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Economics & Policy

Misrata under siege

by Sarah Lynch May 3, 2011
written by Sarah Lynch

Packed with humanitarian aid, food, weapons, ammunition and rebels soon to be on the front line, a small Libyan fishing vessel sailed away from the eastern port of Benghazi last month, making its way west.

“Qadhafi’s destroying buildings and shooting innocent people like women and children,” said 28-year-old Walid al-Fitouri as he sat in the captain’s wheelhouse. Like dozens of others on board, he was going to help his comrades in Misrata, Libya’s third largest city, which has been under siege by Colonel Muammar Qadhafi’s troops for two months.  Caught in a crossfire and faced with heavy bombing and economic devastation, the city’s residents are facing countless struggles as rebels battle regime forces to keep hold of their western bastion; Executive was in Misrata to document the siege.    

Indiscriminate targeting

For weeks, rocket propelled grenades and bullets have whizzed down the city’s central frontline of Tripoli Street, which runs from the center of town west toward the nation’s capital.

But this isn’t the only place where violence abounds; Qadhafi’s forces have surrounded the city. On a rooftop not far from Misrata’s port, a woman who asked to be referred to as “Mrs. Mustapha” rocked her six-month-old granddaughter, Aisha. Just two days earlier a rocket hit the family’s home and put a hole in the baby’s bedroom ceiling. “What’s wrong with them? These are children. Innocent children,” said Mustapha. It was 6:30 a.m. when four rockets hit the family’s home, causing part of Aisha’s bedroom ceiling to crumble. Now displaced from their home, the family lives in a makeshift apartment, where 30 people share two bedrooms and one bathroom. Aisha and her grandmother are a few ofthe lucky ones; no one was injured in the surprise attack. Like so many others, they have been pushed from their homes after weeks of heavy bombardment of civilian areas.

One local elementary school is home to at least 25 families, some with more than 30 members each. “We’re homeless,” said the elderly Hania Abdallah, who sleeps in one of the school’s classrooms, “[Qadhafi] is bombing our children and he’s taking us as prisoners.” 

After two months of Qadhafi’s troops pounding Misrata, some estimates placed the city’s death toll by mid-April at more than 1,000 people. At one of Misrata’s hospitals, head doctor Fathi Mohammad said he was seeing eight to 10 deaths on average each day and had counted more than 1,500 injuries. Many of the victims are unarmed civilians. 

Abdel Basat Ibrahim never thought he’d be confined to a hospital bed when he went out to buy his family groceries. On an afternoon last month he was with his neighbor when the two men were hit by a sniper. Doctors say many patients have also been wounded in their homes; too often they see injured, or dead, children.

Logistics of living under siege

As Executive went to print, mobile networks in the city had been down for about a month, and water and electricity had also been cut. Before the uprising began in mid-February, water entered Misrata via The Great Man-Made River — the network of pipes Qadhafi’s government built in the early 1980s. The flow of water has since been electronically switched off meaning that many residents were  forced todraw water from coastal wells. But the wells could become contaminated by infected runoff because the city’s sewage system has been blocked. 

“This is criminal,” said Nassar Sahli, a Libyan water quality consultant and professor. “Water and electricity shouldn’t be stopped for any human.”

Residents said electricity is out in areas of intense fighting, and that it was being rationed in residential areas. Roads leading to nearby farms and factories on all sides of the city were blocked, and the city’s dairy factory had been recently bombed. The only way goods could enter the city is via the port, which, too, has been continuously shelled by Qadhafi’s troops. On the same cold night that the rebel-packed Libyan fishing boat pulled into Misrata, the road leading from the sea into the city was lined with shipping containers in flames. The day before, rockets and cluster bombs hit the port.

“Nowhere is safe in Misrata — not one single place,” said the port’s radio controller Said al-Fitouri, adding that access to the sea let the city’s residents survive. “The port is like the mouth of the human. If you close the port, that means you will die.” The occasional shipment of vegetables came in by boat, but the small imports were not sufficient to meet the need. Grocery store shelves were sparsely stocked, some completely empty. The shortage of food — particularly fresh produce — had prompted the price of vegetables to increase tenfold. As an example, Shoukri Mohammad, a father of five, said that on a rare day last month when tomatoes were available he bought a one kilogram bag for 5 Libyan dinars [$4.16], up from 50 dirhams [$.41] before the siege.

“It’s difficult to live on bread and water alone,” said 50-year-old Mohammad. “But for change, we’ll go through anything.” 

On sidewalks and side streets across the city, men young and old waited in bread lines for hours each day. Ahmed Rouad, 65, sat with his head in his hands; his skin is burnt from the coastal sun.  “I’ve been waiting in line for bread since seven o’clock this morning,” he said. By then he’d been waiting four hours. Bread factory owner Ali Abdel Karim said there was a shortage of flour and it was difficult for his business to operate with little electricity. “We open from 10 to three o’clock everyday, but people wait in line from dawn,” hesaid.

At a nearby fuel station, the situation was not any better. On a typical day, more than 200 cars piled up. “I spend half my day waiting in line for bread, and the other half waiting for fuel,” said Abdel Hakim. With unpredictable attacks and snipers poised on roofs, many people were afraid to go to work. Countless numbers of shops and businesses had closed, and residents said only two fuel stations in the city remained open.

Strong family ties seemed to have kept Misrata functioning financially, even when every bank in the city had closed: many of those who did not have cash borrowed money from others. 

“Many people in Misrata are businessmen and traders, so they keep money at home,” said Misrata resident Yahia Hamsa. “But people aren’t buying and selling a lot.” 

Roads weaving through the city were secured by rebel forces at checkpoints, with roadblocks made of piled sandbags and metal pipes. Local groups had issued rebel fighters identification cards that they had to carry with them at all times. On one long road in particular, drivers tended to speed up. “There’s a sniper up there,” said Said al-Fitouri, pointing to the top of a white building.

Sailing away

Rain pelted the small fishing vessel as it pulled away from Misrata’s port. This time it carried more than 100 refugees who were lucky enough to be able to escape.

“Life in Misrata is unbearable,” said Mohammad Nour, huddled in a group to hide from the wind. “They’re striking all the time – night, dawn and morning.” And so dozens like Nour had boarded the rickety ship to make the 36-hour journey to safety. As the boat pulled close to the port in rebel-held Benghazi, the passengers cheered, “Free Libya!” and “God is great!” One man slowly stepped off the boat. His son greeted him with a hug as tears ran down his cheeks.

May 3, 2011 0 comments
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Hezbollah’s quiet discontent

by Nicholas Blanford May 3, 2011
written by Nicholas Blanford

Hezbollah’s silence on the unprecedented developments in neighboring Syria betrays a growing unease over the outcome of the uprising and the strategic ramifications of a collapse of the Assad regime.

If Syrian President Bashar al-Assad is toppled it could fundamentally reshape the strategic balance of the Middle East and present stark challenges to the Lebanese group and its Iranian patron.

At the end of April it appeared evident that Damascus was pinning its hopes on maintaining the status quo through force against the protestors rather than ushering in meaningful reforms. It has long been axiomatic among some analysts that reforming the system in Syria would weaken the regime’s grip on the country and spell the demise of the Assad family’s rule.

Syria plays a key role in the so-called ‘Jabhatal-Muqawama’, or ‘Resistance Front’, which groups countries and militant organizations opposed to Israel and the American policy in the Middle East. It is the crucial lynchpin that connects Hezbollah and Iran, serving as a conduit for the transfer of weapons into Lebanon, providing strategic depth (and in the past, political cover) for Hezbollah and granting Iran a toehold on Israel’s northern border.

A colleague recently recalled a conversation she had with a mid-level Hezbollah official during which she asked whether the party had drawn up a contingency plan for the possibility of a collapse of the Syrian regime. Hezbollah’s constant refrain is that it is “ready for all eventualities” and it is well known that the party does compile meticulous contingency plans to cover all potential developments. But the official told my friend that no plans had been made because a collapse of the Assad regime was considered something of a taboo subject amongst the leadership. I’m not sure that is strictly true.

The notion of Syria departing from the Resistance Front is not a new concept. Hezbollah long ago internalized the possibility that Syria might one day leave the alliance. It was generally assumed, however, that Syria’s departure would occur as a result of a breakthrough on the Israeli-Syrian track of the Middle East peace process rather than an internal upheaval. That moment almost occurred 11 years ago when the two countries seemed on the verge of signing a peace deal. At the time Hezbollah refused to reveal its planned course of action if peace had been reached, but it was evident that Syria, the dominant actor in Lebanon at the time, would have required the party to dismantle its military wing as a component of its settlement with Israel.

Hezbollah has grown more powerful since then, especially after Syria politically disengaged from Lebanon in 2005 following the assassination of former Lebanese Prime Minister, Rafiq Hariri. Iran entered the vacuum left by the Syrians and will probably seek to consolidate its influence in Lebanon through Hezbollah if the Assad regime falls or Syria collapses into chaos. As for the longer-term impact on Hezbollah and Iran, it depends very much on what new order emerges in Syria. For example, if a Sunni-dominated regime reaches power in Damascus, it could ally itself with Saudi Arabia at the expense of the three-decade alliance with Iran. A Saudi-friendly Sunni regime may prefer to cooperate more closely with Sunni elements in Lebanon and seek to roll back some of Hezbollah’s power.

Another possibility being aired is a continuation of the present system in Syria but under a new leadership, possibly drawn from the military or security establishment replacing the Assad clan. Such a regime may prefer to maintain the alliance with Iran and the confrontational stance against Israel.

For now, Hezbollah officials and cadres are closely watching developments in Syria, hoping that Assad will prevail and that there will be no fundamental change to the Resistance Front. But the Arab world is passing through a major upheaval where previous maxims no longer apply. The Arab-Israeli conflict paradigm has been superseded by the new reality of the people against the state. Iran, Syria and Hezbollah traditionally derive much of their legitimacy from their anti-Israel positions and it must be disheartening for them to see the struggle become relegated to the second tier of regional interests.

 

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

 

May 3, 2011 0 comments
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Real Estate

Bankrolling the builders

by Rayya Salem May 3, 2011
written by Rayya Salem

Though Lebanese real estate has always carried its weight as a prime investment tool and a win-win sector for both suppliers and end-users —even during the uncertainty of the civil war years — the cracks are finally beginning to show as both internal and external factors are affecting (former) market strongholds.

Banks, the middle-men who keep the property market in swing, are now in an unfamiliar situation and may be left with little option but to rein-in loan offerings to the real estate sector;  its profit harvest has diminished compared to healthier years and its expected contribution to gross domestic product has weakened. The trickle-down effects of the financial crisis on Arab wallets (residential salesto foreigners plunged 31 percent this quarter), combined with sticky top-dollar prices that stem from the high cost of (limited) land, have come into play simultaneously, with the result a whopping 21 percent fall in transaction volume in the first quarter, compared to this period last year.

According to Hani Haddad, managing director at A&H Construction and Development, although the debt-to-equity ratio “has definitely decreased due to banks being more conservative given the weak performance of the real estate sector in the past year,” tightness of lending is expected to only have an effect on the financing of new projects. However, this likely won’t hit end-users, as banks are remaining aggressive in providing home loans to households.

At the end of 2010, loans to the sector reached $13.6 billion when taking into consideration loans to contractors and developers to build projects, to businesses to rent real estate and to individuals for home loans. Thus, lending to the sector made up nearly 35 percent of total lending, but the percentage is closer to 16 percent ($6.3 billion) if one only considers loans for construction, according to data from Banque du Liban (BDL), Lebanon’s central bank.

Though the number reflects a steady, mutually beneficial relationship between banks and real estate professionals (following a period of growth whereby loans to real estate increased 59 percent from the beginning of 2008 to February 2010), it can be attributed to what many say was the culmination of a real estate high note that saw an unprecedented wave of mega-launchings such as District S, the Landmark, Beirut Terraces and Damac Tower in Beirut’s central district last year.

Freeze over funds

According to Samer Kahil, vice president of finance and administration at MENA Capital, “definitely more than three” alpha banks have already frozen funding to developers in the last three to four months. “It could [last] a year, it could be a couple of months… it depends on their risk management department, their allocation of funds to real estate and the developer’s track record and location” of their upcoming projects.

“If you are talking about lending to projects, we have less than 10 percent [relative to total] lending,” said Saad Azhari, chairman and general manager of BLOM Bank. “We have about another 8 or 9 percent for housing loans for those with domiciled salaries. So in total… it comes out to 16 or 17 percent [of total loans that go towards the real estate sector].”

But Kahil said that banks were still funding nearly 50 percent of the equity in MENA Capital’s developments, due to the company’s strong reputation in the market. The company is expecting approval on financing for an upcoming residential tower. “They are providing more than $20 million, out of $45 million of total equity for the project [because] we had a good feasibility study, prime Ashrafieh location and they have the allocation,” said Kahil, though he declined to name which alpha bank.

Indeed, Hani Haddad of A&H affirmed that, “Banks are more concerned about who to lend to rather than which project to lend to,” placing a magnifying glass over developers’ financial statements.

Of course, banks are also betting on builders outside the country. With the unprecedented public infrastructure spending in Saudi Arabia, and the slew of projects lined up to build Qatar into a world-class destination fit for hosting the FIFA 2022 World Cup, the strategy makes for a strong game plan. Walid Raphael, general manager of Banque Libano-Francaise (BLF), added that financing contractors, even outside of Lebanon, remains a large part of the business. “We have three large markets [for contracting]: Saudi Arabia, Qatar and Algeria.  And then wealso have the Emirates.”

We the people

Unless you’re one of the big players, it seems the tide has receded and bank loans to developers have reached a steady drift that mirrors the current sales volume in Lebanon.

“I don’t think that we are going to see real estate lending increasing but I see that housing loans [to individuals] are still healthy… and are going to increase,” said BLOM Bank’s Azhari. 

“Banks still seem to have a big appetite for home loans,” added Haddad, as evidenced by an increase in housing loans from $2.8 billion in December 2009 to $4.5 billion in December 2010, according to the Central Bank. And since banks and developers had to get creative in order for individual households to afford homes when prices leapt in the last two years, providing home loans to residences still under construction created a new definition of risk. When a physical home cannot be secured as collateral, banks secure a simultaneous agreement with a project’s developer (or contractor) and end-user to diminish risk.

“So we know whether the funding is available to finish the house… In a way you are guaranteeing [its completion] because you are financing the building,” said Azhari. It is only to be expected that banks ask for additional security and hold the land as a mortgage, with all sales proceeds funneled to their accounts first in order to pay off the principal and interest.

“When you are financing the promoter, you’re already taking the risk of the project and you’re going to make sure that the project will be achieved and delivered, so you have less risk,” said BLF’s Raphael. However, many banks have buckled under pressure and frozen subsidized loans to individuals, according to MENA Capital’s Kahil, a move that acutely impacts developers building mid-range residential projects.

But the real risk hovering over our rooftops needs to be viewed from a regional perspective — not only does uncertainty plague the MENA region but Lebanon remains without a government and thus contributes to a wait-and-see stance from buyers.

May 3, 2011 0 comments
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Arab spring warms a Kurdish winter

by Gareth Smith May 3, 2011
written by Gareth Smith

Iran’s Supreme Leader Ayatollah Ali Khamenei was quicker towel come the ‘Arab Spring’ than United States President Barack Obama. While publicly comparing the unrest to its own “Islamic Revolution,” Tehran was weighing how the demise of two friends of the US in Egypt and Tunisia, and unrest in Yemen and Bahrain, might affect its struggle for influence with the US and its allies. The Iranian authorities meanwhile nipped in the bud February’s attempt by the opposition Green Movement to return to the streets, while the economy was buoyed by rising oil prices that passed $100 a barrel for the first time since 2008, due to the events in Libya and fears of unrest in Saudi Arabia.

Iran’s fiscal outlook suddenly looked rosier, easing apprehension over contentious plans to phase out $100-billion in annual subsidies of everyday items, such as gasoline. Then came unrest in Syria, a challenge to both Tehran and Washington. The US had tried for two years to entice Damascus into a “peace process” with Israel, and to weaken its alliance with Iran, buying into the Syrian regime’s argument that it acts as a bulwark against militant Sunnism and al-Qaeda. For Iran, Syria is far more strategic, its sole long-standing ally in the Arab world whose loss would mark a major setback. Of course Tehran would miss its most practical link to Hezbollah in Lebanon; additionally, Syrian unrest, along with protests in northern Iraq, has brought the ‘Arab spring’ dangerously close to home.

The concern here for Tehran lies in Kurdistan. Iran’s seven million Kurds have never shown love for the Islamic Republic. A military onslaught was deemed necessary after the 1979 Revolution to bring them into line, and while the main Kurdish party, the Kurdistan Democratic Party of Iran, ended its armed presence in Iran in 1997, it has been outflanked by the Party for a Free Life in Iranian Kurdistan, an active and militant group linked to the Turkey-based Kurdistan Workers Party. The 1997 presidential ballot was also the last time Kurds engaged in any meaningful way with the national electoral process, turning out in massive numbers for Mohammad Khatami.

A little more than six years ago, Nawsherwan Mustapha, who has subsequently led Goran (‘change’), the main opposition group in Kurdish northern Iraq, told me that future opposition in Iranian Kurdistan would not be armed struggle but non-violent street protests. His words may prove to be prescient. In Kurdish Syria, Bashar al-Assad’s decision to grant citizenship to tens of thousands of Syrian Kurds — originally from Turkey — has not stemmed unrest in the northeast. Many Kurds have been inspired by the autonomy carved out by the Kurds in Iraq, rousing in them the idea that, sooner or later, they will be able to assert their own rights.

In Iran’s Kurdish region, Tehran has a large security presence and military posts dot the borders with Iraq and Turkey, but even so many Iranian Kurds travel back and forth to Iraq. This is more often to smuggle goods than attend political meetings, but it still spreads contagion.  Opinions differ on the fragility of the Iranian body politic. John Bolton, former United Nations ambassador for the United States and a colorful expounder of influential views in US foreign policy, recently presented an op-ed to the Wall Street Journal depicting Iran as a regional hegemon bending the region to its will.  This caricature suits many political interests — including those of the Israelis, of the Saudis in denying domestic unrest in Bahrain or Saudi Arabia itself, and of certain factions in Lebanon — but it flies in the face of the military disparity in the Persian Gulf. Even excluding Israel or the formidable Bahrain-based US fifth fleet, the Gulf Cooperation Council countries spent 16 times as much on arms as Iran did between 1988 and 2007, and Saudi Arabia alone has more combat planes and tanks.

True, President Mahmoud Ahmadinejad and some cohorts, still enthused by their surprise election victory in 2005, often portray Iran as a superpower. But wise counsel within the leadership knows well that Iran is hugely outgunned, that the Shia are greatly outnumbered in the Islamic world, and that the Islamic Republic has therefore a greater interest in stability than in conflict.

Hence the Iranian leadership’s muted response to the March 14 intervention of Saudi-led troops in Bahrain to quell Shia-led protests; hence its nerves over Syrian unrest. As summer approaches, the ‘Arab Spring’ blows an increasingly uncertain wind toward Tehran.

Gareth Smyth is a former correspondent for the Financial Times in Iran

 

May 3, 2011 0 comments
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Economics & Policy

Executive Insight – The GCC expands

by Fabio Scacciavillani May 3, 2011
written by Fabio Scacciavillani

The ‘Arab Spring’ is yielding some unexpected and exotic political fruits. The proposal to accept Jordan and Morocco into the Gulf Cooperation Council is certainly among the most intriguing, and it was followed almost immediately by Palestine’s request to join.

GCC Secretary General Abdul Latif al-Zayani announced that the current six members (Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Bahrain and Oman) would welcome Jordan and Morocco into the bloc, saying that meetings “to complete procedures” are to be initiated soon.

Given the swift response by an institution not known for the timeliness of its decision-making process, it is likely that there were earlier discussions on this matter at the highest level (although Kuwait, Oman and Qatar reportedly expressed reservations about the move, preferring a limited membership, like that of Iraq and Yemen, confined to cultural and sporting events).

Previously, Jordan had shown interest in joining the bloc, but its requests had been politely turned down. Yemen’s request for membership has stalled for years but the country, though currently embroiled in political unrest, hopes to join by 2016. On the other side of the region, Morocco has apparently been invited to join.

This development could mark the coming of age of an international forum with ambitions to be a sort of Arabian version of the European Union, but which has been marred by a weak institutional framework and erratic procedures. Created in 1981 as a bulwark against a perceived threat from Iran, the GCC’s original agreement was ambitious in scope and covered vital areas with the potential to reshape and modernize the economies of the Gulf, while fostering a common foreign and security policy in a region endemically at risk of destabilizing crises. These included:

  • Harmonizing regulations in economy, finance, trade, customs, tourism, legislation and administration
  • Promoting scientific and technical progress in industry, mining, agriculture, water and livestock
  • Establishing scientific research centers
  • Setting up joint ventures
  • Establishing a unified military presence (the Peninsula Shield Force)
  • Encouraging cooperation of the private sector
  • Strengthening ties between populations
  • Establishing a common currency by 2010

Within the GCC framework the six countries have undoubtedly made some progress, for example in creating a Customs Union, in freeing the movement of citizens (but not of foreign residents), in establishing a joint military force (which was deployed recently in Bahrain), in cross-border investments and capital movements and in a number of other minor fields.

However, there are two fundamental differences between the GCC and the European Union. First and foremost, the members of the EU have transferred national powers to EU institutions. The most visible, influential and famous of these is the European Central Bank, which exercises its monetary authority in full independence from any political interference, as enshrined in the Amsterdam Treaty.

In several additional key areas member states have devolvedtheir functions to the EU Commission or other supranational bodies:international trade, antitrust legislation, agriculture policy and visaregulation. The EU Commission issues directives through a  common legal charter, which can span virtuallyany field, to which all national legislation must adhere.

In case of controversy or lack of compliance with adirective, the European Court of Justice can rule to force national governments to conform to EU legal provisions. Often pieces of national legislation are struck down by the EU Courts, which in some cases can even overturn the verdicts of national Tribunals.

Furthermore, one of the main achievements of the EU, the single market, allows for goods and other services to be traded freely across the EU and removes customs and passport controls between most member countries. One can travel from the Arctic to the Mediterranean without encountering a single frontier post. In essence the EU is a super-state with institutions that exercise powers even against the will of national governments, an elected Parliament and a body of laws and principles (the so called acquis communautaire), which is valid for all citizens and all the 27 countries. More recently the EU has adopted a Constitutional Treaty that establishes the fundamental principles guiding its actions and the decision-making rules.

By contrast, so far the GCC has been mostly a permanent structure of regional diplomacy, facilitating the exchange of views at the highest level. The implementation of decisions made by the GCC is the responsibility of national governments, not of common, independent institutions. The only (limited) exception is the Monetary Council, which is the precursor of the Gulf Central Bank to be established when, or if, the GCC issues a common currency. This will be the first genuinely independent supranational institution in the Arab world. But the plans for the monetary union, which was supposed to go intoeffect at the beginning of 2010, are proceeding slowly, with two countries (Oman and the UAE) out of six having declared their intention not to join.

The accession of the Jordanian and Moroccan monarchies to the GCC could help inject new life into the integration project and would mark a historic step forward, so long as it is conducive to an institutional framework modeled on the EU, with a devolution of powers at GCC level.

A major goal could be the establishment of a true single market, styled on the EU, with completely free movement of capital, goods and labor, plus an antitrust authority with pervasive powers.

At present, border controls, trade barriers and protectionist measures among GCC members are still very much in place (even to transfer a used vehicle between two countries requires a dose of patience and money which could be put to better use). This hampers the development of industries and economic activity that could create the several million jobs needed to absorb an increasing youth population, which, as recent events clearly show, is ever more restless and impatient.

On the other hand, the proposed enlargement might turn out to be just a political card played on an increasingly shaky table. It could very well be that the GCC’s newfound hospitality is intended to raise the six nations’ profile in the region and is more of an internal security pact by which member states would intervene in the case of internal unrest. If this is the case, the GCC would merely gain a front row seat to events unfolding in Algeria and Syria (as it already has in Yemen).

But for the GCC to limit itself to merely preserving the political status quo of its member states would be a missed opportunity: United States President Obama delivered a major policy speech on the Middle East last month, which foreshadows an unprecedented involvement in the region outside the security arena, and a clear indication — underlined by the explicit mention of the pre-1967 borders between Israel and Palestine as a natural negotiation platform — that the wind has dramatically changed.

The enlargement of the GCC could either constitute a myopic move for preserving the status quo (and another form of diplomatic jostling) or the means to address the roots of the economic malaise in the region by following a cooperative approach along the lines of the EU. The next few months will tell.

Fabio Scancciavillani is chief economist at the Oman Investment Fund

May 3, 2011 0 comments
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Economics & Policy

Renewable energy and climate change in the region

by Rend Stephan May 1, 2011
written by Rend Stephan

BCG

 

Rend Stephan is a partner and managing director of the Boston Consulting Group in Dubai. BCG’s Eduardo Neto, a project leader, and ChristianSchwaerzler, a consultant, contributed to this report

The Middle East is home to one of the world’s largestreserves of fossil fuel, primarily used for what is considered “conventionalenergy.” It also has strong natural advantages in renewable sources of energysuch as solar power. The region may also be well positioned in the climatechange debate through its potential ability to inject carbon gas emissions intooil fields. But the road ahead is not easy — far from it. Both public andprivate sector players need to choose their positioning and investmentstrategies wisely, for the region to play a leading role in this space.

Renewable energy – a global view

The unprecedented interest in alternative energy during thelast decade was driven by two major factors: the increased reliance onfossil-fuel-generated energy with its related political concern over energysecurity, and the drive to curb carbon emissions to combat climate change.Looking ahead, we expect an even more rapid adoption in the next decade thanhas been widely foreseen thus far, especially for solar and to some extent, forwind. But at the same time, we acknowledge that many economic and structuralhurdles stand in the way of a truly smooth growth story.

Over the next decade, few renewable technologies will beable to match traditional energy sources on the cost side, known as “reachinggrid parity.” Photovoltaic (PV) will continue its cost improvement trend, sothat it will reach grid parity in high-priced markets such as California andSpain. New pilot technologies in Concentrated Solar Power (CSP) may also havesome potential. On-shore wind is largely mature and very close to grid parityon the best sites, but growth can be limited by the availability of prime sites(with regular strong winds). Offshore wind is nascent, with high investment andmaintenance costs due to remote locations, and is unlikely to exit thesubsidy-driven phase by 2020.

In addition, the expected improvement in storagetechnologies (such as thermal storage, batteries), and the development of moreflexible grid systems do not seem groundbreaking enough to alleviate theintermittent nature of solar and wind. On the structural side, slow regulatoryframework changes, “subsidy fatigue” and hesitant global climate policies alsopose hindrances to their development. But all in all, the combined share ofsolar and wind energy may reach 20 to 25 percent of the total power generationmix globally in 2020.

A leading role for the Middle East?

Against this backdrop, it is important to explore what rolethe Middle East could play. While wind has some potential here, it is really insolar — where the region has large areas of cheap and available land with highirradiation — that a potential global competitive advantage could be built. Butthree very careful choices have to be made.

The first choice relates to local solar energy productionfor local consumption. Such energy sources will find it more difficult to reachgrid parity, given the direct and cheap availability of fossil fuels in theregion, as well as the existence of substantial power generation subsidies.However, this is an incomplete, simplistic and misleading view, since theopportunity cost of making fossil fuel available for exports needs dramaticallychanges the picture.

Countries in the region with fossil fuel reserves understandthis position and some are starting to investigate and invest in local solarenergy production (plus some nuclear) for local consumption and to preservefossil fuels. This trend has to be articulated, encouraged and sustained.

The second choice relates to solar energy exports. Therecent developments in long distance electricity transmission and the relativeproximity of large solar prime sites to high energy demand areas make solarenergy exports a worthwhile option to investigate. Projects such as theDesertec initiative (North Africa solar energy production for consumptionprimarily in Europe) illustrate this point well. From the “Western”perspective, these projects face many hurdles related to political stabilityand investment risks, as well as governance. Yet they constitute a tremendousopportunity for many of the Middle East countries to position themselves assolar energy exporters, substituting for the inevitable decline in fossil fuelavailability and, hence exports, in the long run.

A well-articulated strategy to position the region in thisspace and to make such solar energy exports a reality has to be defined andinitiated.

The third choice involves local investments in solartechnology or manufacturing — namely, the undertaking of related, value-chaininvestments — has to be generally discouraged, at least initially. Suchinvestments are typically not yet attractive in the broad economic sense, andwould have to compete with research and development (R&D) technology centersin the developed world on the one hand, and production facilities in low-costcountries, on the other.

It is true that while building local solar energyproduction, some related value-chain investments could prove attractive;however, these need to be considered very cautiously and selectively and not asa “grand-scheme” plan. This position may change in the long run if/when theregion can create a sustainable solar energy export market — one that hasenough scale to allow further attractive positioning in the adjacent parts ofthe value chain.

Beyond solar, the Middle East’s strategic pre-occupationwith fossil fuels could promote an emerging alternative energy topic: carboncapture and storage for enhanced oil recovery (CCS–EOR). This complex namerefers to capturing carbon gas emissions from power plants and injecting theminto oil fields. This enhances the recovery of oil reserves while at the sametime reducing carbon emissions and hence climate change impact — a doubleadvantage not to be overlooked. Our research has shown that the proximity ofcarbon emitting plants to suitable and large oil fields in parts of the regioncan make such investments economically viable.

This unique advantage of the region could position it as anincubator of CCS-EOR technology development and use. We estimate the region tobe able to quickly capture more than 20 percent of global market share, plus a‘first-mover’ advantage position.

What next?

The future for alternative energy is closer than commonlyassumed and stakeholders in the Middle East should move sooner rather thanlater. The recommendation is simple: get back to basics, and relentlessly focuson the region’s competitive advantages in this space.

In essence that means: Invest in local solar energy productionfor local consumption where it increases the longevity of current fossil fuelreserves and/or fossil fuel exports, but shy away from making grand-schemeplans to play in technology or manufacturing in the short-to-medium term.Actively position the region for solar energy exports, a critical long-termsubstitute for fossil fuel exports, and align other policy decisionsaccordingly. If done well, and on a large enough scale, this could well openthe option of technology and even manufacturing leadership in themedium-to-long term.

A ‘first mover’ advantage in CCS-EOR should be pursued andefforts should be made to ensure that the potentially conflicting interests ofmultiple players do not distract the region from such a unique leadershipposition.

This strategy is urgent but selective, and needs rapiddetailed articulation of each country’s choices, and a relentless alignment ofleadership, policies, regulations and incentives in energy and other sectorsaccordingly. The private sector and incumbent utilities, as well as nationaloil companies (NOCs), will need to understand and align themselves to thesepriorities while being careful, if not dismissive, about risky ventures thatare not aligned with the overarching strategy.

A lot can be done at a country level in the short-to-mediumterm (such as local solar investments and CCS–EOR), but the maximum potentialfor the region (solar energy exports, leadership in technology andmanufacturing) can only be attained in the medium-to-long term with strong cooperationand alignment between countries .

There is work to do today and tomorrow and no excuse forprocrastination. In the end, it is not a question of if alternative energieswill disrupt our ways of life and doing business, but when, and how can the MiddleEast capture the leadership opportunities available to it.

 

 

May 1, 2011 0 comments
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Society

Smiles from the starting line

by Thomas Schellen May 1, 2011
written by Thomas Schellen

Car distributors in the Gulf and Middle East region have seensales bloom in the first quarter of 2011. Whether they are unrestrainedly regalchariots or utterly practical wheels, vehicles made by automotive brandmanufacturers of the Far East, Europe and the United States have enjoyedbroadly improved demand in the Arabian Peninsula and the Levant, as comparedwith the first quarter of 2010.

Rolls Royce, the British luxury brand and proper matrimonialmotorcar maker, reported that regional sales were up 90 percent this springwhen compared with the same quarter in 2010. According to a statement by theRolls Royce dealer for Dubai and the Northern Emirates, AGMC, Dubai was at thefore of Rolls Royce’s regional sales increase with 178 percent first quarter growth.This put Rolls Royce at the top of regional percentage growth among carmanufacturers who provided Executive with first-quarter performance figures forthe Middle East.

A spokesperson for Rolls Royce Middle East told Executivethat the car maker had not only a record first quarter in the Middle East, butalso expects in 2011 to globally outsell the 2,711 motorcars it shipped in2010. That would include another record year in Middle East sales.

Kia, Korea’s easiest-to-pronounce auto brand, said it recordedyear-on-year growth of 19 percent to nearly 45,000 sold vehicles for the MiddleEast region in the first quarter of 2011, including a single-month gain of 29percent March-on-March. In first-quarter statistics for the Gulf CooperationCouncil, the make advanced 6.3 percent year-on-year to 14,444 units.

Kia’s increases notably came from a base of already highunit sales a year ago, as the manufacturer claimed three consecutive years ofgrowth in the Middle East from 2008 to 2010.

Last year, Kia sold 175,369 units in the Middle East for ayear-on-year increase of 48 percent, according to figures provided by thefirm’s head office in Seoul.

United States-based General Motors and Ford also sawimproved demand in the GCC last quarter. In GM’s stable of brands — comprisedof Cadillac, Chevrolet and GMC — just shy of 30,000 vehicles rolled out of theregion’s showrooms, representing 16 percent better unit sales than the yearbefore. 

Without releasing actual sales numbers, Ford Motor Companysaid it achieved a 52 percent increase in GCC sales compared to the same periodlast year. According to Ford Middle East, Saudi Arabia recorded the highestregional growth for the brand, at 75 percent, followed by Kuwait with a 50percent increase. The United Arab Emirates, meanwhile, saw an increase of 32percent.

National trends

‘Full blossom’ was also the assessment for the Germanbrands, which regionally enjoy a strong position among European imports andhave the reputation of doing particularly well in the premium segment. BMW, theBavarian auto smithy whose motto hails driving as enjoyment, sold more than4,600 new BMW and Mini cars in 14 Gulf and Levant markets in the first quarterof 2011, for a 19 percent year-on-year increase, though more than 4,200 ofthese cars were BMWs. Abu Dhabi and Dubai registered year-on-year increases of42 and 38 percent, respectively. 

BMW Middle East confirmed to Executive that the firstquarter of 2011 was the group’s best ever in the region in terms of sales forboth BMW and Mini brand vehicles. This marks a further increase from a 2010performance where group sales of 17,119 vehicles across the region had been thehighest in BMW history. According to BMW, its 2010 sales in the Middle Eastexceeded regional sales of any other European premium manufacturer.

Audi, the German car maker in perennial praise ofengineering, whose hometown is just a 38-minute train ride from BMW’s Munichbase, proved a close competitor in percentage gains, reporting 19 percentgrowth in first quarter unit sales in the Middle East. In the UAE, Audiadvanced 23 percent in the first quarter. The manufacturer’s spokesperson saidgrowth was driven by the marque’s flagship sedan and by its sports utilityvehicles.

The communications head office of Stuttgart-based Mercedestold Executive that first-quarter sales growth in “Arabian markets, includingDubai, Kuwait and Saudi Arabia” amounted to 5.6 percent for total first quartersales of 4,000 Mercedes-Benz vehicles.

UAE distributors of Japanese auto brands, whose marketshares in the Middle East are proportionally higher than Japanese car makers’global market share, continue to appear the least eager to disclose unit saleswhen compared with their Korean, European and American competition. But NissanMiddle East, marking a trend toward transparency, did provide Executive withexact numbers for the first quarter and the company’s fiscal year 2010, whichended March 31. Jebel Ali-based Nissan Middle East Free Zone (NMEF) said thetotal first quarter 2011 sales of Nissan and Infinity vehicles amounted to45,137 units. For the 2010 financial year, the regional total was 166,448units. While both NMEF figures represent drops on a year ago, full-year numberswere down less than one half of 1 percent. First-quarter sales, however, weredown more than 14 percent from 52,938 units in first quarter 2010.

The contraction in unit sales for Nissan vehicles in theMiddle East runs counter to the overall growth trend in sales of cars made bybig name manufacturers. The news is not all bad for NMEF, however, whichinformed Executive that the group’s up-market Infinity brand realized 28.6percent growth in sales during the first quarter of 2011 when compared to thesame period in 2010. 

According to estimates by General Motors, total motorvehicle sales of 1.148 million across the Middle East in 2010 were up 8 percentfrom 2009. Of these, 48 percent were Japanese, 14 percent Korean, 15 percentAmerican and 23 percent European makes, with emerging markets’ automotivebrands — from India, Iran and China — “not on the radar” of local buyers.

Yet, given the lack of confirmed governmental data on exactvehicle numbers for the GCC and for individual member states, all industryfigures include a larger portion of assumptions and estimates than isdesirable. This means for the manufacturers and distributors that market shareassessments are in part guessing games and brand manufacturers have onlythemselves, their own previous performances and their own targets to reliablybenchmark against.

The global picture

In announcing their good performances during recent weeks,the global car makers’ Middle East representatives have broadly attributedtheir sales growth across the region to a mix of economic recovery, notablyincluding easier access to bank loans for prospective buyers, plus increasedefforts by car dealerships, and, more than anything, their new model lineups.

At the same time, the Middle East numbers have to be seen inlonger-term regional and global contexts to provide a fuller picture. While theperiod from January through March 2011 produced absolute unit sales records forseveral manufacturers, the comparison with 2010 is somewhat flattering forothers whose sales results in 2007 or 2008 were substantially higher than 2009and 2010 numbers. When measured against peak sales in 2007 and 2008, firstquarter 2011 numbers are good on an industry level but not as impressive as ayear-on-year comparison with 2010.   

In both the downturn of 2009 and in the upswing now,regional results were moreover co-cyclical with global results announced by bigEast Asian, European and American car manufacturers. Kia, for example, said itsglobal unit sales in first quarter 2011 were 20 percent higher when comparedwith a year ago. Under the same comparison, Germany’s Volkswagen sold 14percent more cars and BMW recorded a global increase of 21 percent.

On the global profits side, big manufacturers have alsodisplayed demonstrative smiles. Daimler AG, maker of Mercedes, posted a firstquarter net interim of $1.75 billion [AED 6.42 billion] — a greater than 90percent improvement on the first quarter of 2010. Ford reported a group-widefirst quarter net gain of $2.55 billion [AED 9.36 billion], its highest in the21st century to date, and even Chrysler spread its feathers in pride at the endof April with a net interim of $116 million [AED 426.08 million].

Chrysler, whose twice-tarnished record in recent yearsentailed a 2007 breakup after a failed marriage with Daimler and then a descentinto Chapter 11 bankruptcy protection in the second quarter of 2009, presentedits first quarterly profit in five years or more.

From Japan, ahead of announcements of 2010 results by Toyotaand Nissan expected in mid-May and covering the 12 months to the end of March2011, analysts published expectations that the leading Japanese car makerscould announce 2010 net profits far above 2009 results.

Profits generated in the Middle East region, which are notdetailed in the interim or full-year financial reports of the manufacturinggroups, will only in the rarest cases translate into very visible improvementsto the overall results profile of the automotive groups.

Caught in traffic

Going forward, the remaining months in 2011 could spell theslowing of automotive business on several fronts globally and, to a lesserextent, regionally.

Balance sheets of Japanese car manufacturers are expected toshow the impact of the Great Tohoku Earthquake and Tsunami, which devastatednortheastern Honshu on March 11, in their results for the first six months oftheir 2011 financial year, which began April 1. According to an average ofanalyst estimates compiled by Bloomberg, Toyota’s six-month losses up toSeptember 30 could reach $4.9 billion [400 billion yen]. While progress reportsfrom the car makers Toyota, Nissan and Honda show gradual restoration ofcapacities to pre-catastrophe levels, production of parts and vehicles in Japanwill still be impacted in various forms throughout much of the remainder of2011.

Statements by Japanese manufacturer Nissan as regards theimpact on the Middle East acknowledged the likelihood of vehicle supplybottlenecks choking the market, but without specific projections. Othermanufacturers said they were observing the markets but by the end of April hadnot been revising sales targets for the region. 

In their estimate of overall sales outlook for the MiddleEast, GM expects 2011 to see industry results of 7 percent growth on 2010.Manufacturers contacted by Executive said that unrest in the region hadtemporarily subdued buying moods in some areas of Saudi Arabia and had a directimpact on showroom visits by prospective buyers in Bahrain and Syria, but thesetwo markets do not contribute large shares to regional volume.

However, as Ford Middle East General Manager Larry Preinsaid, events such as the unrest in North Africa (which is not part of theMiddle East region by the auto industry’s classification) had “an impact oneverybody from a customer confidence point of view. This has a ripple effectthrough the [Arab] countries. We will just have to play it out and manage therisks the best we can.”

On the upside, government measures in the important Saudimarket, such as job creation and the infusion of cash into households, couldhave positive impacts on car sales.

 

 

 

May 1, 2011 0 comments
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Feature

Hail to the shale

by Executive Editors April 28, 2011
written by Executive Editors

Lacking oil and gas deposits and eager to scale back its reliance on energy imports, Jordan is taking a chance on one unconventional resource it has in abundance. The kingdom has inked a $1.8 billion concession agreement with Karak International Oil (KIO), which will produce enough oil shale to meet more than half of the country’s fuel needs by 2026. The first of its kind for the Middle East and North Africa, the agreement could provide a model for energy self-sufficiency for countries with oil shale deposits.  

Over the past five years, KIO, a subsidiary of British firm Jordan Energy and Mining Ltd (JEML), has been conducting feasibility studies at the Al Lajjun field, 110 kilometers south of Amman. In March, the company signed a deal with Jordan’s Natural Resources Authority for what will be the country’s largest oil shale extraction project. One of 26 identified deposits, the 35-square-kilometer field represents just a fraction of Jordan’s oil shale reserves — estimated to be the world’s eighth largest at around 34 billion barrels, according to the World Energy Council, while JEML holds that figure to be as high as 70 billion.

In May 2010, Estonia’s Eesti Energia inked a concession agreement to produce 36,000 barrels per day (bpd) at Attarat um Ghudrun, as well as to conduct feasibility studies for a power plant fired by burning oil shale, while Royal Dutch Shell had already signed on to explore shale deposits in 2009. These deals place Jordan at the vanguard of international oil shale exploration, with only three other countries opting to exploit this resource on a commercial scale thus far. Estonia utilises oil shale to meet 90 percent of its power needs, while Brazil and China also produce oil shale.

At the signing of the KIO deal, Khaled Toukan, minister of energy and mineral resources, said the venture would “increase energy from indigenous oil shale resources from 0 percent to 14 percent of the country’s energy requirements by 2020; and thereby reduce our reliance on imported oil and gas products from our neighbors.”

Starting with 15,000 bpd by 2014, the area’s production is slated to reach 30,000 bpd by 2020 and 60,000 bpd by 2026.  Jordan’s oil demand is 110,000 bpd, according to the energy ministry, with the country importing nearly all of its energy needs. In mid-2010, the government announced plans to increase its natural gas purchases from 240 million cubic meters to 330 million cubic meters in 2011. 

Around 80 percent of the kingdom’s gas comes from Egypt. However, political unrest in January caused Egypt to stop gas exports, forcing Jordan to decrease the weight of gas in its energy mix and replace it with more expensive fuel oil. As a result, at $197 milion, Jordan’s oil and electricity import bill for that month was 78.7 percent higher than the same month of the previous year. In March, Egypt announced that it would resume gas exports to Jordan, but at a higher cost. Previously, Egyptian gas had come at a discount of nearly 50 percent off the market price. This, coupled with oil around $100 per barrel, has given further impetus to the kingdom to look to other sources to meet its energy needs.

Until recently, oil shale extraction was prohibitively expensive at up to $95 per barrel. The United States, for example, has the world’s largest oil shale reserves at over 2 trillion barrels, but has declined to begin large-scale production since crude is cheaper to produce. However, new technology has lowered the price of oil shale production to the neighbourhood of $60 to $75 per barrel, with Shell predicting that it can eventually reduce this figure to $25.

In this light, oil shale is looking like an attractive option, and Jordan has sided with that optimism. “The future of Jordan lies in the investment in minerals and oil shale production,” local press reported energy minister Toukan as saying at a parliamentary session in February. Under the deal with KIO, the government will receive 65 percent of net operating profits. If oil prices are $75 per barrel, this means revenues of $2 billion over the next 30 years, according to JEML.  And of course, if oil prices continue to stay high, it will be even clearer that Jordan made the right decision. 

April 28, 2011 0 comments
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Feature

Untying the tyrant’s tentacles

by Executive Editors April 28, 2011
written by Executive Editors

From his humble tent in the south of Tripoli, Libya’s currently embattled leader Colonel Muammar al-Qadhafi had under his control at least $210 billion — almost three times the worth of Carlos Slim, the world’s richest man according to Forbes. The United States, Canada and the European Union had, since the Libyan uprising began in mid February until the end of March, frozen approximately $70 billion in assets controlled by Qadhafi, through the Libyan central bank, 18 family members and at least 16 companies and investment vehicles, but the search for additional assets continues.

Executive has scoured data and reports from governments, financial institutions and media outlets around the globe to compile what is perhaps the most comprehensive, publically available listing to date of Libya’s direct foreign asset holdings [see page 50]. Given the sheer enormity of the size and spread of these assets, and the opaque nature of Qadhafi’s secretive investment vehicles, there are likely significant assets unaccounted for in this listing — indeed, it is speculated that the web of investments is so far flung that the Colonel himself cannot account for all his billions.

Weaving the web

Since the lifting of sanctions on Libya in 2004 and the subsequent increase in oil exports and global prices, Qadhafi collected hundreds of billions of dollars in oil revenues, a large part of which were transferred to personal foreign accounts and to a complex web of Libyan sovereign wealth funds. Key individuals identified by Western authorities to be acting on behalf of Qadhafi or at his direction include his wife, Safia, his seven sons, most prominently Saif al-Islam al-Qadhafi, and his only daughter Aisha. Other senior government officials were also targeted by the US sanctions, but their roles are limited to security aspects and do not appear to hold any notable foreign assets.

Libya’s main foreign investment vehicle is the Libyan Investment Authority (LIA), a holding company founded in 2006 to oversee and manage the country’s various investment funds. The authority was created with capital of $40 billion, but is now estimated to hold $70 billion in assets with private investments in real estate, banking, agriculture, infrastructure and oil and gas, in addition to bonds and equity stakes in publicly listed companies around the world.

More than seven investment funds with foreign assets fall under the umbrella of the LIA, with the $8 billion Libyan African Investment Portfolio (LAP), established in 2006, perhaps the most prominent, if not the largest. LAP focuses on direct investments across the African continent, partly through its telecom holding company LAP Green Networks. LAP Green Networks’ portfolio comprises investments in Chad, Niger, Ivory Coast, Nigeria, Rwanda, Sudan, Togo, Uganda and Zambia.

LAP’s other subsidiaries include Libya Oil Holding Company (OiLibya, previously Tamoil Africa), which manages the country’s oil-related investments in Africa, and the Libyan Arab African Investment Company  (LAAIC) which manages holdings in virtually every African country and sector ranging from the Rainbow Tourism Group in Zimbabwe to the Democratic Republic of Congo’s Oryx Natural Resources diamond mining company.

Also under the LIA is the Libyan Arab Foreign Investment Company (LAFICO), founded in 1981 and boasting $2 billion in assets as of the end of 2009. LAFICO was the main investment arm of the Libyan government, focused on international equities and fixed income holdings, before the establishment of the LIA.

 LAFICO’s regional investments include stakes in United Arab Emirates-based Kingdom Hotel Investments, Jordan’s Arab Potash Company and Bahrain’s First Energy Bank.

At the same time, the LIA oversees the $10 billion Long Term Investment Portfolio (LTIP), which owns several real estate and banking foreign assets. In effect, the holdings of LTIP would be classified under the LIA, similar to foreign holdings by the National Investment Company, so it is difficult to separate the portfolios of every investment fund under the LIA.

In Europe, Libya established Dalia Advisory Limited in 2009 at a property on Upper Brook Street in London — valued at approximately $9.8 million — with the aim of managing Libyan investments in the UK and the rest of Europe. During the same year, LAP reportedly poured hundreds of millions of dollars into a newly-established London-based hedge fund, FM Capital Partners.  On the other side of the Atlantic, in a 2010 diplomatic cable released by WikiLeaks, LIA’s Chairman Mohamad Layas spoke to the US ambassador in Tripoli of $32 billion in liquidity held by several American banks, each managing $300-500 million. These amounts have now been reportedly frozen.

On the banking side, the Central Bank of Libya (CBL), which is fully-owned by the Libyan government, held $139 billion in foreign exchange as of the middle of 2010, according to a CBL Director, though it is not clear how much of the foreign exchange assets are physically available in Libya and how much are part of the assets frozen by foreign governments. (For example, the International Monetary Fund reported last month that the CBL had on hand roughly 144 tons of gold, currently worth some $6.5 billion.)

The CBL also holds equity stakes in regional financial institutions, including Bahrain’s Arab Banking Corporation and ALUBAF Arab International Bank, either directly or through its subsidiary, the $2 billion Libyan Foreign Bank.

In addition to Libya’s official investment vehicles, Qadhafi and his family members are estimated to hold several billions of dollars in secret personal accounts.

Speaking to British-based newspaper The Guardian, Professor Tim Niblock, a Libya specialist at the University of Exeter in the UK, said, “The bulk of that wealth is distributed between bank accounts and liquid assets in banks in Dubai, United Arab Emirates and other Gulf states, as well as in the countries of Southeast Asia.”

Despite the variety of Libyan investment fund names, Libya’s known direct assets in more than 60 countries are ultimately all under the control of Qadhafi and his sons. As Western governments push ahead with their military and financial offensive, the coming weeks will likely bring more light to bear on Libyan elite’s secret assets around the world.

April 28, 2011 0 comments
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Feature

A view to a rebellion

by Executive Editors April 28, 2011
written by Executive Editors

The luck of the rag-tag rebel forces in Eastern Libya has swung wildy since the uprising began in February. Revolutionaries seized the momentum early on to head west and liberate towns along the coast, only to be beaten back by forces loyal to Colonel Muammar al-Qadhafi; NATO airstrikes  turned the tide again just as loyalists were preparing to lay seige to the rebel stronghold of Benghazi.

To document the rebellion and life in the newly-liberated east of the country, Executive made its way to North Africa last month, crossing the border of Western Egypt into Libya. Shops and restaurants had reopened, even if some had no running water with which to cook, while old men and young children alike were signing up to bolster the ranks of a rebel outfit increasingly beset by losses. From Tobruk to Benghazi, Ajdabya to Ras Lanuf, these photographs show a people desperate, yet full of hope, that their struggle could free them and their country from decades of tyranny.

1.The coastal town of Ras Lanuf has seen intense fighting, changing hands multiple times

2. A rebel mans air defenses outside Ajdabya

3. Rebel fighters in Ras Lanuf prepare to head to the frontline

4. Refugees camp out at the border between Libya and Egypt. Many had lost their jobs and belongings and were demanding international aid to allow them to start new lives in their home countries

5. A fresh coat of graffiti marks almost every wall on the streets of Benghazi as residents express their new found freedom

6. Benghazi residents wait for a bank to open. Cash reserves were in short supply after protracted closures

7. The sun rises over eastern Libya, just south of Benghazi.

8. Rebels re-load an artillery piece as they fight to retain control of the oil refinery town of Ras Lanuf

9. A rebel fighter mans a checkpoint north of Ajdabya

10. Children play on a tank in the city of Benghazi

11. TV crews watch as an oil refinery explodes near Ras Lanuf

12. Volunteer border guards check passports on Libya’s border with Egypt

April 28, 2011 0 comments
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Since its first edition emerged on the newsstands in 1999, Executive Magazine has been dedicated to providing its readers with the most up-to-date local and regional business news. Executive is a monthly business magazine that offers readers in-depth analyses on the Lebanese world of commerce, covering all the major sectors – from banking, finance, and insurance to technology, tourism, hospitality, media, and retail.

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