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Comment

Assad’s dungeons

by Nadim Houry May 3, 2011
written by Nadim Houry

Marwan had trouble sitting down during our interview. He had bruises all over his body and bandages on his head from the beating security officers subjected him to during his two-day detention by the Amn Al Dawla — one of Syria’s notorious mukhabarat, or secret security services. His crime was participating in a peaceful protest in Douma on April 1, calling for reforms.

Marwan’s case is not unique. Syria’s mukhabarat have detained more than a thousand anti-government protesters since mid-March and many of those recently released have reported that security forces tortured them in detention. Often, like Marwan, they have the scars to prove it. 

Particularly disturbing is the pervasiveness of ill treatment by security forces, the routine beatings, torture and humiliation that hundreds of protesters incurred in dozens of security detention facilities. Of the 22 released protesters interviewed by Human Rights Watch, almost all reported being beaten and tortured. Three of them were children, who were treated no differently from the adults. One protester detained at an unknown facility in Damascus vividly recalled that he could not sleep during his first three days of detention because of screams emanating from the interrogation room next door.  “The screams pierced my ears. I could not sleep, could not eat,” he recalled.

A shopkeeper from the coastal village of Banias, one site of anti-government protests, described his treatment at the local military security facility: “They beat me during each one of my four interrogations. I think it was with sticks and with whips but I don’t even know; I couldn’t see anything. They beat me on my head, on my back, on my shoulders. They especially beat me on my face. With every word, they would beat me. They asked me why I was trying to destroy the regime.”

A protester from Al Tal, a suburb of Damascus, reported that officers of the Palestine Branch of Military Intelligence used electric shocks to torture him. Another protester from the town of Douma felt lucky that his Amn Al Dawla interrogators just beat him with cables. “Many others in my cell told me that they had used electric batons on them,” he said.  In one particularly gruesome testimony, a detainee described how he helped his cellmate, another protester, walk to the bathroom after his cellmate’s toe-nails had fallen off following a vicious session of beatings on the soles of his feet.

The beatings were meant to punish the protesters and elicit information. Released protesters repeated that interrogators kept asking them about who paid them to protest. “They simply did not believe that we were doing this out of our own free will,” a Douma resident told me over the phone. After most interrogation sessions, protesters had to sign a confession that they could not read. Some detainees even reported being filmed by state television crews while they confessed to being “terrorists and killers.”

Brutality by Syria’s mukhabarat is not new. Human rights groups have documented such practices for years, prompting the UN Committee against Torture, tasked with monitoring compliance with the Convention against Torture, to say in May 2010 that it was “deeply concerned about numerous, ongoing and consistent allegations concerning the routine use of torture by law enforcement and investigative officials” in Syria.

What is new, however, are the increasing numbers of people across the Arab world who will no longer keep silent about this brutality. The revolutions in Egypt and Tunisia were both sparked by abuses committed by security forces. And Syria is no exception — it was the mukhabarat’s torture of a group of Daraa school children who had scribbled graffiti criticizing President Bashar al-Assad that originally drove people to the streets.  And now that they are on the streets, we hope that their chants once and for all will end the screams emanating from the mukhabarat’s dungeons. For if this ‘Arab Spring’ is to usher in a new era, the torture chambers of today need to become a relic of the past — or better yet, museums that bear witness to the crimes committed against ordinarycitizens.

Nadmim Houry is director of the Beirut office of Human Rights Watch

May 3, 2011 0 comments
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Editorial

We are under attack

by Yasser Akkaoui May 3, 2011
written by Yasser Akkaoui

Whether or not the accusations against Lebanese Canadian Bank are true, whether or not there is substance to the rumors that there is a list of banks yet to be targeted, we have to assume that doing business in Lebanon is now fundamentally different than it was just months ago. And not only is the timing of the attack no mistake, but the cause is unmistakable.

What is happening is an external response to our internal politics. It is the price we pay for Hezbollah and company taking over at the helm of government. The surging growth in business and commerce — the economic hiatus from reality we proudly took for granted over the last several year seven while the rest of the world was thrashing in crisis — is over. Now, with our heads out of the clouds, we are only just beginning to realize that we may not have a parachute.

We do not know who pulled which strings in Washington to spur the US Treasury’s accusations, and we do not know their next move, but what is certain is a central pillar —  that spared our country the economic collapses seen elsewhere in recent years — is now being threatened.

No amount of honest dealing can make up for the Western perception of our new government and the repercussions of such. The private sector has gone through a blissful period of disassociation from political turmoil, but that period is ending and without conscious acceptance of this and efforts to counter it, we will all suffer the consequences.

Should we be lax in countering this threat, it is the Lebanese men and women who have done their best to build businesses for this country, indeed to build this country and spur prosperity while government has lain comatose, who will pay the price.
 

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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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

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Frontline Headlines

by Executive Editors April 28, 2011
written by Executive Editors

On a chilly early March evening in  Benghazi, staff at the recently formed newspaper Libya worked furiously under the dim light of two dangling bulbs. Notebooks, hard drives, empty water bottles and tangled cords covered the news desk as writers’ faces glowed blue from the light of their laptop screens, their eyes tired from long days of hard grind.

Operating out of a former state security building on the Mediterranean waterfront, the newsroom walls were covered in colored caricatures criticizing Libyan leader Colonel Muammar al-Qadhafi. One poster showed him as half of a two-headed dragon and another with Michael Jackson’s nose. Like other writers, journalists and activists that have mobilized in the midst of Libya’s uprising, the volunteer team has embraced newfound media freedoms after nearly 42 years of repression. 

For the first time in more than four decades, radio broadcasts relate accounts of events across the country uncensored by government authorities. While rebels battle Qadhafi’s forces on the front lines, press warriors back in Benghazi’s media bastion armed themselves with the power of the printed word, waging their resistance with computers and notebooks. As Executive went to press, more than half a dozen new publications had been founded in rebel-liberated eastern Libya since the revolution began on February 17.

“This paper allows us to get out the depression we’ve been storing within ourselves for years,” said Libya editor Mohammad Sader Mousa. The head of the media department at Garyounes University in Benghazi came up with the idea for the paper just before midnight on February 22, in the early days of the anti-Qadhafi uprising. He worked furiously throughout the night making calls to colleagues whom he thought would be willing to help.

“I was here in the media center and I told people about the significance [and] the role of media in revolutions,” he said, sporting a button of the red, black and green pre-Qadaffi Libyan flag on his navy blue coat. “The only way we could communicate locally was by making a newspaper and then try to have it reach the world outside through the Internet.”

That night, electrical engineers moved in to the soon-to-be news bureau to set up a satellite Internet connection. All other networks across the country had been cut. While writers hastily gathered to flesh out reports, a publishing house volunteered to print the paper for free. By 10 am that morning the first edition was printed.

“When it was finished we couldn’t believe it,” he said. “We looked at it and thought, ‘How come?’” Neither Mousa nor anyone else on his team has spent a penny on the publication, which has a print run of 1,500 papers a day and a team that quickly grew to 62 members.

“Freedom is the sweetest thing,” said 47-year-old volunteer Amal bin Ghazi as she tapped away on her silver laptop – one of nine personal computers spread across the table, all used by writers and editors nearing deadlines. “Because I’m working with this group there is a feeling of liberty within me.”

“I always saw the truth but I could never talk about it. There was no freedom of speech, no real journalism”

A print-run repressed

If it weren’t for the uprising, another Libya volunteer, 25-year-old Ousbah Awami, would have been pounding out words in the office of a newspaper with much different stripes; for years Awami worked at Qurayna, a paper created in 2007 by a company owned by Saif al-Islam al-Qadhafi, one of Colonel Qadhafi’s sons. While Awami did occasionally write articles for the paper that were critical of the regime, his editor consistently prevented them from being published.

“I always saw the truth but I could never talk about it,” he said. “There was no freedom of speech, no real journalism.”

But the tide changed for Awami and his colleagues when Libya followed Tunisia and Egypt in revolt. He and a handful of others spent nights sneaking into the Qurayna office to send pictures and videos of the uprising — not yet widely covered by international press — to news agencies outside of the country, as at the time, the newspaper had one of the country’s only working Internet connections. In doing so they were not only at risk of being attacked by Qadhafi’s supporters, said Awami, but also from rebels if they were mistaken for supporting the dictator.

Operations at the newspaper took a turn after a bloody Benghazi battle left scores of anti-Qadhafi protesters dead. Members of the staff decided to write and run a story documenting the events and announced they had sided with the rebels. “After that we stopped calling Qadhafi a leader and called him a criminal, a murderer,” said Awami. But this didn’t come without risk. “One by one, every staff member received a phone call from someone saying, ‘We can kill you. We can kill your family,’” he explained.

When the newspaper’s editor fled the office shortly thereafter, Awami claims he took 100,000 Libyan dinars ($83,194) with him, swindling the 120-person staff of two months’ salary, although this could not be independently verified by Executive. Awami added that their Internet connection was subsequently inoperable. For two weeks the employees worked without pay, but have since been receiving funding from Libya’s Al Khaleej oil company, allowing them to continue to print 10,000 copies per week under a new editorial committee and the new name, Bourniq, after an ancient city northeast of Benghazi.

Journalists under fire

Despite the new tastes of freedom in parts of Libya, concerns loom large for local and international journalists. As the momentum of the uprising shifted in the favor of pro-government forces through mid-March, conditions deteriorated for reporters. Al-Jazeera cameraman Ali Hassan al-Jaber was killed and another wounded on March 12 on the outskirts of Benghazi when gunmen opened fire on their car; on March 19, Mohammed Nabbous, founder of the recently-launched independent Libya AlHurra TV (and one of the founders of the Benghazi media center) who provided video coverage of the rebellion, was shot in the head by a sniper while covering a government attack on Benghazi.

The Committee to Protect Journalists (CPJ) has documented more than 50 anti-press attacks that include assaults, detentions and threats. Some 13 journalists are either missing or in government custody, according to the CPJ. The missing include four from Al Jazeera and two from Agence France-Presse. In addition, six Libyan journalists are unaccounted for, the group said. The tense situation prompted at least three Bourniq reporters to resign from the paper for fear of losing their lives. “I don’t sleep at home anymore; I don’t use my own car; everyday I’m concerned for my safety,” said Awami.

“We will fight back with media. We are going to destroy him”

Warrior poets

To enter the rebels’ political headquarters, inside an old courthouse in North Benghazi, one must pass a short interrogation by armed guards and walk through a metal detector at a side entrance. Tucked into a small corner room of the courthouse last month was 21-year-old Ash Mohamed Zagogo, writing poems about the liberation of Libya. Judges’ robes hung from a coat rack to Zagogo’s right and law books lay dusty in a bookcase behind him. The former break room is now the operating base of Libya Al-Hurriyah, Arabic for “Free Libya.”

“I write these words not from my mind, but from my heart,” Zagogo said, after reciting a poem he wrote for the paper, which publishes both articles and art. Like other start-up newspapers here, donations cover the operation costs of running Libya Hurriyah, printed every other day and distributed in cities all the way to the Egyptian border. Most of the people on the staff are female lawyers and students. “They volunteer because they feel the injustice that people are living,” said Warida Bernawi, the 35-year-old director of Libya Hurriyah.

While she bustles about the room, a group of young women hunch over a single computer across from where Zagogo and two others quietly write. Although night had long fallen over the Mediterranean town, it would still be hours before the staff went home for a few hours rest.

“Do you know Qadhafi called us rats?” Zagogo asks, his face stiffening as he quickly sat up. “He crossed the line, so we will fight back with media. We are going to destroy him.”

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Reforms in reverse

by Executive Editors April 28, 2011
written by Executive Editors

In setting targets for foreign investment in Syria during a speech last year, the country’s then-Deputy Prime Minister for Economic Affairs, Abdullah Dardari, admitted that there was “a long way to go.”

“A competitive economy is a mindset, a new way of seeing things,” he said. “This is the real challenge. But the political determination is unquestionable. There is no going back.”

That, however, was before regional unrest in recent months spread to the home front and spurred a reshaping of Syria’s policy direction. The government’s almost decade-long embrace of an economy-first model unraveled as events unfolded in Tunisia and Egypt; to keep the wolf of revolt from Syria’s door, a slew of small appeasement packages and limited social reforms were implemented — sometimes in complete reversal of long-term economic strategies. This strategy initially appeared to have kept investor confidence high and popular unrest at bay but in the later half of March, previously unthinkable public demonstrations of dissent began in cities across Syria.

As Executive went to print a clampdown by state security forces had killed at least 61 in the southern city of Daraa and dozens more elsewhere, while hundreds had been injured and arrested throughout the country. Needless to say, Syria’s social and economic future seems somewhat uncertain. At least one major foreign investment was halted on March 23, according to Reuters, the same day stocks on the Damascus exchange dropped an average of 3 percent across the board.

In need of help

Syria’s economy is in bad shape. Ten years of reforms aimed at moving the country toward a free market system — such as opening up the banking sector, lures for private investment, a nascent stock market and cutting subsidy programs — had begun to nudge the economy into recovery after 50 years of centralized, national socialist policies.

But with declining oil reserves, inefficient and decrepit industries, weak and arbitrary trade and competition regulation, high inflation and an unemployment crisis looming, the economy still desperately needs more fixing. Reforms were recognized as being potentially painful for ordinary Syrians in the short term — especially in regards to an increased cost of living — but unavoidable if the country was to develop economic security, improve its standard of living and raise foreign investment to the targeted $55 billion.

The question now is, with unrest erupting across the country, how severely will short-term efforts to assuage the public derail the long-term plans to revamp the economy?

In the barrel

With Syria’s oil reserves diminishing rapidly, the cost of extraction rising and demand skyrocketing, the country has been looking to its neighbors to secure lucrative oil and gas pipeline deals and shore up domestic energy supplies. The country’s crude production peaked at 583,000 barrels per day (bpd) in 1996, but by last year had dropped to 390,000 and the country will deplete existing reserves within 18 years, according to its reserves-to-production ratio, as calculated by British Petroleum (BP).

Foreign investment is necessary to enhance old, inefficient oil refineries, such as those in Banias and Homs, which together have a capacity to refine 240,000 bpd — well below domestic demand of nearly 350,000, according to a 2007 study by Syrian economist Ziad Arbash. Syria worked hard to position itself as a regional transit hub for gas into Europe through proposals to extend the Arab Gas Pipeline — linking Egypt, through Jordan, to Syria — to connect to a pipeline between Syria and Turkey; an idea that was plugged during a recent presidential tour of Turkey and Eastern Europe.

Plans for a second auction of offshore exploration rights (the first failed to attract any investors) were also announced by Oil Minister Sufian Alao in February, covering a total of more than 5,000 square kilometers across the Mediterranean. Despite relatively lower yields and unfavorable production-sharing contracts, until now Syria’s political stability, as compared to other more oil-rich countries like Iraq, had worked in the country’s favor. But the ambitious plans to develop an extensive gas transport infrastructure now look uncertain. With instability across the region and the breakout of revolt at home, it is likely that the endeavors will be put on pause as nervous investors wait to see what unfolds.

These are long-term plans with the goal of increased price stability, easier access and less waste to meet demand. More immediately, Syria is looking to cut the costs of inefficient energy handling without unsustainably increasing the financial burden on households, and that means one thing: subsidies.

How severely will short-term efforts to assuage the public derail the long-term plans to revamp the economy?

Subsidies setting back the clock?

 On January 16 — one day after the Tunisians forced president Zine al-Abidine Ben Ali to flee the country — the Syrian government announced plans to reinstate fuel subsidies for public workers by 72 percent, up to the equivalent of $33 a month. Shortly after came the announcement of a $250-million package for 420,000 families, to combat poverty. Currently, approximately 14 percent of the population is below the poverty line. Last month, the state also reduced the cost of many imported food items.

These moves appear to be a complete reversal of a policy in recent years of repealing subsidies. Beginning in 2007, with subsidies costing an estimated $2 billion annually and artificially lowering retail prices, the government embarked on a three-phase plan to eradicate them. By doing so, it was reasoned, the government would not only allow fuel and electricity prices to meet international market levels, but make more funds available for public investment.

The plan had begun to yield results. The initial 2007 hike in gasoline prices succeeded in reducing fuel consumption by more than 50 percent per household, but electricity consumption shot up by an average 10 percent each year. Nonetheless, direct energy subsidies still cost Syria around 5 percent of gross domestic product.

But households were feeling the pinch. With energy and food previously subsidized by around 50 percent, under the new system food and energy were adding up to an average of 10 percent of monthly household income. Inflation, stable but high at around 3 percent between 2010 and 2011, after spiking at 15.7 percent in 2008, has still not been matched by an increase in wages, with the average family income sitting at 13,000 Syrian Pounds ($260) a month.

Following the 2011 National Household Survey, which showed overall higher living costs and a growing gap between rich and poor, sources told Executive that plans were already underway to use the results to implement a secondary study to assess how removal of subsidies affects popular approval of state policy.

But even if temporary and relatively modest reintroduction of subsidies may go some way to quell unrest, reversals might be hard to undo. “The size of the subsidy is not the important issue here, especially in the short-term,” explained Said Hirsh, Middle East economist at Capital Economics in the United Kingdom. “My concerns will be on its impact on medium-term structural reforms and economic policies. We don’t understand yet whether this will divert money away from more important investments, for instance, or if any are to be shelved/delayed due to this.”

Already, implementation of the value added tax has been delayed indefinitely, but the real test, according to Joshua Landis, director of the Center for Middle East Studies and associate professor at the University of Oklahoma, will come on April 1 when subsidies for heating fuel were supposed to be lifted.

“If the government cancels this, we can safely say that it is due to the mood of revolt in the Arab world,” said Landis.

Hirsh expects the short-term political gains to have long-term costs. “There is no doubt that these measures are targeted at short-term political survival,” he said. “They are dangerous in the sense that it is very difficult to reverse these policies, especially if there are no changes to living standards and an end to economic hardship. Syria is amongst the poorest countries in the region and there is still a big gap to fill before it is able to improve economic conditions.”

Looking to finance

In a secondary attempt to reduce the budget deficit and diversify its sources of finance, Syria last month announced its second ever offering of $63.9 million in treasury bonds.

Following the first bond offering in December, February’s offer was oversubscribed in a sign of optimism in the country’s political stability.

But with the sale only open to 14 local banks, and with yields well below the rate of inflation, analysts warned that such optimism is premature. For bonds to become a substantial source of funding, Hirsh said, the government will need to issue more and at longer maturities.

And, while traditionally opposed to dependence on foreign players, Syria may also need to consider extending the offer to foreign banks, a measure the International Monetary Fund (IMF) has long urged, if results are to have any real impact on treasury finance. Current yields will likely be unacceptably low to international investors, and recent events may make the prospect even less appealing.

“Although Syria’s government appears stable, this position may change very quickly given events elsewhere and Syria’s political and economic conditions,” said Hirsh. “Any international investor is likely to take this into account more than local banks.”

Selling debt locally may cover costs in the short term but, according to Landis, “it means little because the alternative for Syrian banks is to keep their money earning no interest… It is an expression of the lack of alternatives,” he said. “The below market interest rates make clear that Syria does not yet have a free market, which will have to be encouraged to up foreign investment.”

“Although Syria’s government appears stable, this may change very quickly given Syria’s condition”

The youth

If there is one thing that Arab governments should have learned by recent events, it is that securing youth employment and satisfaction is a priority. There is little doubt the protests are primarily linked to a failure of the country to secure jobs and growth. In many ways more so than elsewhere, the demands are particularly urgent. Amid falling oil revenues, the population has soared to 22 million since the mid-1980s. Birth rates are skyrocketing at a 2.7 percent annual increase. Syria already has one of the highest youth unemployment rates in the world and with 50 percent of the population under 30 and over 30 percent under 14, it is only likely to get worse, presenting a potentially disastrous youth unemployment bubble unless jobs can be created.

Aside from curbing population growth rates, the real challenge to this is encouraging the private sector and increasing youth job skills.

While the Syrian government has engaged in initiatives to promote entrepreneurship and business development, the 2010 “Silatech Index Report: Voices of Young Arabs” found that despite the growing need to shift a greater share of the country’s workforce from public sector to private sector jobs, 54 percent of young Syrians say they would still prefer to work for the government at a time when public sector jobs are increasingly scarce.

As a result, increasing private investment and job opportunities, has topped the government’s to-do list for the last two ‘Five Year Plans,’ but private investors still grumble about significant obstacles to entering the market. Despite the introduction of foreign banks, relaxed bans on trade and the opening of the Damascus Stock Exchange, private investment has remained low in the face of poor competitiveness ratings, inefficient industry, unsupportive legal frameworks and the perception of dogged corruption, not to mention the renewal of United States sanctions.

As of last year, foreign direct investment was expected to reach just $2.5 billion. Infrastructure investments, especially funds targeting agriculture, are going ahead, but without a specific timeline, such as the recently announced $2.1 billion irrigation project to pump 1.25 billion cubic meters of water from the Tigris to irrigate some 200,000 hectares (2,000 square kilometers) of land in the northeastern governorate of Hassakeh, the home of the country’s struggling drought-afflicted oil, gas, wheat and cotton industries.

Half way up and half way down

While investment plans plod along, the fundamental problems with the economy-first model are emerging in sharp relief. Stuck half way between a free-market economy and national socialism, Syria risks losing on both political and economic fronts by sitting on the fence.

“I think the economic reforms that Syria has started are important,” said Hirsh. “Nonetheless, it is still very slow and it is very difficult to see how the political class will handle the economic changes without any major political reforms or changes… At least, Syrians have to be prepared for major, and in some cases painful, re-adjustments to their way of life.”

As in Egypt, said Hirsch, this may provoke social and civil unrest. “Not everyone will be a winner through this process.”

April 28, 2011 0 comments
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Eyes for the world

by Executive Editors April 28, 2011
written by Executive Editors

If it weren’t for people like Malath Aumran, the video showing Syrians mourning over the bloody corpses of demonstrators killed by state security forces in Sanamein would never have reached the outside world. Nor would detailed documentation of demonstrations, arrests, injuries and deaths end up on the breakfast table in morning newspapers around the globe. If the Internet is the information highway, Aumran and his ilk are the on-ramps.

Anti-regime demonstrators are up against a litany of barriers, within and without: a brutal and pervasive secret police force, a stunted political culture and the international community’s near-universal dread of an unstable Syria were it freed from the iron grip of Bashar al-Assad’s regime. And for the most part the press, too, have abandoned those on Syria’s streets; most notably Al Jazeera, the ‘voice of the people’ during the Tunisian, Egyptian and Libyan revolutions, has — when it gives Syria coverage at all — increasingly settled for interviews with pro-government officials and police, and reports disproportionately from pro-Assad rallies.

In their stead, citizen journalists like Aumran are putting their lives in danger to present a different reality of Syria to the world.

The birth of activism

Aumran is a fitting representation of what can happen when a social and political consciousness converges with the power of the Internet. Today, he is a cyber activist working under a pseudonym, but not long ago he was, in his own words, “like any other Syrian.”

“I thought that we had the best country, the best regime, and all of that,” he said. It was in 2006 that his worldview changed, with the honor killing of a friend who had been caught having sexual relations with a man her family disapproved of. The killer, her brother, was sentenced to just six months in prison, in accordance with Syria’s permissive laws surrounding honor crimes. It would be a moment that wed the future activist’s sense of social justice with alternative information sources, and which would lead him on a beeline toward the “Arab Spring.”

“My friend told me about this thing, the Internet,” he said. “I searched for information about honor killing and it was all there.” He became involved with Syrian women’s rights groups, while at the same time developing his awareness of the other issues that plagued his country. “I started to be aware that we had a bigger problem — not just women’s rights: human rights and political rights.”

Some friends accompanied Aumran on his ideological awakening and others were picked up along the way. Eventually, they had developed a small activist community. At this time he was still working under his real name, and in order to protect his identity Executive cannot reveal his specific activities.  “The problem is that our people are not political at all, especially our youth,” he explained. “Four decades of regime have taken them out of public life.”  So Aumran and his friends set out on a campaign to “poison their milk for them.” One of the primary, and most successful, initiatives was called “Proxy to your inbox.” In 2009, 10 people, including Aumran, sent an email out to their contacts with a link to a program called UltraSurf that facilitated users’ connections to a “proxy server,” an intermediary online gateway that allows users to bypass censorship restrictions. Thanks to the viral nature of the Internet, it quickly spread, and with it the Syrian Facebook community grew. Aumran isn’t sure of the exact number but, he said, the fact that the email has ended up back in his inbox nearly 100 times is an indication of its mileage.

“Before recently, our role was to organize protests, but the role now is to cover them [and] develop media attention”

The Arab Spring

Though cyber activism in Syria was making some headway by 2010, it wasn’t until the Tunisian uprising that the youth population awoke. “After Tunisia, hundreds of young people began to get Facebook accounts under nicknames and call for change,” Aumran said.

But the Syrian “day of rage” planned on Facebook for February 5, by whom Aumran doesn’t know, failed to gain popular support and was a step back for those who hoped Syria would follow Tunisia and Egypt’s example. The streets were even quieter than on a normal day, apart from the secret police milling about.

Again, on March 15, another Facebook-led “day of rage” passed without results. Aumran and other activists watched as the expectations of most were seemingly confirmed: President Bashar al-Assad’s state apparatus was untouchable. But the next day something changed. Small groups, usually linked together by the Internet but under no central organization, began to stage small but much more successful acts of civil disobedience than the prior attempts of pulling off an instant mass protest.

In Damascus, 27 families of political prisoners marched to the Ministry of Interior to demand the release of their relatives. Within minutes they were set upon by secret police. Some were beaten. The organizer of the protest, a human rights activist who asked to remain anonymous, told Executive that she saw “mothers beaten and pulled on the ground.” According to her, there were 45 confirmed arrests and 32 will face trial on criminal charges of “weakening national feelings,” which carries a one to three-year sentence in prison. One of those arrested was Tayeb Tezeni, a prominent Syrian philosopher and intellectual, though he was quickly released. “His arrest was a clear message that nobody is safe in this country,” the organizer said.

Within days, protests were popping up in Daraa, Homs, Banias, Damascus and Deir al-Zor. For devoted activists like Aumran, long at the forefront of anti-regime activity but suddenly observing a movement without any centralized control, the playbook had to be revisited. “Before recently, our role was to organize protests,” Aumran said. “But the role now is to cover them, to develop media attention and to articulate demands.”

As events unfold in Syria, the lack of a traditional journalistic presence in the country has made activists and amateur videographers crucial; despite having no coverage on the ground, satellite television news outlets like BBC and Al Jazeera were able to show, for example, an attack by security forces on the Omari Mosque in Daraa on the night of March 22. The video was posted on a social media site and quickly did the rounds on the Internet. The original videographer is not known.

The contribution of blogs, social media and YouTube in the movements that have swept the Arab world has in many ways been overblown. To dub Hosni Mubarak’s ouster the “Facebook Revolution” discredits the blood and sweat of those who camped for weeks in Tahrir Square far from the glow of a computer screen. But the Internet does provide activists the unique ability to synthesize and disseminate information in the midst of an otherwise disparate campaign.

For example, last year at this time, for the Kurdish holiday of Nowruz, there were major confrontations in Syria’s northeast between demonstrators and security forces. This year, expecting a repeat on March 20, Aumran enlisted the help of a Kurdish friend living abroad to mobilize people he knew on the ground to develop a system by which information could reach the outside world. This involved two people shooting video and taking pictures on the ground and two others transporting the memory cards to safe houses where they would be uploaded to the Internet.

Activists in the crowd had Turkish SIM cards — common in this area of Syria — to avoid monitoring by Syrian state security, as colleagues outside the country periodically called in for updates, which they then typed into emails and tweets, spreading them across the Internet and to their contacts with the press. In the end, however, demonstrators this year did not face the same resistance from the authorities and the holiday passed without major incident.

On March 22, as Aumran spoke with Executive, he tweeted information as it came to him from all over Syria. He found out the daughter of Sultan al-Attrash, a legendary figure in Syria’s struggle for independence, had been arrested. “This will backfire for them,” he said emphatically. From Daraa however, where on March 19 soldiers fired on protesters from helicopters and killed at least six, there was only silence; the two activists sent to the city from Damascus hadn’t been heard from since. In a way, the group is unorganized; it is an unofficial network of friends (and friends of friends) each doing their own part. “Everyone works individually, but we cooperate as a team,” one activist, who focuses on documenting human rights abuses and informing the press and non-governmental organizations, said. “Usually all of us do everything, but some are more able to do certain things than others so we try to refer that kind of work to him or her… for example when we need something related to Internet expertise we ask [Aumran].”

As the demonstrations have gained traction, the online community has continued to expand and to splinter. In one case, on the Facebook page of “The Syrian Revolution March 15,” a wall post (a publicly viewable message) suggested using alternative protest tactics, such as, for example, demonstrating at a soccer game.

One day later, March 18, in the town of Deir al-Zor a small group of fans-turned-flash-mob stormed the field at halftime calling for their rights. The Syrian National Television broadcast of the game suddenly went black, due to “technical difficulties.” It is unclear who organized them but the original inspiration for the idea is likely that seemingly innocuous wall post. According to the human rights activist, “Every day there is a new group calling for a new movement on Facebook.”

For activists calling for regime change, there is a long and dangerous road ahead. As Executive went to press, 61 had been confirmed killed in Daraa, dozens in Latakia and Sanamein and, since March 1, hundreds injured and arrested throughout the country. Even if it were possible it is yet unknown whether the majority of Syrians would support the overthrow of Bashar al-Assad’s regime. Nonetheless, the “Sturdy House That Assad Built,” as a Foreign Affairs article dubbed it in March, is clearly showing cracks. In large part due to Aumran and his fellow artisans of information, its flaws are the world’s to see.

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