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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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Comment

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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Economics & Policy

How peace pays

by Josh Wood June 1, 2010
written by Josh Wood

For the past 32 years, UNIFIL — the United Nations Interim Force in Lebanon — has been a thread in the fabric of life in Lebanon. While most mentions of UNIFIL relate to Lebanon’s numerous conflicts with its southern neighbor and violations of the UN-mandated Blue Line that ostensibly marks the border with Israel, there is another face to the peacekeeping mission: its economic impact.

Over the past year alone, UNIFIL spent $32 million on contracts with local Lebanese firms, according to UNIFIL spokesperson Andrea Tenenti. UNIFIL’s nearly 13,000-strong military force and civilian staff also pump millions of dollars into the local economy through privately purchased goods and services – and the mission says that it is the largest single employer of Lebanese citizens in the south. In addition, in an effort to improve its public image, the mission invests millions of dollars every year in building infrastructure for local communities and offering direct aid to the population of South Lebanon, which is among the poorest areas of the country, having endured the 22-year-long Israeli occupation.

While UNIFIL is by no means an economic savior for the south, it is certainly a crutch. Its continued presence has provided a steady stream of income for the local economy for more than three decades, with the amount of money being spent soaring in recent years as troop numbers have grown. After Israel’s 2006 war on Lebanon UNIFIL rapidly began increasing its personnel numbers, from less than 2,000 before the hostilities to around 11,500 military personnel by the end of 2006.

These new troops were not cheap: UNIFIL’s 2006 to 2007 total budget topped $495 million, a 543 percent rise from the $91 million spent a year earlier.  For 2009 to 2010, the appropriated budget reached nearly $590 million.

The procurement spending spree

Most of UNIFIL’s budget is given to countries that contribute troops to the mission, money sent to cover the salaries of soldiers. While the Lebanese economy sees some of this money later through troops’ private spending, it is UNIFIL’s procurement budget for goods and services which offers the largest cash injection into the Lebanese economy.

Items on UNIFIL’s yearly procurement budget include everything from condoms to laptop computers — estimated to cost UNIFIL $136,763 and $138,500 respectively, in 2009. The most costly this year — and nearly every year — is food rations to feed UNIFIL staff and soldiers, with an estimated tab of $18.2 million.

In filling its procurement needs UNIFIL turns to companies around the world, but has, over time, shown a preference for awarding contracts to Lebanese businesses.

“As a rule, [UNIFIL] generally tries to buy most things from Lebanon — if you can find it here of course,” said Timur Goksel, a longtime UNIFIL spokesman who now teaches at the American University of Beirut.

This year, 160 Lebanese vendors and firms were awarded roughly $33 million (40 percent) of the total anticipated procurement budget of $82 million, according to Executive’s calculations.

While UNIFIL was unable to produce similar statistics for most other years, in 2007 UNIFIL spokeswoman Yasmina Bouziane told the international media that the mission was set to spend $36 million of its $90 million spending budget in Lebanon — again about 40 percent. In October 2006, shortly after the Israel-Hezbollah ceasefire, UNIFIL’s acting Chief Administrative Officer Jean-Pierre Ducharme said UNIFIL had spent $40 million on Lebanese contracts that year and that 60 percent of its total procurement budget over the last three years had been spent locally.

The largest contract with a Lebanese company has been an exclusive deal with Medco to supply fuel for UNIFIL jeeps, armored personnel carriers, helicopters and other vehicles, as well as generators. Since 2006, these contracts have totaled $50.7 million, with contracts signed in 2007 alone running at $22 million.

With UNIFIL’s increased demand for new bases and extra space on existing bases to accommodate its mushrooming numbers, Lebanese construction firms have also benefited.

The largest construction contracts UNIFIL has disclosed have been with Hanna Khoury and Brothers Company ($9.3 million), Dalal Steel Industries (at least $3.2 million), Maroun Assaf ($1.5 million) and Daher Contracting ($1.1 million).

UNIFIL’s Miguel de Cervantes base near Marjayoun — considered “the best UN base in the world” by many UNIFIL personnel — was little more than a campground in 2006. Marwan Dalal from Dalal Steel Industries said that his company provided 90 percent of the steel and prefabricated buildings used on the $16 million base, which was primarily built using prefabricated structures.

Major goods procured by UNIFIL in 2008

Major goods procured by UNIFIL in 2008 - Lebanon

Major services procured by UNIFIL in 2008

Major goods procured by UNIFIL in 2008 - Lebanon

Dalal added that the company had been responsible for similar amounts of work at other UNIFIL bases and positions.

Besides working with UNIFIL, Dalal Steel has also maintained contracts with American forces in Iraq and Afghanistan, the Lebanese Armed Forces, as well as with other UN missions across the world. While not disclosing exactly how much the company makes per year, Dalal said that contracts with UNIFIL could account for up to 20 percent of the company’s yearly business.

While arranging construction and procuring petroleum require fairly large contracts, UNIFIL also maintains smaller contracts — covering everything from gardening to mobile phones — with more than 150 other Lebanese firms.

Local jobs for local people

UNIFIL claims that its 800 or so full-time local staff make it the largest single employer of Lebanese in the area. Many more Lebanese also work with the peacekeepers on a temporary basis.

UNIFIL’s permanent local staff members are attracted by comparatively high salaries, jobs that have room for professional development and the opportunity to eventually take their career outside of Lebanon.

“Most of the Lebanese who started off with UNIFIL in the early years have now become permanent UN staff members all over the world,” said Goksel.

About 140 of UNIFIL’s permanent local staff are translators. Amal Kahawaji, a translator with UNIFIL’s Indonesian battalion, said that translators are paid about $2,000 per month – an attractive sum for young Lebanese university graduates whose average starting salary on entering the workforce is usually much lower.

For contractual workers, the jobs are also welcome but they do not reap the benefits of full-time UNIFIL staff.

Several cleaners from One World (a company working exclusively with UNIFIL providing cleaning, maintenance and landscaping services) on the Miguel de Cervantes Base said that they didn’t feel that their $500 per month salary was fair compensation for the work they were doing. However, the women, all from the surrounding villages, said that they were still lucky to have the jobs as work was scarce in the area.

All in all, former UNIFIL spokesman Goksel estimated that around 2,000 families in South Lebanon rely on UNIFIL for their livelihood.

Yoga and reconstruction

While contracts between UNIFIL and Lebanese firms clearly represent the most significant economic contribution of the peacekeeping mission, direct commitment of UNIFIL money and resources to local communities in the South also has a major impact on the area.

Civil Military Cooperation (CIMIC) projects are aimed at capturing the ‘hearts and minds’ of local residents and improving the public’s perception of UNIFIL.

“Quick Impact Projects” are the most common CIMIC operation. These small-scale projects cost up to $25,000 a piece and are primarily aimed at reconstruction and infrastructure building.  Examples of such projects include building sports facilities in villages and renovating schools.

The UN funds $500,000 worth of these projects a year — enough money for 30 projects in 2009.  Individual troop contributing countries, however, fund the majority of the projects. In 2009, Italy led the field, completing 112 projects worth $2.1 million. The Korean contingent completed 25 projects, totaling $1.3 million.

UNIFIL also provides a host of other activities within the local communities, from clearing unexploded ordnance to hosting free health clinics and even Yoga and Taekwondo classes, organized by the Indian and Korean contingents respectively.

Last year, UNIFIL’s clinics and medical teams treated more than 40,000 local patients, and since the beginning of 2005, a total of 150,000 people have received such treatment.

While Yoga might not have the same tangible benefits as other contributions such as free healthcare, UNIFIL stands by these endeavors, saying that they improve the quality of life for residents. Educational courses, such as language and computer classes, also help build skills to boost residents future job prospects.

A home away from home

On the tree-lined roads leading up to UNIFIL’s Miguel de Cervantes base near Marjayoun, Spanish flags fly outside of shops and locals greet foreigners with a friendly “hola, como estas?” At the Mirage Bar, camouflage-clad men drink $2 Almaza beers while their comrades scope out the prices of Hezbollah souvenir items and electronics next door.

This scene — repeated in permutations across South Lebanon — is a direct result of combining foreign troops with comparatively high disposable incomes and entrepreneurially minded members of the local population.

“If every soldier spends just $1, it will be very good for the economy,” said Jallal Ramal, who runs the PX (military jargon for an on-base store) at UNIFIL position 8-33 on the Lebanese-Israeli frontier.

While it is difficult to calculate exactly how much money UNIFIL soldiers and civilian staff regularly spend in the local economies of southern Lebanon, it is certainly far higher than Ramal’s $1.

Countries that contribute troops are given $1,028 per month per soldier by the UN. Additionally, the UN directly pays soldiers $1.28 per day for serving in Lebanon. As this wage is well below the standard salaries offered in some — especially Western — troop contributing countries, some contingents’ home countries subsidize this pay quite heavily. 

Other, poorer countries pay their soldiers directly out of the UN-provided stipend, though not necessarily always the full $1,028 per month.

Neither the diplomatic missions of most troop contributing countries nor UNIFIL headquarters in Naqoura were willing to comment on troop salaries for the various contingents, making it difficult to ascertain exact troop spending across the board.

However, Lieutenant Colonel Mar Guslin of the Indonesian battalion estimated that each soldier in his unit spent a minimum of $100 per month in the local economy. 

With around 1,000 troops stationed on the battalion’s Adchit Al Qusayr base, this would equate to at least $1.2 million spent on consumer goods and services in the surrounding villages each year.

Salaries for Spanish soldiers are much higher. Including the UNIFIL stipends and subsidized pay from the Spanish government, soldiers’ salaries start at 3,500 euros ($3,954) per month, according to Colonel Rafael Ropero Bolivar, a liaison officer at the Spanish embassy in Beirut. 

Pay grades go all the way up to 8,000 euros ($9,866) per month for Spanish generals serving in Lebanon.

With much more disposable income than other contingents, it is reasonable to assume that troops from European countries spend money more freely in the local economy.

While admitting it is difficult to calculate exactly how much cash a soldier might splash, Lieutenant Colonel Ismael Muro, a public information officer for the Spanish contingent, said that the average soldier might spend between $200 and $330 per month, with some spending up to $670 monthly.

By the lower-end estimates Muro supplied Executive with, annual local spending by the 1,076-strong Spanish contingent would be more than $3 million.

The presence of peacekeepers with money to burn has spurred a growth in shops, restaurants and services that cater exclusively to UNIFIL. 

“I don’t have any local customers,” said Khaled Nahra, the owner of Casa Elias, a large gift shop near Marjayoun that sells everything from blue beret-wearing stuffed animals to hard liquor and ninja throwing-stars to its peacekeeping clients.

In some of the predominantly Shiite Muslim southern towns, such as Naqoura, market demand has outweighed Islamic conservatism, with shops and restaurants selling alcohol for soldiers.

As stores catering to UNIFIL across the south expand their warehouses and the mission’s gargantuan headquarters in Naqoura sprawls even further in a flurry of construction, it is apparent that the word “interim” has lost its meaning.

With troops entrenched in the south for the foreseeable future, companies, communities and families in the area can look forward to continued economic benefit from the restive reputation of the land south of the Litani.

June 1, 2010 0 comments
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Real Estate

Q&A – Mark Sleiman

by Nada Nohra June 1, 2010
written by Nada Nohra

Creative Solution for Housing is a Lebanese real estate advisory and consultancy firm. Established in 2009, the company aims to introduce a ‘pay as you grow’ housing loan scheme for aspiring home-owners with limited incomes.

Executive sat with Mark Sleiman, the company’s managing director, to discuss the new scheme and Lebanon’s lending market.   

E  What is ‘pay as you grow’?

We are trying to become the middle point between the real estate developers, the buyers and the banks, and to service all three from a financial and a real estate perspective.

The ‘pay as you grow’ scheme is different from the conventional housing loan, because payments adapt to income over time. People’s income increases, so it makes sense that the payment rises in line with their income.

It exists in the United States but in a very different way. We changed the financial formulas that they use and we registered the concept as intellectual property.

I find the buyer the appropriate property within his budget and I manage the financing with the bank. We are reaching a new market which could not afford to buy houses before.

E   Has introducing a new concept to the market been challenging?

When buyers are committing to paying double what they are paying now in 10 years time, it is a big commitment. [The challenge is that] you have to first educate people about this type of product, which takes time.  

E  Are their special requirements to obtain the loan that differ from conventional requirements?

[The requirement] depends on the bank. This is only a loan repayment concept. We give [banks] a method of calculating payments based on interest and growth in income. The rest is all based on the bank.

E in Lebanon income does not grow with inflation, so how will you calculate the increase in payments?

We took all the numbers available at the Central Administration of Statistics and we realized that we have 4 to 4.5 percent growth in yearly income on average. We capped this growth to 3 percent. The person whose income today is $1,600, we consider that in 15 years it will be $2,400. It is very conservative but we don’t want to take the risk.

It is hard to calculate the numbers [but] you can predict the minimum. This product is not for everyone, there is a profile for the [right kind of] buyer, what he studied and where he is working.

E  If the buyer’s circumstances change, will the plan change?

We can refinance, reschedule, or give him more money. The basic point is flexibility.

E  Lending is becoming increasingly available. Will this affect demand and prices?

Yes, but the demand [we are targeting] already exists. In Lebanon [there is demand for] between 50,000 and 70,000 apartments per year. There are around 25,000 marriages per year, 7,000 divorces; all these create a certain housing demand. What we are trying to do is give that demand access to the supply… to target the real demand, not the speculators or investors, but those who have a real need for housing.

E  Do you think there should be regulations to stop price hikes?

You cannot do that in a free economy. I think rents will increase substantially, as it is the only alternative to buying. When rents rise, [property prices] will drop. Maybe not in prime areas like Achrafieh, but it could do, for example, in Metn or Keserwan.

What is scary is that the leverage ratio is increasing. The banks are financing up to 95 percent of the [cost of a] house, and some banks even 100 percent, depending on the person. This is what is dangerous and is what caused the financial crash abroad.

June 1, 2010 0 comments
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Real Estate

Eating away at the edges

by Nada Nohra June 1, 2010
written by Nada Nohra

“Buy land, they’re not making it anymore,” said the American author and humorist Mark Twain. Following Twain’s advice in a small country like Lebanon makes sense, as both the country’s geography and booming real estate sector have pushed quality plot prices to a premium.

That Lebanese can buy land in Lebanon is a fairly uncontentious issue; allowing or restricting foreign ownership in the country is, however, highly controversial. The issue has created a schism in the political arena between those who lobby for an open economy to attract investment, and those who want to fight speculation and preserve Lebanon’s identity.

The Maronite patriarchy, among the opponents of unfettered foreign ownership, recently issued a 175-page report entitled “Niyyel elli baad aandu marqad aanze bi Libnen,” which, roughly translated, means: “Anyone who has enough space in Lebanon for a goat to lay down should count themselves lucky.”

The report questions the accuracy of current land ownership data and proposes amendments to the current law. On the other hand, market experts Executive spoke to said that unless foreigners can pack their land in their luggage and head to the airport, there is nothing to worry about.

“A lot of people are making it sound a lot scarier than it is,” said Karim Makarem, director at Ramco real estate advisors. “I think it is very political and I think that what you will hear in general is a lot of scaremongers, depending on their political affiliations.”

The law

The foreign ownership law was issued back in 1969 and last amended in 2001. It states that any individual without the nationality of an “internationally acknowledged country” is forbidden to own real estate in Lebanon, thus preventing Palestinian ownership.

Moreover, it says that no foreigner can own more than 3,000 square meters of land suitable for construction or of a built-up area — replacing the previous ceiling of 5,000 square meters — unless approved by a special decree signed by the Council of Ministers, Lebanon’s Cabinet.

Both Father Camille Zaidan, director general at the Maronite Center for Research and Development, and Mohamad Chamseddine, policy research analyst at research firm Information International, said that it was easy to obtain a special decree. However, due to political disagreements and rising awareness of the issue, the number of decrees granted has lately decreased.

“In the last five months, only two decrees have been issued,” said Zaidan. 

Ramco’s Makarem added that “it is easy if you are somebody particularly important in the Arab world… It used to be more common pre-2005, but since then we have seen less.”

The law also stipulates that foreign ownership of land should not exceed 3 percent of the total area of each qadaa, or district. The current law also allows for 10 percent foreign ownership. The cap applies to land ownership by companies which are majority-owned by foreigners, in whose case only 50 percent of land owned by the firm is considered under the restriction. The General Directorate of Land Registry and Cadastre (GDLRC) is required by the law to update these numbers every six months and stop foreign land registration when the maximum is reached. As Executive went to print, the last time the figures were issued was July 2009.

The owner also has to develop the land within five years of the purchase, a deadline which can be extended once by the Council of Ministers. The Lebanese Company for the Development and Reconstruction of Beirut Central District (Solidere), a publicly traded company, is considered a special case and was allowed to freely purchase land for 25 years (starting 2001), but cannot sell to foreigners unless it is in accordance with the law.

The problem

The effectiveness of the law in controlling and monitoring foreign ownership of real estate in Lebanon is questionable. A major concern are large, unsurveyed swaths of Lebanon not recorded at the GDLRC. Paperwork for the sale of unsurveyed land is handled at the office of the local mokhtar (mayor or governor) and is not reported to the GDLRC. Consequently, there are no central recordings of sales to foreigners in these areas. Chamseddine explained that the largest unsurveyed areas are in the Bekaa Valley, Mount Lebanon and South Lebanon.

“Regardless of the restrictions and the laws we issue to limit foreign ownership, the numbers will not be specific since there are hundreds of areas which are yet to be surveyed,” said Zaidan. 

The report issued by the Maronite research center includes numbers from the Ministry of Finance stating that in 2007, 51 percent of Lebanon had yet to be subject to a final survey. However, according to Chamseddine, around 30 percent of Lebanon is currently unsurveyed, as in recent years the government has hired private firms to conduct the surveys, which are expected to be finished within 4 years.

Also of concern, says Zaidan, are foreign-owned companies registered in Lebanon that own land and foreign-funded Lebanese who purchase real estate. In either case, effective control of the land is not in Lebanese hands. Quantifying these numbers is difficult however, as on paper at least, it is all Lebanese owned.

“A Lebanese came to negotiate with a close friend of mine in order to help him buy 600,000 square meters of land in Baabda for a foreigner,” said Zaidan as an example.

“There is a certain number [of people purchasing property in this way], but how much… no one knows,” said Georges Chehwane, chairman of Plus Properties.

Officially, when foreign land ownership in a qadaa hits its limit, foreigners will only be able to buy from each other. However, the concern is that the official numbers vastly understate the foreign ownership, given the unrecorded sales. 

“After the research that we have done, I am convinced that in Baabda they’ve already trespassed the three percent, and Beirut is definitely more than 6.51 percent,” said Zaidan.

Does it really matter?

Opinions diverge on whether to implement stricter restrictions on foreign ownership, or allow the free market to exercise its power over the sector.

Zaidan says he is worried that high foreign demand is fueling speculation and inflation. He adds that middle class Lebanese can no longer afford property in Beirut and are being pushed out of the city, as wages are not rising in accordance with inflation. According to Ramco real estate advisor’s research department, residential property prices in Beirut have increased some 120 percent on the lower end and, on average, 150 percent for high-end property in the last five years.

 “The main question is: Where are we heading?” Zaidan said. “We are entering into a social crisis that has no solution.”

He suggested that the foreign ownership issue should be monitored through better documentation, with more legal restrictions on the purchase of real estate by non-Lebanese. 

On the other hand, advocates of a free market say that the foreign purchasing in Lebanon is still a very small percentage of the total, and is thus too insignificant to have an impact on the real estate sector.

Elie Harb, president of Coldwell Banker, said that the laws restricting foreign ownership should be repealed; arguing that it only represents some 2 percent of the real estate market. Both Harb and Makarem also said that many foreigners are currently selling their land or apartments, and sales to foreigners have gone down, mainly due to the financial crisis.

“The day we put up rules to ban foreign ownership we are going to scare many investors,” said Makarem. “So I think those consequences outweigh the consequences of allowing foreign ownership.”

George Sioufi, chief operating officer of GRE properties, said that he also encourages foreign ownership of properties. He is concerned that it might hurt the market if international owners start selling their properties.

“It is true that a year and a half has passed since the financial crisis started, but what if they are leaving Lebanon as their last resort?” he said. 

Building ahead

As it stands, with some 30 percent of Lebanon not surveyed, a foreign ownership law that is easily skirted, in addition to politicization, has made it nearly impossible to ascertain exactly how much of the country is owned by foreigners.

In the future, it remains to be seen whether the Lebanese authorities will answer the conservative call to implement stricter control, or if they will adopt a more liberal approach which, some experts say, is healthier for the future of the real estate market and the economy as a whole. 

June 1, 2010 0 comments
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Economics & Policy

Q&A – Paul Griffiths

by Paul Cochrane June 1, 2010
written by Paul Cochrane

DubaiAirports Chief Executive Officer Paul Griffiths currently oversees operationsat Dubai International while at the same time coordinating the launch of DubaiWorld Central-Al Maktoum International (DWC), which is slated to be the world’slargest passenger and cargo hub. He sat down with Executive to discuss thecompany’s activities.

E   Dubai International became thethird busiest airport in the world this year. The expectation is that it willbe the busiest by 2020, but could you reach the top spot before that date?

Basedon our growth projections, this is entirely possible. The busiest airport forinternational passenger traffic currently is London Heathrow with around 60million per annum, whereas we will reach 46 million this year and 52 million bythe end of 2011. As you know, recent proposals for a third runway have beenshot down, which significantly constrains Heathrow’s future capacity. Paris,Frankfurt, Hong Kong and Amsterdam also face capacity constraints, althoughthey are less severe and have slower growth rates. All told, we believe we canget to the top spot within the next several years.

E   What challenges are you facing tohandle such exponential growth in passenger and freight traffic?

Theprovision of timely and efficient capacity, both in terms of infrastructure andairspace, is a top priority. We have aggressive plans in place to boostcapacity at Dubai International from the current 60 million passengers per yearto 90 million by 2018 and to complete the world’s largest airport at [DWC], bythe midpoint of the next decade for 160 million passengers. Our goal is tostreamline processes and implement technologies that allow us to do this asefficiently as possible.

E   While Dubai International is thebase of carrier Emirates, what are you doing to attract more airlines?

Dubai’sopen skies policy combined with top-flight infrastructure provided atcompetitive rates has served us well to date. With 130 airlines offeringservices to 220 destinations on six continents, we already provide consumerswith a compelling range of options. That said, we are always looking to growthose numbers and do so primarily through direct and ongoing consultation withexisting and prospective client airlines.

E   DWC began cargo operationsrecently. Did this have any affect on Dubai Airport’s freight operations? Ifnot, why is that the case?

Thetwo operations are complimentary. They provide attractive options to our clientairlines whose commercial and operational requirements often vary. To date we have19 cargo airlines signed up to operate at the new airport. We expect thatnumber to increase in the years ahead as slot availability for cargo freightersdiminishes and air freight volumes reach capacity limits at DubaiInternational.

E   The Strategic Plan 2015 is forDubai to be the region’s aviation hub. What role will Dubai Airport play inthis plan, given the development of DWC? What will happen to DubaiInternational when DWC is fully operational?

Ithink it’s safe to say we are already the region’s aviation hub and haveestablished Dubai as a leading global aviation hub. The next step in thejourney is to fully develop Dubai International’s capacity and cement itsposition as the number one international hub by the end of the decade. DWC willtake us to the next level serving as the world’s largest airport with room for160 million passengers and 12 million tons of freight when it is completed atsome point in the mid-2020s. It is too early to say what will happen to DubaiInternational at that point.

 

 

June 1, 2010 0 comments
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Since its first edition emerged on the newsstands in 1999, Executive Magazine has been dedicated to providing its readers with the most up-to-date local and regional business news. Executive is a monthly business magazine that offers readers in-depth analyses on the Lebanese world of commerce, covering all the major sectors – from banking, finance, and insurance to technology, tourism, hospitality, media, and retail.

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