibly VX agents — all more effective, and in the case of sarin and VX, deadly, than chlorine.  According to experts, the Syrian government is thought to possess hundreds of tons of chemical agents — enough to pose a militarily viable threat — that can be delivered by aerial bombs, artillery and surface-to-surface missiles like SCUDs.

Syria’s alleged stockpile stands out by current global standards: it is one of just eight nations that are not party to the Chemical Weapons Convention (CWC), which mandates the complete destruction of chemical agent stockpiles that have no peaceful uses, and places severe restrictions on so-called ‘precursor’ chemicals — substances that can be used to manufacture chemical agents. Damascus maintains a strategic ambiguity over whether the program exists or not.

Observers often link the rationale for Syria’s chemical weapons program to Israel’s nuclear arsenal. As analyst and former Syrian diplomat Zuhair Diab argued in 1997, “Syria’s primary motivation in pursuing chemical weapons is to acquire a mass-destruction capability that could serve as a means of retaliation in the event of Israeli use of nuclear weapons against Syria.” (Israel has signed, but not ratified the CWC.) But while chemical weapons have been described as “the poor man’s atomic bomb,” experts note that the two are hardly comparable. Greg Thielmann, a proliferation expert at the Washington-based Arms Control Association (ACA), told Executive chemical weaponry “is not, strictly speaking, a weapon of mass destruction. It is a pariah weapon, of possible tactical but not strategic significance.”

Thielmann’s comments stem from the difficulties of effectively using chemical weapons. Sarin, an agent that works by disrupting the function of neurons, quickly disperses into the atmosphere, so an effective attack must involve bombarding the same area with overwhelming quantities of the chemical. The most deadly known agent, VX, is lethal from even a drop on the skin; however, providing you do not touch it there is little danger from inhalation as it evaporates too slowly. Mustard, on the other hand, is rarely lethal, but can cause painful blistering of the skin several hours after exposure, latently incapacitating a victim.

Further complicating matters, not all chemical agents are created equal. The US produced sarin in the 1950s that reportedly stayed more than 90 percent pure for decades. During the Iran-Iraq war, however, Iraqi sarin was of such low quality that by the time international weapons inspectors came to document its destruction in the 1990s, it had degraded to less than 10 percent purity, markedly reducing its effectiveness.

Noting reports that Syria is dependent on other nations for its technology, Jean Pascal Zanders, a proliferation and chemical weapons expert at the European Union Institute for Security Studies (EUISS), says that the government’s chemical agent stocks “do not come close to anything the US or Soviet Union had.” On the other hand, Leonard Spector, deputy director of the James Martin Center for Nonproliferation Studies (CNS), says, “[Assad] is 20 years later, and he’s had a lot of time to perfect these weapons and a lot of help. We don’t know, but it’s quite possible his product is superior” to Iraq’s.

Adding even more complexity to agent efficacy is how it is stored: in bulk or in filled munitions. If the Syrian government has stockpiled filled chemical munitions, “one would expect a very advanced program because some of those agents, notably sarin, are highly unstable and will deteriorate very fast,” according to Zanders. Thus, last month’s report by NBC News in the US, again citing anonymous US government officials, that the Syrian regime had recently filled munitions with agent from bulk storage might suggest a less-advanced chemical program.

But bulk storage presents its own problems. “If the agent is in bulk storage,” says Zanders, “then it takes a complex and extensive process to fill the munitions.” Such a process would be time consuming — even a fully automated system takes at least two minutes to fill each separate munition — and requires skilled technicians, whether ideal safety precautions were taken or not. Hardly death at a “moment’s notice.”

Given these complexities and the nature of the current conflict, the regime’s use of chemical weapons is “highly unlikely,” argues Zanders. This is especially true for mustard and VX, which both evaporate slowly and thus are better suited to denying an enemy the use of terrain or buildings — not an effective tactic in street-to-street fighting. Similarly, the need for sarin to be employed in high concentrations would require saturating an area with a sustained barrage of agent — again, a less effective fighting tactic within a city.

Of course, such an attack could be effective against a rebel-held area where government forces are not involved in close combat. However, in this case political calculations may also come into play. These would certainly include the unspecified “consequences” Obama threatened last month.

“The United States and other nations have issued strong statements to deter the Assad regime from using chemical weapons. It is hard to think of how the Assad regime could use chemical weapons where the benefits outweigh the costs,” says Gregory Koblentz, a proliferation and terrorism expert at the Council on Foreign Relations (CFR). Indeed, the use of chemical weapons has become understood as the “red line” that would prompt western military intervention in the Syrian conflict. One possible situation for chemical weapons use, however, is if the regime is on the verge of collapse, says Koblentz. In such a scenario, “these rational cost-benefit calculations may not apply.” But then again, “the issue becomes whether [Assad’s] order can be transmitted to chemical weapons-armed units in the field and if those orders would be obeyed.”

As the New York Times reported this week, the US has allegedly sent private warnings to some Syrian commanders, threatening to hold them personally responsible for any use of chemical weapons. On the flip side, the US “seem[s] to be signaling that the guards of these facilities will be protected from retribution if they continue to successfully maintain vigilance over the sites,” says the ACA’s Thielmann.

A further possibility that has been trumpeted in the West is that the Syrian government could give a portion of its chemical stocks to its Lebanese ally Hezbollah, but experts question this, citing the inherent difficulties of dealing with chemical weapons. In addition, notes Zanders, Lebanon is party to the CWC. “Any country that is party to the convention would have to take actions to secure chemical weapons present on its territory.”

For its part, Hezbollah has unequivocally ruled out the use of chemical weapons. “We do not possess chemical weapons and we will not use chemical weapons,” Secretary-General Sayed Hasan Nasrallah told Al Mayadeen TV in September.

 

Under new ownership

However the government is no longer the only game in town when it comes to Syrian chemical weapons. As the rebels expand the areas under their control, chemical weapons facilities — like the suspected one at Safira — will likely fall into their hands. (Although it is unclear whether these facilities will have any chemical agent: last month, the Russian foreign minister claimed Syria had moved its stocks to more secure locations.)

To mitigate the danger of accidents and pilfering, CNN has reported that western governments have been training Free Syrian Army (FSA) fighters to secure and handle them. Reports even surfaced that the FSA had created a specialized chemical weapons handling unit.

There are many reasons for the FSA not to want to use chemical weapons. Not only would rebels face the steep technical difficulties handling and employing these arms, but also severe political consequences. “Why the rebels would take any risk that would put them into a bad light and perhaps eliminate the assistance they are getting — it just doesn’t seem like a realistic prospect,” says the CNS’s Spector.

However, the armed opposition consists of a wide range of various groups and ideologies. While the CFR’s Koblentz considers rebel use of chemical weapons to be among the least likely outcomes in the conflict, he makes an exception for Jubhat Al Nusra, the jihadi group that took control of the chlorine factory near Safira last month.

See also: The quick guide to chemical weapons

nteractive map of Weapons of Mass Destruction in the Middle East

Since Jubhat Al Nusra first became widely known in January 2012, it has set about a strikingly different strategy from most other rebels. While the FSA leadership has sought to attract international support and tone down internal sectarianism, Jubhat Al Nusra has scorned Western accommodation, and spoken in overtly sectarian language. According to an October report from the International Crisis Group, for the group “overthrowing Assad represent[s] only half the battle; success would come only once the entire regime was replaced with an Islamic state following Salafi principles.”

Jubhat Al Nusra’s allegedly strong links to al-Qaeda in Iraq (AQI) — with many of its fighters reportedly veterans of the Iraq War — were used as justification for the US to recently designate the group a terrorist organization. If these links to AQI prove true, Jubhat Al Nusra might not have the same reticence to use chemical weapons as other rebel groups. In 2007, AQI attempted to use chlorine in attacks in Baghdad. The effort was unsuccessful, owing largely to chlorine’s properties as a relatively mild and quickly dispersing agent — especially when heated by an explosion.

Even if they may have the intent, however, Jubhat Al Nusra or any similar group would face the same technical obstacles to using chemical weapons as the government. Here, experts draw a clear distinction between possessing chemical weapons and being able to use them. If rebels took over a stockpile, “it would be quite a leap to conclude that they would be able to use such weapons against Syrian forces or for terrorist purposes,” says the EUISS’s Zanders, noting the added difficulty and required expertise if the agent is in bulk storage. “The people involved [in filling munitions] would need to be highly trained.”

Rogue agents

So while concerns about the use of chemical weapons have perhaps been overplayed, there are still large concerns over losing track of chemical stocks if the government falls. This issue may be magnified depending on the number of chemical sites, how the government is currently securing its chemical stockpiles, and the accuracy of foreign and rebel intelligence. As the CFR’s Koblentz explains, “the collapse of Iraqi security following the 2003 US invasion, which led to the looting of large stocks of radioactive material, conventional weapons, and explosives from unguarded government sites, is a worrisome precedent for this scenario.”

And as Moammar Qaddafi’s rule collapsed in Libya last year, an untold number of weapons flowed into underground stockpiles and black markets. In all, some 20,000 specialized weapons capable of shooting down commercial jets went missing, among other conventional weapons, according to the Stimson Center — an American think tank that specializes in security and transnational threats.

Speaking to Executive, Stimson’s Rachel Stohl observed, “as we learned in Iraq and Libya, it is very clear that when a country is in crisis or transition and loses control over a stockpile of weapons — be they conventional or chemical — there’s an inherent danger to the population. Loose weapons in a destabilized region leads to problems for the country involved and for its neighbors.”

Experts are cautious about predicting the future of the conflict, but hint that the chemical warfare question may not end, but become even more complicated if the rebels are successful in toppling the government. In that case, rebels could become locked in a power struggle between rival factions. Depending on who gains chemical expertise, who controls chemical weapons and how they are secured, the risk of proliferation may continue.

But the threat of their use must be examined against the hard truths of chemical warfare, including the tens of millions of dollars needed for even a small program, the difficulty of exports, the limited effectiveness of most chemical agents and international hostility towards their use.

These barriers greatly diminish the likelihood of chemical weapons use by any party in Syria. However, in general, “holding any weapon inherently means power because you can threaten to use it,” says Stohl. It is this ability to threaten that most likely motivates anyone seeking or possessing chemical weapons. But, as the case of chemical warfare illustrates, threatening can be quite far removed from acting.

January 10, 2013 1 comment
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The Buzz

Morning briefing: 10 Jan 2013

by Executive Staff January 10, 2013
written by Executive Staff

Economics

The United Arab Emirates (UAE) produced around 2.6 million barrels per day (bpd) of crude in December, its oil minister Mohammed al-Hamli has said.

More from Gulf Business

 

Bahraini works minister Essam Khalaf has said the government will spend more than $2.5bn on infrastructure projects in the next 10 years.

More from AME Info

 

Egypt's bourse hit a fresh 10-week high on Wednesday after a $2.5 billion financial lifeline from Qatar spurred Cairo investors to buy equities, as most Gulf markets continued their rise on the back of strong fourth-quarter earnings expectations.

More from Reuters

 

Libya's oil ministry has reached agreement with the country's army chief and defence and interior ministries to secure exporting terminals, Oil Minister Abdelbari Al-Arusi said, after several protests have caused shipping disruptions.

More from Reuters

 

Companies

Middle East Airlines has signed a final agreement with leading aircraft manufacturer Airbus to acquire 10 planes for $1 billion in a move aimed at boosting the fleet of the national carrier.

More from The Daily Star

 

The Islamic unit of Emirates NBD, Dubai's largest listed bank, intends to begin a AED1.5bn ($408m) rights issue this month.

More from Arabian Business

 

Etihad Airways has announced that it set a new record for the number of passengers carried across its worldwide network in a single day on January 5.

More from Arabian Business

 

Qatar Airways’ chief executive played down safety concerns over Boeing’s new 787 Dreamliner aircraft on Wednesday, dismissing a series of recent incidents involving the plane as “teething problems” and saying he had no plans to cancel orders.

More from Gulf Business

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Hot air in Doha

by Peter Speetjens January 9, 2013
written by Peter Speetjens

Lebanon is presented with the most serious challenges it has faced in the past decade. The economy is struggling, the internal security situation is deteriorating and the country’s neighbors pose real threats. In these circumstances the very fact that the country continues to operate can be seen as a success. And amidst everything, there are opportunities — not just in newfound offshore oil and gas but also within the country’s ingenious population.

As we head into 2013, what can be done to help the country unite, to overcome its challenges and ultimately to grow? Over the course of this week, eight influential figures will address seven important topics, each suggesting one proposal to help the country move forward. In this first article, former Labor Minister Charbel Nahas argues that the country’s economy needs fundamental reform.

There is always something ironic about holding an international conference on climate change, yet certainly when such a summit takes place in Qatar. In late November, some 16,000 delegates, experts and journalists from all corners of the world traveled by plane to the acclimatized hotels and meeting rooms of Doha to discuss how to reduce global greenhouse gas emissions. 

The irony becomes bitter when the summit — dubbed COP18 for being the 18th annual meeting of the ‘Conference of the Parties’ under the auspices of the United Nations Framework Convention on Climate Change — is headed by one of the world’s top former oil men in a country that is regarded as the world’s most polluting per capita, and when an extra, 11th day of talks is needed to grind out an agreement that is worth virtually nothing. 

Now, of course, the hosts did their utmost to give the event a positive spin. The summit’s Executive Secretary Christiana Figueres defined it as “historic”. All that is needed now, according to her, is “a change in political will”. Likewise, the summit’s chairman, Abdullah bin Hamad al-Attiyah, remained upbeat. What he dubbed the “Doha Climate Gateway” marked “the beginning of discussions” on a binding agreement on reducing greenhouse gas emissions.  The beginning? The world has been debating and discussing ever since the first World Climate Conference in 1979 — and with very little to show for it. Perhaps Attiyah — the former president of the Organization of Petroleum Exporting Countries and “Petroleum Executive of the Year 2007” according to Energy Intelligence — has been breathing too much of his own emissions. If anything, the accord inked by nearly 200 nations on December 8 is a “getaway” from any serious commitment to reduce greenhouse gas emissions any time soon. 

The only thing 11 days of talks brought the world was an extension of the Kyoto Protocol (KP), while — hold on to your chair for this one — member states agreed to try to agree on a new agreement by 2015. See here the reason why Andy Atkins, executive director of Friends of the Earth, defined the accord as an “empty deal”.

One should know that the KP ended in 2012, and that the 2010 Durban agreement had already called for a new deal to be agreed by 2015 and to take effect by 2020. What’s more, the KP did not exactly produce heaven on earth. Signed in 1997, it only obliged the European Union and Australia to reduce their greenhouse gas emissions to some 5 percent below their 1990 levels by 2012. The good news is that the some 37 countries involved are to meet the target. Collectively, they are likely to cut their emissions by some 16 percent. The bad news is that they only produce some 15 percent of global emissions, which since 1990 have risen by an estimated 50 percent. Most of the increase comes on the account of China and, to a lesser extent, India. In Doha, they joined the ranks of the United States, Canada and Russia as the loudest opponents to any kind of climate deal. 

Now, Qatar can of course not be blamed for the disappointing outcome. It had hoped that the biggest conference ever to take place on its soil would write history, put Doha on the map of the world and give Qatar some much needed green credentials; as the summit ended in failure, the opposite may happen. 

After all, most people are increasingly aware that global warming is a real threat and that something needs to be done. However, on the back of the continuous summit failures from Bali to Rio, less and less people take climate talks seriously. The same is true for the media. Few journalists bothered to cover the Doha summit in depth. “We expected nothing and got nothing,” said the editor of the Dutch newspaper I write for, defending her choice not to send anyone. 

The latest Doha failure will only fuel this general sense of fatigue and negativism. The cynics will claim that organizing a summit on climate change in a country with the world’s third biggest gas reserves, as well as the world’s highest carbon and ecological footprint per capita, says it all about the level of political will and ability needed to fundamentally change the world economic order.  Worse, there is very little hope that the stalemate will have changed by 2015, or 2020. Hence, the word on the street: “Do you want to reduce the amount of hot air entering the atmosphere? Stop organizing international climate change summits!” 

Peter Speetjens is the Beirut-based correspondent for Netherland’s Trouw newspaper

January 9, 2013 0 comments
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Morning briefing: 9 Jan 2013

by Executive Staff January 9, 2013
written by Executive Staff

Economics

A strike by Electricite du Liban’s workers has further exacerbated the electricity crisis in the country as repairs on aging power plants came to a halt Tuesday.

More from The Daily Star

 

Qatar has said it would lend Egypt's government an additional $2bn and grant it an extra $500m outright, extending a lifeline as the government battles to contain a currency crisis.

More from Al Jazeera

 

Lebanon's Tourism Ministry has launched Tuesday a 50-day campaign of 50 percent discounts in a bid to lure tourists back to the country.

More from The Daily Star

 

Plans for several thousand government employees to move to Abu Dhabi from other emirates will place additional strain on already overloaded private schools, education authorities have cautioned.

More from The National

 

Global Financial Integrity, a Washington-based non-profit, research and advocacy organization, estimated the cumulative illicit financial flows from Lebanon at $21 billion between 2001 and 2010.

More from The Daily Star

 

Companies

More than 80 percent of UAE finance executives will be recruiting in both the first quarter and first half of 2013, according to specialist financial recruiter Robert Half UAE.

More from Arabian Business

 

Italian designer Roberto Cavalli has opened a cafe-lounge along the waterfront in downtown Beirut, with the designer personally attending the launch along with Haifa Wehbe and Nancy Ajram.

More from Arabian Business

 

BMW Group has announced the delivery of more than 20,000 vehicles in the Middle East in 2012 – the most successful year in its history in terms of regional sales and a 14 percent increase on 2011 figures.

More from AME Info

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Morning briefing: 8 Jan 2013

by Executive Staff January 8, 2013
written by Executive Staff

Economics

Brent crude futures steadied above US$111 per barrel on Tuesday, trading in a tight range, as investors opted for caution ahead of key data from China and a European Central Bank meeting this week.

More from Reuters

 

The agricultural sector in Lebanon is bracing for extensive damage from the harsh winter storm sweeping, said the Farmers Association Monday, lamenting the absence of any formal compensation framework.

More from The Daily Star

 

Cypriot President Demetris Christofias will pay an official visit to Lebanon on Thursday to discuss the prospects of cooperation in the exploitation of offshore oil and gas.

More from The Daily Star

 

Iraq has promoted former South Oil Company chief Fayadh Hassan Nima to be the deputy oil minister for downstream, the first of many changes to be made to the leadership within the Oil Ministry as age limits force skilled staff into retirement.

More from Iraq Oil Report

 

The UAE’s non-oil private sector recorded a 19-month high growth in December 2012 and that marks a positive start for the country’s economy in 2013.

More from Khaleej Times

 

Kurdistan has begun to export crude oil directly to world oil markets through Turkey, industry sources said on Monday, which poses the biggest challenge yet to Baghdad's claim to full control over Iraqi oil.

More from Reuters

 

Companies

Qatar Airways has launched its first new route of 2013 with the introduction of scheduled services to Gassim in the Kingdom of Saudi Arabia.

More from AME Info

 

The biggest threat facing Dubai's residential real estate market in 2013 is overconfidence, which could result in unsustainable growth, according to a new report by Jones Lang Lasalle.

More from AME Info

 

Dubai contractor Arabtec has won a key $653m contract to build Abu Dhabi’s version of the Louvre museum.

More from Arabian Business

 

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Abou Slim’s class of 78

by Eileen Byrne January 8, 2013
written by Eileen Byrne

Lebanon is presented with the most serious challenges it has faced in the past decade. The economy is struggling, the internal security situation is deteriorating and the country’s neighbors pose real threats. In these circumstances the very fact that the country continues to operate can be seen as a success. And amidst everything, there are opportunities — not just in newfound offshore oil and gas but also within the country’s ingenious population.

As we head into 2013, what can be done to help the country unite, to overcome its challenges and ultimately to grow? Over the course of this week, eight influential figures will address seven important topics, each suggesting one proposal to help the country move forward. In this first article, former Labor Minister Charbel Nahas argues that the country’s economy needs fundamental reform.

Saleh Daky remembers having breakfast with his mother that morning back in 1978. He was 19 years old. He had spent three months in detention before being released on bail, and was dressed smartly for his court appearance. By lunchtime, however, he had been sentenced to spend the rest of his life in prison, the judge having found him guilty of spreading rumors and of possessing writings that questioned Libya’s economic system. Such were the absurdities of life in Libya under Colonel Muammar Qadhafi.

His dissident activities had been spontaneous and unorganized. “At that age, you don’t really have any political background,” he says. Daky had been studying history. Like everyone else, he had seen television footage of the swinging bodies of those executed two years earlier, during the purge of campuses that Qadhafi dubbed his ‘student revolution’. Before that, the ‘cultural revolution’ of 1973 had been a crackdown on intellectuals. Like all students, Daky was well aware that the security services on campus were eager to fill their files with the details of anyone who showed a spirit of opposition.

Daky recalls how the guard said “Welcome” as he entered the maximum security prison in Tripoli’s Abou Slim neighborhood where he was to spend his 20s, before hooding him and taking him for his introductory beating. For the next 10 years the soundtrack to his life would be Qadhafi’s seemingly endless speeches, revolutionary songs, or just state radio, blaring out from loud speakers. Sometimes the guards could stand the speeches no longer and flipped the transmitter to ‘off’, leaving the prisoners with just the electronic buzz of the speakers to torment them. But the hope of release never faded. Inside the prison they met Islamist activists who had been there since 1973. “They were still strong. They encouraged us,” he recalls.

In 1988 the Supreme Court overturned the life sentence. “There were some real judges, and many others who were corrupt,” Daky says. On the day he and a batch of fellow detainees were released, Qadhafi’s internal security chief Abdullah Senussi was at the prison to see them off. As the freed men walked away Senussi bellowed after them, “In the future, there is no more prison!” The meaning was clear. Any further transgression would mean death. “It was like a red card hanging over us. You were constantly under suspicion,” says Daky.

He was assigned to teach history in a secondary school: Greek, Roman, Arabic history, the French Revolution, the Italian colonial period. His students didn’t know he was an ex-political prisoner, and he didn’t advertise the fact. After three years, he was taken away from the classroom and restricted to administrative posts.

In 2011 the prison was memorably stormed by ordinary Libyans, after its administrative buildings had been hit during NATO bombing, and today Daky — a small, slim man in a leather jacket, driving a people-carrier — has offered to show us around the complex. He shows me a black-and-white passport photo of that meditative 19-year-old, back in 1978. He went on to marry, and has recently likewise shown his six children around the prison. He writes poetry, and on one of these visits wrote on the wall of the cell where he had been held: “How amazing to weep as you revisit the cell as a free man. How amazing to commune here, through their graffiti, with those who left as martyrs.”

On the way out we run into other visitors. Two of them, Ali al-Akremi and Haj Saleh al-Gousbi, are from the class of 1973 and spent 30 years inside. Akremi, a heavy-built man exuding enormous strength of character, has brought along his small daughter. She will gaze wide-eyed at where other adults once held her father prisoner.

Abou Slim’s low-built housing faces directly onto the prison’s high, white-washed walls. The area is regarded as pro-Qadhafi, but we find some other former Islamist prisoners chatting with a local man. He is showing them a petition that is going around the neighborhood, demanding the site never again be used for “security” purposes. It could be kept as an educational memorial for a few years, the man suggests, then turned into a school or a football pitch. One of the visitors suggests the building could now be used to hold those responsible for the abuses of the past. He is only half-joking.

Eileen Byrne reports from Tunis for the London-based Guardian and The Sunday Times

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Finance

Investment ideas: January 2013

by Maya Sioufi January 8, 2013
written by Maya Sioufi

As 2012 came to an end and investors wrapped up trades in what proved to be another frantic year, investment strategies were being discussed amongst analysts, portfolio managers and traders to figure out how to position trades going into 2013. Many market issues still lingered, the most prominent being the United States’ fiscal cliff, combination of expiring tax cuts and government spending cuts that were slated to come into effect December 31, if no budget-balancing deal is reached in Washington. For recommendations, Executive sat with Issa Frangieh, head of equities at Blom Bank and Shady Sahyoun, head of private banking at Credit Financier Invest. 

 

Issa Frangieh 

> Deploying money in the markets? “I’d be selective,” says Frangieh. He sees more investment opportunities in emerging markets than in developed markets because of higher growth prospects. Within emerging markets, he would be selective too: more cautious on China, which is going through a slowdown and favoring Latin America instead. His favorite countries in Latin America to invest in are Mexico and Chile and he would gain exposure by acquiring cyclical sectors. 

> Investing in Europe? “It is tough to call,” says Frangieh, as he expects the current crisis to drag on further. He does, however, believe that the worst is behind us but expects to see further slowdown going forward and would not invest in Europe for now. 

> Concerned on the United States’ fiscal cliff? Frangieh believes that US politicians will allow the tax cuts to expire and will come up with different tax cuts. “Right now, [the fiscal cliff’s impact] amounts to 5 percent of US GDP; I think they will reach a solution [costing] 1.5 to 2 percent of GDP,”    says Frangieh. 

> Thoughts on the MENA region? “The whole area is boiling and it is not that great,” says Frangieh. He is trying to find markets to get into but says it is challenging given that the markets are driven by policy instead of economic growth. His two favorite countries to invest in are Saudi Arabia and Qatar, for their relative stability and the significant government spending programs. 

> Top picks in MENA region? In Saudi Arabia, he would invest in the construction and cement production sectors. His top picks are Yamama Saudi Cement Company and Saudi Telecom Company. In Qatar, he would go for blue chips like Qatar Water & Electricity and Qatar National bank. He also likes the Egyptian market but warns it is riskier than Saudi Arabia and Qatar. He recommends investing in Telecom Egypt, which offers an attractive 10 percent dividend yield. He also likes Orascom Construction, which is separating its construction and fertilizer businesses and Frangieh says he thinks this will unlock value. 

> Lebanese securities? He likes Lebanon’s perennial real estate giant Solidere, which he believes will be interesting in 2013 with the upcoming Lebanese parliamentary elections, as Solidere stock price is sensitive to political news. 

> Top investment globally? Netflix, the US provider of on-demand Internet streaming media, as he expects the company to be bought out by a company such as Amazon or Microsoft.

Shady Sahyoun 

> Favorite markets? In the medium term, Sahyoun is bullish on the United States and the Far East, mainly South Korea and Malaysia. In the short term, he favors Saudi Arabia for its positive current account, Switzerland for its low inflation and high net foreign assets held by the banking sector, and China where he expects a continued solid GDP growth. 

> Top sectors in the US? Sahyoun is positive on the real estate sector due to the improving indicators such as home prices being revised upwards and inventories dropping. As for the fiscal cliff, he recommends adding positions in the markets on weakness, as even if it is “at the last hour of the last day of the end of the year, it will be resolved,” says Sahyoun. 

> Thoughts on Europe? He would avoid investments in Europe due to the continuing austerity measures, the high public debt and the lack of economic growth. 

> Top asset classes? Sahyoun favors stocks over bonds because they are relatively cheaper. He would invest in cyclical sectors and would add cyclical stocks in 2013. He also recommends owning commodities such as gold as an inflation hedge. For energy, he favors crude oil at least until the regional disorder subsides. In the long term, he recommends food related commodities as he expects a food shortage.

> Lebanese securities? Sahyoun stays clear of Lebanese stocks or bonds. “We don’t see how we are going to avoid turmoil given what is happening in the region, especially in Syria. Add to that our internal economic adversity and also very low liquidity and we have no interest in the Lebanese stock market.” 

 

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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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