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An unnecessary tragedy

by Nadim Houry
written by Nadim Houry

Alem Dechasa-Desisa’s death at age 33 would have probably gone unnoticed — like that of so many other migrants — if not for a widely circulated video showing her being physically assaulted by a man, later identified as labor recruiter Ali Mahfouz, at the gates of the Ethiopian consulate 20 days prior. Dechasa-Desisa had come from Ethiopia to Lebanon in December 2011 to work as a domestic worker. She committed suicide on March 14. Caught on film, the abuse of Dechasa-Desisa triggered a public outcry that pushed the prosecutor to charge Mahfouz on March 22 with contributing to and causing her suicide. 

The abuse of Dechasa-Desisa was outrageous and its perpetrator must be held accountable. But the issue here is not just the criminal behavior of a recruiter, but the entire system of recruiting and regulating migrant domestic workers. Dechasa-Desisa’s death was entirely foreseeable and could have been prevented had the Lebanese authorities granted domestic workers their most basic rights.   For years now, human rights groups have been raising the alarm over the high suicide rate among domestic workers in Lebanon. A 2008 Human Rights Watch study concluded that domestic workers were dying at an average rate of one a week, mostly from suicides and failed escape attempts from buildings. KAFA, a Lebanese women’s rights group, compiled information about nine deaths for the single month of August 2010. This year, The Guardian newspaper reported on the death of Lila Aacharya, a Nepalese woman who arrived to Lebanon in late 2011 and died on January 29, her body found dangling from a balcony window near Beirut. A few days later, Paltishi Hendor, an Ethiopian domestic worker, was found dead after she hung herself at her employer’s house in Keserwan. The situation has gotten so bad that three years ago an ambassador from one of the ‘labor sending’ countries told me that he was no longer running an embassy but a funeral parlor. 

Suggestions that these women were simply unstable are unfounded. Interviews with embassy officials, and friends of domestic workers who committed suicide, suggest that the main factors in these deaths are isolation caused by forced confinement, excessive work demands, employer abuse and financial stress. Dechasa-Desisa’s overriding worry, according to a social worker from the Caritas Lebanon Migrant Center who visited her at the psychiatric hospital a few days prior to her death, was her ability to feed her two children in Ethiopia and repay the debt she had incurred to travel to Lebanon. 

Faced with overwhelming evidence of a broken system that regularly drives migrants to despair, the Lebanese authorities’ lack of an effective response amounts to negligence. Under pressure from rights groups and countries that started barring their nationals from coming to Lebanon, the authorities introduced a compulsory standard employment contract for domestic workers in January 2009. But the contract provides weak protections, is only available in Arabic — a language most workers cannot read — and is rarely enforced. Most importantly, the authorities took no measures to grant these workers the right to move freely during their time off, which would help end the isolation they often endure.  

If Lebanon wants to end the high suicide rates among migrant domestics, it must fundamentally revisit the current kafala (sponsorship) system that grants employers so much control over domestic workers’ lives. As one ILO representative told the media, the kafala system creates “a total dependency of the worker on the employer for her food, sleeping, health, everything. Total dependency creates total vulnerability and opens the door wide to exploitation.”

Lebanon needs to catch up with international standards by ending this dependency and ensuring that workers can — as a matter of law — leave the household during their time off. Visa regulations must be amended to allow them to live on their own if that is the arrangement they prefer. And finally Lebanon must reexamine the role of private recruitment agencies whose business is to make money by finding and selling cheap labor to Lebanese families. At a minimum, the authorities need to ensure that all agencies are licensed through a rigorous inspection process and monitored regularly. Better still, they should explore an alternative recruitment process that reduces the role of intermediaries.

Short of that, Dechasa-Desisa’s tragic end will be far from the last. 

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Society

Lonely in Luxury

by Yasser Akkaoui
written by Yasser Akkaoui

Dipping my head to walk onto an Air France flight at Beirut’s Rafiq Hariri International Airport last month, I suddenly found myself sitting next to some familiar faces. To one side of me I found former telecommunications minister Marwan Hamadeh. In the next row, I saw Bank Audi general manager Marc Audi, who was sitting next to Azmi Mikati, nephew to the Prime Minister, and in the last row sat Progressive Socialist Party leader Walid Joumblatt and his wife Noura. 

Now, I was not overly surprised to find myself in such an assembly, as Paris, more than any other city, is our Lebanese home away from home. We may do business in the Gulf — and nearly everywhere else on the planet — but for savoir vivre, we return to the Seine. What did surprise me was that I fly business class and when I had stepped on board I had glanced to my left and saw that “La Premiere,” the first class, was empty. Should not all these members of the Lebanese uber-elite be sitting in first class instead of hobnobbing in Affaires?    

Curious to find about the first-class Air France service between France and Lebanon, I arranged a press trip with our friends at the airline. Three days later, after I had concluded my business and filled my inner reservoirs with cultural and culinary delights, I stepped out of the front door of my Paris home to find a car from the airline ready to drive me to Charles De Gaulle.

What I arrived to was anything but the clunky Paris hub I was used to. I was recieved in what looks more like a hotel than a terminal. There was no counter to wait at, only a dazzling attendant assinged to you (and only you) wearing the finest bleu, blanc est rouge. The exchange with this lovely French damme is anything but the usual drab airline chitchat, and you barely notice as she takes your documents only to bring them back promptly and whisk you through customs to a dedicated elevator bringing you to the La Premiere Lounge. There, surrounded by a fine art exhibition and served the best French cusine by Alain Ducasse’s own staff I began to understand why, after the fall of the Concord, Le Premiere has become Air France’s alternative offering to the world’s well-heeled. After relaxing in the spa, it was time to board and my personable attendant drove me (in a  French car of course) to the plane. 

I was the last passenger to board, welcomed and escorted to the vestibule of my seat by a flight attendant who was yet another dazzling lady. But the four hours back to Beirut in La Premiere was enough time for me to return to the question: why on earth were the Lebanese elite I saw three days prior flying business class instead of in noble first?

First I thought it was a matter of image. Bankers, even the top brass at the largest banks, may be sensitive to the public perception that demands austerity in harsh economic times. But nobles and princely ‘zaims’ surely do not have to consider those business image factors, so I thought of other reasons. While sitting lonesome in the first-class cabin, I thought maybe isolation is not a Lebanese thing. Lebanese boys  like to show off, but in La Premiere, as you are last-on and first-off, nobody ever sees you, so how can you show off if nobody walks by? 

In the end, I think I figured it out. Every crown has its jewel, and for those gems no price is too high for those who want what no one else has. But while no other airline offers such daily first-class service from Beirut to Europe, and clearly there are enough high-net-worth Lebanese to fill eight, or even 16 seats, do they have the will, or find the worth, in spending $1,000 an hour for the privilege? 

I may have rubbed shoulders with absolute luxury and the finest culture (albeit in splendid isolation), so if I am invited again, or if high demand for business class in the summer narrows the price gap considerably, I will gladly consider La Premiere. But when, as this spring, the return flight on first will mean shelling out about $5,000 after adding taxes, when a business class seat will set me back $2,000 or less, I think I would rather use Affaires and rub shoulders with neighbors.

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Hezbollah softer on Syria?

by Nicholas Blanford
written by Nicholas Blanford

Is Hezbollah beginning to dampen its enthusiasm for the regime of Syrian President Bashar al-Assad? The answer is probably no, but that question is being asked in diplomatic circles after indications that Hezbollah has toned down some of its rhetoric on the Syria crisis lately.

Most notably, in a speech in the middle of March, Secretary General Sayyed Hassan Nasrallah declined to repeat accusations that the upheaval in Syria is the work of the West and allied Arab states to weaken a cornerstone of the anti-Israel ‘Axis of Resistance’, the pan-regional alliance that brings together Iran, Syria, Hezbollah, elements in Iraq and some Palestinian groups. Instead, he opted for a more conciliatory tone, stressing that only a political solution could end the bloodshed.

“Since day one, we have called on the Syrians to avoid carrying arms and adopt a political solution… It has been one year since the crisis began and no tangible results have been achieved,” he said. “There is only a political solution in Syria. That is [for both sides to] lay down arms simultaneously within an agreed-upon mechanism, in order to embark upon a clear political solution.”

Referring to a silent plurality in Syria that does not necessarily support the Assad regime but fears an alternative, Nasrallah said, “There are people who want reforms and not a civil war or partition. They want to continue [to resist Israel] and be loyal to Palestine. We are with them.”

When the revolt in Syria erupted a year ago, it posed a serious dilemma for Hezbollah, as well as Iran. Syria is a critical ally of Iran and Hezbollah, the geo-strategic lynchpin connecting the two that serves as a conduit for the flow of arms and provides strategic depth for the Resistance. The loss of Syria threatens the integrity of the alliance. However, offering unvarnished support for the Assad regime risked worsening already strained relations with the region’s Sunnis. Hezbollah has always championed intra-Muslim unity, believing that the schism between Shias and Sunnis distracts from the more pressing goal of confronting Israel. But the hostility of Syrian Sunnis towards Hezbollah has steadily grown over the past year as the uprising has taken on a more sectarian tone.

In dozens of interviews with Syrian refugees, activists and Free Syrian Army fighters, accusations have been leveled against Hezbollah for helping the Syrian government forces stamp out the rebellion. Some claim to have seen men “dressed in black with beards” kept separate from Syrian security forces. Others insist that the suspected Hezbollah men were speaking with Lebanese accents. Yet little concrete evidence has emerged that Hezbollah is fighting alongside Syrian troops to crush the protests.

In the early stages of the uprisings in Tunisia, Egypt, Bahrain and Libya, Hezbollah sided with the rebels. Indeed, Hezbollah officials could barely disguise their glee at the sight of Hosni Mubarak, former Egyptian president and arch critic of Hezbollah, carried into court on a stretcher after his downfall. But when the Arab Spring came to Syria, Hezbollah changed its tune, opening the party up to charges of hypocrisy. Hezbollah, however, makes no apology for its seemingly contradictory stance toward Syria. The argument runs that Syria is deserving of Hezbollah’s support because of its rejectionist stance toward Israel and its support for the Resistance, unlike all the other countries subject to the Arab Spring revolts, which were allies of the West.

Nevertheless, Nasrallah must surely rue the lost opportunity that was available early in the crisis when the Syrian regime could have staunched the protests by embarking upon a genuine reform program, which would have left the regime in place but addressed some of the demands of the protestors. There is an argument, of course, that the Syrian regime cannot implement meaningful reforms without fatally weakening its hold on power.

Either way, Hezbollah has little choice for now but to follow Iran’s lead and continue backing the Syrian regime in the hope that it can eventually prevail. If the Assad regime collapses it will upset the strategic alignments across the region. In the — admittedly unlikely — event of a smooth transition to a Sunni-dominated regime in Damascus that realigns closer to Saudi Arabia and Turkey, Iraq could emerge as the new regional fault line between Iran and the Gulf states. That would leave Hezbollah still domestically strong, but regionally isolated on the shores of the Mediterranean with its Iranian patron on the other side of the Middle East.

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Mainstreaming extremism

by Spencer Osberg & Ali Sayed-Ali
written by Spencer Osberg & Ali Sayed-Ali

Last month a new player was born into the world of sectarian politics in Lebanon. Sheikh Ahmad al-Assir, the Imam of Bilal Bin Rabah Mosque in the southern city of Sidon, was for the first time given a national audience, his speech to a rally of some 2,000 Salafist Sunni Muslims in Downtown Beirut on March 5 broadcast across the spectrum of Lebanese satellite TV stations, his words printed in newspapers and websites affiliated with all the country’s sectarian power centers. Overnight, Sheikh Assir became the face of the Salafist movement in Lebanon.

Until last month, the strongest association most Lebanese had with the word ‘Salafi’ was the siege of Nahr Al Bared in 2007, when a group of heavily armed, mostly-foreign Sunni extremists waged a four-month war with the Lebanese army at the Palestinian refugee camp near Tripoli, leaving many hundreds dead and wounded, tens of thousands displaced and the camp leveled. Until last month ‘Salafi’ was synonymous with a vein of religious fanaticism most Lebanese find abhorrent.  

Not unaware of this, Sheikh Assir clearly made moves to legitimize and rebrand the Salafist movement and move it closer to the mainstream. Opening the rally before Assir took the stage was Fadel Shaker — the pop-culture icon most had previously associated more with Lebanon’s glitzy, Champagne-guzzling nightclubs than a literalist Sunni interpretation of the Quran — who crooned an Islamic anthem to bless the ceremonies. Then came Assir’s conciliatory words to the country’s Christians, emphasizing their essential place in a religiously plural Lebanon. He repeated this sentiment the following week in an interview on the nation’s most popular talk show “Kalam Ennas”, on the Christian-affiliated LBC channel. While on air he shrewdly went as far as he probably could to distance himself personally from the extremist label while not alienating his followers when he said that he is, in fact, not a Salafi at all, but at the same time to be a Salafi “is not a crime.”

During this interview, despite saying, “I am not a politician,” Assir made his political ambitions clear: he intends to replace Saad Hariri as the leader of the Sunni sect in Lebanon. That’s ambitious, as Assir’s movement is still small relative to other political parties in the country, with a support base focused mainly around Sidon and Tripoli, but it has gained momentum in recent years. 

Following Hezbollah-led fighters’ effective takeover of much of Beirut in May 2008, many Sunnis were left feeling humiliated and abandoned by their traditional leaders. The enduring absence of Hariri from the Lebanese political scene and the financial troubles battering his business empire have left much of the Sunni populace increasingly adrift for leadership — an opening Assir seeks to exploit.

Assir is also emboldened by the regional gains of the Salafi movement within the context of the Arab uprisings, with Salafi parties making public shows of force at the ballot boxes in Egypt and Tunisia, and the Syrian uprising increasingly becoming a regional rallying cry for Sunni liberation.

There is a fundamental incongruence, however, in trying to take an extremist ideology into the mainstream, and the more Assir’s movement is in the spotlight of scrutiny, the more these inherent contradictions will surface.   

While the rally in downtown Beirut was ostensibly a show of support for the Syrian uprising, the Salafi character of the demonstration played perfectly into the warnings of the Syrian regime that there is actually a sectarian conflict being waged by religious extremists. 

While there will also undoubtedly be a Salafi showing on the next ballot for parliamentary elections in 2013, can a group that explicitly believes non-Sunnis to be ‘infidels’ reconcile this with responsibility to govern fairly over a population as religiously diverse as Lebanon’s?

Perhaps the contradictions are no better embodied than by the man who opened for Assir at the rally, Fadel Shaker. Despite having sung his way out of a youth of poverty and being invited to open the rally precisely because of his famous vocal cords, Shaker said afterward in an interview on MTV’s “Inta Hurr” talk show that — in line with fundamentalist Islamic teachings — he considers singing a sin and was going to retire. He’d decided to postpone his professional exit, however, to use his immoral abilities to support the Syrian revolution — and introduce the nation to its newest religious icon.  

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Parched policies

by Sami Halabi
written by Sami Halabi

As Lebanon edged closer to war in the early 1970s, an ambitious project to provide irrigation and drinking water to South Lebanon was launched. At the time what came to be known as the ‘Litani River Project’ (also known to water experts as the Canal 800), was to be the most expansive undertaking to tap Lebanon’s largest — and one of its few — major water storage facilities, the Qaraoun artificial lake. The project aimed to bring potable water to more than 300,000 residents and irrigate 15,000 hectares of farm land in Marjaoun, Bint Jbeil and Yaarin. It never happened.

When war broke out plans were abandoned, only to resurface again a decade ago, and just last month a decision was finally made: the Litani River Project is a go. But whenever Lebanon’s politicians finally agree not to disagree, most often the people end up paying the bill, even if they didn’t get served the drinks. 

At the announcement ceremony chaired by Prime Minister Najib Mikati and Parliamentary Speaker Nabih Berri were swathes of politicians from both sides of the aisle, lending their support to the ‘development of the south’. Amongst them was former PM Fouad Siniora, Future Movement Member of Parliament and Chairman of the Council for Development and Reconstruction (CDR) Nabil al-Jisr, as well as their arch nemesis Energy and Water Minister Gebran Bassil. Rarely, if ever, has their been such consensus in Lebanon; could it be our fractious politicians merely had a change of heart? 

Not likely. As much as the country needs to employ, not to mention develop, its scant water storage infrastructure, going ahead with it now, and in this way, puts politics over policy and does little but allow grandstanders to tout promises, soon to be followed by the distribution of hundreds of millions of dollars to their favorite contractors. In the end they will likely leave us all thirsty, more indebted and sick to our stomachs. 

While the Litani project may have been feasible in the 1970s, since then other projects that use the Qaraoun’s water have been completed and others newly approved. Due to a lack of environmental standards and enforcement, what has also happened is that the lake, and the Litani River that feeds it, have become among Lebanon’s largest sewage dumps. Any water used from it will probably have to be treated for heavy metals that have started to surface, with the cost of such treatment likely making the Litani project financially unfeasible.

Given the lack of alternative sources, the World Bank-funded Awali Project to bring water to Beirut will also draw from the Qaraoun — thanks to a recent cabinet decision. It may also need a treatment that is unaccounted for. Documents and research conducted by Executive all point to the probability that after hundreds of millions of dollars of public money is spent,  the people of Beirut and the South will still have limited access to water because, simply, there will not be enough to go around. That is unless more infrastructure for water collection and storage is built, for which funding and feasibility is questionable at best. It is also important to note that Lebanon’s most productive agriculture region, the Bekaa, is being passed over and the hydroelectric power plants that use the same water could also fizzle out. The entire plan would seem to make no sense, until you remember it is not about people; it’s about politics.

Speaker Berri and his cohorts have been pushing for the Litani project for years to keep their support base in the south happy, Michel Aoun needs to show that his son in law is doing something by bringing water to Beirut and Mount Lebanon, Saad Hariri and Siniora need to use the CDR to contract out projects to their friends, and Mikati, well he’s just the middle-man of Lebanese politics anyway. 

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Oil in Lebanon: sparring for margins

by Paul Cochrane
written by Paul Cochrane

There are few sectors of the economy that elicit less sympathy than the oil industry. Thus one has to wonder whether there wasn’t more anger than pity generated last month toward oil-importing companies, truckers and gas stations after their one day strike left those who failed to fill up in time sucking on fumes. The oil industry was crying foul, however, over what it claims are profit margins that are plummeting due to government imposed surcharges and the minimum salary increase. The March 15 protest was the latest engagement of a long running battle with the Ministry of Energy and Water over price structuring. 

To judge whether industry advocates have a case or not, one must understand the basic dynamics of the sector. Every Wednesday the government sets the price for a jerrycan (20 liters of fuel); it is a crucial revenue stream for the country, with tax of 5,500LL ($3.66) and value added tax (VAT) of 2,500LL ($1.66) on every jerrycan ($23.16 as of going to print). For gas station owners, margins used to be 10 percent on a jerrycan, but has been whittled down as oil prices have risen (to $108 a barrel as of going to print) to 4 percent, or 800LL ($0.53), which they claim is not enough to cover infrastructure costs and the newly introduced minimum monthly wage, which went from 500,000LL ($333) to 675,000LL ($450). 

The government did not give in to the strike, saying if it did, prices would rise by $3.33 on every jerrycan. The argument put forward by the Energy Minister, Gebran Bassil, was that the oil sector's demands were “unrealistic and unjust,” he told reporters at a press conference. “How can they claim to be losing money when we see stations opening everywhere and given that Lebanon has the highest number of gas stations per kilometer in the region.”

The minister has a point but he seems to have overlooked the fact that a license freeze on new gas stations was put in place last year, and if new stations are springing up around the country, they have done so illegally, outside the remit of Bassil's own ministry. Indeed, what Bassil did not mention was that out of the 3,250 gas stations in Lebanon, only 1,450 have licenses. Perhaps the ministry itself should start a nationwide process of regulating, even fining, the 1,800 gas stations operating without licenses as part of a project to reform the sector.

Bassil also threw out a figure that the oil importers make $100 million a year. General Labor Confederation Union chief Maroun Khawli went even further by saying the country's 14 oil importers are acting like a cartel and generate $300 million in profits each year. 

However, Bahij Abu Hamzi, the head of Cogico — which owns Levant Oil and Nat Gas — and is the former head of the country’s oil importers syndicate, told me he had no idea where these figures came from. He claimed $1.2 billion in oil is imported each year and profits are 5 percent, or $60 million, which is around LL800 per jerrycan.

While something doesn't totally add up here given discrepancies in the tens of millions of dollars, there appears to be some truth in oil companies not having the high profits commonly assumed, as over the past several years five oil importation companies went bankrupt and the sector is struggling to fund necessary infrastructure upgrades, which has had negative knock-on effects. Safety standards are far from being up to par; there have been reports of oil seeping into the ground water and last year an explosion at a gas station in Beirut left seven dead.

A recent report by global accounting firm PriceWaterhouseCoopers has proposed that margins should be raised to 2,800LL ($1.85) for 20 liters. This is assuredly too high for the government to accept given how high oil prices already are for the public, and even oil importers acknowledge that this is not the right time to raise it to that level. 

A solution needs to be found that placates both parties, as the oil sector has indicated it will once again lock up the pumps if its demands are not met. But a viable solution is not likely unless there is transparency in what the oil sector's profits — or lack there of — really are. Addressing the prices at the pump is just the start of a much needed refinement of an industry that is as opaque as the oil it sells.

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Remaking Yemen’s military

by Farea al-Muslimi
written by Farea al-Muslimi

Few in Yemen can remember the last external war their country’s national army fought. For the record, the last time Yemeni troops aimed their artillery at non-Yemenis was the 1934 war with Saudi Arabia. 

Since then, the army’s weaponry has been turned inwards, supporting successive regimes in the suppression of opposition movements across the country. The military, along with the tribes and religious leaders, make up the troika of power in Yemen, and therefore part of the axis of corruption and misery Yemenis have lived with for a very long time. 

Even after this past year of revolution and all the blood spilled, the majority of Yemen’s military to this day remains under the control of the son of Yemen’s former president Ali Abdullah Saleh, as well as his nephews, half-brother(s) and other close ties.  Statistics on the Yemeni military are rare and hard to find, yet there is some consensus that military spending hovers around 5 percent of the country’s gross domestic product, which in 2011 was roughly $36 billion. In 2009 alone, former President Ali Abdullah Saleh signed a deal to buy $1 billion worth of arms from Russia. The flow of American military assistance also increased in the last decade, topping $150 million in 2010. Seeing Yemen solely from a counter-terrorism perspective, American cash and blessings have found their way onto (and under) Saleh’s table since 2001. In return, the US has enjoyed free access to Yemeni airspace. A US diplomatic cable released by Wikileaks reported that Saleh told General David Petraeus that the Yemeni government would continue telling Yemenis, “The bomb is ours,” effectively giving the American military a free pass to launch drone missile strikes against targets it considered linked to Al Qaeda in the Arabian Peninsula — though often resulting in civilian casualties. 

Since the beginning of Yemen’s uprising in early 2011, one of the biggest demands of the protesters was restructuring the army based on national criteria, and replacing Saleh’s relatives with credible military leaders. During the uprising, Saleh relied on two segments of the army — the Republican Guard, led by his son, and the Central Security Forces (CSF), lead by his nephew — to put down peaceful protests. The CSF contains a counter-terrorism unit that had received American military training and equipment, resources it used to great effect against protesters. 

But armies founded on personal interests rather than national ones have indelible fault lines that splinter under pressure, as was the case in Yemen. The First Armored Division, led by Ali Mohsen al-Ahmar — another of Saleh’s relatives — in March declared its support for the revolution and its intent to protect the squares where protesters had set up camp. This lead to battles between it and the Republican Guard, dividing Sanaa into what seemed two different republics. Yemenis lived in a nightmare for months after, afraid that the clashes would lead to civil war, which at times seemed inevitable. 

Among the core provisions of the Gulf Cooperation Council deal that facilitated Saleh’s exit earlier this year was the restructuring of the army over a transitional period of two years. While little has been done, and the likelihood for meeting the timeframe seems slight, remaking the army has become the next popular grievance to target for the revolutionaries. Opposing them is an established military elite, with few of the elderly commanders inclined to cede power to the new structure. The precariousness of the situation becomes more apparent when one takes into account the several hundred thousand soldiers receiving salaries from the government, but who are not part of the regular army. These are salaries funneled through tribal Sheikhs and military leaders each month via a shady, pseudo-mafioso system, which has built and sustained fiefdoms of armed influence and a complex hierarchy of loyalties. 

Yemen faces a humanitarian crisis, more than half a million internally displaced people, multiple armed conflicts and a near endless stream of other imminent catastrophes. Yet the restructuring of the army is arguably the most complicated and crucial task the country must deal with. The hope is that attempting to do so does not simply make things worse for everyone. And even if, by a miracle, the reconstitution of the army occurs without major mishap, it will take decades for the Yemeni military to reconstruct its relationship and image with the people of Yemen. 

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The Buzz

Unbinding the books

by Youssef Zbib
written by Youssef Zbib

A modest two-story residential apartment building in the city of Saida houses a Lebanese publisher far more optimistic than others in the industry these days; that the company is also a software firm and owns no printing presses is indicative of the fundamental transformation underway.

Sitting in his quiet office, surrounded by bound tomes published by some of Lebanon’s most prominent publishing houses, Nabih Barakat, a software engineer at Byblos Microsystems, which operates arabicebook.com (AEB), says that many of the paper volumes around him have already completed their digitalization into PDF files, after receiving the consent of respective publishing establishments. These books are now a part of the company’s growing database that currently holds 2,500 electronic books on offer, a process that began in 2001.

“A large part of our work consists of producing [academic] software, and sales of electronic books make up less than 50 percent of our total sales,” Barakat says, adding that there is a rosy outlook for sales growth of electronic books, given the increasing popularity of electronic reading devices, and online purchases in general. Sales in Arab countries other than Lebanon are still the main market for e-books sold through AEB, says Barakat, explaining that Lebanon accounts for 20 percent, while Saudi Arabia is the main market for AEB’s products.

The perspective of many of Lebanon’s 669 other publishers, (a number provided by the Ministry of Information), is markedly different. The quantity of printed books in Lebanon fell as much as 35 percent last year, according to Nabil Abdel Haq, vice president of the Lebanese Publishers Union (LPU), while Lebanese customs figures showed the total value of printed books, brochures, leaflets and other similar material exported fell from $83 million to $51 million between 2010 and 2011, marking a decrease of some 40 percent.

The unread uprisings

“The problems that are ongoing in Iraq, Syria and Egypt hit our exports to the Arab world,” says Abdel Haq.

Nizar al-Laz, a sales executive from the publishing house All Prints Distribution and Publishing (APDP), notes that: “Every year we participate in 15 book fairs, but [in 2011] we could not participate in book fairs that took place in Egypt, Tunisia or Bahrain… The shipment we sent to be displayed at the Cairo book fair was returned and we didn’t even understand why, so eventually we didn’t participate.”

The Arab uprisings also turned the public’s attention away from reading as they followed televised news coverage, according to Bassam Shbaro, owner of Arab Scientific Publishers (ASP). “People were preoccupied with these events because they felt that they affect their lives,” he says.

Long-term threat online

While publishers currently face difficulties due to their decreasing ability to market their products in an Arab world in turmoil, in the long term the adoption of online and digital means to access information — rather than paper mediums — is a trend that looks to permanently change the publishing landscape.

Shbaro did not hesitate to point the finger at online piracy as the main threat to his business, complaining specifically about the illegal trafficking of the Arabic translation of the “Da Vinci Code,” which is the copyright of ASP.

“The availability of pirated books in Arabic through websites such as Google is the real problem,” Shbaro complained. “If you search for Arabic books online you will find [thousands] of pirated electronic copies that are available for free, including our own. These websites don’t do anything about it because they benefit from advertising, and readers of course will not hesitate to download a free a copy if it is made available to them,” says Shbaro, adding that he has discussed this point several times with representatives from Google. Google failed to comment on Shbaro’s allegations despite promises to follow up on the matter from Maha Abouelenein, Google’s head of communications for the Middle East and North Africa.

Illegal physical reproductions of novels are also chipping away at sales. “We have sued several publishers in Lebanon, Syria and Egypt over piracy-related charges but [the legal framework] to prevent piracy in the Arab world is useless and there’s nothing much we can do about it,” Laz says cynically. “At the end of the day, all readers care about is getting a copy of the book for the cheapest price possible.”

The e-challenge

The online challenges facing traditional Lebanese publishing can only grow with increasing Internet access across the region. Along with piracy, competition will likely be felt from the increase of options available for readers of online Arabic that result from a cooperation plan, started in October 2011, between the Qatar Computing Research Institute (QCRI), part of the Qatar Foundation, and Wikimedia Foundation.

The cooperation aims to increase the number of articles in Arabic while guaranteeing high quality translations by using actual translators provided by QCRI, rather than relying on translation software, according to Barry Newstead, chief global development officer of Wikimedia Foundation, which manages the popular online user generated reference Wikipedia. While any improvement in the quality and accessibility of information will ideally benefit readers, publishers realize that sooner or later they have to play according to the rules set by electronic media.

One form of adaptation to this new reality is offering readers electronic books. While AEB in Saida may be among the forerunners, several Lebanese publishers Executive interviewed declared they have also started digitizing their publications, or are seriously considering the option — lest tomorrow see them turn the last page on their businesses.

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Economics & Policy

A poisoned chalice

by Zak Brophy
written by Zak Brophy

In the midst of the incessant torrent of winter rains this year, it is hard to imagine that the country’s water resources are a serious cause for concern; but they are. A history of decaying infrastructure, poor management, rising demand and fetid politics has taken its toll. Lebanon is now blighted by seasonal rationing on domestic supply, farmers irrigating with raw sewage and roughly half of all the water entering the water network being lost in transmission and distribution. What is more, the cost of inaction in the water sector is estimated at $433 million every year. 

In an average year demand outstrips supply by around 100 million cubic meters (MCM) and that rises to around 300MCM in a dry year; approximately enough water to fill New York’s Empire State Building three times over. These are big quantities that demand big solutions. As the aquifers, rivers, lakes and reservoirs are replenishing during the winter, building a stock to feed the coming dry months, the government is pressing ahead with a number of strategies and projects that aim, in the long term, to plug the gap and keep the nation’s households, farms and industries watered. Huge quantities of money are involved and the implications, most notably for public health, cannot be understated.

Two costly solutions, one source

Since the beginning of the year two major water infrastructure projects have been officially unveiled that will fundamentally shift the state of play in the sector. The Canal 800 and the Greater Beirut Water Supply Project (GBWSP), also known as the Awali project, will feed expansive water networks to South Lebanon and Beirut, respectively. In reality the designs for both projects date back to the pre-civil war era but the plans inked on paper are now set to become a reality. However, as the politicians tout the vote-winning promise of an abundance of water for the faucets and farmsteads of Beirut and the South, concerns abound regarding the safety of the water we are being promised. May Jurdi, chairperson of the American University of Beirut environmental health department, warns, “You are building a problem. The issue is the quality. You don’t build on a problem, you need to solve the problem first.”   

What’s more, once hundreds of millions of dollars have been spent and the concrete and pipes are set in place, there are doubts that there will actually be enough water to fulfill the lofty promises now being made. In the words of a senior consultant working with the government on water management, speaking on condition of anonymity because they were not permitted to speak to the press, “As usual, politicians are over-evaluating volumes of water and over-allocating it.” 

The Canal 800 is slated to draw 110 MCM every year, from the Qaraoun reservoir in the Southern Bekaa, to the south of the country. The lions share of this water, 90MCM/yr, is intended for the irrigation of around 14,700 hectares of farmland, including the areas in and around Marjaoun, Bint Jbeil and Yaarin and the remaining 20MCM is destined for the household taps of some 100 southern villages. The first phase of this project alone carries a price tag of $330 million; $162 million in loans from the Arab Fund for Economic and Social Development and the Kuwait Fund for Arab Economic Growth, $38 million from Lebanon’s Council for Development and Reconstruction (CDR), the government body in charge of implementing infrastructure projects and $130 million dollars is yet to be secured.

As for the GBWSP, it will be drawing water in the opposite direction, from the Qaraoun Reservoir and Awali River south of the capital to the homes of 1.2 million people in Baabda, Aley, parts of the Metn and Southern Beirut, areas of Greater Beirut and Mount Lebanon region. Shifting such large quantities of water across such expansive tracts of the country is no cheap feat and the total financing requirements are estimated at $370 million. The bulk of the cash will once again come from foreigners, this time in the form of a $200 million loan from the World Bank signed last month. The government will stump up $30 million for land acquisition and the Beirut and Mount Lebanon Water Authority will cover the remaining $140 million. Whilst the two schemes are funded, planned and ultimately implemented independently of one another, they are also intrinsically linked at their source: the Qaraoun Reservoir, from which the Canal 800 is totally supplied and the GBWSP partially. 

 

The (not so) great lake

Built in 1959, the man-made Qaraoun Reservoir sits at the foot of the eastern slopes of the Mount Lebanon range in the southern Bekaa, collecting water from the Litani River before it snakes east on its ineluctable descent to the Mediterranean Sea. It is, in the words of Veronique Kaspard, professor of environmental and isotopic geochemistry at the Lebanese University, the “dustbin” of the Litani, Lebanon’s longest and most polluted river. For this reason there a number of specialists in the field who are deeply concerned about the prudence of taking 150MCM/yr of its water to the homes and fields of southern Lebanon and Beirut.      

Ismael Makki, agriculture and environment manager at the CDR, challenges these doubts, arguing that conventional treatment plants will suffice in cleansing the water from Qaraoun. “The water contains some contamination but it remains within the treatable limits, by conventional treatment,” he says.   

However, the government water consultant, a high-ranking source at the Litani River Authority (the body responsible for the management of the Litani River Basin), and Kaspard, were adamant in their rebuttal. Among the many pollutants found in the river and the reservoir are the recent findings of trace metals that are of greatest concern. As the LRA source explains, “There is a different kind of contamination and the concern is with trace metals. They are approaching the permissible levels but they only appeared in the past few years.”

Makki acknowledges that the trace metals have given cause for concern and points out that the World Bank sent a team of its specialists to conduct an independent examination. “This has been reviewed several times, and not just by the CDR, but by the World Bank itself, which appointed a committee to review the water quality and quantity for the greater Beirut project. This issue has been addressed from a highly technical point of view,” he argues. Whilst the World Bank report did conclude that the levels of trace metals were within the permissible limits, its findings are not enough to assuage the worries of everyone. 

Professor Kaspard explains that the mushroom in industrial and agricultural activity in the Litani River basin is creating a “pollution history” from which the outcomes cannot yet be known. “If you are at the appropriate time you can measure high trace metals, if you are not you will measure low. It is not steady. This is why we are now doing proper scientific work on the whole system,” she says. An environmental and social impact assessment for the Awali-Beirut Water Conveyor Project presented to the CDR in August 2010 suggests Kaspard is within reason to fear that the current situation will deteriorate before it improves, stating, “The possibility of a lower water quality both for the Awali and lake Qaraoun sources should not be ruled out.”

A 2010 USAID report on the management of the Litani River Basin further warns that the recent detections of trace metals, “renders water unsuitable for drinking and requires advanced treatment processes to deal with these types of contaminants.” 

 

What we’ll be drinking

The same report outlines many of the adverse health affects that can result from prolonged exposure to these trace metals, and it doesn’t make for comfortable reading. The three metals whose ascendancy is most pronounced in the basin are cadmium, manganese and barium, which are associated with a plethora of ailments including bone and cardiovascular disease, toxicity of the nervous system, swelling of the brain and liver and kidney damage. The USAID study report levels of cadmium more than double the national standard level and that manganese levels were increasing, with a mean level of 0.04 milligrams per liter (mg/l) encroaching upon the maximum standard limit of 0.05mg/l; moreover, 30 percent of the sample sites exceeded this limit level. 

AUB’s Jurdi warns, “Trace metals have a cumulative affect in the body so the signs may not appear for some time. It may take 10 or 15 years, but it is a risk. Especially depending on the treatment process we are implementing.”

The main cause for the deterioration in the quality of the Litani River’s water is the dumping of untreated industrial effluent and excessive use of agricultural fertilizers and pesticides, including smuggled and unlicensed varieties. With unknown quantities of unknown pollutants — including recent findings of complex chemicals from pharmaceutical industries — contaminating the river and its tributaries, Kaspard argues there is little hope of being able to successfully treat the tainted concoction once it has been drawn from the Qaraoun, as is currently planned.

“There are different qualities of pollution from the different industries and they can all converge with unknown outcomes,” he says. “They cannot be treated from the same plants because they require different treatments.” 

As the Litani River is being sullied there is a general consensus on the need to better manage and regulate the basin before the toxins enter the system. The CDR’s Makki says, “If you have pollution and you have a project of this size and with the potential benefit for so many people, you have to stop the pollution and not cancel the project.” However, that requires financing, institutional organization and coherent policies that are currently lacking, not to mention enforcement by the Internal Security Forces. “There are regulations to control discharge but very, very few have the monitoring capacity or capability,” says Nadim Farjallah, senior expert in land, water and environment at engineering firm SETS explains. “They barely have enough personnel to collect fees. The monitoring of quality… there is nobody to control it. That is a major problem.”

Soggy laws, vaporous implementation 

The ubiquitous disparities in Lebanon between laws on paper and laws in practice are a major cause of this problem. Law 221, May 2000, was meant to restructure the water sector in Lebanon, but as Abdo Tayar, advisor to the minister of energy and water, Gebran Bassil, concedes, its incomplete implementation means wastewater management remains a major problem; “Now no one is really responsible for wastewater,” he says. “It is fragmented between the CDR who is doing projects, the municipalities who are running some and the ministry is doing some others, so there is a big grey zone.”

If the scientists’ fears — that toxic contaminants such as trace metals could continue to rise — manifest, then the conventional treatment options currently slated will not suffice in protecting hundreds of thousands of Lebanon’s inhabitants from a noxious nectar coming through their taps. The LRA source warns that the economic feasibility of the projects will be severely impacted if expensive treatment methods have to be employed such as selective ion removal or reverse osmosis. “It will end up being more expensive than bottled water,” he says. A recent study from the University of Texas at Arlington found that the construction specifications for an advanced treatment technique often used to remove trace metals, called reverse osmosis, would cost an additional $2,240,000, and that is before maintenance and monitoring. The plant in question is smaller than the proposed Ourdanyne plant for the GBWSP, and treatment costs do decrease with size, but it gives an indication of the hidden stings that may arise if and when it is determined that the advanced treatment techniques are required.   

No water anyway

In any case, farmers and residents may not need to fear the contents of their water tanks for the simple reason that they may be empty. In meeting minutes obtained by Executive from a session of the council of ministers on October 2011, the Ministry of Energy and Water warned that “executing the Canal 800 will affect the amount of water intended for delivery into Beirut [via the GBWSP]… During certain years it may be impossible to deliver any amount of water into Beirut. “This portent echoes the concerns of the water consultant and the source within the LRA, with the former saying, “Add one plus one plus one… sometimes you’re going to run out.”

The CDR’s Maki is adamant that the numbers have been checked and all the projects will receive the water they have been allocated. “There is no problem in that regard,” he reassures. 

Following a complaint by 51 residents of greater Beirut in November 2010, led by Fathi Chatila, a hydrologist and long time detractor of the GBWSP, the World Bank commissioned a study by the Water Institute at the University of North Carolina (UNCWI) to assess the quantitative, qualitative and financial feasibility of the scheme.

In conclusion, the report found the conveyor would receive enough water so long as, “The Canal 800 irrigation project will not begin to withdraw water until 2021 and will not reach maximum value until about a decade later.” An assertion supported by Makki. However, in the cabinet minutes leaked to Executive the CDR stated that the Canal 800 will go into service in 2017 and not 2021, hence undermining the UNCWI assessment. 

Another lynchpin in this matrix is the planned construction of the Bisri Dam between the Chouf and Sidon. Makki explains that for the coming 10 or 12 years the GBWSP can draw from existing sources, but as it enters the second phase and the water flows increase from 250,000 CM/day to 700,000 CM/day, “Then we will need the Bisri Dam. This will constitute the main source of this project.”  

This assessment is supported by the Minister Bassil, who stated in a press conference that the Bisri Dam was an “inseparable and integrated” part of the project and that building the conveyor infrastructure without building the dam would result in “an investment that is useless, resulting in paying a lot of money for a little bit of water.”   

However, this runs in contradiction to the assessment of the World Bank, the very body the ministry is pinning its hopes on to finance the majority of the Bisri dam. It stated in its response to Chatila’s complaint that, “the Bisri Dam is not a component of the GBSWP nor is it relevant to, or necessary for, the achievement of the objectives of the GBWSP.” 

In the minutes from the October 11 council of ministers meeting, the Ministry Of Energy and Water claimed the World Bank had committed to a $125 million loan to break the back of the estimated $260 million price tag on the dam. However, the most concrete commitment that Executive could elicit from the bank’s sector manager for water Ato Brown was that the bank would not commit to financing “until an evidence based approach is finalized.” 

The divergence in opinion between Lebanese government officials and the check writers at the World Bank over the interconnectivity between the GBWSP and the Bisri Dam suggests it is perhaps a bit early to take it as a given that the bankers will sign on the dotted line.

Another dry debate

In conclusion the LRA source stated that the concurrent development of the Canal 800 and GBWSP — in addition to the existing Canal 900 that irrigates some 2000 hectares in the southern Bekaa — will push the reserves of the Qaraoun and the Litani river to the limit and in many years will simply fall short: “The problem will be in the scarce years. [The annual reserves of the Qaraoun] will not reach the 300MCM which is a maximum, but this is only every three to four years. In the good years we should be able to cover all of the projects.” 

The government consultant agrees with this analysis and expands: “These projects will not reach their objectives. They won’t reach their internal rates of return. They won’t reach the number of hectares they are meant to serve, and they won’t provide the benefits they are meant to provide.” 

The same advisor complained that the decisions to implement these major developments have been driven more by political calculations than any technical and holistic reasoning of how best to manage the nation’s water resources. He argues that the Canal 800 project has been given the green light in a deal cut between speaker of the parliament Nabbi Berri and prime minister Najib Mikati, securing a vote-winning development in the heartlands of Berri’s constituencies in the south.  

He continues that the logic of drawing such large quantities of water from the Litani to the south, primarily for agriculture, does not make sense as the real agricultural backbone of the country is the Bekaa, which also happens to be the region that suffers from the greatest water deficit. “They are taking the water out of the Bekaa to other river basins around. So what happens to the people of the Bekaa?” he asks.

The CDR’s Makki denies out of hand that there has been any political interference, assuring that there is a long history behind the projects and they are part of a much larger development strategy in the water sector.

However, Abdo Tayar, one of the key advisors on this strategy at the Ministry of Energy and Water, says: “I am distancing the ministry from this [the Canal 800]. We do not have visibility on this.” That one of the biggest developments in the water sector for decades is not being pursued under the direction of the Ministry of Energy and Water (MoEW) is perhaps indicative of how politics are overriding policy. 

Lebanon can ill afford to idle over the development of its water resources. By the same token the direction and implementation of this evolution must not be misjudged. Avoiding tough questions and waxing over painful truths may enable the grand gestures of politicians in the short term. But, the possibility of swathes of the country being exposed to pernicious toxins and hundreds of millions of dollars being squandered on unsustainable projects is reason enough to drag the debate out of the meeting rooms of technocrats, bankers and contractors, and into the living room of every household in the country.

 

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Business

Blockbuster financing

by Maya Sioufi
written by Maya Sioufi

It seems like a sweet payoff to invest in films these days. Take for example the the hit comedy “The Hangover”, which cost $35 million to produce and earned $242 million, or the whopping $200 million the film “Paranormal Activities” brought in, costing only $15,000 to produce. Not all movies are that lucky however, and investing in a movie is risky business, as many Hollywood films — 60 percent or more according to industry experts — are a flop, or more commonly known in the industry as “box office bombs.” 

Lebanon’s FFA Private bank, undaunted by stage fright, has recently joined the ranks of Hollywood financial backers by investing in the three-dimensional animated movie “The Prophet” based on Khalil Gibran’s best-selling book. 

“It is a risky business, but it is also highly lucrative if you know what you are doing and if you hit the right movie,” says Julien Khabbaz, head of investment banking at FFA.

With a $12 million budget, the Prophet is expected to hit the big screens by the end of the year. It will be produced by Salma Hayek’s production company, Ventanarosa Productions, led by Roger Allers, director of the highest-ever grossing two-dimensional animated movie, “The Lion King”, which took in nearly $1 billion worldwide. 

Other investors include Financière Pinault, the holding company owned by Hayek’s husband François Pinault. Brothers Haytham and Naël Nasr of Mygroup Lebanon are also investing in the movie and brought the opportunity to the FFA. Given FFA chairman Jean Riachi’s personal friendship with François Pinault, “the trust was immediate,” says Khabbaz. 

By committing 30 percent of the budget entirely with equity, FFA is the largest stakeholder in the movie. The bank sees the movie doubling its investment in the next three years by generating at least $24 million, with a more optimistic scenario forecasting $36 million or more in revenues. With a minimum ticket of $50,000, FFA’s investors expect to receive returns in perpetuity — think DVD sales — with the majority of the profits anticipated in the first 18 months after the movie’s release. 

The film, which will be produced in Los Angeles, does not benefit from any tax breaks, and with no distribution deal secured and no pre-sales completed, this is a high-risk investment. When asked if they are hedging against the movie bombing, Khabbaz replies: “there is no real hedge against flops — people will either go watch the movie and like it, or they won’t.” FFA is betting on a renowned script based on a book that sold more than 100 million copies worldwide, and a solid production team.

While it is not FFA’s first venture into the movie industry, it is the highest profile one. Its previous venture came to naught when the bank had to recently pull out of investing in “Mary Mother of Christ” starring Al Pacino, as conditions set forth by FFA to the producers were not fulfilled in a timely manner. Its only other international movie endeavor was for a French movie “Cloclo”, in which it invested 10 percent of the €20 million ($26.5 million) budget. FFA has also invested a small amount in a Lebanese movie called “39 Seconds” by Nibal Arakji, due to be released in a few months.

In the volatile markets today, turning to alternatives such as movie investments is becoming more appetizing. FFA did look at investing in movies through funds in order to mitigate the risk, but in the end found little demand in the region for a movie fund. “When you tell clients ‘lets invest in a fund that is doing several movies’, you lose the excitement, it is very personal as an investment,” says Khabbaz.

When asked whether FFA intends to invest more in the movie industry going forward, he replies “definitely.”

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