As the needle pierces Reza Etesamifard’s skin in central London, the heroin entering his blood stream is on the final stage of a journey that most likely originated in Afghanistan. The drug in his veins has traveled more than 6,000 kilometers across battlefields, mountain ranges, deserts, rivers and seas, changing hands dozens of times. Along the way it has crossed at least 10 borders, eluding customs and law enforcement agencies at every stage.
Only moments after Reza removes the syringe, the heroin starts to kick in and he begins to scratch his face irritably, a common symptom among heroin users. As chance would have it, Reza is a refugee from Iran, one of the many countries that the heroin he uses most likely passed through en route to Britain. Unlike the vast majority of the United Kingdom’s users, his path to addiction began by smoking opium when still in Iran.
Reza would be the first to attest to how addictive heroin is and confesses that he will do anything to get his next fix and avoid the withdrawal pains, which he describes as being like “ants crawling around your skeleton.”
Although the 10 British pounds [$16.20] that he pays for 0.2 grams of heroin on a daily basis may not seem like much, he is just one of more than 11 million heroin addicts across the world whose combined payments make the heroin trade a $55 billion industry. Though highly profitable to some, the trade is lethal to others, with the United Nations Office on Drugs and Crime (UNODC) estimating that as many as 100,000 people die from the use of Afghan opiates every year. Some one million people worldwide are involved in heroin trafficking alone, while as many as three million Afghans play some part in the cultivation of poppy plants that yield the raw opium from which heroin is made.
One of those poppy farmers is Wali Jon, who supplements subsistence farming with cash from poppy crops in order to help support his wife and four children. Wali is from south Helmand Province, which alone produces half of Afghanistan’s opium. If prices are similar to last year he expects to make about $250 from two acres of poppy (8,093 square meters), which he hopes will yield four kilograms (kg) of opium. Like many other farmers in the region he is fearful that the authorities will destroy his crop; when asked what he would do if they did, he to Executive, “If somebody takes away your water on a hot day, what do you do?”
Reza and Wali are both tied to opiates — one through addiction and the other through his livelihood — but the similarities end there. Reza spends roughly as much on heroin every fortnight as Wali hopes to make from his whole crop in a year, despite the fact that Wali will produce enough opium in that year to supply Reza with heroin for eight years (given that it takes seven kg of opium to produce one kg of heroin). In short, Reza pays for each hit approximately 200 times what Wali was paid to produce its raw ingredients (based on last year’s prices).
As with any commodity, prices go up and down at both ends but no matter how high they rise, the Afghan farmers only ever see a tiny proportion of the whole profit.
The many roads from Afghanistan
So how does Wali’s opium reach Reza as heroin? Who actually makes the profits and how did Afghanistan become the world’s leading heroin producer? Although the heroin trade is illegal, the answers lie in conventional economics that link supply to demand and more importantly, reward to risk.
Unlike most other illegal recreational drugs, which are by and large produced and consumed within the same region, the vast majority of opium production is restricted to only three areas on Earth: Afghanistan, Southeast Asia (mainly Myanmar) and Latin America (Mexico and Columbia). Since 2005, Afghanistan has controlled some 90 percent of the global total, at about 8,000 tons of raw opium per-year. It also accounts for 85 percent of the world’s heroin, most of which is processed here or in neighboring Pakistan and Iran.
The net result of this concentration of production is a worldwide narcotics trafficking network emanating from Afghanistan, the likes of which can only be rivaled, in both the reach and value, by Colombian cocaine trafficking. Afghan production single-handedly supplies heroin to Western Europe and Russia, by far the world’s two biggest markets, which together make up 47 percent of global heroin demand, and although Myanmar and Latin America are the major suppliers for China and the United States, respectively, small proportions of Afghan heroin also feed these markets.
By the very nature of illicit drug trafficking there is no way of saying with certainty how heroin has been smuggled from one place to another. The routes are fluid and change frequently, with traffickers taking advantage of loopholes as they appear. There are, however, established flows that have been identified by law enforcement agencies and bodies such as the UNODC and the European Monitoring Center for Drugs and Drug Assistance (EMCDDA).
Essentially heroin and opium take one of three routes out of Afghanistan; either the “Northern Route” through central Asia and into Russia, the “Southern Route” through Pakistan, or the “Balkan Route” via Iran and then onwards through Turkey and the Balkans to Western Europe. Much of the drugs that transit through Pakistan subsequently also pass onto the Balkan Route.
The UNODC estimates that some 25 percent of all Afghan heroin (95 tons) leaves via the Northern Route, 40 percent (150 tons) via Pakistan and around 35 percent (130 tons) via Iran. From the combined Iranian and Pakistani routes around 37 percent of Afghanistan’s total heroin production continues onto Europe via the Balkan Route.
Global opium production
The vast majority of the 95 tons of heroin that leaves via the Northern Route is consumed within Russia, while the Southern Route’s supply satisfies Pakistan’s demand (19 tons) and that of other destinations, including Iran (35 tons), South East Asia (25 tons), Africa (20 tons) and the United Arab Emirates (11 tons), the
latter of which is almost exclusively for onward shipment, mostly to China and South Africa. Of the Balkan Route heroin, after accounting for seizures and consumption in the countries en route, some 88 tons make it tote high-value sales in Europe, where four countries alone are thought to account for more than half the market, namely the UK (19 tons), Italy (18tons), France (10 tons) and Germany (7 tons).
The Balkan Route carries the largest volume the greatest distance and to the highest value market. Heroin was smuggled along the Balkan Route well before Afghanistan became the chief producer, during the period when it originated from Pakistan and Burma.
Laurent Lamiel, an analyst at the EMCDDA, described the route as “the illegal version of the silk road.”
“Heroin was travelling on [the Balkan Route] even when the Iron Curtain was in place, which shows how strong this route is and how developed, protected and historical the networks are,” he said.
Control of the routes
“The thing that is very important to understand is that the big players on the Balkan Route are Turkish criminals and traffickers,” Lamiel explained. “[They] are able to concentrate a large amount of heroin produced in Afghanistan into their hands and act as wholesalers to the British market as well as other European markets.” The UK’s Serious Organized Crime Agency (SOCA) backs this assertion, believing that some 140 Turkish networks control the heroin supply to Europe.
That Turkish criminal groups have taken dominance over other criminal organizations along the route is hardly surprising, not only because the route traverses some 1,600 kilometers of Turkish territory but also because Turkey controls the Bosphorus Straits, the most direct access point to Europe from South Asia without having to pass north of the Caspian and Black Seas. Turkey also shares a long land border with Iran, where heroin can be bought at prices similar to those in Afghanistan, and there are extended communities of Turks in London and elsewhere in Europe, particularly Germany, who can facilitate connections and legitimize travel. In a similar way, Pakistani groups that smuggle direct from Pakistan to the UK, by air or sea, exploit their connections within the UK and their close proximity to the Afghan market, cutting out middlemen to maximize profits on a route where they can buy at around $3,000 per kg and sell at $30,000 per kg; that route only accounts for small volumes of traffic, however, at most some five tons between ships and flights from Pakistan to the UK or the Netherlands.
Although Turkish and Pakistani groups largely control the Balkan and direct air and sea routes, respectively, individuals and groups from many other countries are also involved, as the arrest figures for heroin traffickers attest. In the Netherlands, for example, which could be considered the end point of the Balkan Route and is a key hub for onwards shipment to various European countries including the UK, Dutch citizens account for 20 percent of arrests, followed by Nigerians (19 percent), Turkish (16 percent), British (5 percent), Brazilians (5 percent) and Americans (5 percent).
Similarly, at several points along the route ethnic groups that straddle national borders, or have large diaspora populations, facilitate trafficking, examples being Kurds along the Iran-Turkey border, Aziris along the Iran-Azerbaijan border across which a sub-route branches north from Iran into Russia or Europe, and Albanians who are particularly visible in the trade in Greece, Italy and Switzerland.
The economics of the trade
Even though Afghanistan has a near monopoly on global opium and heroin production, the economics of the trade conspire such that the country makes far from the lion’s share of revenues. At retail prices the total world opiate value is approximately $65 billion — $55 billion for heroin and$ 10 billion for opium. The market with the highest value, Western Europe, accounts for approximately $20 billion of the global total, followed by the Russian federation ($13 billion), China ($9 billion) and the US ($8 billion). At best Afghanistan makes a small fraction of the profits. In 2009 the combined total paid to Afghan farmers was an estimated $400 million. When opium trafficking and opium processing into heroin are factored in, the value of the opium/heroin industry to the Afghan economy was some $2.4 billion, which is roughly 3.5 percent of the global market value. Antonio Maria Costa, the executive director of the UNODC, quoted Afghan President Hamid Karzai as telling him: “We take 3 percent of the revenue and 100 percent of the blame.”
Nonetheless, to a poor country like Afghanistan this revenue is still substantial. To put it in context, recent projections for Afghan government expenditure this year estimate it at $4.5 billion, of which the government can only raise $1.9 billion itself, the remainder being provided by international donors. Afghan heroin revenues are one-seventh the size of the nation’s licit gross domestic product, which according to the International Monetary Fund was $16.6 billion in 2010, although even this figure is inflated by international donor money, with an estimated $5 billion in annual aid fuelling the economy.
In general, the further away from Afghanistan, the higher the potential profits from heroin. Along the Balkan route, the wholesale heroin price varies from just $2,400 per kg in Afghanistan, to $11,000 per kg at the approximate mid-point in Turkey, to $30,000 per kg in the UK (see map page 37). Part of the explanation for this is that, in broad terms, the route travels up two gradients: firstly from less developed to more developed countries, where higher prices can be charged, and secondly from an area of abundance to one of relative scarcity. There is also the fact that the further the heroin travels, the more hands it passes through and the more costs are incurred, which must be recouped in the eventual sale price.
Global heroin consumption
“Although the UK is the highest value market in Europe, with some of the highest street prices for heroin anywhere in the world, there is more money flowing into Afghanistan from opiates consumed in Iran than there is from the UK,” explained a SOCA financial specialist who requested only to be identified as ‘Richard’ due to the sensitive nature of his work. To understand this, one must break down the price and look at where the revenues from street sales go.
At approximately $30,000 per kg the UK’s wholesale heroin price is below the European average of $36,000 per kg. This perhaps reflects the fact that, barring Russia, the UK has the single highest consumption in Europe and the pull of the market pushes the price down even after factoring in the risk to dealers, which is considerable given that the UK makes among the highest number of seizures in Europe. However, the street value of about $ 80per gram is above the European weighted average of $77 per gram, so that UK dealers are in a privileged position of buying at lower-than-average prices and selling at above-average prices.
The majority of the street value stays in the UK, with criminals making $50,000 for every kg of heroin sales, albeit most of these sales at street level will be in very small quantities, typically of 0.2 grams. Most of the wholesale import price of the heroin has to be paid down the chain of traffickers to pay costs incurred on the way, with any significant profits being retained well before Afghanistan by the controlling criminal groups.
This model is widely applicable to the high-value European markets, meaning the largest revenues from heroin sales are retained within the countries of final sale, even if they may be distributed between large numbers of dealers. Richard makes the point that, “When you go back to the cultivators and the processors in Afghanistan the price has nothing to do with the destination market, so they’re getting as much for each jirib [approximately2, 000 square meters] of land that they’ve cultivated whether the opium is smoked in Pakistan or the UK.”
Like so many things in life it’s a question of who you know.
“In reality if [Afghan traders] could get [heroin] to the UK themselves they would,” Richard said. “They’re entrepreneurs to a degree, but they can only sell it to the people they know who will buy it from them and they tend to be across the first border in Iran or Pakistan.”
Mechanisms of trade in Afghanistan
It is widely understood that the majority of Afghan opium farmers make very modest profits and are simply trying to make a living. In fact, many are stuck in an economic trap not dissimilar to that of coffee plantation laborers in various parts of the world who, after working hard in the fields, only receive a fraction of the profits that up-market Western coffee shops reap. The difference is that poppy crops are illegal and there will likely never be a “fair heroin trade” campaign. To this end the UNODC, together with most organizations, do not generally consider that the line of criminality has been crossed until the opium or heroin reaches the hands of substantial traders. Nonetheless, Afghan farmers stand the risk of having their crops eradicated by the Afghan National Security Forces (ANSF) and are often suspected of having links with the Taliban who, although not necessarily in control of the opium trade, do facilitate and profit from it.
Often Afghan farmers have turned to opium as a last resort in areas where the government provides very few services or even basic security. In such places, the Taliban or other anti-government elements can be an attractive source of support, especially in relation to poppy cultivation. At a grass roots level they provide poppy seeds and small loans to farmers to prepare for the harvest, as well as organizing collection of the opium. It’s in the Taliban’s interest to do so because the farmers in turn pay a tax on their opium, known as ushr, direct to the Taliban, which is usually levied at 10 percent.
Further down the chain, the Taliban are more closely involved with traders and lab processors, who pay for protection, facilitation and, where necessary, logistical assistance in heroin processing, storage and packaging. They also charge a zakat tax on traders, generally set at 2.5percent. Wherever they can, the Taliban levy these taxes on all goods, but with illegal crops they generally take payment in kind, knowing they can get higher prices beyond Afghanistan’s borders. However, contrary to what is often portrayed, the model is more one of the Taliban taking advantage of pre-existing trade than their having direct control of it.
The Taliban are known to apply pressure on farmers to grow opium but their decisions to do so are affected by a broad range of factors. Although it is true that opium usually fetches higher prices than alternative cash crops, other practical considerations must be taken into account. In the first place, with other crops farmers would have to get their produce to market by their own means, which can be difficult given the state of infrastructure in Helmand, or indeed most locations in Afghanistan. Secondly, raw opium acts as a form of currency, which is particularly important in under-developed rural areas where no banking facilities exist.
Some sort of transferable savings are especially valued during times of war and uncertainty, as Jean Luc Lemahieu, the UNODC’s representative in Afghanistan, explained: “Many people have been displaced, but if they are able to take their raw opium with them and their opium seeds, they have an income which will stay good for 10 years. Try to do the same with pomegranates, which only keep well for three weeks, after which they’re rotten in your pockets.”
To give some idea of the increase in earnings that opium can bring to farmers, according to the UNODC the average income of non-opium growing farmers in 2006 was $2,370, while that of opium growing farmers was $5,055. That said, the reality on the ground in Helmand and other poppy producing locations changes radically from one place to another. According to Richard of SOCA, “It’s very much a moveable feast. Village by village, prices change [and] intentions change, as does the role of authority and whether the local tribal leader or key person is sympathetic to the government or the Taliban.”
Price fluctuations and their causes
This year the average raw opium price in Afghanistan is estimated to be much higher than last — some $280 per kg compared to just $80 per kg in 2010. A very small portion of this rise can be attributed to successful eradication, which reduces supply and hence pushes up prices. However, there are two much more significant factors in the price increase: the first being that widespread disease triggered a blight in the crops last yearend tightened supply, second and more importantly, is speculation.
“The military operations mean that a lot of farmers are very uncertain about their future prospects and so they start to stockpile opium because in times of war it’s one of the best commodities to have,” said Lemahieu, pointing out the similarities to the classic economic model of the ‘Dutch tulips’.
Essentially the opium farmers are asking the same questions that any Afghan observer asks: “Is the troop surge going to work?” The farmer, however, must think beyond this to ask: “If the surge does work, will I be able to plant opium in the future and should I stockpile some of what I have?”
As Lemahieu notes, “It’s Wall Street all over again — except in Helmand and Kandahar — and these are not high paid bonuses for bank executives, these are poor farmers thinking ahead and saying ‘in this uncertainty, I’m not selling. I want to sit on it and see what happens to the price’.” The recent price rises are substantial enough so as to have provided many farmers who had previously abandoned poppy crops with the extra incentive to renew cultivation. The UNODC estimates that of the 20 provinces (from a total of 34) in Afghanistan that were for all intents and purposes ‘opium free’ by 2010, thanks to eradication efforts, at least four will see renewed cultivation in 2011.
Generally speaking, as the volume of opium production has increased over the years, from just 1,000 tons in 1980 to a peak of 9,000 tons in 2007, prices have decreased, but previous large price fluctuations at the supply side are not unheard of. Following the Taliban’s ban on opium cultivation in early 2001 prices rose from less than $50 per kg in July 2000 to nearly $700 per kg in August 2001. The ban was strictly enforced, making it probably the quickest and most effective, albeit short lived, drugs eradication program in history. The Taliban partly put the ban in place to appease Western governments in the hope that they would recognize the regime, not then aware that the move would be rendered redundant by the events of September 2001, which led to Western military intervention, the removal of the Taliban regime and a resumption of opium production.
Although the supply side prices may be prone to fluctuations given shortages in production, this is no different from any other commodity. The farm gate price of opium, however, is so low compared to the eventual market prices of the heroin that these fluctuations have negligible effect on heroin markets in distant locations, where the bulk of the price is driven by high risks to the dealers, combined with covering the costs of transport. Furthermore, the local mid-level traders take up some of the slack in the market, as Lemahieu explained: “[They] act as a price cushion in between the demand and the production so that some of their inflated profits from the past have gone down over the last months because they are paying for the extra cost on the production side while higher prices are not really reflected in the consumer side.”
Afghan production of opium has become so high that if it were all converted into heroin it would outstrip global demand three times over. From what has become such a strong and steady supply, European prices have gradually dropped, with the average heroin wholesale price falling from $100,000 per kg in 1990 to just $36,000 per kg in 2011. It suits the wholesale suppliers — in other words the larger organizing criminal groups — to keep the prices steady.
“They’re no different to other commodity brokers, which is essentially what they are, in terms of the ways they absorb price fluctuations and try to manipulate the market and the supply,” said Steve Coates, deputy director of SOCA.
Becoming the sultan of smack
It is only since the early 1990s that Afghanistan became the world’s dominant opium and heroin supplier and, effectively, the current war in Afghanistan has only consolidated its position. There had always been some opium production in Afghanistan but it wasn’t until the Soviet war through the 1980s that it became a major supplier. Previously, Pakistan had been the world leader in opium and heroin production, but as the Afghan mujahedin who were fighting the Russians began to use opium to fund their resistance, Afghanistan’s annual production started to increase.
As weapons were smuggled into Afghanistan, largely by Pakistan’s Inter Services Intelligence (ISI) and partly funded by the American Central Intelligence Agency (CIA), opium would be brought back and refined to heroin in Pakistan. In the early 1990s Pakistan clamped down on its production, virtually ending Pakistani poppy cultivation, but elements within the ISI continued to turn a blind eye to Afghan opium traders using the preexisting routes and processing infrastructure within Pakistan.
Following the Soviet withdrawal in 1989, a fierce civil war was fought between different Afghan factions, all of whom used opium revenues to some extent to fund their war effort. The Taliban, who had conquered all butte furthest northern reaches of Afghanistan by 2001, were no different in their use of opium as fuel for war, a fact that continues to this day.
What has changed is that opium production has roughly doubled since 2005 and has become increasingly concentrated in Afghanistan’s embattled southern areas, while it was not until the last decade that the majority of heroin began to be processed inside Afghanistan.
An end in sight
The extent to which the Taliban profit from the opium and heroin trade is often misunderstood. Of the $2.4 billion value of the opiates trade that is retained in Afghanistan, the UNODC estimates the Taliban’s total share would be around $125 million, with other less conservative estimates suggesting it to be as high as $400 million. Even the higher figure gives the Taliban only a 0.6 percent share of the total revenue generated from foreign sales of Afghan opiates. As a portion of Afghanistan’s share of the global spoils, it is only 17 percent. Nonetheless, in a country where entry-level police salaries are less than $100 per month, this allows the Taliban to compete with, and often out pay, state security forces’ salaries.
Successfully ending the opium trade would cut off a significant source of insurgent funding, but eradication is a double-edged sword that can sometimes act to alienate Afghan farmers, pushing them closer to the insurgents. In the past this has led US forces to back away from tackling the drugs problem, which they haven’t considered part of their main mission. Thanks to a change of policy in recent years, a slow decline in cultivation is beginning to take place.
“The real change [regarding opium] came about two years ago when the US military decided to go after the drugs, which they had not been doing for nine years,” said journalist and Afghanistan expert Ahmed Rashid. “If [former US Secretary of Defense Donald] Rumsfeld had not had that policy for so many years there wouldn’t have been such an awful situation.”
This year was the first that the US marines had a permanent presence in Marjah, previously one of the centers of the opium trade in Helmand. Although the farmers had been warned that eradication would go ahead many still planted poppy. As the harvest period approached, government tractors began to plow up the fields with marines providing security. Usually the harvest is the last quiet period before the Taliban’s yearly spring offensive begins, but this year in Marjah hostilities got off to an early start. No sooner had the tractors been sent into the fields than the drivers found themselves under fire from angry locals, some of whom had just crossed the line from farmer to insurgent. In a classic Catch-22, the eradication that is necessary to end the insurgency has also fueled it.
Until stability returns to Afghanistan it will continue supplying the world with the deadly by-product of its wars. It is estimated that there are more than 10,000 deaths per year from heroin overdoses in NATO countries, more than four times the total number of NATO troops that have been killed in Afghanistan since hostilities began in 2001. As Rashid sees it, “You cannot eradicate drugs until the war comes to an end. That’s the bottom line. When that happens, you can talk about a nationwide policy but you can’t really effectively tackle the problem until the war is over.”
The problem, however, is not simply to defeat the insurgents but to extend the government’s reach throughout Afghanistan. In many parts of Southern Helmand the first real evidence that the farmers had seen of any government action was the eradication of their precious poppy crops, before alternatives were put in place or any significant services provided. As Wali Jon, the poppy farmer, insists, “If the government provided any services or alternatives, I wouldn’t grow poppy.”
That certainly doesn’t seem like a reality in the near future and in the distant streets of London Reza Etesamifard has little concern that supply will dry up. As he strolls comfortably around his adopted city he points out the many locations where it’s easy to score heroin, from Soho back alleys to upper class suburbs.
“In every part of London there are dealers; it’s an epidemic and nobody is dealing with it,” he said. “Plenty of users hold onto a job — it’s only the ones who have lost everything that you notice.”
Reza is frank about his addiction; he knows he’s lost everything. Although young, bright and energetic, he is homeless, penniless and without a friend he can trust, willingly confiding that the addicts he spends his time with would put heroin before their friendship, no matter the cost. The only thing forming any structure to his life is the acquisition of his next pain-staving, euphoria-delivering fix.
The routes
Although the so-called “Golden Crescent” covers parts of Iran and Pakistan, virtually all of the opium production in this area now takes place in Afghanistan – half of it in Helmand Province alone, which by no coincidence is also the heartland of the Taliban insurgency. The “Golden Crescent” was named after the “Golden Triangle”, consisting of Burma, Laos and Thailand, which had previously been the largest opium producing area until the1970s, when it was overtaken by Pakistan and subsequently Afghanistan. Most heroin processing occurs inside Afghanistan, but there is also significant processing along the Pakistani border. Once processed, most of the heroin transits through Pakistan, Iran and Turkey in bulk, where seizures of hundreds of kilograms (kg) at a time are not uncommon. Beyond this point, shipments are usually broken into much smaller packages with the average size of European heroin seizures in the tens of kg.
It is worth noting that seizures in Pakistan, Iran and Turkey alone accounted for 62 percent of global seizures in 2008 and almost half the European seizures in the same year were made by just three countries, namely the United Kingdom (18 percent), Italy (14 percent) and Bulgaria (13percent). The combined volume of heroin estimated to enter Iran is some 140tons, of which 14 tons is consumed in country and 32 tons is seized, giving Iran the best interception record at some 22 percent of its overall flow, compared to 18 percent in Pakistan and 10 percent in Turkey.
Iran’s seizure efforts are not surprising given the scale of its heroin problem, with more than 400,000 addicts. Taking into account Iran’s international isolation, common ground in the fight against drugs serves as one of the few political bridges left to the West. As Jean Luc Lamahieu, the United Nations Office on Drugs and Crime’s representative in Afghanistan, explained: “It’s an area of rapprochement. Starting with counter narcotics issues we have to get the confidence to discuss other issues of importance.” Although the map show flows away from Afghanistan, some of the organized crime groups operating the routes also send precursor chemicals required for heroin processing and other drugs in the opposite direction into Turkey and beyond. There are several salient points on the map, most notably the price of heroin in Bahrain, by far the highest at $240,000 perkg (wholesale and retail), which can be partly attributed to the fact that Bahrain is a small island with few users and a strict state security apparatus that still has the death penalty for heroin traffickers.
For the aficionados, dog fighting is more than a sport — it is a platform to play God with the violence of Darwin’s natural selection.
“I have Hitler’s mentality,” says 35-year-old Mike Kennel, a pseudonym he chose to maintain anonymity. “I aim for humans to advance, just like I am allowing these dogs to advance — I only let the most intelligent marry each other and the strongest marry each other.”
On the outskirts of Beirut down a winding road off the Hadath highway, an iron gate opens onto a secluded path bordered by agricultural land. Yet the organically grown plots, the picturesque greenery and the peaceful ambiance camouflage a farm of another kind: This is doggie boot camp.
A seemingly abandoned building at the end of the path houses dogs enrolled in a rigorous training regimen, and on the other side of the clearing, leafy fichus trees shade a square fighting arena, in which they are trained to tear each other apart.
Apart from fulfilling his competitive lust, Kennel claims he stages fights to test for specific traits to ensure the preservation of the species.
“I check for the dog with the stronger jaw, the strongest mind and the longest breath, and I use it for the selection I breed. To test it, I need to put it in the ring,” says Kennel. “We believe in the rule of the jungle. We believe in the survival of the fittest, because the fittest will make stronger offspring, and prevent the extinction of the animal.”
When these canine “ultimate fighters” are in the ring, the faceoff is brutal. American pit bull terriers (APBT) have been bred for their capacity to fight and inflict maximum damage. It is also their “gameness,” or ability to attack regardless of their physical condition, that is one of their most appealing attributes for their masters.
APBTs have a predisposition to tolerate pain through anesthetizing compounds that their bodies naturally secrete. The selection and genetic make-up, rather than the use of any drugs, says Kennel, have allowed the development of strong, feisty pit bulls that are born with a predator’s instinct to hurt other dogs.
What started for Kennel as a fascination with animal competitions at age 12 led him, by 16, to become a professional dog-fighter, trainer, breeder, trader, handler and referee; in other words — a dogman. Today he says it is also a lucrative business, but one that he declined to quantify to avoid litigation by auditors from the Ministry of Finance.
Kennel owns 75 dogs that he trains and breeds; 25 are APBTs, which are the only species he raises for fighting purposes. Kennel’s work in breeding and training has earned him a region-wide reputation: in his workshop he builds self-powered treadmills that he sells for $600 around the Middle East to improve the cardiovascular fitness of the dogs without exhausting them.
Dogs also wear weighted collars, usually four kilograms, to increase upper body strength, and their biting power is improved by having them chomp on a hanging rope from which they are suspended for extended periods. Kennel has also developed strict nutrition regimes complete with vitamins and minerals to complement dogs’ training.
A puppy is trained until the age of two before entering the ring for the first time. Formal matches are usually arranged two months in advance to give time for training, with the details — such as the wager of each owner and the weight class of the dogs — drafted into a contract for the competing parties to sign.
Lord of the ring
Just before formal matches dogs are weighed to ensure they adhere to the agreed weight category, and if not, the party in breech of the contract pays a penalty, usually half the value of the bet, or an average of $2,000, to cover the cost of the training. The opponent can then also choose to cancel the bout.
After passing the weigh-in, the dogs are washed to remove any possible poison hidden in their fur. Handlers then bring the animals into the pit, or “ring” — a four meters by four meters square with walls up to 75 centimeters high. They hold the dogs by their hips behind “scratch lines” in opposing corners as the dogs prepare to attack.
The referee stands in the middle of the ring, ready with a wooden or plastic “breaking stick,” which is the only way to pry open a pit bull’s locked jaws. At the signal of the referee, handlers release the dogs for the first “scratch” — dog fighting terminology for an attack — and the animals leap at each other in a fever of bloodlust.
“We don’t tell the dogs ‘Go’,” said Kennel. “The dog has an instinct to go on its own. If we have to invite the dog to the fight, we don’t want it.”
At the fight Executive attended last month, the dogs became entangled in a “dance of death” standing on their hind legs, then took turns mauling each other, quietly encouraged by their respective handlers with words the dogs were conditioned to hear when striking opponents.
During the first scratch, the dog that locked its jaws on its opponent first won a point. The dogs were then pried apart with the breaking sticks — no one flinched as blood oozed from the wounded animal.
At this point in the match the owners and the referee will check for the dog’s gameness.
“Even if the dog gets wiped, if it still has gameness then it is selected for breeding,” said Kennel.
At the second scratch, the dog that lost the first round will be released to attack his opponent. If after a 10 second count by the referee the dog still has not attacked, then the other dog must scratch and secure a lock on its opponent. If the second dog fails to attack as well, then the dogs are even and the match is over.
“Both dogs will go bye-bye,” explained Kennel with a hint of sarcasm. “They can’t be sold, there is no breeding, and their value will be zero even if they cost $10,000.”
When a dog loses, it gets a loss added to its title record, and if it does not display gameness it will never be bred or enter a ring again.
After each fight, Kennel injects the dogs with antibiotics to speed their healing. He confirms though that unless it’s a finishing game, where a dog has to be kept in the fight until its last breath, no owner would let his dog die in the ring.
“No one kills a dog worth $4, 000,” he said, though Kennel admitted that dogs often die the day after a fight due to injuries.
As a result, medical care for the dogs before and after the fight is essential in preserving their value and improving its performance.
Gambling on gore
With the blood sport underway in the ring, betting outside goes into full swing, with 10 percent of all bets going to the referee and ring, which usually go together. Kennel says there are three rings in Lebanon for professional fights.
“There are no limits for bets,” he explained. In Gulf countries, bets can reach up to $30,000, and can include automobiles and property.
Kennel says that in Lebanon, the bets don’t go beyond $5,000, and the big betting is usually limited to a handful of insiders. The dog-fighting circle is secretive and clandestine, with heavy emphasis put on the anonymity of participants given the involvement of some of the country’s prominent businessmen, according to sources that also declined to be identified.
The price of a gladiator
As a fully-fledged dogman, Kennel takes a lot of pride in his lineage breeding. The price of a puppy ranges from $500 to $1,500. After that, prices increase with the level of training, the titles a dog earns and the owner’s emotional attachment to the animal.
With each match victory, a dog’s value normally doubles; three wins earns a dog a champion’s title, and five wins earn it the title of grand champion, which can elevate the price to as much as $50,000 in Lebanon.
Kennel’s endeavors have evolved into a highly disciplined enterprise compared to “street level” dog fighting. Sources, which asked for anonymity because they have received threats from dog fighters in these other circles, describe them as being associated with criminal networks, with bouts staged in secret locations that are only revealed to the participants shortly beforehand via SMS mobile messages. Dogs fighting in these settings tend to be subjected to extreme abuse, often deprived of food and forced to live in darkness to increase their aggressiveness.
Kennel, who sees himself as a professional, abides by the “Cajun rules,” a detailed list of guidelines related to dog fighting created in the 1950s in the United States. He argues that street dog fighters are amateurs and ignorant of important information pertaining to adequate dog training, such as the fact that darkness weakens the eyesight of a dog and makes him aggressive towards people in daylight.
“A dog that is aggressive towards humans is not allowed in [our] ring,” he says.
In fact, Kennel now recruits amateur dog fighters to join his training camp, teaching them how to be professional handlers and trainers in the creation of true canine predators.
“I recommend that anyone who has a pit bull, go to a professional to learn… the value and the love of the dog,” said Kennel.
There are currently no laws in Lebanon that pertain to dog fighting. Kennel says he believes that dog fighting should be regulated, and that those who fail to ensure a safe and secure environment for their dogs should be penalized. Inspection and regulation should be the job of the government, he says, and not that of animal rights activists who don’t understand the emotional and financial value of game dogs and want to “castrate” them.
“Why don’t we castrate Mohammad Ali? Or all the people who like boxing?” says Kennel.
“We don’t have to be enemies with animal rights activists, we can work together,” he said. “Instead of stifling those who are addicted to this sport, we can teach them to do things right. This is a dangerous sport and safety procedures have to be respected.”
The fight for legal teeth
The only reference to animal abuse in Lebanese law is found in articles 761, 762 and 763, which define a domesticated animal as “any animal that is in the guardianship of the person who owns it and raises it,” while stipulating that a person who “hurts of exhausts” either a domestic or wild animal without cause may face “prison with a bail of 10,000 to 20,000 LL.”
Animal rights organizations have been urging for clearer legislation in Lebanon to prosecute animal abusers, as the absence of such laws leaves them effectively toothless in trying to stop dog fighting and address issues related to animal cruelty. As a result, groups such as Animals Lebanon – a non-profit organization promoting animal rights and protection – are now working with the Ministry of Agriculture and a team of lawyers in drafting new laws regarding animal welfare. The new legislation, the first draft of which is due June 17, needs to be comprehensive in addressing animal cruelty, according to Lana el Khalil, president of Animals Lebanon, and include a ban on all forms of animal fighting. “Dog fighting represents one of the ugliest faces of humanity,” said Khalil. “You see the most prehistoric traits of violence in a setting like this.”
Though there is the argument that dog fighting as traditional and cultural pursuit, Executive Director of Animals Lebanon Jason Mier said that society needed to evolve and recognize things like dog fighting are “simply not OK anymore.” “Does Lebanon want to be at the forefront and join the countries that are making these things illegal, or do we always want to be behind and catch up to other countries later,” he said. Joe Khoury Helou, whose team of lawyers is working on the draft, said that a law is of no value without effective implementation, including the enforcement of sanctions, which would fall under the jurisdiction of the ministries of agriculture and the interior. Currently the team is outlining the key issues the laws should cover, based on the recommendations from activists at Animals Lebanon.
As Executive went to print, details of the draft were still vague. Animals Lebanon is adamant that dog fighting and animal cruelty be explicitly banned. However, lawyers fear that by going into details about these issues, they might risk not passing parliament. They believe the safer approach is to offer only general guidelines in the earlier stages. A crucial step is for Lebanon to sign onto the Convention on International Trade in Endangered Species (CITES), which Minister of Agriculture Hajj Hassan has promised to do within a year. Joining CITES would help plug gaps in domestic legislation, given that where Lebanese law fell short, the international treaty would apply.
Signing CITES, however, would be effectively useless without the presence of national laws, as the two would need to be complementary. The first national workshop on animal welfare featuring experts from the European Union was held on May 18 and 19, under the patronage of the Ministry of Agriculture, to discuss CITES and the European Union minimum standards and how they can be applied in Lebanon. Putting forward the case for proper animal rights legislation in Lebanon, Khalil said: “A country that protects its animals is a country that is likely to protect its people, because it means you have reached a level of civility.”
There has been a suggestion that a “third intifada” is imminent following the deadly border incidents on May 15, when Israeli troops fired live rounds into demonstrators commemorating the Nakba (or “catastrophe”) anniversary in south Lebanon and in the Golan Heights, with eight confirmed deaths and well more than 100 wounded.
There has been talk for several months of launching a fresh drive for Palestinian emancipation, with a focus this time on the rights of the Palestinian refugees expelled from their homeland in 1948 and 1967. The first intifada between 1988 and 1993 was associated with stone-throwing children and the second between 2000 and 2005 with suicide bombers. The third could adopt the tactic of mobilizing mass marches of unarmed Palestinians to the borders of Israel, including from the West Bank.
This would present a serious dilemma for the Israeli army, which knows how to deal with armed aggressors and unarmed individuals but, as history shows, is unprepared to deal with large crowds of unarmed civilians.
The May 15 marches in Maroun Al Ras on Lebanon’s southern border and opposite Majdal Shams in the Golan Heights, and Israel’s deadly —and characteristically disproportionate — use of live ammunition against unarmed protestors, diverted attention, albeit briefly, from the crisis in Syria. The increasingly beleaguered Syrian president, Bashar al-Assad, would be wise to recognize the value of mounting future marches against the Golan Heights in the coming weeks.
There is no shortage of willing volunteers. The Palestinians would enthusiastically volunteer for such marches; so would the descendants of the roughly 120,000 Syrians driven from their villages on the Golan in the 1967Arab-Israeli war. As for the Lebanon front, there is little to prevent further mass Palestinian marches to the southern border.
The threat of breeches along the Lebanon-Israel border by a crowd of Palestinians is a nightmare scenario for the Israelis. Even with the relatively small breech in the Golan on May 15, one enterprising Palestinian made it all the way to his ancestral home of Jaffa before turning himself in to the police.
There have been previous gatherings of Palestinians at the Lebanon-Israel border fence. In October 2000, a crowd of Palestinians gathered at Marwahine in the western sector of the border to protest Israel’s crackdown on the nascent Al Aqsa intifada. Four of them were shot dead by Israeli soldiers when they tried to scramble over the fence. Shortly afterwards, Hezbollah launched its operation to kidnap three Israeli soldiers from the Shebaa Farms in the eastern sector, confirming that the Palestinian protest was intended to divert the attention of Israeli military commanders. Perhaps the most effective target for a civilian march along Lebanon’s southern border is not the original boundary with Palestine, but the Shebaa Farms.
The Shebaa Farms is not sovereign Israeli territory; it is internationally recognized as occupied Arab land. It is unpopulated except for Israeli troops deployed in seven hilltop outposts, most of them beside the Blue Line. There are three potential points of access for large crowds looking to infiltrate the farms — the Shebaa Pond gate at the northern end, the Hassan Gate in the middle and via the road from the Arslan family estate at Majidiyah in the south. Israeli frontline outposts, including Rowsat Allam and Jabal Summaqa, overlooking Kfar Shuba and Ramta above the Bastara farmstead, could beblockaded by crowds deployed on the military roads connecting the outposts.
The Israelis would face three unpalatable choices. They could attempt to physically prevent the crowds from crossing the Blue Line by shooting at them, evacuate troops in the frontline posts before the access roads are cut by the civilian marchers, or leave the troops in the outposts and resort to a diplomatic means of ending the crisis.
Such a march would require a high degree of prior planning and coordination and it would risk a confrontation with the United Nations Interim Force in Lebanon (UNIFIL), which is mandated to preserve the integrity of the Blue Line. But if the Lebanese state approves the march — or at least fails to prevent it from occurring — then UNIFIL will be in a bind. It too will not want to stand in the way of thousands of determined and angry marchers and would probably step aside. The tactic of civilians marching into occupied territory hastened the withdrawal of Israeli troops from south Lebanon in 2000. One wonders whether a similar tactic would work with the Shebaa Farms.
Nicholas Blanford is the Beirut-based correspondent for The Christian Science Monitor and The Times of London
Many questions have been raised following the May 15 “Nakba” border incidents in southern Lebanon which left six demonstrators confirmed dead. But so far they haven’t been the right ones.
International coverage of the day was a predictable whitewash. The security of Israel’s borders was debated — with the United Kingdom’s the Independent claiming Israel was “reeling” after the border breach at the Golan Heights — followed by news that Israel would be filing a complaint against Lebanon and Syria to the UN Security Council. Speculation abounded about the launch of a third intifada, complete with bogeyman reminders of mass mobilization and suicide bombers. The simultaneous killing by Syrian snipers of a woman attempting to flee the country into the northern Lebanon village of Wadi Khaled prompted a spate of finger-pointing that Syria and Hezbollah had choreographed the Nakba event to divert attention from unrest at home, somehow hijacking the Palestinian cause for their own advantage.
Syria and Hezbollah did indeed supply buses that drove tens of thousands of people to the border. Yellow-capped Hezbollah medics and security personnel were on hand at the Maroun Al Ras park and later Hezbollah Secretary General Hassan Nasrallah praised protesters for their honor. But every person protesting on the day was there of their own volition.
Domestically, the focus was on the security arrangements on the day. Questions have emerged about why the Lebanese Army, working with the United Nations Interim Force in Lebanon (UNIFIL), were deployed north of Maroun Al Ras, at Fatima Gate. UNIFIL, which defines its mandate as monitoring the cessation of hostilities in southern Lebanon in support of the Lebanese Armed Forces and ensuring humanitarian access to civilian populations, were nowhere to be seen, though UNIFIL deputy spokesperson Andrea Tenenti told Executive that they had provided aerial observation upon request and had helped to coordinate blockades at the base of the hill, according to their mandate. These are important concerns but they should not overshadow the principal issue — Israeli soldiers shot and killed at least a half dozen demonstrators, and yet it seems everyone is to blame for this loss of life except Israel.
Late last month Mounib Masri, a 23-year-old American University of Beirut student was in intensive care at the American University Hospital in Hamra, recovering from a gun-shot wound to his lower back. One of more than 100 wounded, he had surgery to remove his spleen, one kidney and fragments of bullet around his spinal cord. Like most of the 40,000-odd men and women that day, which included young and old, secular and religious, Lebanese and Palestinian, Masri took the winding bus route to the border hills to show his support for the right of Palestinians to return home after 63 years in exile. Like most of those stationed on what became the macabre viewing platform overlooking the valley, alongside ice-cream vans and plastic chairs set out for prayers and speeches, the ringing out of machine-gun fire and the five-hour pattern of bloodied bodies arriving up the hill on stretchers was shockingly at odds with his expectations for the day.
Masri, in deciding to head down the valley to the technical border fence, certainly didn’t expect to end up with a bullet in his spine. There was never any chance of Masri, or any of the protesters, getting over two sets of electrified barbed wire fences, and the rocks thrown from the Lebanese side of the border were no match for the returning bullets, shot at close enough range that the Israeli soldiers, protected in their full military garb and helmets, could look most of their victims in the eye before pulling the trigger — those that were facing them, that is.
The most important issue — lost in discussion about security arrangements, border security and the character of the Arab Spring — is that of the unnecessary force and criminal disregard for human life that has become so characteristic of the Israeli Army that we take it for granted. Protests are scheduled to take place again at Maroun Al Ras on June 5, on the anniversary of the outbreak of the 1967 Six-Day War. Organizers say events will not become violent; let us hope they are right, although that is easier to say than ensure given that it is the Israelis who decide whether or not to pull the trigger.
Lauren Williams is a freelance correspondent for The Guardian
On the surface, the status quo of recent months in Syria continues; each Friday tens of thousands of protesters throughout the country face live ammunition from security forces, widespread detention persists and entire towns are still being put under siege by the army. People are now starting to find mass graves.
While the situation in the streets remains largely consistent, behind the scenes the organizational structure of a grassroots political movement is beginning to take shape. Syrian President Bashar al-Assad, like his father before him, has always relied on the mantra that for Syria it is either “us or chaos”, and this principle has been put into full effect in recent months. What this mentality asserts is that without a strong-handed leader the many sects that make up the country’s population will fight to fill a power vacuum, with bloody results.
But recent developments in Syria suggest the possibility of an ordered, inclusive and participatory alternative to dictatorship.
Though revolts continue to be largely decentralized, and not centered on Damascus or any other major city, individual communities throughout Syria have developed opposition councils, or Local Coordination Committees. These groups were informally established weeks into the uprising and have overtime developed into an extensive organizational network. On the ground they coordinate protests, organize members and provide valuable information to the outside world about what is happening inside Syria.
They seek to give a voice to the people in the streets, the people who have been tortured and those who remain in prison. In a country that methodically seeks to disempower civil society, the formation of these organizations is a critical step, especially as they are now beginning to communicate and organize among each other. They have formed an umbrella group, the Local Coordinating Committees of Syria (LCC Syria), consisting of 15 LCCs from Daraa to Deir El Zor, to better synchronize their activities and develop a platform beyond the local level.
On May 15, LCC Syria issued a statement declaring the conditions under which the opposition would negotiate with the regime, among them the cessation of violence against protesters and the release of political prisoners. Ultimately, this organizing effort could create the foundation for a lasting and deep democracy, where citizens have empowered themselves to make their demands heard.
In another sign of increasing political organization, on May 31 supporters of the Syrian opposition were invited to participate in a meeting in Turkey in order to discuss plans for a transitional council and to further coordinate activities. As of this writing on May 26, many opposition groups were expected to come together, including the Damascus Declaration. Although those on the ground in Syria will most likely have been unable to attend, various other participants will hopefully have represented the LCCs’ demands. Ideally, the agenda will have been set, not by politicians, but by those who are actually seeing what’s happening in the streets.
While these are small steps toward building a foundation for democracy, they are important reminders of the true nature of the movement, which is neither sectarian nor violent. On May 20 in Talbisah, a town just outside of Homs, 15,000 demonstrated (the largest gathering of this Friday), an event organized by the local LCC, including local Christians and Alawites, who are said have the most to lose from Assad’s departure. That same day there were protests in 50 towns and cities around Syria.
The regime doesn’t have the manpower to cut off all of these focal points. In Banias, 20,000 soldiers occupied a town of 40,000 people. After 15 days of occupation, the army withdrew, and the next Friday 3,000people in Banias took to the streets in protest — even people who had been severely injured while in security custody. These acts, while certainly preventing many from demonstrating, out of understandable fear for their lives, only serve to further politicize the Syrian people. The general population has been engaged and, most terrifying for Assad, increasingly they have a political outlet for their demands.
RAMI NAKHLE is a prominent Syrian human rights cyber activist, until recently working under the pseudonym Malath Aumran
The staff at the Israeli embassy in Cairo must be feeling a little uncomfortable these days. In the heated atmosphere of post-revolutionary Egypt, few people in the city are willing to talk to them and diplomats sometimes have trouble even reaching the embassy building due to the frequent clashes outside between riot police and pro-Palestinian protesters.
On top of their short-term logistical difficulties, the Israelis are facing the increasingly apparent medium-term reality of the Egyptian government abandoning the cozy arrangements that have prevailed on the border between Egypt and Gaza for the last several years — in many ways the operational centerpiece of the Israeli-Egyptian relationship. Former President Hosni Mubarak, who remains in hospital in the Red Sea resort of Sharm El Sheikh, worked closely with Israel and the United States to isolate Gaza and put pressure on the Palestinian Islamist group Hamas to accept Israeli conditions for peace talks. That meant giving the Israelis a de facto veto over the goods and people going in and out of the impoverished coastal strip, which was under Egyptian control from 1948 until 1967.
Mubarak’s policy, which flew in the face of Egyptian public opinion, was hard to sustain even when he was in control of the country. Several leading members of the ruling military council have been skeptical about the wisdom of his approach, and the post-revolutionary government had promised to reopen the border as of the end of last month and bring an end to the blockade that began in earnest when Hamas defeated the rival Fatah movement in Gaza in 2007. If Egypt did indeed fulfill that promise, a new era in the foreign policy of the Arab world’s most populous country will have truly begun.
This shift is a natural outcome of the uprising that drove Mubarak from office on February 11 after 18 days of protests throughout the country. Free at last to assemble and express their opinions, large numbers of Egyptians from the main political groups — leftists, Islamists and liberals — have set their minds to ensuring that the new government does fulfill that pledge. Thousands were out on the streets of Cairo in commemoration of the Palestinian Nakba (or “catastrophe”) on May 15, and a major battle broke out that night when protesters tried to break through the cordon of police around the Israeli embassy. Unlike the demonstrations in Lebanon and Syria, no one could claim that the protesters were acting on anyone else’s behalf. The police repelled them with tear gas and rubber bullets, but the protesters made their point — to the Egyptian government, to Israel and to those who naively enthused in January and February that the Egyptian revolutionaries paid little attention to the Israeli-Palestinian conflict.
The Egyptian government, which has already succeeded in one respect where Mubarak failed — to mediate reconciliation between Hamas and Fatah —knows it will not be easy. Reopening the Gaza border could drag Egypt into conflict with Israel and with the United States government, which gives Egypt $1.4 billion each year, mainly as a reward for protecting Israel’s southern flank.
Cairo is anxious to ensure diplomatic cover for its change in policy by bringing Fatah and the European Union into the new arrangements for the Gaza border, in the hope that this might offset US and Israeli displeasure. In the wider, tumultuous Middle East, Egypt’s new rulers are feeling their way tentatively, mulling the possibility of better relations with Iran, which Mubarak always kept at a distance. But they are wary of any regional commitments at a time when no one knows who will still be in power at the end of the year.
The government’s last-minute nomination of Foreign Minister Nabilel-Arabi as secretary-general of the Arab League, rather than old-regime politician Mustafa el-Fiki, has saved the position for Egypt and given a morale boost to the post-revolutionary foreign ministry. But a struggle now looms over who will replace Arabi. The military council, which has the final say, could choose someone with the same Arab nationalist tendencies, reinforcing a shift in Egyptian policy toward the Arab center. But the pool of candidates, probably all of them current or former Egyptian diplomats, is heavily weighted towards the more conservative segment of the Egyptian establishment.
After parliamentary elections, scheduled for September, foreign policy changes are inevitable. None of the most vocal political forces will defend Mubarak’s geopolitical alignment without reservation. They say instead that they will have to listen to the will of the people.
Jonathan Wright is managing editor of Arab Media and Society
On May 2nd, television cameras broadcast around the worldimages of jubilant crowds at ‘Ground Zero’ in New York, in front of the WhiteHouse and across the United States celebrating the killing of the figurativeleader of Al Qaeda in Abbottabad, Pakistan. While many Americans may view thedeath of Osama bin Laden as an emotionally cathartic ‘closing of the accounts’,the reality is far less clear.
With the 9/11 attacks on New York and Washington, bin Ladengoaded America into invading Afghanistan, where a decade on US marines stillwallow in a grinding game of attrition against an enemy they cannot seem tokill, all the while hemorrhaging hundreds of millions of dollars of taxpayers’money daily. Riding on the coattails of the Afghan war, the Bush administrationinvaded Iraq, which provided Al Qaeda the platform it needed to ignite aninferno of sectarian hatred and killing, and recruit thousands of new adherentsto the anti-American jihad.
Besides the hundreds of thousands of casualties, projectionshave these wars adding trillions of dollars to America’s debt, which is rapidlyapproaching a ratio of 100 percent of GDP and threatening the US’s AAA creditrating.
That it took 10 years for US intelligence services tofinally find bin Laden is a mark of failure; his killing by US special forcesis hardly a final victory, given that his legacy — his impact upon America —will likely outlive those who hunted him down. Moreover, the US militarycommanders were lucky bin Laden did not meet an untimely end all on his own bysimply tripping over stairs, or from kidney failure, in the time he spentwaiting for them.
To say the world’s only superpower is suffering decline isno controversial statement, with the limits of its once vaunted militaryexposed and its status as the global economic engine quickly eroding.
America has always been looked to as the torchbearer offreedom and democracy in the world; if the US cannot get its house in order andreverse the slide it has found itself in since that fated September day 10years ago, it faces the real possibility that bin Laden, from whichever hell heis in, will be left the last one laughing.
The recent political unrest in Middle East and North Africa (MENA) countries has underscored the importance of boosting the region’s economic stability.
Small and medium-sized companies have an important role to play in securing the region’s economic future, and as a result, interest in entrepreneurship has surged. A recent Booz & Company survey illustrated that the face of self-employment is changing, shifting away from small shops and other relatively unsophisticated businesses toward the development of innovative products and services with the intention of building new large businesses.
This is a positive trend consistent with dynamic industrialized economies and suggests that a long-term change in the region’s economy is afoot. There was a 100 percent year-on-year increase in business plan submittals to the MIT Arab Business Plan Competition in 2010-2011. Several banks and finance centers are establishing programs aimed at appealing to entrepreneurs and start-up businesses. Many organizations, such as YallaStartup, INJAZ, Arabnet and Endeavor have created mentorship programs and other one-stop centers for entrepreneurs. Venture capital firms and banks have established specialized funding arms for small businesses.
Charting the challenges
But these initial activities and signals of interest are only modest steps in what will need to be a much larger and more sustained effort.
Booz & Company conducted a survey of more than 300 individuals, most of whom consider themselves entrepreneurs, and a series of focus groups to determine what must be done to remove the institutional barriers to entrepreneurship in the Middle East. This showed that for a number of reasons, it is difficult for entrepreneurs to establish themselves, secure necessary seed capital and family support, negotiate complex and lengthy bureaucracy and regulatory systems and then develop the necessary infrastructure to build self-sustaining businesses of their own.
The survey took place in Saudi Arabia (where it was conducted in collaboration with the National Young Businessmen Committee, associated with the Chamber of Commerce), the UAE and Qatar.
The key issue raised regarded financing; of those surveyed, 42 percent said that family, friends and government sources provided primary debt financing and 60 percent said that those same sources provided primary equity financing. Yet beyond those sources, entrepreneurs face an uncertain and challenging process to secure the capital needed to buy equipment, establish a payroll and meet ongoing needs during the startup phase. In particular, there are funding gaps in sectors such as education, technology, tourism and hospitality, which get less investment than the energy-intensive sectors that dominate regional economies. In addition, although there is funding in place for small and large businesses, few have addressed the “missing middle” — those business with an enterprise value between $500,000 and $8 million. Even financial institutions that do offer funding need to do a better job of broadcasting that fact: approximately nine out of 10 entrepreneurs we polled were not aware of financial institutions that provide entrepreneurial and small and medium-sized enterprise (SME) financing.
Meanwhile, entrepreneurs face considerable cultural barriers: in the MENA region, there is greater prestige in working in large and established businesses than in experimenting with an entrepreneurial idea. This is especially so as the fear and stigma of failure is a pervasive problem for entrepreneurs, more so in the region than in Europe and the United States, where most successful entrepreneurs routinely cite their first failed efforts as critical opportunities for learning. For example, 78 percent of those surveyed said their teachers did not encourage them to pursue entrepreneurial businesses; a similar percentage reported the same treatment from mentors. Among the major challenges facing entrepreneurs, those surveyed said lack of prestige and lack of support from family members were the biggest, outpacing competition, time, financial demands and regulatory hurdles.
Complicating the startup process even more is the difficulty of gaining access to market opportunities. In the US and other markets, governments and large enterprises reach out to small businesses and even reserve slots on tender opportunities; by contrast, in the MENA region, tender requirements tend to call for certain qualifications, financial records and business networks, all of which make such opportunities a remote possibility for startups.
At the same time, entrepreneurs have limited access to education and training in business management, such as how to develop business plans. Formal mentoring programs are not available nearly enough, judging by the fact that close to 70 percent of those polled said they resorted to mentoring from family or friends, rather than from colleagues, investors, consultants or others. This was true for training as well. While entrepreneurs reported seeking training in skills such as marketing, management, finance and planning, they resorted to training from friends and family, or self-learning, in 40 percent of cases — far more than any formal online or technical institute or university, which collectively helped 26 percent of respondents.
The way ahead
Taking on these challenges will require a multifaceted approach. Although MENA nations can’t be expected to immediately overcome certain challenges — such as cultural resistance to risk-taking and failure — they can put into place several programs and efforts to develop an active entrepreneurial ecosystem. Booz & Company, leveraging workshops with key stakeholders, has identified several opportunities to increase entrepreneurship.
One such method is the creation of entrepreneurial service centers to help start-up founders write proper business plans, learn where and how to apply for financing, understand key business financial concepts such as bookkeeping standards and income statements and master more informal but equally valuable skills such as client recruitment and retention.
In addition, such service centers could provide beneficial data and statistics for companies seeking to develop greater market awareness, which would help them to further sharpen their business strategies.
Finally, one of the most valuable offerings of such one-stop centers is informal meetings; the ability to network with other entrepreneurs gives business founders a way to share experiences, learn from others’ mistakes and connect with interested financiers.
Entrepreneurs would also benefit from a more formal mentoring process, featuring communities of advisers led by those who have succeeded in the region already. Ideally, each mentor “pod” would consist of five to 10 young entrepreneurs and one experienced and successful entrepreneur. Each pod would focus on business plan development, financing assistance, introductions to key networks and a regular review of emerging challenges.
While the region’s banks may already be launching financing arms with a focus on entrepreneurs, policymakers could streamline the financing process by establishing a one-stop shop for those seeking loans and those offering them. These may include both private lenders and government sources. Importantly, these centers will help early-stage businesses properly apply for financing and track applications so they do not stall unnecessarily.
Regional entrepreneurs could also secure greater access to opportunities if large corporations and government-backed entities initiate programs to attract SMEs as potential suppliers. Such a program would call for these organizations to set aside a certain amount of tender contracts for entrepreneurs and small and mid-sized enterprises. This would greatly reduce the barrier to entry for such startups and elevate their visibility to key purchasers.
Taken together, these actions will provide a powerful tool to support and fund startup founders and will provide a valuable outlet for those entrepreneurial individuals who have been frustrated in the past. Importantly, such a coordinated effort would demonstrate to the rest of the industrialized world that MENA countries are ready to move to the next major stage of economic development — one that is led by innovative and small companies focused on building value throughout the economy and which are seeking to compete regionally, if not internationally.
Ahmed Youssef is a partner, Chady Zein a principal and Raymond Soueid a senior associate at Booz & Company
For the most part, a drive out of Beirut down Lebanon’s southern coastal highway offers a scenic respite from the city; to the right lies the sparkling waters of the Mediterranean and to the left the mountains of the Chouf. But the natural beauty becomes marred when another mountain emerges to block the seascape. It is the gargantuan massif of garbage just outside the southern city of Saida that has been growing for some 40 years, due to the lack of solid waste planning and program implementation by the government.
“It was a mountain, now its two mountains and there is no place to have a third one,” said Mohamad Seoudi, head of Saida’s municipality, which is charged with managing Lebanon’s most infamous waste disposal site. “The dump yard is overloaded. It was always overloaded. We have had to deal with this dump yard for over 40 years and the situation is now critical.”
Last month a crisis erupted in the areas around Saida when Seoudi refused to accept the garbage from the city’s surrounding municipalities. He said the reason was that they were not willing to allocate 40 percent of the money they receive from the Independent Municipal Fund to pay for separation and solid waste treatment.
This same process occurs in Beirut, where the money goes to the private waste management company Averda. This arrangement is far from cost effective, however. According to Seoudi the price of processing one metric ton of garbage comes to $170 in the capital when you include sweeping costs; by comparison, the upper estimate of the average cost of waste treatment in Germany ranges between $81 and $91 per metric ton, according to a report published by the European Commission.
Garbage began to pile up on the streets of Saida at levels reminiscent of civil war days, when the lack of functional government left garbage uncollected around the country.
“Nobody pays [for] anything,” said Seoudi “This is the difficulty, you tell them to come and share the burden and let the government manage the plant, and to deduct 40 percent from their budgets, and they don’t accept because they are used to paying nothing.”
What adds to the incredulity of the issue is that a solution is already present. Just next to the dump, a solid waste treatment plant sits idle. The plant belongs to the Lebanese-owned, Saudi funded IBC company, according to Seoudi. He said that an agreement was signed with the company to process the waste as far back as 2003 with operations slated to begin in 2005, yet nothing happened due to a dispute over pricing.
“We asked Prime Minister Hariri to deal with the issue and with the owners and they have to negotiate,” he said, adding that discussions are ongoing between the company and members of the ministries of interior and environment.
The annual cost of environmental degradation in Lebanon could be around $1.48 billion
The tip of the trash mound
The Saida dump seems to be only the tip of the iceberg when it comes to Lebanon’s environment issues. The new Country Environmental Analysis (CEA) study on Lebanon currently being compiled by the World Bank sheds light on many of the environmental problems Lebanon faces and will continue to face if action is not taken. The study seeks to identify the difference between the cost of mitigation and the current level of government financing to recommend policies to improve the country’s environmental standing.
As ever in Lebanon, timely figures are few and far between. But extrapolating the latest figures available (from 2005) — which set the annual cost of environmental degradation in Lebanon at 3.7 percent of gross domestic product — into a context of today’s economy , poor environmental practices could be costing the country some $1.48 billion per year.
Proportionally, this figure is actually a decrease on the last estimate taken in 2000 when the figure was put at 3.9 percent of GDP, with the fall attributed to the one piece of major environmental policy passed by a post-war government targeting pollution. Before 2002, anyone driving down from the mountains above Beirut could hardly make out the empty Burj Al Murr tower through the thick layer of smog. Thankfully, that is no more the case, after a 2002 decision to ban diesel engines in cars.
Not surprisingly, the CEA document predicts Lebanon will most likely not achieve United Nations Millennium Development Goal Seven, which aims to “ensure environmental sustainability,” mostly due to a lack of adequate reform in reforestation, solid waste and wastewater management. The problem of solid waste was highlighted as a “major environmental problem with more than 700 open dumps used by the municipalities and where some of the waste is still burned.”
The lack of proper solid waste management also weighs down Lebanon’s poor ranking on the World Bank’s 2010 Environment Performance Index. The index ranked the country 90th of 163 countries in the world, according to the CEA study, with a noted rapid decrease in environmental sustainability since 2008.
May Jurdi, director of the department of environmental health at the American University of Beirut, said that in addition to the disease-ridden cockroaches and rodents that come with these open dumps, there are also long-term health risks associated with the lack of action. “When it rains all the garbage goes into the groundwater and into the rivers,” she said.
But getting an accurate reading of the problem and how it affects the population is difficult.
In order to assess how much the issue is affecting public health, real monitoring figures are needed, and these currently don’t exist. Jurdi said the health ministry has collected some data, but it is far from sufficient.
“The problem is that there are no clear indicators,” she said. “In countries like ours [the government is] afraid of indicators. We are a country of conspiracy theories and doubts. Everything is a conspiracy because we don’t have trust.”
Already citizens consider water from the taps undrinkable. Groundwater is the most commonly used source of water in Lebanon because of the widespread prevalence of wells in the country, and the lack of dams. The Ministry of Energy and Water estimates that the total number of private wells exceeds 42,000, compared to the 620 officially sanctioned and government-owned wells. Private wells’ total yield is estimated at around 440 million cubic meters per year while the government wells draw only 260 million cubic meters.
However, due to the fact that most of these wells are illegal, ministry officials admit that the number could be as high as twice the official estimate. As a result, no one really knows how much of the water being consumed by the people is safe or how much is contaminated by garbage.
“People are unhappy if VAT is increased but they don’t want to pay directly for services”
Wasting water
Probably the most work that has been done in the past decade toward protecting the environment has been in the wastewater sector. At present 11 wastewater treatment plants operate in the country, with six others constructed but not yet connected to a network, according to the CEA study [See page 100]. When the existing facilities are all online, the country will have the capacity to treat 400 million cubic meters a year (CM/yr). At present, only 46.5 million CM/yr are being treated, according to the study.
Furthermore there is dispute over what constitutes a treatment plant and also what is being achieved. “Ghadir is not a plant because it does not have secondary treatment, Saida is a pumping station and at Baalbek, 20 percent is reaching the plant because people are stealing the wastewater for irrigation,” said Jurdi.
That practice is causing widespread public health risks, which at present are not being measured. For starters, when wastewater is used to irrigate plants, carcinogenic trace metals accumulate in the soil; change in the soil’s PH levels can cause them to enter the plants and thus be ingested by humans. Fruits and vegetables destined for market shelves are often ‘cleaned’ with wastewater, causing fecal material to accumulate, not to mention the parasites, bacteria and viruses that are attracted to such material.
Manfred Scheu, principal advisor at the German Agency for International Cooperation (GIZ), said that the development of the wastewater sector over the past decade is “remarkable,” given that just to find a place for a treatment plant in Europe takes around a decade. “If you are not a dictatorship [that] can expropriate land without worrying about people then this takes time. Its absolutely normal,” he said, adding that by 2020 most of the wastewater discharged in Lebanon should reach a treatable level.
“Today the treasury is broke, the institutions are broke and the people are broke”
Paying for it
Paying for everything will be a monumental task. At present, just covering operations and maintenance (O&M) in the wastewater sector will require an estimated 50 percent increase in the lump sum tariff that consumers pay, according to Scheu. “That is only O&M. That is not going to cover your investment. But in Lebanon it’s much cheaper, in Europe you have to double [the tariff],” he said.
So far no government official has been willing to stick his or her neck out and propose such an increase on a highly sensitive political issue of this kind.
“People are unhappy if VAT is increased but they don’t want to pay directly for services,” said Fadi Doumani, an environmental analyst and World Bank consultant who worked on the CEA report.
Last month Gebran Bassil, caretaker minister of energy and water, declined to comment on any increase in the tariff structure associated with building new water infrastructure. When pressed by Executive on whether the plan was to borrow the money needed for water infrastructure, such as dams, he responded that the debt is already mounting due to the subsidies to the regional water establishments.
“Today the treasury is broke, the institutions are broke and the people are broke,” he said. Since Lebanon’s only law protecting the environment was passed nine years ago, no government has issued the implementation decrees needed to put it into effect. The law covers many areas of environmental protection, including mandatory environmental impact assessments for approval of projects that would affect the environment and the formation of a National Environmental Council to protect Lebanon’s natural sustainability. Other laws also call for the environment ministry to house environmental police to implement the law. However, there is currently little legal means or active framework to mitigate the effect of environmentally harmful developments. The environment has “remained a secondary priority characterized by an uncompleted legal and institutional framework as well as by ineffective policies to address the challenges and political constraints to deliver reforms,” states the World Bank report.
Still, even if the Lebanese government does not implement the reforms needed to protect the environment, it is unlikely to affect their ability to attract funding, as World Bank funding has continued despite the lack of substantive reform measures by any post-war government.