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Special Feature

Kenneth Morse

by Executive Editors June 3, 2010
written by Executive Editors

Kenneth Morse is the co-founder of 3Com Corporation, Aspen Technology Inc. and a number of other startup companies. He is also the former managing director of the Massachusetts Institute of Technology’s Entrepreneurship Center and currently holds the chair of Entrepreneurship, Innovation and Competitiveness at Delft University of Technology. Executive caught up with the business guru during a tour of the region promoting entrepreneurship to gather his insight on how governments and young business leaders can spur the creation of new and innovative enterprises.

  • What steps should governments in the region take to promote entrepreneurship in their respective countries?

They need to become good customers, meaning that they quickly make decisions to buy, and then pay on time. Governments have a tough time making quick decisions because they are rewarded more for not making mistakes than for doing the right thing — and because the press love to jump on mistakes.

This makes them risk averse. In the Middle East, the worst thing about governments is that they don’t pay their suppliers on time. It is easy to kill start-up companies by being slow customers who pay late.

  • But what about e-procurement models that we have seen some governments adopt in the region?

Do you think that is really happening? Every small company that I have found tells me that it is impossible to sell to governments. And the corruption problem compounds the challenge. They take a long time, then they want a bribe; you have to pay somebody off, so your profit is all lost in the bribe. Or, hopefully, the small company says it will not pay the bribe. Compare that with North America and parts of Northern Europe where governments like to buy from start-ups because they are more innovative. Of course, corporations need innovation and they love to buy from start-ups.

  • The bureaucratic processes that are part and parcel of governments in this region don’t give new businesses that luxury and facilitate corruption inside of government itself. Have you seen any progress on this front?

I have seen both some very exciting start-up companies here and some sincere commitment to start-ups.

  • In terms of public policy?

The leaders in the United Arab Emirates, Jordan and Lebanon know that the public sector has reached its limit in terms of its ability to create meaningful jobs. So they have turned to the private sector. Large companies in the private sector are growing and are so the small companies. It’s simple Aristotelian logic.

  • We have seen an increase in the amount of aid being supplied to the region by the United States since President Barack Obama’s 2009 speech in Cairo. Could there really be a paradigm shift in the US’s strategic policy for the region, or is it more likely that this is a public relations stunt?

There is a paradigm shift in thinking for sure. For example, one of the proposals in [Obama’s] speech in Cairo on America’s relations with the Muslim world was to have a conference on entrepreneurship in Muslim Majority Countries.

  • But these are just conferences. They may look good on paper but they don’t necessarily have effects on the ground.

Entrepreneurship is still a good thing for America to export to the world. It’s not controversial. However, I’m not sure how well implemented the new policy is.

  • Why are you not sure of the implementation?

Well, not if they work it through the United States Agency for International Development (USAID). USAID is reluctant to pay any of their consultants more than $565 a day, and I don’t think [they] are going to be able to attract fantastic entrepreneurs at those rates. 

  • So you think there needs to be more funding? 

The funding is there but they won’t spend the money because they are not willing to face up to the fact that [$565 a day] is a low sum.

  • But does it have to be done through USAID? 

There are competing forces in Washington but USAID claims that [the funds] should go through them — and they are brain-dead. Still, entrepreneurship is a message of hope and an export from the US, and there is plenty of interest in importing entrepreneurship.

  • So where do we go from here?   

There is a program that builds on all the current initiatives. It’s called the ‘10 by 20 program’ where each year 10 companies form a paragon [of companies] and commit to achieving $20 million in annual revenues within 5 years. This is an ambitions target; if you are not ambitious you need not apply.

The firms involved are given training and helped to access markets through the diaspora and other means. You were also talking about another model: public private partnership. The public sector could provide the money — it could be through the central bank — and the private sector would administer it because they [are more efficient], and then those companies that were in the program could take off like a rocket.

  • But many governments are in debt and may not be willing to put up the capital.

The payback on the [similar] Quebec program took one year; after that it was tax revenue. It’s about job creation — you take people off unemployment and onto the payroll.

  • When do you think young entrepreneurs should take the dive and start their own businesses?

The ambitious small and medium-sized enterprises of today are the big companies of tomorrow. I am not in favor of having kids start companies right out of school. They don’t know enough to achieve sustainable growth.

I am more a fan of having young people participate in business plan competitions to taste what entrepreneurship is about and then work for well managed, rapidly growing companies, where they learn how to sell, get a purchase order, how to move though an organization and how business processes work, and then start a company with a large team and a critical mass.

  • Where do you see the greatest growth potential in the Middle East?

Women. Female entrepreneurs in the Middle East are [proportionally] the highest percentage in the world. I teach at Delft University (in Holland), where only one in 112 CEOs that I have taught during my tenure [are women]. In the Middle East it is 25 to 30 percent.

This is because entrepreneurship does not suffer from a ‘glass ceiling’. When there is no glass ceiling, you start your own company, you are the president and you are all set.

Women entrepreneurs in the Middle East are doing well for other reasons. They work harder, they are more dependable and the men tend to be lazier.

Who would you rather buy from? Someone with hustle, or someone who is complacent?

  • Do you think this is a long-term trend?

I have observed it for seven years; I don’t know what you think long term is. It doesn’t seem to show any signs of letting up.

  • If you could speak to policy makers in the region about entrepreneurship, what do you think would you say?

Promote ambition. Fix the bankruptcy laws. Become good customers.

June 3, 2010 0 comments
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Feature

A new American intervention

by Executive Editors June 3, 2010
written by Executive Editors

The policy of aggressive democracy promotion in the Middle East, a hallmark of former United States President George W. Bush’s administration, seems to have been sidelined by his successor in favor of a softer approach to international relations. While not renouncing the democracy campaign altogether, Barack Obama’s government has refocused its methods toward State Department projects that target economic advancement, education and job creation in the region.

This shift was exemplified by the Presidential Entrepreneurship Summit on April 26 and 27, where more than 250 delegates from 50 Muslim majority countries (MMCs), as well as Secretary of State Hilary Clinton, Secretary of Commerce Gary Locke and several members of Congress, gathered in Washington, DC to discuss methods to foster entrepreneurship as a means of spurring economic growth and community development.

The summit signals a wider move in the administration to position the Middle East as part of a worldwide religious community, rather than the home of the ‘axis of evil’, as America reformulates its role in the region. The US’s long history of involvement in the Middle East, however, begs the question of whether this new initiative is a genuine policy shift or whether the White House has simply entered another phase of the decades-old strategy of quietly promoting civil society development while maintaining relations with heads of state.

On the surface, the White House appears eager to trumpet its departure from previous US policy. At April’s summit, Secretary of State Clinton cited Obama’s June 2009 “New Beginning” address at Cairo University as the administration’s “new approach to foreign policy.”

In a press statement, the Chief of Media and Cultural Affairs at the US Embassy in Lebanon, Ryan Gliha, said he considered changing the way the US administration was seen in the region as the “crux of the point” for the event.

Many of the new programs differ in that they favor local expertise over imposing an external agenda for development or aid. Yet their details remain largely unknown, and citizens’ suspicions of American intervention lingers.

A new beginning

Former Secretary of State Madeleine Albright will partner with Walter Isaacson, president of the leadership-oriented Aspen Institute, and Muhtar Kent, the Turkish-American chief executive officer of the Coca-Cola Company, in launching the “Partners for a New Beginning” program — part of the State Department’s push for innovation. Described as “a team of eminent Americans from across sectors and industries who will lead an effort to engage the US private sector in carrying out our vision for a new beginning with Muslims,” little additional explanation was given as to the program’s specific plans.

Two other initiatives, the Silicon Valley-based Global Technology and Innovation Partners and the Innovators Fund, have already been set up by venture capitalists following Obama’s Cairo speech and aim to “support innovation” in Egypt, Jordan, Lebanon, Turkey and Malaysia.

Having already reached out to Jordanian venture capitalists Oasis 500 and several American firms, the Innovators Fund plans to expand.

Secretary Clinton also mentioned the e-Mentor Corps, a project that will allow entrepreneurs seeking advice to access mentors on-line from Intel, Ernst & Young, the Kauffman Foundation, TechWadi, the Young Presidents’ Organization, Babson College and Endeavor.

While many of the schemes sounded well intentioned if vague, Clinton delved into greater detail regarding the Global Entrepreneurship Program (GEP), which is set to begin in MMCs and grow from there. Clinton said that the private sector will partner with civil society groups to “help create successful entrepreneurial environments” by providing access to capital, business education from US business schools, mentoring programs and by identifying promising ideas. Launched in Egypt in April, the GEP pilot  will soon start in Indonesia, the countries with the largest Arabic speaking and Muslim populations, respectively.

Egypt exemplar

Egypt’s GEP was launched under the auspices of the US-Egypt Business Leaders Forum, the latest manifestation of a decades-long collaboration between wealthy Egyptian and American businessmen, such as Taher Helmy, co-founder of Hamza, Helmy & Partners Law Firm, and Steven Farris, chief executive officer of the Apache Petroleum company, Egypt’s largest US investor. Helmy and Farris, co-chairs of the Forum, explained that after years of economic and financial reform, Egypt is ready to receive support for entrepreneurship.

“Reforms [have been] substantially successful, the private sector controls over 75 percent of the Egyptian economy…our primary focus has shifted to entrepreneurship and education,” Helmy told The Daily News Egypt.

Egypt’s willingness to undertake controversial reforms won it recognition with the GEP pilot program, and Clinton urged other nations to follow suit: “We need to encourage your governments to make the legal and commercial reforms needed to encourage trade, allow for the free flow of ideas [and] lower the barriers to launching new businesses,” she said in her speech.

Endeavour sets the pace

Although the efficacy of the State Department and its affiliates in promoting innovation in MMCs remains untested, Endeavor is an independent organization already active in the region. Initially focused in Latin America, the non-governmental organization began giving entrepreneurs access to mentors and angel investors in Morocco, Turkey and Egypt in recent years and is contemplating a Beirut office.

Endeavor’s method — identifying successful small businesses and helping them grow to scale, becoming role models for other entrepreneurs — represents what Elmira Bayrasli, policy and outreach coordinator for Endeavor Global, refers to as a “paradigm shift” — offering support to successful local initiatives rather than descending with a list of externally-generated goals.

“We don’t apply a cookie-cutter model. We have a framework that is driven by finding local business leaders and local networks that will then define how their own framework is built,” she said at Endeavor’s International Selection Panel in Cairo in March. “It’s really up to them to drive it forward in the vision they feel is best suited to that country.”

The event brought Endeavor Board Chairman Edgar Bronfman to Egypt to advise small business owners hoping to partner with the group. Bronfman, the CEO of Warner Music Group and heir to one of the wealthiest families in Canada, explained his commitment to facilitating entrepreneurship, particularly in the Middle East: “I’ve always believed that the more people that have jobs, the greater the opportunities for peace and the fewer opportunities for anger and frustration,” he said. “This is true everywhere, but especially important in the Middle East.”

His statements echo those made by Clinton, who listed a strong economic foundation and a stable middle class as “essential” to good governance and the rule of law. While the words “democracy” and “US security” enter the vocabulary of the Obama administration with less frequency than that of his predecessor, its policies represent the unspoken understanding that Bush had the right agenda but the wrong methods.

As a congressman, Obama’s record for democracy promotion included co-sponsorship of the Advance Democracy Act, while in 2005 he introduced the Democratic Republic of Congo Relief, Security and Democracy Promotion Act. Monetary support for democracy in the Middle East may re-emerge after trust has been re-established by the US’s respect for sovereignty and international rule of law.

America comes first

In the meantime, civil society groups in Egypt, Jordan and other countries have watched funding disappear. United States Agency for International Development told the Associated Press that cuts resulted from a drawing down of military aid, especially to Egypt.

The DC-based Project on Mideast Democracy reported that funding in Egypt fell from $10 million in 2008 to $2.6 million in 2010, and that only groups registered with the Egyptian government may receive funding, a hindrance for those attempting to monitor the upcoming presidential election in 2011, for example. Perhaps in an attempt to counterbalance this loss of civil society funding, the Obama administration has sponsored social entrepreneurship in the region.

Ultimately, the Presidential Entrepreneurship Summit’s role as a catalyst may be more important than the event itself. For example, it inspired the recent Arab World Social Innovation Forum in Cairo, hosted by international social entrepreneurship NGO Ashoka and attended by representatives from Microsoft, Price Waterhouse Coopers, the Arab League and USAID, among others.

However, this one summit should not be taken as a sure sign of fundamental change in US policy in the Middle East. Although the White House may seem to have changed its methods, it will undoubtedly continue to pursue policies to promote what it considers best, both for the region and for its own interests.

June 3, 2010 0 comments
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Feature

Bred to kill

by Executive Editors June 3, 2010
written by Executive Editors

For the aficionados, dog fighting is more than a sport — it is a platform to play God with the violence of Darwin’s natural selection.

“I have Hitler’s mentality,” says 35-year-old Mike Kennel, a pseudonym he chose to maintain anonymity. “I aim for humans to advance, just like I am allowing these dogs to advance — I only let the most intelligent marry each other and the strongest marry each other.”

On the outskirts of Beirut down a winding road off the Hadath highway, an iron gate opens onto a secluded path bordered by agricultural land. Yet the organically grown plots, the picturesque greenery and the peaceful ambiance camouflage a farm of another kind: This is doggie boot camp.

A seemingly abandoned building at the end of the path houses dogs enrolled in a rigorous training regimen, and on the other side of the clearing, leafy fichus trees shade a square fighting arena, in which they are trained to tear each other apart.

Apart from fulfilling his competitive lust, Kennel claims he stages fights to test for specific traits to ensure the preservation of the species.

“I check for the dog with the stronger jaw, the strongest mind and the longest breath, and I use it for the selection I breed. To test it, I need to put it in the ring,” says Kennel. “We believe in the rule of the jungle. We believe in the survival of the fittest, because the fittest will make stronger offspring, and prevent the extinction of the animal.”

When these canine “ultimate fighters” are in the ring, the faceoff is brutal. American pit bull terriers (APBT) have been bred for their capacity to fight and inflict maximum damage. It is also their “gameness,” or ability to attack regardless of their physical condition, that is one of their most appealing attributes for their masters.

APBTs have a predisposition to tolerate pain through anesthetizing compounds that their bodies naturally secrete. The selection and genetic make-up, rather than the use of any drugs, says Kennel, have allowed the development of strong, feisty pit bulls that are born with a predator’s instinct to hurt other dogs.

What started for Kennel as a fascination with animal competitions at age 12 led him, by 16, to become a professional dog-fighter, trainer, breeder, trader, handler and referee; in other words — a dogman. Today he says it is also a lucrative business, but one that he declined to quantify to avoid litigation by auditors from the Ministry of Finance.

Kennel owns 75 dogs that he trains and breeds; 25 are APBTs, which are the only species he raises for fighting purposes. Kennel’s work in breeding and training has earned him a region-wide reputation: in his workshop he builds self-powered treadmills that he sells for $600 around the Middle East to improve the cardiovascular fitness of the dogs without exhausting them.

Dogs also wear weighted collars, usually four kilograms, to increase upper body strength, and their biting power is improved by having them chomp on a hanging rope from which they are suspended for extended periods. Kennel has also developed strict nutrition regimes complete with vitamins and minerals to complement dogs’ training.

A puppy is trained until the age of two before entering the ring for the first time. Formal matches are usually arranged two months in advance to give time for training, with the details — such as the wager of each owner and the weight class of the dogs — drafted into a contract for the competing parties to sign.

Lord of the ring

Just before formal matches dogs are weighed to ensure they adhere to the agreed weight category, and if not, the party in breech of the contract pays a penalty, usually half the value of the bet, or an average of $2,000, to cover the cost of the training. The opponent can then also choose to cancel the bout.

After passing the weigh-in, the dogs are washed to remove any possible poison hidden in their fur. Handlers then bring the animals into the pit, or “ring” — a four meters by four meters square with walls up to 75 centimeters high. They hold the dogs by their hips behind “scratch lines” in opposing corners as the dogs prepare to attack.

The referee stands in the middle of the ring, ready with a wooden or plastic “breaking stick,” which is the only way to pry open a pit bull’s locked jaws. At the signal of the referee, handlers release the dogs for the first “scratch” — dog fighting terminology for an attack — and the animals leap at each other in a fever of bloodlust. 

“We don’t tell the dogs ‘Go’,” said Kennel. “The dog has an instinct to go on its own. If we have to invite the dog to the fight, we don’t want it.”

At the fight Executive attended last month, the dogs became entangled in a “dance of death” standing on their hind legs, then took turns mauling each other, quietly encouraged by their respective handlers with words the dogs were conditioned to hear when striking opponents.

During the first scratch, the dog that locked its jaws on its opponent first won a point. The dogs were then pried apart with the breaking sticks — no one flinched as blood oozed from the wounded animal.

At this point in the match the owners and the referee will check for the dog’s gameness.

“Even if the dog gets wiped, if it still has gameness then it is selected for breeding,” said Kennel.

At the second scratch, the dog that lost the first round will be released to attack his opponent. If after a 10 second count by the referee the dog still has not attacked, then the other dog must scratch and secure a lock on its opponent. If the second dog fails to attack as well, then the dogs are even and the match is over.

“Both dogs will go bye-bye,” explained Kennel with a hint of sarcasm. “They can’t be sold, there is no breeding, and their value will be zero even if they cost $10,000.”

When a dog loses, it gets a loss added to its title record, and if it does not display gameness it will never be bred or enter a ring again.

After each fight, Kennel injects the dogs with antibiotics to speed their healing. He confirms though that unless it’s a finishing game, where a dog has to be kept in the fight until its last breath, no owner would let his dog die in the ring. 

“No one kills a dog worth $4,000,” he said, though Kennel admitted that dogs often die the day after a fight due to injuries.

As a result, medical care for the dogs before and after the fight is essential in preserving their value and improving its performance.

Gambling on gore

With the blood sport underway in the ring, betting outside goes into full swing, with 10 percent of all bets going to the referee and ring, which usually go together. Kennel says there are three rings in Lebanon for professional fights.

“There are no limits for bets,” he explained. In Gulf countries, bets can reach up to $30,000, and can include automobiles and property.

Kennel says that in Lebanon,  the bets don’t go beyond $5,000, and the big betting is usually limited to a handful of insiders. The dog-fighting circle is secretive and clandestine, with heavy emphasis put on the anonymity of participants given the involvement of some of the country’s prominent businessmen, according to sources that also declined to be identified.

The price of a gladiator

As a fully-fledged dogman, Kennel takes a lot of pride in his lineage breeding. The price of a puppy ranges from $500 to $1,500. After that, prices increase with the level of training, the titles a dog earns and the owner’s emotional attachment to the animal.

With each match victory, a dog’s value normally doubles; three wins earns a dog a champion’s title, and five wins earn it the title of grand champion, which can elevate the price to as much as $50,000 in Lebanon.

Kennel’s endeavors have evolved into a highly disciplined enterprise compared to “street level” dog fighting. Sources, which asked for anonymity because they have received threats from dog fighters in these other circles, describe them as being associated with criminal networks, with bouts staged in secret locations that are only revealed to the participants shortly beforehand via SMS mobile messages. Dogs fighting in these settings tend to be subjected to extreme abuse, often deprived of food and forced to live in darkness to increase their aggressiveness.

Kennel, who sees himself as a professional, abides by the “Cajun rules,” a detailed list of guidelines related to dog fighting created in the 1950s in the United States. He argues that street dog fighters are amateurs and ignorant of important information pertaining to adequate dog training, such as the fact that darkness weakens the eyesight of a dog and makes him aggressive towards people in daylight.

“A dog that is aggressive towards humans is not allowed in [our] ring,” he says.

In fact, Kennel now recruits amateur dog fighters to join his training camp, teaching them how to be professional handlers and trainers in the creation of true canine predators.

“I recommend that anyone who has a pit bull, go to a professional to learn… the value and the love of the dog,” said Kennel.

There are currently no laws in Lebanon that pertain to dog fighting. Kennel says he believes that dog fighting should be regulated, and that those who fail to ensure a safe and secure environment for their dogs should be penalized. Inspection and regulation should be the job of the government, he says, and not that of animal rights activists who don’t understand the emotional and financial value of game dogs and want to “castrate” them.

“Why don’t we castrate Mohammad Ali? Or all the people who like boxing?” says Kennel.

“We don’t have to be enemies with animal rights activists, we can work together,” he said. “Instead of stifling those who are addicted to this sport, we can teach them to do things right. This is a dangerous sport and safety procedures have to be respected.”

June 3, 2010 0 comments
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Deadly dithering in Yemen

by Abigail Fielding-Smith June 3, 2010
written by Abigail Fielding-Smith

If your knowledge of Yemen was gained entirely from donor briefings and government statements, you might think it was a politically troubled, developmentally challenged country, like Egypt on a bad day.

When the international community was spurred to ‘do something’ about Yemen, following the attempt to take down a United States-bound airliner by a would-be suicide bomber — who apparently trained there — the impulse was not to send over emergency relief, like Ethiopia in 1984, but to set up working groups to investigate Yemen’s complex developmental challenges.  

But as donors deliberate the best way to boost the country’s long-term institutional capacity, increasing numbers of its citizens are living on the margins of survival. In the capital, Sanaa, when your car slows down even for a few seconds, thin fingers will inevitably begin tapping on the window begging for money. Poverty and privation is even worse in the countryside.

On a trip to Al Mazraq refugee camp last year, I saw people who had fled the war in the northern province of Saada shouting angrily into the sandy wind that they had nothing — no means of ensuring their own survival. Their situation has since become much worse.

Yemen may superficially be a part of the Middle East — a “middle income” region — but its statistics are in a different league. Child malnutrition rates are second only to Afghanistan, and a recent shortfall in funding to the World Food Program (WFP) means that, quite simply, more children will die this year as their plates go empty.

“We are expecting the moderately malnourished children to fall into a severe malnutrition state, and those who are already severely malnourished will sustain life-long implications,” said Wisam al-Timimi, a nutrition specialist with UNICEF in Yemen. “Their survival will be jeopardized.”

According to the WFP, one in three Yemenis, some 7.2 million people, suffer from chronic hunger and 1.7 million people will become unable to meet their basic nutritional requirements with seasonal food price rises this summer. Lack of funding will force the WFP to withdraw assistance from 80,000 beneficiaries in July, and it has already almost run out of food for the 270,000 internal refugees from the northern conflict — between Houthi insurgents and government forces — who are completely dependent on aid handouts. As of last month, the agency began distributing half rations to trickle out the supply longer. 

“Anyone arguing this is a nightmare scenario wouldn’t be wrong,” said one humanitarian expert I spoke to.

Its not just the WFP that is suffering a funding crisis — an appeal for $177 million in humanitarian assistance for Yemen launched by a coalition of international agencies last year has only received around 30 percent of this target. 

“It’s puzzling,” said Gian Carlo Cirri, head of the WFP in Yemen. “There’s lots of talk about helping Yemen, but very little money.”

Some speculate that the Haiti earthquake has caused donor fatigue. Yemeni political analyst Abdul-Ghani al-Iryani blamed the government in Sanaa — which disputes the WFP’s findings — for not making food security a high profile issue due to the potential political embarrassment. 

“The callous position of the government on the issue of hunger is costing each year more lives than all the wars that Yemen has seen since its founding,” said Iryani. “The most vulnerable group is too powerless to protest.”

Another theory is that humanitarian aid has become the victim of development aid policy concerns . 

“Expectations that Western donors would give more money have not materialized,” said the Deputy Finance Minister Hisham Sharaf. Western delegates at a conference held in London after December’s failed bombing attempt didn’t pledge new funds to the country, but instead vowed to direct $5 billion donated following a 2006 conference, much of which remains untouched.

Donor desire to implement a considered development strategy that avoids propping up a system notorious for its corruption and inefficiency is understandable, but the country’s immediate humanitarian needs are too acute to be held hostage by such concerns. This is not only a moral issue, but a strategic one as well.

Protests have already begun in Saada after the announcement of half-rations for internal refugees, and there are fears the $35 million WFP funding shortfall for food supplies to feed these people could destabilize the situation in the north, where a fragile ceasefire is holding.

After all, $35 million is, as Cian Carlo Cirri keeps telling reporters, a relatively cheap price for stability.

ABIGAIL FIELDING-SMITH  reports on the Middle East for the Financial Times

June 3, 2010 0 comments
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Editorial

Tomorrow’s zeal

by Yasser Akkaoui June 3, 2010
written by Yasser Akkaoui

Last fall, I was teaching a business ethics course at the American University of Beirut and explaining the ‘double bottom line,’ the concept that in modern business, a healthy bottom line must also include a firm commitment to corporate social responsibility and corporate governance. Two of my students, Omar Touma and Linda Sawaya, asked me how Executive could call itself a responsible company, and presumably claim to have a double bottom line, when it prints 25,000 copies of a magazine every month.

They had a point. So much so that Executive immediately set about improving its green profile. We started by only sourcing paper made from wood grown in sustained forests, while internally we began recycling. But it still wasn’t enough. We still felt we were falling short of being on good terms with our carbon footprint.

It was only back in the classroom this spring, this time teaching strategic management, that the final piece of the jigsaw fell into place. Another group of students suggested that for every magazine we distribute, we should make a commitment to collect up to three more, of any publication, for recycling.

We are empowered and inspired by the enthusiasm, awareness and talent shown by our young business leaders. What is all the more remarkable is that they have demonstrated such maturity in the face of a society that has dragged its heels in embracing the ethics, not only of the modern business community, but the wider world. That they have done so is a testament to the power of the media to cross borders and positively affect us all.

I am telling you this, not only because I am proud of the way Executive has reacted in its own small way to embrace best practice, but because the solutions came from our youth, our future leaders. It is the duty of our generation to ensure that they, and the generations that will follow as they mature, have a world worth inheriting.

Finally, it was with profound sadness that Executive learned of the sudden death of Melhem Karam, who for 50 years was head of the Lebanese Journalists’ Union. He was 78.

As a journalist and writer, he penned many works including ‘The Storm,’ ‘A Thousand and One Nights’ and ‘The Secrets.’ Karam also founded the Arabic weekly Al-Hawadeth, the daily Al-Bayraq and the magazines La Revue du Liban and Monday Morning.

He will be missed.

June 3, 2010 0 comments
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Economics & Policy

Tightening inflows

by Executive Staff June 3, 2010
written by Executive Staff

Total net private financial inflows to the Middle East and North Africa are projected to be $12.9 billion in 2010, a decrease of 23 percent from 2009’s $16.8 billion, according to the International Monetary Fund.

The estimate accounts for 6.1 percent of global inflows to emerging and developing economies, projected at $210 billion. By comparison, Latin and Central America are slated to be the largest recipients of net private inflows in 2010 with $80 billion, or 38 percent of the total. The IMF’s predications, however, vastly differ from those of the Institute of International Finance, which forecasts inflows of $709 billion globally.

The IMF forecast net private direct investment to the MENA region at $71.7 billion this year and $77.8 billion in 2011, up from $70 billion in 2009. The body also estimated foreign currency reserves to increase by $60 billion in 2010 and $71 billion in 2011.

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Finance

Checking up

by Executive Staff June 1, 2010
written by Executive Staff

Lebanon saw a 38.7 percent rise in check clearing activity in the first quarter of 2010. According to figures released by the Association of Banks in Lebanon, total cleared checks came to $16.9 billion. The increase was attributed to a 43.1 percent surge in foreign currency denominated checks, 22.7 percent higher than in local currency.

Activity peaked in March, up by 56.6 percent on the same month last year, and 17.4 percent and 32.6 percent higher than January and February, respectively. The rise in foreign currency denominated checks has led to an increase in dollarization to some 80 percent in the first quarter versus 78.4 percent over the same period in 2009.

June 1, 2010 0 comments
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Israel’s parting shot

by Nicholas Blanford June 1, 2010
written by Nicholas Blanford

At a sharp turn in the road between the villages of Meiss Al Jabal and Houla along the Lebanon-Israel border, a small patch of scarred asphalt still sparks my memory from a decade ago.

May 23, 2000 marked the third day of Israel’s headlong retreat from South Lebanon and the border zone it had occupied for 22 years. The western and central sectors of the zone had already collapsed, with militiamen from the Israeli-allied South Lebanon Army (SLA) fleeing across the border the night before.

At around noon, I was watching a procession of captured SLA armored vehicles grind through the nearby village of Aytaroun when I heard my name shouted and saw a familiar face emerge from a shop. It was Abed Taqqoush, a long-time driver for visiting BBC journalists.

Abed hurried over, grinning broadly, eyes bulging with excitement. He handed me a can of Pepsi and slapped me on the back.

“Isn’t this amazing?” he said, gazing at the chaotic scene around us.

We were joined by veteran BBC Middle East correspondent Jeremy Bowen and his cameraman Malek Kenaan. Bowen said he was going to Aadayseh where the SLA had blocked the road, denying access to Marjayoun and the eastern sector of the zone still held by the Israelis. Taqqoush and the BBC team departed and I followed a few minutes later. Along the way, at Meiss Al Jabal, I pulled over to call The Times newspaper.

As I spoke to one of the editors there was an explosion just to the north, loud enough to be heard down the phone line in Wapping, east London. A thin column of smoke rose gently into the sky ahead. Motorists heading south flagged me down and said Israeli tanks were shooting at cars. It was a little later that I learned Taqqoush had been killed in the explosion.

The BBC crew had stopped on a corner opposite the Israeli settlement of Manara. Bowen and Kanaan left the car and walked 100 meters back down the road to record a news piece, using as background Manara and the wreckage of a car in which a civilian had been killed by Israeli tank fire the day before.

Bowen, who was wearing a distinctly unmilitary pink shirt, saw what looked like a military observation position at Manara and waved to indicate his friendly intentions. Taqqoush remained in the car chatting on the phone to his son.

An Israeli tank positioned on the border beside Manara fired a single round into his Mercedes, engulfing the car in a ball of fire. Bowen was speaking to the camera when the blast occurred; wreckage from Taqqoush’s car flew into Kanaan’s camera shot.

The horrified pair ducked behind a wall and were pinned down for an hour by machine gun fire while the flames stripped Taqqoush’s car to its metal skeleton. It was not until four hours later that Taqqoush’s body was removed.

The Israeli army subsequently claimed that the tank crew at Manara had suspected Bowen and Kanaan of being Hezbollah men preparing to fire an anti-tank missile.

Pink shirts are not the customary garb of Hezbollah fighters, nor do their anti-tank teams fire from the middle of roads in broad daylight within clear view of their target and begin the operation by giving a cheery wave to their intended victims.

The Israelis killed several other civilians during the withdrawal, all of them by tank fire. But Taqqoush had the tragic distinction of being the very last Lebanese civilian to be killed during Israel’s occupation of South Lebanon.

The next day, the Israelis completed their withdrawal from Lebanon. The blackened carcass of Taqqoush’s car was towed away a few weeks later.

While, over time, long grass and thistles smothered all traces of the burnt earth, a melted patch of asphalt remains on the road where his Mercedes was engulfed with flames — a permanent cicatrix to jolt my memory and somber my mood every time I pass by.

 

 NICHOLAS BLANFORD is the Beirut-based correspondent for The Christian Science Monitor and The Times of London

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Time to lay new tracks

by Paul Cochrane June 1, 2010
written by Paul Cochrane

The Middle East and the United States have a lot in common when it comes to transportation. Both places have a love affair with the automobile and both had long-distance train networks well over 100 years ago. Both now also have an over abundance of private vehicles clogging up the roads while railways and public transport systems are substandard, if they exist at all.

There is a clear correlation that can be drawn here, between the rise of the car and the demise of rail transportation. But what is more noticeable on a macro-level is how the Middle East and the US stand out from nearly everywhere else in neglecting and underfunding their respective railway networks. Around the world, from South America to South Korea, investment in railways, metros and high-speed trains has been ongoing for decades.

In recent years a growing web of tracks has enmeshed the globe, with China alone earmarking $300 billion over the next decade to build 25,000 kilometers of high-speed railroads. By comparison, the US has just 735 kilometers of high-speed track. The Middle East has, well, zero.

The tide seems to be turning in the US, which had long practiced a policy of “starving the beast” — underfund the railways then shut them down due to inefficiency — until the American Recovery and Reinvestment Act in 2009 allocated $13 billion to improve the railways over the next five years.

It’s been a long time coming but the Middle East is also finally undergoing a railway renaissance. Jordan and Syria are both reinvesting in train lines that were built in the early 1900s and once linked Damascus to Mecca, part of the famous Hijaz Railway.

Meanwhile, in the Gulf Cooperation Council investment in railways could reach $109 billion over the next decade, according to a report by the Kuwait Financial Center. Saudi Arabia is expanding its railway network, which will include a $1.8 billion high-speed railway between Mecca and Medina; Qatar is spending nearly $25 billion on railways and a metro; and the United Arab Emirates is mulling a railway network to compliment the Dubai and Abu Dhabi metros.

All three countries would then link to the 2,177 kilometer GCC rail network slated to open in 2017. With an estimated cost of $25 billion, the network will run from Kuwait through Saudi Arabia, Bahrain, Qatar and the UAE before the last stop in Oman, or possibly Yemen. This will be money well spent, as an effective railway will better connect the people and economies of the region and reduce the environmental impact of travel.

What is remarkable is how long it has taken the GCC to roll out a regional track, despite its obvious benefits, and to not have done so as a priority over other major infrastructure projects. The same incredulity can be applied to Lebanon, with the government squandering the opportunity in the early 1990s to implement a comprehensive railway network alongside all the other post-civil war reconstruction work. A train line running down the coast between Tyre, Beirut and Tripoli would be a dream; connecting Beirut to Damascus beyond a fantasy.

But Lebanon may yet take part in the Middle East’s railway revival. The French government announced in May that they plan to fund a study to rehabilitate Lebanon’s coastal railways, which would be a start. The traffic situation around Beirut is appalling, and is set to get even worse as more cars pile onto the roads. It is the same in pretty much every major city in the region.

The public will be hoping that for once, talk of improving Lebanon’s transport network goes beyond the planning stage. But judging by some of the discourse on transportation heard in Beirut of late, they shouldn’t hold their breath.

Earlier in the year Beirut’s muhafez (governor) came up with a creative idea to solve the city’s traffic problems: sidewalks should be no wider than one meter. And in 2005, during discussions of the national master plan, investment in public transport was dismissed with the claim: “Lebanese like their cars and don’t like public transport.”

Considering the problems that the region’s cities face in terms of congestion, pollution and infrastructure, governments need to get serious about public transport planning. Their citizens deserve better than smaller sidewalks and clapped-out old taxis: it’s time to wean people off their love affair with cars and start laying tracks.

PAUL COCHRANE is the Middle East correspondent for International News Services

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Ill placed pride

by Alice Fordham June 1, 2010
written by Alice Fordham

There was a tone of triumph after Iraq’s elections. Western diplomats crowed that the polls were as democratic as any in the Arab world, ever. An American military commander told me he even yelled “attaboy!” to the Iraqi troops who kept the country relatively secure as people cast their ballots on March 7.

World leaders paid tribute to Iraqis who had committed to democracy. Even as a post-election vortex swirled and bombings filled a political vacuum, people stressed that the elections had been an achievement. As one British politician put it, Iraq was on its way to becoming a “beacon of democracy” for the Middle East; the withdrawal of American troops, which depended on successful elections, is now set to begin at the end of August.

But this election was held up with the scaffolding of an American-led international presence, which bullied and wheedled a recalcitrant Iraq into holding a poll. Although the voting had a veneer of credibility, it was not exactly a model of democratic process, and without help, it would not have happened. For there to be any crowing, the diplomats would have to be able to look to the next parliamentary elections, to the Iraq of 2015, and say with some certainty that they would be as democratic as those held in March.

The chances of that are slim. Without American support, the Iraqi government as it now exists would struggle to hold an election. The March poll happened only after telephone calls from Washington to Kurdish leaders to persuade them to stop stalling electoral legislation. All political parties — except the Sadrists — came to the United States embassy for lessons in how Iraq’s convoluted election system worked. While US soldiers were not directly responsible for security in the cities, their training is still the backbone of the Iraqi security forces.

There is also little commitment to democracy among Iraq’s leaders. Politicians showed a strong tendency toward tactics that were more than dirty politics, from the exploitation of rules to disqualify candidates for links to the regime of former President Saddam Hussein, to Prime Minister Nouri al-Maliki’s threatening to invoke his powers as commander-in-chief in calling fraud on the results, in which his rival Ayad Allawi won a plurality of the parliament seats. Security may have held during the elections, but in the aftermath, coordinated bombings — which killed dozens — have sharply increased in frequency, as have assassinations, largely of Sunni leaders.

Allawi, who campaigned on a platform of secularism and was supported by most of Iraq’s Sunni Muslims, claimed 91 parliamentary seats out of 345, two more than Maliki’s State of Law party. But he will probably be sidelined; a grand Shiite coalition is being formed, whose power will likely leave Allawi’s voters feeling disillusioned with democracy, deepening sectarian rifts.

The electoral framework is also shaky, symptomatic of a country where institution building has taken second place. Laws have been contested throughout the electoral process and the judiciary, which rules on legal disputes, is corrupt, as is the government — the fourth most corrupt in the world, according to Transparency International. Also, ordinary Iraqis continue to live without reliable electricity or clean water. Basic infrastructure, let alone the regeneration of the roads, schools and banks that the country needs, is still lacking. The recent revelation of secret prisons for Sunni Arabs shows that brutal human rights abuses are still prevalent, and it seems likely they are used for political ends.

Even with its current international presence, Iraq can only manage what John McCain called a “messy, but effective” democracy. As the country’s security forces grow in strength, it is unlikely to return to the sectarian bloodbath seen from 2005 to the end of 2007. But as oil revenues begin to pour into the country, the money will reinforce a government that tends toward autocracy, corruption and disinterest in the principles of democracy and human rights.

The US, the UN and the international community should spend less time trying to convince the world that democracy has landed in Iraq, and more time working on building law, the parliament and infrastructure, so the country does not backslide as they leave.

Perhaps then, Iraqis, who have suffered so much, might get something close to the country they deserve.

ALICE FORDHAM is a Baghdad correspondent for The Times of London

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