Society

Dealing with trauma and depression

by Nabila Rahhal
written by Nabila Rahhal

Life in Lebanon means regularly dealing with the unexpected, and often the unpleasant. From the civil war in 1975 and moving to the consistent bouts of armed conflict that strike the country every now and then, the Lebanese have become accustomed to living with the unacceptable. Less dramatic, though also stress-inducing, are how simple acts such as trying to turn on the lights, taking a shower or even driving your car to work can have uncertain outcomes in this country. With all this stress surrounding us on a daily basis, one has to wonder: are the Lebanese still sane? What do the experts, and the numbers, have to say about the mental health of the Lebanese population?

Between 2002 and 2003, the Institute for Development, Research, Advocacy and Applied Care (IDRAAC) embarked on the first nationwide survey on mental disorders in Lebanon (the Lebanese Evaluation of the Burden of Ailments and Needs Of the Nation – ‘LEBANON’). The sample — 2,857 people over eighteen years old selected from the five different regions in the country — was subjected to extensive one-to-one household interviews based on the World Mental Health Composite International Diagnostic Interview. The participants were also asked about their level of exposure to the civil war. 

Results showed the majority of mental disorders prevalent in Lebanon fall under the broad category of anxiety disorders, such as post-traumatic stress disorder (PTSD) and generalized anxiety disorder, and are followed by mood disorders such as chronic depression and bipolar disorder. According to the survey, 25.8 percent had at least one mental disorder, a percentage similar to that in Western Europe. 

The survey’s findings are in line with the figures from the Lebanese Syndicate of Pharmacies, which show the largest number of mental health medications sold in 2011 were tranquilizers, or anti-anxiety pills, of which just under one million were bought. This was followed by 642,000 boxes of antidepressants sold last year. According to a representative from the syndicate, these numbers are expected to rise by 15 percent this year. 

‘There’s a pill for that’

Doctor Antoine Harb, head of the Ministry of Public Health’s chronic medication distribution center in Karantina, explains that, in the area of mental health, the ministry provides medication for chronic or manic depression and for psychotic disorders, such as schizophrenia. Anti-anxiety medications are not covered by the ministry due to the high prevalence of such disorders, and also because they are cheap and easily available. “Approximately 22 percent of the patients who visit the center come for psychiatric medication. In fact, the majority of patients seeking medication from us are either cancer patients or mental health ones,” says Harb. He adds that since the year 2005, they have been seeing a yearly increase of around 15 percent in mental health patients seeking medication. 

 

“The most prevalent mental health issue we have witnessed in the areas we have previously served, and are serving in Lebanon, is chronic depression. This is actually a global problem and the proof is that the theme for this year’s Mental Health Day revolves around it,” says Hala Yahfoufi, the psychologist advisor for Médecins Sans Frontières (MSF), a nonprofit organization providing, among other services, free mental health awareness and treatment in underserved communities around the world.

The Society psyche

In trying to explain the causes of these mental health problems, doctors interviewed agreed that susceptibility to mental disorders is equally due to the person’s genetic makeup and to his or her innate level of resiliency. “Two brothers, raised in the same manner and exposed to the same environment, can have different psychological responses to the same triggers,” explains Yahfoufi. She is reluctant to attribute Lebanon’s mental health problems solely to the war, saying that there are other every day triggers we are struggling with which also account for these problems. According to her, one of the main triggers for mental health issues in Lebanon, though not necessarily ones leading to psychiatric visits, is repression brought on by societal pressures and traditions. 

Harb says that they see a lot of PTSD in the center, and that this is caused by exposure to war traumas. The LEBANON study revealed that almost half the sample interviewed was exposed to war-related events, such as being a civilian in a war zone or being a refugee. According to the study, this exposure increases the risk of developing a mental disorder for the first time. 

Doctor Elias Karam, psychiatrist and member of IDRAAC, explains that globally and in Lebanon, it is the younger generation which is suffering more from mental illnesses, which cannot be attributed to the civil war as those most exposed to it are adults by now. Referring to IDRAAC’s studies, Karam attributes the prevalence of mental health problems in youth to various conjectural factors, including different and faster paced lifestyles than their predecessors that include more competition and less social cohesiveness. “With the advances in technology, and the extreme mobility taking place all over, the youth have lost access to a real and comforting social network, and this causes feelings of stress and loneliness,” says Karam. 

Though mental health problems are prevalent in Lebanon, only 10 percent of those with moderate to severe mental illnesses are treated, according to Karam. “This may be due to a lack of knowledge on the patient’s part, or because they don’t realize they have an illness and think they can overcome their emotions by themselves,” explains Karam. In contrast to chronic depression, according to Karam, 50 percent of those who suffer from panic disorders do receive some sort of treatment — though maybe not from a trained mental health professional — and this is because symptoms of such disorders are physical and difficult to ignore. If there are no physical symptoms, however, mental disorders seem to be considered part of daily life.

Improving Mental awareness

This is an issue that MSF is earnestly working at through raising awareness about mental disorders in Lebanon. “After three years of working in the Burj Al Brajneh refugee community, people were more comfortable with visiting psychologists and would voluntarily seek sessions with our mental health professionals. This was achieved through a strong awareness campaign which even targeted people’s homes,” says Yahfoufi, who says she hopes to achieve the same level of awareness in Tripoli through the work they are currently doing with the government hospital there.  

Though the National Social Security Fund does cover psychiatric medications, only three or four private insurances cover such medications at the moment, according to Karam. Yahfoufi believes that while it is easier for public hospitals to consider taking psychiatrists, physicians that specialize in mental health, on board as part of their medical team, psychologists are still not as readily accepted in public hospitals. Given the pervasiveness of mental health problems in the country, and the ongoing stress we are subjected to on a daily basis, we look forward to the day when mental health intervention and awareness are taken more seriously. 

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Companies & Strategies

Fortune in the tube

by Thomas Schellen
written by Thomas Schellen

 

Most manufacturers of widely used products vie for the attention of the masses, doing everything they can to promote their products and identities into the center of public awareness. Some other businesses fly under the public radar, whether by desire or because their products just don’t engender affection. For some of these manufacturers and the entrepreneurs running them, their media exposure is as low as their business growth is high. 

One such company is Future Pipe Industries, built and run by Lebanese businessman Fouad Makhzoumi. The company grew from a $100-million-a-year business around the turn of the century into a billion-dollar conglomerate with global reach in the course of the past 10 years.

“We represent 16 percent of the world market for fiberglass pipes and are the largest manufacturer; the world market for these pipes is $117 billion annually,” says Makhzoumi.

Future Pipe Industries (FPI) is the centerpiece of Future Group, a family holding that also includes an investment arm, ventures in real estate, engineering and business development as well as an organization dedicated to philanthropy. While the group is headquartered in Dubai and the philanthropic Makhzoumi Foundation is focused on Lebanon, FPI has operating manufacturing plants in seven countries, which distribute their goods across the globe.

In terms of economic contribution, FPI accounts for about 80 percent of Future Group’s activities. The corporate story entails several narratives of the self-made Arab man: A family-rooted individual, who had the fortune of seeing an opportunity and the flexibility to respond to it, plus the passion and power to capitalize on the initial fortune and expand it over decades. 

Fortune’s seeds of chance

As he recalls his entry into pipe making in conversation with Executive, Makhzoumi says he was a hot-headed 20-something who decided to drop the pursuit of a PhD at the Massachusetts Institute of Technology in 1974 when his doctoral advisor insinuated that his Lebanese homeland might no longer be around as a country by the time the young man received the degree. 

The young Arab took his Masters degree in chemical engineering and in 1975 moved to Saudi Arabia, where a chance encounter at a future inlaw’s house led to a job offer by Amiantit, a pipe making company that was at the time linked to the Swiss cement dynasty, the Schmidheiny family, and is still a major Saudi manufacturer today. To Makhzoumi’s question as to why he, a chemical engineer, should be interested in such things as asbestos cement pipes, the answer was “Try it for a month”.

Jump forward through about seven years of laboring for the Amiantit Company and Makhzoumi put together an investment offer to acquire the non-Saudi pipe making ventures in the region from Schmidheiny Group. “With Stefan Schmidheiny not too keen to stay in the business after his father’s death, I was able to obtain a syndicated loan and buy all the business in the Middle East outside Saudi Arabia, except for Lebanon, which in 1984 was very difficult to access.” FPI was born, the manufacturing process was altered to use fiberglass instead of the perilous asbestos and the company grew into a Middle Eastern fiberglass pipe manufacturer of note.

 

Playing back to Lebanon

The story could settle here into a routine tale of industrial growth in the 90s, were it not for some interesting decisions and Makhzoumi’s knack of seeing economic pictures in wider terms, a geostrategic gene that he may have in common with other billionaires with Lebanese DNA. In one interesting decision, Makhzoumi moved back to Lebanon in 1992 and in 1993 established one of his FPI plants in Akkar, the country’s deprived northern region. “Akkar was an ideal place,” he says. “Lebanon’s majority of export business is construction materials and food, which require road transportation. In the north, you are very close to the Syrian border which means you can export your products.”

Although he built the plant near the [dormant] regional airport, then touted loudly as investment project by the government’s IDAL agency, he never got a power line from the electricity grid or even a landline phone until he closed the plant 17 years later, Makhzoumi says. 

The plant’s 2010 shuttering was not because of missing national demand for pipes — public water infrastructure projects could have taken around two years worth of output, according to the entrepreneur — nor the deficient physical infrastructure, although he laments, “If you look at Lebanon anywhere north of Tripoli, it is like Somalia. There is nothing being done there.” 

What he says made the plant economically unfeasible was that Lebanese politicians made every effort to put obstacles in the company’s way, such as blocking the sale of pipes made by FPI in Akkar to national infrastructure projects. The exercise deeply expanded Makhzoumi’s knowledge of the Lebanese political approach to industrial needs. “By default, if you disagree with a [Lebanese] politician, he will give instructions to the government to fight local industry,” he claims. 

Instead of waiting any longer for answers from Lebanese political players, Future Group pulled the plug on the Akkar plant and is currently expanding in Spain, buying factories in the country seen widely as being one of Europe’s embattled economies. Makhzoumi’s rationale for the anti-cyclical step is that he anticipates a new trend for 2013 that will bring new opportunities. “For me, market collapse is an opportunity. I don’t look at it as a disaster as long as you have managed your core business in such a way that you can sustain and bridge the cycles,” he says. 

Under the public radar

Neither he nor FPI are very visible in international or regional media. Even though the company was valued at $1.6 billion when it was preparing for an initial public offering on Nasdaq Dubai in 2008, and his personal net worth must be assumed to be considerably above that mark today, Makhzoumi has never appeared in the Forbes’ list of billionaires. In international media, he was dragged into British headlines in connection with a scandal over a former United Kingdom minister, Jonathan Aitken, but vigorously rebutted the allegations that he himself was implicated in any wrong conduct. 

Makhzoumi has a bone to pick with local media in Lebanon, accusing them of not covering his philanthropy and the work of the Makhzoumi Foundation, because these media are affiliated with political camps that dislike him. His rare mentions in media notwithstanding, Makhzoumi appears as a skilled manipulator and someone who communicates with a keen sense of effect. When he lambasts what he sees as the failings of the Lebanese political class, he does not seem prone to thoughtless outbreaks of criticism, but rather as someone who uses candor with a great sense of impact and otherwise always says the right things with natural conviction, such as explaining his drive for business success with his passion. “You should enjoy what you are doing. If you enjoy what you are doing you can be innovative all of the time. If you think it is a job, you get bored.” 

One suspects that it is easy to be bored with pipe making. Pipes and pipe systems are an ancient technology that has been upgraded tremendously through modern engineering and manufacturing processes. They come in a surprising variety of metal, cement and plastic pipes for an extensive range of uses from the kitchen to intercontinental transport. Various lobby groups and industry associations promote the advantages of the respective materials and numerous companies claim to be world leaders in producing basic types and sub-categories. 

Pipes and geopolitics

Makhzoumi sees pipes with different eyes and listening to him, the humble pipe takes on strategy dimensions in regional and global security-economic contexts. In the Far East, for example, he says specialty pipes in marine applications will be needed for enabling the navies of Korea and Japan to build vessels that can counterbalance the expansionary naval presence of China. Developing a joint venture with Korea’s SK Chemicals, Future Group will play a part in delivering pipes for use in naval vessels.

A broad geostrategic aspect of piping is the transport and distribution of vital materials, control of which Makhzoumi sees as today being more important than their production. Oil and gas pipelines that traverse the Middle East or link Asian producers to Europe are well-known for their strategic importance, but China also provides a hot current example. 

According to Chinese state television reports, the country last month started construction of its third pipeline in an extensive internal gas transportation network. China’s latest West-East pipeline construction project is projected to cost $19.9 billion and cover a distance of 7,300 kilometers, the state media said, adding that the first two pipelines of the West-East network were realized between 2002 and this year with an investment of $46 billion. 

Pipelines of intercontinental length already are tools of geopolitics and will assume increasing importance in the competition of nations for economic leadership. No wonder then that the FPI founder regards business leadership as inseparable from engaging in politics. “You cannot be a global player by trying to be only a businessman,” he says. “I play regional power and politics to try to understand the trends that are arising and this is how you position your business in order to be part of the change.” 

The pipe maker also sets his sights on countries where he anticipates broad-based infrastructure development needs to meet high population pressure and social development demand. Indonesia, for example, will need to start spending on amenities for its citizens and invest in infrastructure such as pipe-based utilities. “We believe Indonesia is moving. It is becoming one of the largest Muslim countries. They have to start spending in order to avoid falling into the Arab Spring,” Makhzoumi says. 

And there will be no end to piping needs. Global demand will burgeon because higher population densities and scarcer resources will mandate development of pipelines. For every person born on earth, two meters of pipe are needed, he cites. 

The Syria-Russia puzzle through pipes

Even the puzzle of why Russia is not joining the rush to change the regime in Syria can, from the geopolitical entrepreneur’s perspective, be understood by examining the angle of gas transportation. Russian self-interest is to keep control over the price of gas deliveries to Europe via the pipelines that allowed it to develop this crucial revenue stream after the end of the Cold War and the breakup of the Soviet empire. If gas from exploitation of newly discovered finds in the Eastern Mediterranean were to be delivered to Europe at reduced prices, when compared with Russia’s, it would break Russia’s back, Makhzoumi reasons. “That is why Russia invested billions of dollars over the past seven, eight years in Cyprus, against which they have the right to set up their LNG (Liquefied Natural Gas) plant,” he says. “If they control it, they will make sure that this gas will not be delivered to Europe at a lower price than what they are delivering. To be able to do that, you need the LNG plant and you need the military base, which is what Syria has.” 

Makhzoumi’s socio-political power base in Lebanon includes his philanthropic foundation and a political party, both of which he says are wholly self-funded and do not expose him to the levers of influence and the strings that other political players are pulled by. He claims he is a player in Lebanese politics “because this is my country and I am not happy about the way that our people are living”, and when asked if he wants to be prime minister, answers “Yes, why not.” 

Looking East

In the meanwhile, he is positioning FPI for greater global reach. The company, according to Makhzoumi, today has a built-in production capacity of some $4.5 billion, of which the Middle East represents about 60 percent. Besides developing the group’s engineering and procurement capacities, entering Spain as springboard for dealing with Latin America, investing in the marine pipe venture in South Korea and a deep-well equipment venture in Indonesia, the Future Group is also building a $100 million facility in Myanmar. Three to five years from today, the IPO that was first planned for 2008 will likely be on the books again, with a valuation of the company that Makhzoumi expects to be between $4 billion and $5 billion. As to the location of the primary listing, he says, “my feeling is Singapore because the market is moving this way.”   

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Economics & Policy

A decline into uprising

by Jihad Yazigi
written by Jihad Yazigi

While there is a general consensus that the uprising gripping Syria since March 2011 is part of the broader regional movement for better governance and more freedoms, there has been little debate as to the extent to which the economic and social conditions prevailing in the country contributed to the uprising. The question of whether Syrians revolted because of their thirst for freedom, justice and dignity or whether they did so because of their poor economic and social conditions remains, however, important if one wants to understand the reasons that led to the uprising and produce viable economic reconstruction plans.

At the beginning of 2011, Syria had been witnessing for several consecutive years an average annual growth in its gross domestic product (GDP) of between 4 and 5 percent, limited current account, trade and fiscal deficits, a stable foreign exchange rate, rising foreign investments and a curtailed inflation rate. These positive macroeconomic data hid, however, many imbalances that lay behind them, and other longer-term trends must be taken into account in order to better understand the dynamics of the revolution.

The level of GDP growth, for instance, may be high by Western standards but is wholly inadequate by Syrian ones. Indeed, according to most analysts, an average growth of 8 percent is required to generate enough jobs for new labor-market entrants. For more than three decades GDP growth has fallen short of that level, meaning an uninterrupted increase in unemployment for some 30 years in a row.

The fiscal deficit may be limited but this is largely a result of government investment expenditures lagging, thereby contributing to long-term infrastructural shortfalls. As for the trade balance, it remains highly dependent on oil exports, which, in 2010, represented 46 percent of Syria’s total exports. With the volume of crude reserves rapidly declining, there are serious longer-term concerns. Meanwhile, private sector investment is largely geared toward real estate and the services sector, away from more long-term labor-intensive industries such as textiles, which has seen the closure of scores of factories in the last decade. Finally, the foreign direct investment Syria attracts every year may be on the rise but it remains below Jordan’s, a country with a population a fifth of the size as Syria’s,  and none of its vast natural resources.

Booms and busts

A look at longer-term trends helps puts things in perspective. In 1946 Syria was a founding member of the General Agreement on Tariffs and Trade (GATT), the predecessor of the World Trade Organization — out of only 23 countries in the world. In the 1950s, when Algeria was still under French rule and the majority of ‘third world’ countries were still fighting for independence, Syria had a buoyant economy and a vibrant political life. Then, three decades of strong state investment in the country’s physical infrastructure and in its health and education services helped boost the country’s development indicators. In the 1970s, Syria’s Human Development Index — a composite statistic of life expectancy, education and income calculated by the United Nations — was growing at a rate among the highest in the world. In 1983, Syria’s per capita GDP, at $1,901, was higher than that of Turkey — $1,753 — and almost on par with that of South Korea ($2,187). That was only 30 years ago.

Surveying what followed in the 1980s is important in order to trace back the economic challenges the country now faces. At the beginning of that decade the Syrian economy contracted sharply, partly as a consequence of the fall in global oil prices and the decline in remittances and aid from Gulf countries. The foreign currency reserves dried up, leading to a rapid devaluation in the value of the Syrian Pound starting in 1986; this year marked the beginning of the implosion of Syria’s middle class. This was only further compounded by a rapid decrease in spending and investment by the government, which, at the time, played an overwhelming role in the economy. The country never fully recovered.

In the last part of the decade oil began to be extracted from new fields in the country’s northeast, around the city of Deir-ez-Zor. A short boom followed, fueling hopes that the state would lead the recovery by investing in infrastructure and by opening up the economy. The opposite came to bear: revenues from oil income gave new fiscal margins of maneuver for the government as well as a new source of foreign currency earnings, and as a consequence reduced the pressure on the authorities to open up — Syrian economists call the 1990s the lost decade.

Starting in the 2000s, and coinciding with Bashar al-Assad succeeding his father as president, the decline in oil production again threatened the government’s fiscal position and serious economic reforms finally began. Geared toward the services sector, the gradual liberalization of Syria’s economy improved with a modernized legislative framework for investment, reduced taxation on private corporations, an unfencing of trade borders and increased private sector investments in new industries.

These developments spurred the creation of modern and relatively sophisticated banking and insurance sectors with the entry of some two dozen regional banks and financial institutions in the market. The expansion of retail trade and of the tourism industry was evidenced with the construction of large malls and the entry of global hotel operators. What is more, concessions were awarded to private international companies for the management of the country’s two ports of Tartous and Lattakia and there was a general boom in the services sector.

However, this policy of economic liberalization was marred with mistakes typical of similar processes in other developing countries. 

 

The downside of opening up

The free trade agreements signed with Turkey and Arab countries, for instance, were implemented with little safeguards to protect or promote Syrian manufacturers. The reduction in customs tariffs led to an invasion of foreign products that put countless industrial plants and workshops out of business and, consequently, thousands of people out of work, while only limited mechanisms were established to promote exports and improve competitiveness.

More significant is the divestment of the state from the agricultural sector. While the sector had for decades been a major contributor to economic output and to the labor market, it had to face a steep decline in subsidies at the worst of times — amid a severe drought.

In 2008, after three consecutive years of drought, the government announced a threefold increase in the price of gasoil — which is used by farmers to fuel their irrigation pumps — and an increase in the prices of fertilizers to world market levels. The combination of these factors — a drought and poor policy decisions — played a major role in the staggering decline in the share of agriculture in the economy, from 25 percent of GDP in 2003 to 16 percent in 2010, or a decline of a third in its contribution to the country’s economic output in some seven years. At one point, the production of wheat, a major staple food for the population, fell by half.

The crisis of Syria’s agricultural sector led to the migration of hundreds of thousands of people from eastern parts of the country, in particular around the city of Deir-ez-Zor, to the working suburbs of cities located further west, including Damascus, Daraa and Homs.

These twin crises in the agriculture and industrial sectors — or the crisis of the “working world” as one Syrian intellectual put it — converged in many of Syria’s rural and suburban areas; the geographical roots of the current uprising very much mirror the impact. Protests began in the city of Daraa, which lies at the center of a large farming area to which fled many of the people living in the drought-affected northeast. The wildfire of popular discontent soon spread to the rural areas of Idlib and Aleppo provinces, where livelihoods depend largely on agriculture, and to the working suburbs of Homs and Damascus — home to many of the artisans who lost out from the process of trade liberalization. 

But the state divestment from this “working world” is also a reflection of a more subtle generational change in the composition of the governing elite in Damascus. While farmers, for instance, historically represented a pillar of the ruling Baath Party and a large share of its rank and file — Bashar’s father, President Hafez al-Assad, called himself a peasant — the current generation of Syrian officials were largely born and raised in the cities, disconnected and therefore insensitive to the plight of rural areas.

While there is little doubt that the struggle of Syrians for a better life was driven, before anything else, by their thirst for dignity, justice and freedom, one should make no mistake: The dispossession and injustice felt by large segments of the population cannot be understood without taking into account their economic shades. Poverty, forced displacement, loss of assets and property, and gradual deterioration of living conditions are all major contributing factors to the sense of lost dignity and justice, and hence, in the eruption of the Syrian revolt.

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Finance

Q&A: Mastercard’s Basel el-Tell

by Maya Sioufi
written by Maya Sioufi

Today’s smartphones increasingly resemble “mini laptops”, allowing users on-the-go access to the Internet. They are about to get more useful and addictive, becoming wallets as well, allowing users to pay with their mobile phones. Google Wallet, launched in 2011, is an example of a system allowing users to tap their phones for payments. It is still early days and the adoption of phone payments is still nascent. In the Middle East, cash transactions remain the primary means of payment but Basel el-Tell, Levant regional manager  of MasterCard Worldwide, is calling for the region to increase its adoption of electronic payments. While in Beirut, he sat with Executive to discuss the technological changes in electronic payments and their implementation in the Middle East and Lebanon.

Have you witnessed a change in consumer patterns during the Arab revolutions?

While there is a tendency to save, there has not been a shift in spending habits and overall spending is still growing across the region. Point-of-sale transactions are up 32 percent in the first half of 2012 relative to the same period last year. Some countries have been affected by a reduction in tourism but overall spending in the region is still steady.

One year on from MasterCard and Visa’s ban on all Syrian issued cards, how have you been affected by this ban and how many cards were impacted?

We don’t issue figures on cards in Syria but everything was halted: debit cards, credit cards etc. The United States placed sanctions on Syria and we don’t see [our ban] changing unless there is a change in regime.

What percentage of Middle East consumers holds a credit or debit card?

In the region, electronic payment methods account for less than 10 percent of total payments as cash and checks still account for more than 90 percent of payments. In Europe and in North America, electronic payments reach 20 percent; cash and checks still dominate. This is one of our drivers: we want to see a world beyond cash. Our competition is cash and checks. Cash is very expensive as it costs between 1 and 1.5 percent on average of a country’s gross domestic product to print cash, transport it and secure it. We are working with governments to replace cash and checks with electronic payments.

For instance, in Egypt we are working with the Ministry of Finance on a program enabling the payment of employees’ wages by payroll cards. In the United Arab Emirates, we are working with the Ministry of Labor on a wage protection system whereby all migrant workers are paid electronically. This will allow the government to make sure that people are paid on time. In Lebanon, we are working on several projects with local partners. We have made inroads but we don’t have anything to declare today. We see momentum and we think we will shortly see projects where government payments start taking place electronically.

With the ‘Gauss’ virus attacking Lebanese banks recently, what is MasterCard doing to help alleviate consumer concerns regarding electronic payments?

We are aware of this issue and we are working with our technology and security teams to monitor the situation as it evolves, to prevent any impact to our business and our cardholders. We recommend that consumers continue to be diligent when it comes to protecting their personal financial information when they are online. It’s important to take steps such as making sure your virus protection software is current and features the latest updates. Also, consumers should refrain from clicking on links in emails that come from unknown sources for their own protection.

Near field communication (NFC) is gaining more and more traction among mobile phone developers recently, and  it was a disappointment for Apple fans when the new iPhone 5 did not offer this technology. Tell me a bit about it and why it is so important.

Imagine you are walking around in New York City and you want to eat a pizza. You go on Google maps and it shows you the closest pizza place. You can then book a table, order your pizza online and you can pay while you walk to the pizza place. It saves time and it is very secure. In 15 to 20 years, plastic will disappear in most of the world. Currently, many issuers are using NFC technology and we are working on it in the region too.

With the region still behind in adopting plastic but with mobile penetration on the rise, can we go straight to mobile payment and jump plastic?

Mobile penetration in the region shows this is the way forward but we need the infrastructure to make sure the mobile partners are ready. Some telecommunications operators in the region are not able to execute such technology. In Qatar, we launched a Qatar Telecommunication and Qatar National Bank solution so Qataris can walk into a Pizza Hut and pay with their phones. At the beginning, people will be hesitant but the learning curve will take place. We know that the Lebanese culture is one of entrepreneurship, innovation and early adoption of technology. We think PayPass (MasterCard’s “Tap and Go” cards) will be a hit.

How does PayPass work and how successful has it been in the region?

PayPass cards are made up of a radio chip that resides in the card and when it ‘sees’ a contactless reader, it starts communicating. It is designed for low value payments and does not require a signature or a PIN. If the value exceeds the limit put forth by the bank, you need to input the PIN. In the future, you will just tap your phone and not the card. It has been adopted in 41 countries in the world and four in the region: the UAE, Qatar, Egypt and Lebanon.

How many banks in Lebanon offer this technology?

Two banks in Lebanon offer PayPass: Fransabank launched it in 2006 and Bank Audi [launched September 30]. It has been mostly used by Fransabank’s international travelers and some local clients.

How many readers are available in Lebanon for this technology?

There are around 300 PayPass readers in Lebanon currently but we will see many more in the future. There is currently an aggressive marketing plan with retailers and ABC Group, one of the biggest retailers with seven outlets and two big malls, is deploying readers. Bank Audi, which is deploying the readers for ABC, will be installing 2,000 readers in the next 12 months and another 3,000 readers after that.

When do you think Lebanon will be “tapping and going”?

Some banks are still offering magnetic strips and some are moving to chip now. Remember ‘zip-zap’ payments? It used to be zip-zap then magnetic then chip then contactless (such as PayPass) and then NFC. There is a learning curve. Less than 10 percent of the current available readers are Bluetooth GPRS enabled machines, the ones that move to you, and that is because they cost three times more than the regular readers (a Bluetooth reader costs $500 to $1200 vs. $150 to $300 for a regular reader). The acquirer — the MasterCard or Visa licensed financial institution — pays for the reader and often charges the retailer a fee for using it, with an average 2 percent of sales on machine paid to the acquirer.

What does the future of electronic payments look like?

Everything will be on your phone in the end. Your life is on it. It is becoming a big part of our lives.

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Society

Book review: Superman is an Arab

by Faisal al-Yafai
written by Faisal al-Yafai

As cultural editor of An Nahar, Joumana Haddad has long been a presence in the vibrant media landscape of Lebanon. But until recently, she was better known outside of the country for her poetry than her journalism. That changed two years ago, after the publication of ‘I Killed Scheherazade’, a furious tirade about the state of women in Lebanon, the Arab world and elsewhere. It was widely praised, particularly in liberal circles and in the West, a fact that provided Haddad’s critics with ammunition.

‘Superman Is An Arab’ is the follow-up to that book, less a sequel than the continuation of a conversation about what Haddad thinks is wrong in the battle of the sexes.

Haddad turns her attention to men in this book, decrying the ‘Superman’ of the title, a man whose “muscles are just a facade for his insecurities”, who “confuses manhood with machismo, faith with fanaticism, ethics with stale tradition, love with possession and strength with despotism.”

There are, she argues, many of these men “in my dear old Arab region” and happily lists them. It is a long list. “The father, the brother, the boyfriend, the husband, the priest, the sheikh, the politician. In short, the guy next door.” Haddad contrasts these Supermen with the Clark Kents, men who are “timid, clumsy, honest, sweet and mild-mannered. In short, genuine.” Lebanon and the Arab world, she writes, need more Clark Kents.

Despite the title, Haddad isn’t specifically taking aim at Arab men, but men in general. It is clear, however, that she feels especially angry about the treatment of women by men in her own country, Lebanon.

Haddad has said before she feels her country hates her, but she exhibits genuine care for Lebanese. She is just furious at their treatment.

And her fury has many targets. Haddad is outraged by what she sees as sectarianism pervading daily Lebanese life, from the assignation of a child’s religion at birth, to the lack of civil marriage in the country, to the division of political spoils. She fumes at the emphasis on women’s virginity, which she writes leads the bodies of women to be religiously regulated, even mutilated, to be “buried under burqas” and murdered for the sake of “honor”.

Even the social freedom of Lebanon, the “illuminating exception” of the country in the region, provokes her. This freedom is illusory, a glaze of liberty in a conservative country, always compared to places with much less freedom, like Saudi Arabia.

Yet Haddad reserves most of her anger not for individuals, but institutions. She writes sympathetically of women, whom she feels have been victimized and, on occasion, have participated in their own victimization.

Interspersed with the book’s polemical essays are amusing, telling biographical sketches. Haddad is reflective in her writing and recognizes that she has too, on occasion, participated in unhealthy relationships — she speaks of men she has loved who were wrong for her from the start.

But ultimately Haddad is arguing for the freedom of individuals from the bonds that restrict them. She is scornful of marriage. It is a “disastrous invention”, she writes, a patriarchal institution that promotes male superiority over women.

Haddad’s latest work will delight those who enjoyed ‘Scheherazade’; her anger is clearly undimmed and she ranges widely in her exploration of this new territory. The criticism of her critics will remain the same; those who find her shrill, or argue she is perpetuating Western notions of liberation, will find little here to change their minds.

One can disagree with what Haddad says and even the way in which she says it. But it is difficult to argue that Lebanon’s Germaine Greer — still angry, still vibrant, still worth reading in this tirade against manufactured men of steel — does not for the people she writes about.

 

Faisal al-Yafai is an award-winning journalist and essayist. His book about feminism in the modern Middle East is forthcoming from I.B. Tauris, London

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Finance

MENA stock tips, November 2012

by Maya Sioufi
written by Maya Sioufi

Markets appeared to be on the downward slope of the rollercoaster last month. After rallying following monetary easing measures in the United States and in Europe in September, markets have headed back down as companies report their third-quarter earnings, with some corporates guiding the market lower. Executive sat with Abdulla al-Hosani, general manager of Emirates NBD Securities, the brokerage arm of Emirates NBD, and Nadim Kabbara, head of research at FFA Private Bank for investment recommendations. 

 

Abdulla Al Hosani

In which markets would you buy?

Hosani would invest in three regions: South America, for its significant growth and increasing population, the Far East (mainly China), which he says is still booming, and the Gulf Cooperation Council (GCC), where Hosani is seeing investor demand coming back. For more developed markets, he prefers to wait for now. Hosani is mostly concerned about the unresolved European issues.   

Key concerns with these markets?

"Accountability of management” says Hosani. “Management makes a wrong decision and then they take their bonus and leave.” He would also like to see stricter investment banking and auditor regulation. 

Favorite asset classes?

Hosani favors fixed income, equities and property in the three regions mentioned above. For property, he would also consider “one of the big cities such as London, New York or Paris if there were unique opportunities.” As for sectors, Hosani prefers exposure to more defensive sectors, mainly the telecommunication sectors across the three regions.

Thoughts on Middle East equities?

His preference would be for markets in Saudi Arabia, the United Arab Emirates, Qatar and Egypt. He likes Saudi Arabia, Qatar and the UAE for their stability and growth potential. In Egypt he sees strong demand from investors following the uprising. He would also recommend investing in Libya and Tunisia. 

Top investment ideas?

Hosani believes that “the Middle East would be one of the best areas to invest in if the ‘Arab Spring’ settles, especially Syria.” He would break down his investment in the Middle East as follows: 45 percent in equities, 25 percent in real estate and another 30 percent in fixed income. 

 

Nadim Kabbara

Time to buy on third-quarter result weakness?

Kabbara would be selective in what he is buying. He believes that the US’ quantitative easing measures limited the downside of the markets but “it won’t take us forward.” Kabbara is focusing on quality US companies at good valuations and would stay away from Europe as “it is still challenging for now.” He favors betting on increased spending from US consumers, choosing discretionary sectors such as apparel manufacturers and food and beverage. 

Kabbara is also waiting to invest in cyclical companies, with a preference for industrial companies such as Caterpillar and Cummins, and technology companies such as Intel. He also likes the US healthcare sector as the baby boomers are retiring and “are going to need more medication.”

Concerned about the upcoming US fiscal cliff (the massive legally-mandated tax increases and spending cuts coming into effect in 2013 if no budget-balancing deal is found)?

“Extremely concerned” says Kabbara. He does not know what US politicians will do and would not be surprised if “they look to do things at the eleventh hour” just like they did with the increase in the debt ceiling last year. “It is a very big headache for the markets,” he adds. 

Thoughts on Europe?

Kabbara believes that expectations have risen in Europe following the bond-buying program announced by the European Central Bank in September, and would not invest unless there are selective opportunities. He wants to see “less talking and more doing from Europe’s politicians”. 

Thoughts on MENA equities?

Kabbara believes that MENA equities present good opportunities with some companies “trading at very attractive prices to free cash flow with generous dividend yields.”  He would avoid countries in the region that are oil importers or that have a lot of political risk, mainly Kuwait, Lebanon, Syria, Bahrain and Egypt. He favors Saudi Arabia, which is looking to use its revenues to boost non-oil sectors. He also recommends investing in Qatar, Oman and the UAE. 

Top investment ideas?

His top picks are Spirit Airlines, a US-based regional ultra-discount airline company, and Etihad Etisalat, a Saudi-based telecommunications company that he considers an “attractive way to play Saudi consumer spending with a nice growth profile and cash-flow generation capacity.” 

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Last Word

Smiling through our pain

by Sami Halabi
written by Sami Halabi

An economy that can serve the interests of all our people requires confidence. The necessary conditions for that economic confidence are both security and straight talk from those who are entrusted to protect our nation’s growth. That is why it is so damaging that no one called out the president or the prime minister for inflating Lebanon’s economic progress to the public and international community last month.

According to our Prime Minister Najib Mikati’s office, “estimated results” for last year’s economic growth have come to 5 percent and growth in the first quarter of this year increased by “leaps and bounds”. If that makes you think that one of his speechwriters has a substance abuse problem, you are not alone. No one — from the international financial institutions, to local academics, or even the humble journalists who monitor our economy — thinks growth last year exceeded 1.5 percent, not to mention those who believe the economy has been contracting since the third quarter of 2011.

Not to be outdone, at a United Nations conference last month President Michel Sleiman heralded the achievements of the agricultural sector, claiming it now makes up 6.5 percent of the economy while it had previously made up 5 percent. Of course, he neglected to mention that value added in the sector fell in 2010. There are no national accounts for 2011 and certainly not for 2012.

The relatively productive agriculture minister, Hussein Hajj Hassan, who flanked the president at the conference last month also trumpeted his ministry’s development platform for the sector, issued in 2009. A paper was issued in 2009 that contains a laundry list of issues facing the sector, followed by bullet points and badly drawn Microsoft Word Tables stuffed with the keywords governments love to use: “enhance” this, “develop” that, “reduce costs”, “create jobs”. Naturally, the only real targets in the document are those aimed at increasing staff (read: patronage) within the ministry. Since then none of the laws he proposed have passed parliament and the strategy ends next year anyway.

Instead of trumpeting overly rosy figures and touting their outstanding visions, perhaps some more humility would befit a political class that has not managed to have a census in more than 80 years, or even knows what the country’s gross domestic product, employment or inflation rates really are. The statistical, administrative and monitoring frameworks needed to accurately calculate these things are still some way off. In the meantime, there are real indicators that can be monitored in a much easier fashion to appraise the government.
Take, for instance, another half-nation of around five million hard-nosed people with limited government ability to make decisions: Scotland. In a surprisingly successful effort to reform government, the Scots have come up with a system that, on the surface, reads very much like the agriculture ministry’s ‘strategy’. Their ‘National Performance Framework’ starts with a purpose (basically ‘increasing sustainable economic growth’), drills down into five purposes of equally loose language: ‘safer & stronger’, ‘healthier’, ‘smarter’, ‘greener’, ‘wealthier & fairer’. Each category then has indicators (such as improved levels of educational attainment) and measurement criteria (such as gaps in student performance between Scotland and countries from the Organization for Economic Cooperation and Development), with progress reports posted online and updated regularly. The government doesn’t meet all of its targets, in fact they maintain the status quo much of the time, but people believe them when they succeed and listen to them when they explain why they fail. This approach to governance was a contributing factor to ruling Scottish National Party winning an outright majority in 2011 in an electoral system that was designed not to allow that to happen.

Lebanese politicians should take heed: honesty and transparency in governance builds confidence — from international institutions and partners, from the business community, and from those who are supposed to be paramount in all this, the Lebanese. When our economy is suffering, smiling to us and telling us everything is fine will not make it easier to pay rent or get a decent job. Rather, what is needed is an honest appraisal of where things are failing and what is lacking — at least then we will know where to begin to fix things.

Sami Halabi is a Masters of Public Policy candidate at the University of Edinburgh and former managing editor of Executive

 

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Society

Presidential beyond words

by Line Tabet, Zeina Loutfi & Ramsay G. Najjar
written by Line Tabet, Zeina Loutfi & Ramsay G. Najjar

“Obama’s weaknesses on full display in debate”; “Obama admits debate performance a flop”; “In debate style and body language, Romney trumps Obama”.

These have been the sort of remarks making headlines since the first of the three United States presidential debates in the run-up to the vote between Democratic incumbent, President Barack Obama, and Republican candidate Governor Mitt Romney. As expected, the debate has been extensively analyzed in the hopes of predicting who might become the next American president. What was especially striking about the media coverage this time was the excessive attention given to the candidates’ physical language, across both serious and comedic media, which seems to have played a major role in their proclamation of the first debate’s winner.

While the analysis of body language might seem trivial to many, becoming the preferred subject of comedy and spoof shows, some studies have shown that only 7 percent of communication is conveyed through actual words, whereas 93 percent is nonverbal communication. The most telling and over-used example of this is the first American televised presidential debate: The 1960 Richard Nixon versus John F. Kennedy debate. It has become a popular reference that Nixon, the accomplished politician, failed to impress in the face of a young and novice candidate, mainly because he refused to wear makeup.  

Whether the above percentages are accurate or whether we agree or not with the analysis of the Nixon debate, one cannot discount the importance of body language in a public or media setting, whereby posture, facial expressions, hand gestures, voice and dress code have become key components to be taken into account, alongside messaging and content. Trying to predict the winner of the American elections through body language is no doubt a fortune telling assignment. However, given that the whole world is closely watching this event, and that all eyes are riveted on American media screens, we cannot but stop and examine the presidential and vice-presidential debates to illustrate the basics of body language and extract key takeaways, as well as some ‘Dos’ and ‘Don’ts’. Furthermore, keeping in mind that the victor of the elections may well be known by the time you read this article, it is worthwhile exploring whether all this hype about the two candidates’ nonverbal performance had any real value.

Posture: the manifestation of confidence

The reason some viewers may have confused Obama’s first presidential debate with that of a daily press briefing is because of his perceived “defeatist” attitude and posture. His body language communicated stress and anxiety: leaning on one foot, tilting his head to the side and slouching his shoulders. He came across as unsure of himself, lacking energy and outright bored. On the other hand, Romney seemed calm, projecting passion and motivation, whereby his overall posture was straight and upright, conveying confidence and poise, all of which translated into positive energy.  

Facial Expressions: telling it all at a glance

A month prior to election day with polls providing all kinds of forecasts as to voter intentions, candidates need to speak to voters and rally them, be they supporters or opponents, and especially the undecided ones they are trying to win over. Therein lies the importance of appearing to address each and every one of them. And what better way to do so than establishing eye contact so as to give every viewer the impression of being spoken to directly. Both Romney and current Vice President Joe Biden played this card successfully, as they stared straight at the camera to address voters, conveying both candor and caring. 

On the other hand, Obama’s genuine smile, one that has become his trademark over the years, looked dull and faded because of the negative energy he exuded. He was often seen pursing his lips, especially when listening to Romney’s arguments. This brings us to one of the main challenges that face incumbents during such debates: to avoid appearing condescending and patronizing or looking at their opponents with disdain and arrogance. A challenge both men failed to meet. 

Hand gestures: adding punch through motion

The art of hand gestures may seem like a secondary element of body language, one that comes naturally and spontaneously. However, it can strongly affect the image of any politician or public figure, either by making them appear tense or agitated or by adding emphasis and impact to their messages. Indeed, those with overly animated hand gestures often distract viewers, as their attention is drawn to the hand rather than the content and messages. As such, the “Golden Rule” when it comes to hand gestures is to avoid excessiveness. When it came to persuading voters with gestures, Romney outdid Obama in the first debate. Indeed, they were in sync with his speech, reaching out to his audience, creating a feeling of openness, and ultimately making some messages more memorable to the audience.

Voice: conveying impactful messages through delivery 

Recent award-winning movies, including The Iron Lady and The King’s Speech, have shown the importance of voice in conveying leadership: Margaret Thatcher in the midst of vocal training, working on the pitch of her voice to project power and authority, and the lessons of King George VI with his speech therapist to cope with his stammer. These have become iconic scenes that support the claim that voice can accentuate leadership attributes and is an effective means to influence and impact the audience. During election time, the debate’s objectives are to inspire people and mobilize them to vote. Hence the importance of one’s voice, as it transforms lexis into impactful messages and memorable sound bites through the appropriate use of pitch, tone, volume, rate and articulation. Varying the tone of voice allows one to convey dynamism and enthusiasm, which are key to emphasizing pivotal ideas.

Whereas Romney was confident in delivering his messages, speaking eloquently and clearly, Obama had a slower delivery, resorting to verbal fillers, and making long pauses. This did not play to his favor, despite succeeding in projecting empathy and compassion when he softened his tone of voice to mention his grandmother in the context of social security and his fight for the American middle class.

Dress code: the clothes that make the man

Red is typically the color of the power tie, a memo that Romney received and understood, with his dark red striped tie popping on screen during the debate, compared to Obama’s royal blue tie which blended in with the purple background and reinforced his sense of fatigue. The specific choice of color is of course not the point here; what is important to remember is that speakers must always choose attire that accentuates their presence and aura. This example confirms that dress code goes beyond style and can actually influence the image of a public figure, clearly helping to make a strong and positive impact.

Everything comes 

in pairs 

Jon Stewart dedicated an episode of his satirical show, “The Daily Show” to the exaggerated hype given to the candidates’ body language after the first debate, with some media going to extremes by counting the number of blinks for each candidate. However, this definitely subsided following the second debate, with the focus shifting toward content, arguments and promises made by each.

With the parliamentary elections in Lebanon, Jordan, Qatar and Egypt “theoretically” around the corner, potential candidates can stand to learn a lot from the US elections’ experience when it comes to polishing their body language in the hope of possibly compensating for the huge gap in their rhetoric, which remains sorely lacking. When it comes to media performance, and as the saying “everything comes in pairs” goes, it boils down to content and physical language, two ingredients that need to complement each other in order to ensure a successful recipe.

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Society

Szechuan in style

by Nabila Rahhal
written by Nabila Rahhal

Driving down the highway from Antelias into downtown Beirut, one cannot but notice several huge billboards advertising the latest Asian cuisine restaurant, Chenbao — the Chinese word for castle. Curiosity aroused, Executive decided to pay a visit.

Chenbao is the newest conception of the Kazzami group, which brought us the high-end sushi restaurant Osaka and is planning for the opening of the Italian garden restaurant Villagio on Kantari Street, Beirut. Since Chenbao is also promoted as luxurious dining, expectations were high. Situated on the main road in Saifi Village II, with glass panels allowing diners to see the streets outside and be seen themselves by passersby, glamor is projected before you take your first step inside. 

At the entrance, Executive’s party of two is greeted by an Asian hostess wearing a Chinese-style dress, who escorts us to our table and offers us the traditional wet and warm hand towels. The restaurant’s glossy granite flooring and black and gold trimming gives off a subtly luxurious vibe, though the excessive use of dark wood finishing on the walls, perhaps meant to accentuate the Asian feel, lends a somber and somewhat heavy feel to the place. The tables and chairs are placed at such angles so as to allow enough privacy for the diners’ conversations while at the same time allowing them to see most everyone in the spacious setting. The dark wood tables themselves are artfully set with little flowers on the chopsticks holders and upholstered, cream-white chairs prove comfortable for the meal. (An interesting feature of Chenbao, showing particular sensitivity on the owner’s part, is the electric sliding chair attached to the stairs leading to the bathroom — a facility for the disabled, the elderly and those too full to walk down the stairs.)
Menus are provided minutes after we’re seated by another Asian waitress who remains attentive throughout the dining experience, refilling water glasses and removing empty plates almost as soon as the last bite is taken.

sweet and sour
Prepared by the experienced Malaysian chef Eddie Chua, the menu offers traditional Chinese fare, from Szechuan-flavored stir fried meats to rice and noodles, as well as Thai fusion dishes. Matching the high-end image of the restaurant are the prices. A single serving of vegetable noodles costs $11, appetizers are between $20 and $25, and main dishes are as much as $40 if one orders seafood. Upon the waitress’s recommendation, we ordered the wasabi prawns as appetizers, the chicken cashew nuts with vegetables noodles for the main course and finished up with jasmine flavored macaroons — totalling $85 for two, drinks excluded. The artistically arranged dishes of generous portions arrive in perfect sequence, one after the other — the wasabi prawns drizzled in cream sauce offered a unique, harmonious blend between the spicy and sweet adjuncts to the shellfish; the chicken a light and pleasant, if somewhat uninspired, main dish in terms of Chinese cuisine, while the jasmine macaroons were the highlight of the meal, a bouquet of the sweet and the bitter to wrap up the flavor experience.

Having arrived at 9 pm, new customers were still coming in two hours later when we left, keeping the place half full at all times. The clientèle were mainly young professionals, between the ages of 30 and 40, who, according to those who sat around us, were also prompted by the billboard advertisements. 

In the months to come, the tables at Chenbao will likely continue to be filled with inquisitive patrons out to see what all the fuss is about, and while they will certainly not be disappointed by the ambiance and the service, some dishes will have to find a stronger identity to pull their weight in an establishment banking its reputation on high-end and original cuisine.
 

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Comment

Battle of the drones

by Nicholas Blanford
written by Nicholas Blanford

The unmanned aerial vehicle (UAV), or drone, Hezbollah dispatched to fly over southern Israel in October carried a couple of messages.

First, it was intended to remind Lebanon and Israel that Hezbollah’s main focus remains the confrontation with the Jewish state and not the conflict in Syria. The drone’s flight occurred amid increased reports of Hezbollah’s alleged assistance to the regime of President Bashar al-Assad, including sending fighters to Syria to fight the rebel Free Syrian Army (FSA) and train the regular Syrian army in urban warfare. This assistance would contradict the Lebanese government’s policy of disassociation with the war in Syria, though Hezbollah is not the only Lebanese faction operating there — several hundred Sunni Lebanese have reportedly joined the FSA and there are logistical support networks for the Syrian rebels in parts of the northern Bekaa and Akkar regions of Lebanon.

Still, amid such controversy, Hezbollah appears to have decided to switch attention away from Syria and redirect it toward Israel. It worked, at least in the sense that the drone captured headlines for a few days.

The drone’s flight over southern Israel was also a demonstration of Hezbollah’s evolving technical capabilities. It flew a drone for the first time in Israeli airspace in November 2004. That drone, an Iranian Ababil-T, was launched near Naqoura, crossed undetected into Israel and reached near Haifa during its 18-minute flight before returning to Lebanon. The Israelis never spotted it.

Hezbollah sent a second drone over Israel six months later; it also used them in the 2006 war with one drone shot down off the Israeli coast and another off the Tyre peninsula.

However, the drone that ploughed the skies above southern Israel was far more sophisticated than the Ababil-T, which lacks the range to reach the Negev desert from Lebanon — if indeed that was the origin of the UAV. Although Sayyed Hassan Nasrallah, Hezbollah’s secretary-general, admitted that his group was responsible for the flight and Hezbollah-affiliated Al Manar broadcast graphics indicating part of the flight path, the incident remains dogged by uncertainty. Nasrallah said that the drone was launched from Lebanon but did not pinpoint the precise location. The United Nations Interim Force in Lebanon (UNIFIL) said it did not detect the drone, neither on its ground radars in south Lebanon nor on the shipboard radars of the Maritime Task Force, the naval component of the peacekeeping force. That suggests that the drone was small enough or flying low enough to avoid detection. Alternatively, it never flew from Lebanon in the first place.

The guidance system remains unknown as well. Drones are usually controlled by one of two means: either by an operator using radio or satellite signals to directly steer the UAV on its course or by installing a preprogrammed flight plan. The UAV, if launched from Lebanon, was operating beyond the range of radio control, suggesting it was following an autonomous preprogrammed flight plan or it was being guided by satellite signals. If the latter, that would suggest a whole new level of technological advancement for Hezbollah and Iran.

The Israelis said that they picked up the drone when it was still flying over the Mediterranean but decided to tail it until it crossed over empty terrain before shooting it down. Iran and Hezbollah claimed that the drone in fact slipped into Israeli airspace undetected, thus proving the inadequacy of Israel’s air defense systems. As usual, it is difficult to be certain which version is correct. If Israel really detected the drone over the sea and chose to follow it, that would be a first. Usually, Israel shoots down unauthorized aircraft.

It has been speculated, however, that the Israelis attempted to interfere electronically with the UAV to bring it down safely so that it could be examined. Hezbollah is believed to have done something similar a year ago when an Israeli drone mysteriously vanished over south Lebanon after UNIFIL radars saw it floating to the ground. The Israelis appear to have been not so lucky as their Hezbollah foes. When the Israeli cyber interception failed, the drone was shot down so that at least the debris could be salvaged for inspection.

The unusual incident goes to show that even though the Lebanon-Israel border has remained relatively calm for more than six years, the conflict between Hezbollah and the Jewish state continues to rage on the technological front of cyber-warfare and signals intelligence.
 

 

Nicholas Blanford  is the Beirut-based correspondent for The Christian Science Monitor and The Times of London

 
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