Executive Magazine

Morning briefing: 13 Sep 2012

by Executive Staff September 13, 2012

written by Executive Staff

Saudi Arabia's annual inflation eased to 3.8 percent in August, its lowest level in almost three years, government statistics showed.

Slower increases in rents were highlighted as the cause of the slowdown.

Consumer price growth in the world's top oil exporter has been slowing gradually since peaking at 5.4 percent in February and March, registering 4.0 percent in July.

More from Arabian Business

President Barack Obama has vowed to bring to justice the killers of the US ambassador to Libya and three other diplomats after they were murdered by Islamist protesters.

Obama condemned the attack in Benghazi as "outrageous and shocking" but insisted it would not threaten relations with Libya's new elected government, which took power in July after rebel forces backed by NATO air power overthrew Muammar Gaddafi.

The targeting of US diplomats was sparked by a US-made film seen as insulting the Prophet Mohammad.

More from Arabian Business

Israel is undermining Jordan's efforts to establish a nuclear program that would help the country to become fuel sufficient, Jordan's King Abdullah said.

The country, which has one of the smallest economies in the Arab world and almost no natural resources, suffers from energy shortages.

"Strong opposition to Jordan's nuclear energy programme is coming from Israel," the monarch told Agence France Presse in an interview.

"When we started going down the road of nuclear energy for peaceful purposes, we approached some highly responsible countries to work with us. And pretty soon we realised that Israel was putting pressure on those countries to disrupt any cooperation with us," King Abdullah said. "A Jordanian delegation would approach a potential partner, and one week later an Israeli delegation would be there, asking our interlocutors not to support Jordan's nuclear energy bid," he added.

Morning brief: 12 Sep 2012

by Executive Staff September 12, 2012

written by Executive Staff

A leading Lebanese economics expert has warned that the country could slip into recession in 2013 as the Syria crisis continues to undermine confidence in the economy.

Simon Neaime, head of the economics department at the American University of Beirut, said that the lack of consumer spending was hurting the economy.

He also warned the government that attempts to spend their way out of the crisis would be undermined by the already high public debt.

More from Arabian Business

Egyptian protesters scaled the walls of the U.S. embassy on Tuesday, tore down the American flag and burned it during a protest over what they said was a film being produced in the United States that insulted Prophet Mohammad.

In place of the U.S. flag, the protesters tried to raise a black flag with the words "There is no God but God, and Mohammad is his messenger", a Reuters witness said.

Once the U.S. flag was hauled down, some protesters tore it up and showed off pieces to television cameras. Others burned the remains outside the fortress-like embassy building in central Cairo. But some protesters objected to the flag burning.

Morning brief: 11 Aug 2012

by Executive Staff September 11, 2012

written by Executive Staff

Saudi Arabia is concerned by the recent increase in oil prices as the market is no longer short on supply, the country’s oil minister said on Monday. Ali al-Naimi said the Gulf state would continue to increase output to meet any additional demand but warned that the recent price spike was not due to lack of supply. “Saudi Arabia is concerned about rising oil prices in the international oil market. The current high price of oil is simply not supported by market fundamentals,” Naimi in a statement sent to the media.

More from Arabian Business

September 11, 2012 0 comments

Real estate

For your information

by Executive Editors September 7, 2012

written by Executive Editors

Syrian mall project stuck in indefinite pipeline

United Arab Emirates-based developers Majid Al Futtaim (MAF) says the long-term outlook for the Syrian economy and the Syrian consumer keeps them committed to the $1 billion Khams Shamat project outside of Damascus, but Iyad Malas, the group’s chief executive, conceded in a recent interview with CNN that it is nigh impossible to carry on with orderly planning of the project amid the nation’s upheaval. “We hope that things settle so that we can start construction. In reality, today it is very difficult to get contractors to even talk to you about potentially building [in Syria]”, Malas told CNN’s Marketplace Middle East program in early August, coming exactly one year after MAF had announced that it was starting to pour foundations at Khams Shamat. Plans for the mixed-use project, located on a one million square-meters plot just off the Beirut-Damascus International Highway, are to comprise vacation apartments and business spaces anchored by a 300-store shopping mall, which is to be the Levant region’s largest according to MAF.

Strutting like a German on the Dora Highway

Mercedes-Benz dealer T. Gargour & Fils (TGF) last month broke ground on a new 1,500 square meters (sqm) showroom right next to its main location on the northern gates of Beirut, providing a drop of commercial real estate development news. Announcing the expansion at a media roundtable, TGF Chief Executive Cesar Aoun said that the new showroom, which is slated to open in 2013, will have space to exhibit 30 vehicles of the Mercedes-Benz and Smart brands. The new facility will also include 4,800 sqm on two underground levels that can be developed into service centers. Aoun refused to say how much TGF is investing in the new showroom. TGF, the Lebanese distribution partner of Germany’s Daimler AG, has in recent years invested substantially into developing its presence in Syria but currently faces the specter of poor returns in the embattled country. Besides building a new showroom in Beirut, the company is undertaking non-real estate investments this year by beefing up its customer care systems and its networks in Jordan and Palestine.

BDL’s green roof growing slowly

If you are waiting to see the green roof on top of Banque du Liban, Lebanon’s central bank, you’ll have to have just a little more patience. The country’s first high-profile public sector project for an intensive green installation is on course, despite a delay due to changes in the terms of reference, said Hassan Harajli, project manager at Cedro-United Nations Development Program, to Executive. The UNDP energy efficiency program for Lebanon is spearheading the project, which will provide insights on new ways to use green technology for environmentally compatible cooling of buildings in Lebanon’s climate (see Executive’s May 2012 issue). Tenders were supposed to be awarded by midyear but the prequalified bidding companies asked for additional information on the project terms, according to Jamil Corbani, chief executive of bidder Green Studios. “All three companies, including us, asked for more details in the terms of reference and the deadline for the tender was extended twice,” he said. According to Harajli, the procurement process is 90 percent complete. The contract is now scheduled to be awarded within the next month. “Implementation will begin in October and by March of next year, the project should be completed,” said Harajli.

UAE property under the e-hammer

Dubai-based Asteco, one of the United Arab Emirates’ leading companies for real estate and property management, has signed a partnership agreement with a United States-based realty group for a new real-estate auction website. Its partnership is with LFC International Real Estate Brokerage, a Dubai-based unit of the LFC Group of Companies headquartered in California. In entering the partnership, Asteco aims to attract interest from institutional and private investors that are based overseas, said Elaine Jones, chief executive of Asteco. In addition to a commercial agreement, property owners who want to use the online auction channel will have to set a minimum bid price and agree to an auction period during which their property will be featured on the auction site Freedom Realty Exchange (fre.com). LFC Group acts as a real estate auction marketing company which, according to its website, has been operating online property auction sites starting in 2004. LFC said in April of 2012 that it was organizing an online auction for a corporate floor in Dubai’s Burj Khalifa, the world’s tallest building, with a reserve price of $5.4 million. The auction period closed at the end of June but LFC declined to comment on the outcome when contacted by Arabian Business, according to the publication.

U.A.E. developers see big shines and small smears

Several United Arab Emirates-based companies in real estate development and construction beat expectations with their second-quarter profit disclosures. Winners in Abu Dhabi and Dubai were the respective largest sector companies. Pundits viewed the results as indicators for the recovery of the UAE real estate market but the sector also saw losses at two listed companies. Abu Dhabi-based Aldar announced $113.8 million net profit for the quarter, representing a jump of 228 percent on a 500 percent increase in revenues. Sorouh also showed an improvement, albeit smaller, in reporting $45.4 million net that signified a 33 percent gain. The two companies, already siblings by their state affiliations, are in negotiations for a full merger. RAK Properties, the Ras Al Khaimah developer traded on the Abu Dhabi Securities Exchange (ADX), reported that its profits dropped 30.5 percent to $6.3 million. Newcomer Eshraq Properties, also listed on the ADX, disclosed a net loss of $779,000. The company, which went public last autumn, had written a $2.9 million net profit in the first quarter. Emaar, the largest developer listed on the Dubai Financial Market, disclosed $167 million in net profits. The result represented a 245.6 percent improvement from $68 million in the second quarter of 2011 when the company took an impairment charge on its $46.8 million investment in Dubai Bank. Year-on-year profits at Deyaar were up 2.8 percent in the second quarter, but Union Properties swung to a profit of $22.8 million from a loss of $141.8 million, according to calculations by Reuters. Dubai state-owned Nakheel Properties reported first-half net results of $208.8 million, up 36.5 percent from $153 million in first half 2011. Arabtec, the top UAE construction company by market value, surprised negatively with a $3.2 million second quarter net loss, down from a $7.9 million net profit a year ago.

Sign of cement life in Abdali

The Abdali project in Amman — touted as the Jordanian equivalent to Beirut’s central district — has stirred with reports of activity. A Dubai-based company, Al Waleed Real Estate, announced at the end of July its completion of a six-story office building with “investment cost of up to AED 50 million” ($13.6 million). The company said that its Al Waleed Atrium Building provides retail space on the ground floor and office space on the upper floors with 6,700 square meters of gross floor area. “We see that the general situation in Jordan is very good and very encouraging to invest and take advantage of the opportunities available in many economic sectors,” said the chief executive of Al Waleed Real Estate, Mohammed Abdul Razak al-Mutawa. The statement also said that Jordan was one of the few countries “not affected by Arab spring” and that residents are expected to start moving into Abdali by end of 2012.

September 7, 2012 0 comments

Economics & Policy

For your information

by Executive Editors September 7, 2012

written by Executive Editors

Trade with Syria flips on its head

Lebanon’s trade dynamic with its neighbor has reversed since the start of the Syrian uprising in March 2011, according to research by international economic analysis provider IHS Global Insight. In the first quarter of 2012 exports from Lebanon to Syria were valued at LL189 billion ($126 million), which amounts to an 18 percent increase on the same period last year. This is most likely due to a shortage in Syria of consumer, agricultural and energy products as a result of the continuing internal conflict. This reverses a downward trend of such exports over recent years. Conversely, there has been a drop in the value of imports from Syria to Lebanon by 8 percent, comparing the first quarter of 2012 to the same period last year. Lebanon still has a trade deficit with Syria but this has been significantly reduced in comparison to recent years. The report also notes a surge in the smuggling of fuel from Lebanon to Syria, reversing a historic trend of such smuggling in the opposite direction. The analysis also suggests that the growth in illegal smuggling and black market trading means the official trade figures understate the changes in the trade dynamic between Lebanon and Syria.

First, and perhaps last, step toward electoral reform

The Council of Ministers, Lebanon’s cabinet, approved a highly contentious electoral reform law that is based on proportional representation and would divide Lebanon into 13 districts in the upcoming 2013 elections. The law passed through the cabinet despite opposition from three ministers from Walid Joumblatt’s Progressive Socialist Party (PSP) and Minister of State Ali Qanso. In the proposed law the electoral districts are divided with two for Beirut, two for the south, three for the Bekaa, three for North Lebanon and three for Mount Lebanon. The proposed legislation would see an additional three Christian seats and an additional three Muslim seats for expatriates. The law will have to pass in Parliament where there is considerable opposition, most notably from the Future Movement, the PSP, the Lebanese Forces and the Kataeb. [see page 80]

EU aid for agriculture

The European Union (EU) has committed 1.8 million euros ($2.2 million) in technical assistance for Lebanon’s agricultural sector and local development projects. The aid is intended to strengthen the Ministry of Agriculture’s capacities to design, implement and monitor agricultural policies; improve quality and competitiveness of agricultural produce; and increase the economic development of farmers and agricultural cooperatives through easier access to credit. The EU is also extending 2.5 million euros ($3.1 million) in grants to nine municipality clusters in northern Lebanon for local development projects, tackling issues such as education, water and sanitation, health, irrigation, agriculture and waste management. The money comes as part of an 8 million euro ($10 million) development program for the region. Elsewhere, the Islamic Development Bank signed a loan agreement for $26.8 million to finance the second phase of the West Bekaa Wastewater Project, and extended $180,000 toward technical assistance for the project’s implementation. Finally, recent figures show that the L’Agence Francaise de Development’s (AFD) commitments to Lebanon in 2011 totaled 71.4 million euros ($89.3 million), constituting a 54 percent increase on 2010. Lebanon accounted for 6.4 percent of AFD’s aggregate commitments of 1.1 billion euros ($1.37 billion) to the Middle East and North Africa last year, making it the fourth largest recipient in the region.

2011 on the books

The Ministry of Finance published its annual review for 2011, which showed a contraction in the fiscal deficit, a fall in the debt-to-gross domestic product ratio and a fall in tax revenues in comparison to 2010. The total fiscal balance registered a deficit of LL3.53 trillion ($2.35 billion), or 5.9 percent of GDP, in 2011, down 19 percent from LL4.36 trillion ($2.91 billion), or 7.8 percent of GDP, in 2010. A 70 percent increase in non-tax revenues helped offset a minor decrease in tax revenues, resulting in an overall increase in revenues by 11 percent to LL14.07 trillion ($9.38 billion). The significant rise in non-tax revenues was primarily a result of a 136 percent increase in transfers from the telecommunications surplus, which reached LL2.26 trillion ($1.5 billion) in 2011 against LL957 billion ($638 million) the year before. The decline of around 1 percent in tax revenues was likely due to a slowdown in economic activity, less growth of private sector bank deposits and the decision in February 2011 to reduce the excise on gasoline by LL5,000 ($3.33) per 20 liters, which reduced revenue from this tax by LL498 billion ($332 million) from 2010 to 2011. Total expenditures rose a slight 3 percent from the 2010 level to reach LL17.6 trillion ($11.73 billion), amounting to 29.4 percent of GDP. This was due to a 7 percent increase in primary expenditures and a 4 percent decrease in interest payments stemming from the low international interest rate environment.

Numbers behind the wheel

The number of newly registered cars in the first six months of 2012 stood at 16,850, an increase of 10.8 percent on the same period last year, according to the Association of Car Importers in Lebanon. The breakdown by region of origin shows Korean cars came top of the pops with 7,707 registrations, amounting to an 18.5 percent increase on the previous year. This was followed by Japanese cars with 4,688, European autos with 3,280 registrations and American rides with 1,023. Korean cars’ continued strong performance in Lebanon was based on the success of Kia and Hyundai, who came first and third, respectively, in terms of the registration of cars for different manufacturers. Japan’s big sellers were Nissan and Toyota, coming in second and fourth, respectively. In the top 10 brands the only American name was Chevrolet, which came in fifth, with the rest being European makes Renault, Volkswagen, Mercedes, BMW and Peugeot.

Oil, precious gems, skew trade figures

The trade deficit reached LL13.1 trillion ($8.7 billion) in the first half of 2012, up 18 percent on the same period in 2011. The deficit was the highest in five years in terms of both value and volume, and was caused by a rise of LL2.4 trillion ($1.6 billion) in imports and an increase of just LL82.5 billion ($55 million) in exports year-on-year. The rise in imports was mainly for oil and mineral fuels, which increased by 89 percent year-on-year to LL4.8 trillion ($3.2 billion), while non-hydrocarbon imports grew by 1.8 percent to LL11.6 trillion ($7.7 billion). The increase in exports was mostly driven by the rise in international gold and silver prices, with exports of unwrought gold, unmounted diamonds and precious metals increasing in value by 23 percent, or LL237 billion ($158 million), and decreasing by 2 percent in volume in the first half of the year. Excluding these items, exports dropped in value by 7 percent, or by LL153 billion ($102 million). Exports to Arab countries increased by 10 percent, largely due to a rise in exports to Syria by 33 percent, and to Saudi Arabia and the United Arab Emirates by 18 percent each. But the increase was patially offset with a 32 percent year-on-year drop in exports to Iraq, mainly due to political unrest in Syria, which represents Lebanon’s only overland trade route for exports. Re-exports totaled LL289.5 billion ($193 million) in the first half of 2012, compared to LL568.5 billion ($379 million) in the same period last year.

September 7, 2012 0 comments

Banking & Finance

Financial quotes of the month

by Maya Sioufi September 7, 2012

written by Maya Sioufi

“This summer season is not only over, you can say it has been martyred!”

Pierre Achkar, head of the Hotels Association, following the mass kidnappings in Lebanon last month

“We expect profits to fall by 4 to 5 percent and this is linked to the situation in Lebanon and the region.”

Makram Sader, secretary general of the Association of Banks in Lebanon, on profits of the banking sector

Kaspersky Lab, a Moscow-based computer security firm, in a statement on the Gauss computer worm targeting Arab bank accounts and affecting more than 1,600 computers in Lebanon: “All these attack toolkits represent the high end of nation-state-sponsored cyber-espionage and cyber war operations.”

“I did go back and look at my taxes, and over the last 10 years, I never paid less than 13 percent. I think the most recent year is 13.6 or something like that.”

Mitt Romney, US Republican presidential candidate, who has refused to make public his tax returns

An unnamed director at Standard Chartered in an email to head of the bank’s American operations, following the latter’s warning not to deal with Iranian clients: “You f****** Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians?”

“Obviously it is very good business from the Arsenal point of view. Their perspective is it is £24 million ($37.7 million) for a 29-year-old who has a history of injury problems and one truly magnificent season in eight. That is great business.”

Former Arsenal goalkeeper Bob Wilson on the £24 million sale of Arsenal’s captain Robin Van Persie to Manchester United

A NASA scientist after a $2.5 billion mission saw Curiosity, a car-sized rover, land on planet Mars eight months after taking off from Earth:“Touchdown confirmed. We are wheels down on Mars. Oh, my, God.”

Nouriel Roubini, an American economist, famed for having predicted the collapse of the US housing market:“The Olympics are an economic failure as London is totally empty: hotels, restaurants, streets. It turnsout London is totally empty. A zombie city.”

Jaime Ruiz, spokesman for US Customs and Border Protection, after more than 20,000 pairs of fake Christian Louboutin shoes worth $18 million were seized in Los Angeles:“Worn by celebrities and royalty in the fashion world, the lacquered red sole in [the] shoes is a distinctive symbol of the famous French designer Christian Louboutin. However, US Customs and Border Protection specialists have a different view of the lacquered red sole. They see a trademark protected by US law.”

“The Egyptian economy resembles an Arabian horse. It struggles to gallop and can be outright skittish when the surface is uneven and the destination is uncertain. But with firm footing and a clear destination, it can run with speed, endurance and elegance.”

Mohamed el-Erian, chief executive of Pimco, the world’s largest bond investor

September 7, 2012 0 comments

For your information

by Executive Editors September 7, 2012

written by Executive Editors

> Economics & Policy

Emirates Healthcare Buyout

Dubai’s largest private hospital operator, Emirates Healthcare Holding Ltd. (EHL), has been acquired by South Africa-based Mediclinic International in a cash buyout valued at $223.6 million. Mediclinic assumed control of the 49.63 percent in EHL it did not already own by agreeing to pay $200 million for the 44.39 percent stake of United Arab Emirates-based Varkey Group and $23.6 million for the 5.24 percent stake of United States-based General Electric, at price per share equal to that paid to Varkey. EHL operates two hospitals and eight outpatient and walk-in clinics in Dubai, with the 210-bed City Hospital in Dubai Healthcare City as its flagship facility. Mediclinic assets include more than 50 hospitals in South Africa and Namibia and private hospital group Hirslanden in Switzerland with 14 hospitals. Varkey Group, which co-founded the Welcare predecessor venture of EHL in the United Arab Emirates in 1984, explained the sale of its stake allowed it to concentrate on its growing education business, GEMS. Mediclinic, which is listed on the Johannesburg Stock Exchange, said in an August 27 note to shareholders that its business in Dubai has grown at an exceptional rate since the group entered the market in 2006. With The City Hospital as the main driver since its opening in 2008, EHL revenues have grown from ZAR 482 million ($57.4 million) in 2008 to ZAR 1,831 million ($218.2 million) in the financial year ended March 31, 2012. The year-on-year revenue increase at EHL was 37 percent in fiscal year 2011/12 and the earnings before interest, taxes, depreciation, and amortization margin was 19.2 percent. “Emirates Healthcare is ideally positioned to benefit from the ongoing growth within the UAE and surrounding regions,” Mediclinic said in the note, adding that it will finance the acquisition with an equity contribution of ZAR 1 billion ($119.2 million) and the balance to be raised in debt in the UAE.

> Banking & Finance

U.S. seizes $150 million in ‘Hezbollah funds’…

The United States authorities announced they had seized $150 million that they claim was used by Hezbollah entities to launder money. The seizure is the result of a civil complaint filed in 2011 in New York against the now defunct Lebanese Canadian Bank, acquired by Société Générale de Banque au Liban (SGBL) in September 2011 for $580 million. The lawsuit asserts that entities linked to Hezbollah were channeling funds from Lebanon into the US financial system between January 2007 and early 2011 to acquire used cars to then sell in West Africa for cash, which was then transferred back to Lebanon along with funds from drug sales and other crimes. SGBL placed the $150 million in escrow at a New York correspondent account of Lebanon’s Banque Libano Française (BLF) pending the lawsuit. BLF and SGBL are not accused of any wrongdoing according to the prosecutors.

> Banking & Finance

…and scrutinizes banks for Iran dealings

Standard Chartered Bank (SCB), Deutsche Bank and Royal Bank of Scotland (RBS) are the latest banks in the hot seat for their dealings in Iran. New York’s superintendent of Financial Services Benjamin Lawsky accused United Kingdom-based SCB last month of helping Iranian banks and corporates hide some 60,000 transactions worth at least $250 billion, between 2001 and 2010. SCB agreed to pay a record $340 million penalty to settle the charge and prevent the revoking of their New York license. The regulator is also accusing the bank of having similar schemes with other countries sanctioned by the United States, such as Burma, Libya and Sudan. Lawsky said the “rogue bank” is being aided by its consultant Deloitte & Touche, an accusation that Deloitte’s Chief Executive Joe Echevarria considers “distortions of the facts.” Deutsche Bank is also being scrutinized by US authorities according to the New York Times, but with the investigation still at an early stage, no accusations have been put forth as Executive went to print. RBS has volunteered information to the UK and US regulators concerning its dealings with Iran following an internal review.

> Banking & Finance

Egypt requests $4.8 billion from the I.M.F.

Egypt’s president Mohamad Morsi has asked Christine Lagarde, the International Monetary Fund’s (IMF) chief, for a $4.8 billion loan to cover the country’s budget deficits. Talks between Egypt and the IMF have been ongoing ever since president Hosni Mubarak was deposed last year, but a deal failed to go through as the IMF required broad political support as a key condition for the loan. Following the formation of a government by President Morsi and his dismissal of top army generals, the deal is expected to be given the green light, with Lagarde stating that, “It is going to take a bit of time and we feel that we have perfectly competent authorities to negotiate with.” Egyptian Prime Minister Hisham Kandil expects the loan to be signed by the end of the year and be for five years, with a grace period of 39 months and interest rate of 1.1 percent. With limited alternative options, the Egyptian government had to borrow a hefty $12 billion from its central bank in the 12 months to June 2012.

> Economics & Policy

Just Falafel

Just Falafel has taken what used to be a local food staple, falafel, and went global with it. Owned by the Lebanese Fadi Mallas, Just Falafel opened its first store in Abu Dhabi, United Arab Emirates, in 2007. The menu began with the traditional Lebanese falafel sandwich, with the “tarator” dressing, but creatively expanded to include international tastes (such as the Italian sandwich which is served on ciabatta bread or the Japanese sandwich which comes with soya sauce). Today, Just Falafel has 25 stories in UAE, Oman and Jordan and is looking to open 60 to 70 more stores in the UAE in the next two to three years. Store locations in the UAE include most popular malls such as the Mall of the Emirates, with plans to open in Dubai Mall and Ibn Batuta Mall. “Mall operators in the UAE are beginning to feel their food court is lacking if it doesn’t have a Just Falafel store. We offer an alternative food proposition, especially to vegetarians.” With their established success in the Gulf, Just Falafel is now looking for other markets, and is on an aggressive quest to franchise the brand. Mallas has already signed franchising contracts for a few dozen stores in the UK, and is now considering India, where falafel is a popular dish. Other potential markets include the United States of America and Canada. According to Mallas, Just Falafel receives around 15 franchising requests from international markets per day. Just Falafel opened its first shop in Lebanon, on Bshara Khoury Street, Beirut last month and plans to open another store in City Mall, Dbayeh shortly.

> Real Estate & Development

Syrian mall project stuck in indefinite pipeline

United Arab Emirates-based developers Majid Al Futtaim (MAF) says the long-term outlook for the Syrian economy and the Syrian consumer keeps them committed to the $1 billion Khams Shamat project outside of Damascus, but Iyad Malas, the group’s chief executive, conceded in a recent interview with CNN that it is almost impossible to carry on with orderly planning of the project amid the nation’s upheaval. “We hope that things settle so that we can start construction. In reality, today it is very difficult to get contractors to even talk to you about potentially building [in Syria]”, Malas told CNN’s Marketplace Middle East program in early August, coming exactly one year after MAF had announced that it was starting to pour foundations at Khams Shamat. Plans for the mixed-use project, located on a one million square-meters plot just off the Beirut-Damascus International Highway, are to comprise vacation apartments and business spaces anchored by a 300-store shopping mall, which is to be the Levant region’s largest according to MAF.

> Economics & Policy

Talking up the emirates

The two largest telecommunications operators in the United Arab Emirates saw profits go up in the second quarter of 2012, according to announcements the companies made in the last week of July. Etisalat, the Abu Dhabi-based group that is today the second largest telecommunications company in the Middle East after Saudi Arabia’s STC, posted $517 million net profit for the second quarter of 2012. Its younger rival Du, based in Dubai, reported $88.6 million net profit for the same period. While Etisalat came out far ahead in the bottom line, Du achieved significantly faster growth between the two. Its results were up 57.1 percent when compared with the second quarter of 2011. Etisalat’s year-on-year quarterly profit growth rate was 17 percent. Etisalat, however, suggested that it might soon become more attractive again to investors as the company stock could be opened to foreign ownership. Etisalat chief executive Ahmad Julfar, who was appointed to his position one year ago, told media that the company is pushing its 60-percent owner, the UAE federal government, to lift a measure that bans foreigners from owning shares in the company. The company could also further increase its stake in the Saudi operator, Mobily, to gather further points in the struggle for regional markets.

> Banking & Finance

Qatar investment spree continues

This time, Qatar goes after China. Its sovereign wealth fund, Qatar Investment Authority (QIA), has acquired a 22 percent stake in Chinese investment fund CITIC Capital Holdings, known for its investments in real estate and private equity. CITIC is partly owned by CIC, China’s sovereign wealth fund. While the size of the investment was not disclosed, the deal is expected to have a significant impact as it links two major sovereign wealth funds. Back in the United Kingdom, a country Qatar is very familiar with through its numerous investments, the peninsula has been eying a stake in UK-based airport operator BAA, owner of London’s Heathrow airport, the third busiest airport in the world. Qatar Holding is set to acquire a 20 percent stake for £900 million ($1.4 billion) in BAA from Ferrovial, the Spanish company owning 49 percent of the operator. Qatar will become the third largest shareholder in BAA after completion of the deal. “This acquisition is a key element in our exposure to the infrastructure sector,” said QIA in a press release.

September 7, 2012 0 comments

Companies & Strategies

Endeavoring to succeed

by Executive Editors September 7, 2012

written by Executive Editors

Talent rising

Behind the app

Beauty built one piece at a time

September 7, 2012 0 comments

Comment

The Druze are drawn in

by Basel Saad September 7, 2012

written by Basel Saad

The explosion tore through the night as I sat with friends playing cards around a table in the Jaramana suburb of Damascus on August 27. Rushing to the balcony I saw a car passing below with its shattered front-end in flames. The driver was still alive, steering the vehicle away from parked cars lining the road. Gunmen in tracksuits appeared instantly as a dozen neighborhood youth chased the vehicle until it stopped, dead, 40 meters up the road. The air smelled of smoke and gunpowder.

Outside there was mayhem as a crowd swelled to some 60 men. I was on the street starring at a parked car with smashed windows, flat tires and caved-in doors when four shots rang out into the sky: “Please leave for your own safety, intelligence officers will handle this, don’t panic…” a voice boomed over a loudspeaker. Gunmen throughout the area set up roadblocks, while others guarded and inspected the charred vehicle.

It would be hours before the body was removed. His name was Afif al-Shami. While apparently assassinated, no one seemed to know whether he had been pro or anti regime — what I did hear was the car had been owned by a well-known local member of the Shabiha (or government-backed militia) who had only just recently sold it to the unlucky driver. Simultaneously, a kilometer away in Kornish Shamali, in front of Maoone Hospital, another car had exploded, assassinating a member of the armed “pro-regime popular committees.”

Jaramana had until these events largely been spared from the violence and indeed had the reputation as a refuge, with Syrians fleeing fighting in surrounding areas to seek shelter here. Traditionally a mixed-sect neighborhood of Christians and Druze, the area is generally considered supportive of President Bashar al-Assad.

The morning after the assassination a local Sheikh on a loudspeaker curiously announced the funeral of “one martyr only”. An old custom in Jaramana is to publicly announce deaths so people can know to attend the funeral. That afternoon around 3 p.m., however, as those mourners gathered their procession was struck by a car bomb. Initial reports indicated 12 dead and 48 injured; by the next day 27 people were reported killed.

After this explosion Jaramana went on lock-down — men with Kalashnikovs and shotguns manned barricades on every street, searching cars and bags and checking identification cards. As I passed one checkpoint I heard an Armenian youth say he was on guard there with his gun “to defend Jaramana.” The connotations shook me. The saying, “to defend Jaramana”, harkens back to a time a century ago when a lack of security led locals to organize neighborhood militias to protect themselves. And now today, these two minorities, Druze and Syrian Armenians, are again closing ranks around their shared neighborhood to defend it from the perceived “Islamic threat”.

A week later, on September 3, a taxi exploded near a preschool in Jaramana’s Wahde area, killing nine, mostly children, as well as a Druze Sheikh, while injuring another 25. Local media said another bomb was found nearby and defused.

Despite what the international media might say, from what I see in Damascus the situation has not yet sunk into a civil war — that will be far more bloody. These people are not interested in attacking anyone; their concern is simply to defend themselves. The regime, however, is preparing for all-out civil war, and these bombings play directly to the its interests.

The immediate impact is to allow the regime to point the finger and distract attention away from its own atrocities, which are more frequent and brutal by the day. The attack on the funeral was also the first of its kind — it targeted the funeral of a regime supporter who was also from the Druze sect, while most of the victims were Druze as well.

The repercussions of these attacks reach far beyond Damascus and help the regime continue to divide the countryside along sectarian lines. The day after the funeral bombing rumours swirled that bus-loads of armed men from the mostly Druze city of Sweida, near the border with Jordan, had arrived in the capital to support and protect their relatives in Jaramana.

This is the first time Syria’s Druze population at large have entered into the evolving conflict’s field of play, and it has placed them squarely in the regime’s corner with many of the other minority sects, further delegitimizing the rebels inside Syria as leading a Sunni-only revolution. This sectarian entrenchment can only darken Syria’s prospects and lay another layer of complexity on the country’s systematic dissolution.

“Basel Saad” is a Syrian who lives in Damascus. (To protect the writer’s identity, a pseudonym has been used.)

September 7, 2012 0 comments