Executive Magazine

UNESCO tackles physical, psychological and systemic educational challenges

by Mona Betour el-Zoghbi October 28, 2020

written by Mona Betour el-Zoghbi

UNESCO began coordinating school rehabilitation efforts after the massive port explosion in Beirut on August 4th. The Ministry of Education and Higher Education (MEHE) has requested UNESCO to lead a wide international effort to coordinate the rehabilitation of public and private schools in the Beirut governorate. In this role, UNESCO will be coordinating partnerships, finance, implementation, monitoring, and reporting in relation to the rehabilitation of the damaged schools. On
August 27, 2020, UNESCO launched an international fundraising appeal, ‘LiBeirut’, to accelerate international response for the rehabilitation of
schools, historic heritage buildings, museums, galleries and the creative economy.

Putting education, culture and heritage at the heart of reconstruction efforts is paramount because the explosion resulted in diminishing or eliminating access to education for over 85,000 children and youth. According to the latest available reports from MEHE, at least 199 schools (90 public, 109 private), 5 technical and vocational compounds, including 20 buildings, as well as 32 higher education facilities in Beirut and surrounding areas have been damaged or destroyed.

The severe wreckage of these academic institutions in Beirut and neighboring areas has therefore affected thousands of learners who are unable to access and learn in a safe and healthy environment. This makes rehabilitation, reconstruction, the provision of distance learning, as well as psycho-social support, priorities in an education system that was already facing significant challenges.

These challenges are posed mainly by the country’s financial and economic collapse, which makes it more difficult for parents to cover their children’s education costs and needs; the political and security crisis which have caused multiple school-closures throughout this academic year; as well as the COVID-19 pandemic which has impacted the accessibility to school, disrupted the learning process, and added the sudden complexity of distance and online learning.

The MEHE Beirut Blast Committee

The Ministry of Education and Higher Education formed the MEHE Beirut Blast Committee with the aim of following-up on the school rehabilitation
process, mechanisms, and outcomes. Rapid and thorough assessments of the damaged facilities have been conducted and coordinated by multiple partners, including MEHE, UNICEF, and UN-Habitat. Overall, the response priorities identified by MEHE include the complete assessment of rehabilitation and equipment needed for schools (public, private, Technical and Vocational Education and Training (TVET) institutes), as well as the
provision of solutions to accessing remote learning, mainly in terms of devices and connectivity.

In order to ensure safe learning environments that are conducive to quality learning for all, the schools’ rehabilitation and refurbishing will be based on MEHE’s Effective School Profile (ESP) framework, including the guidelines on Water Sanitation and Hygiene (WASH), which address safe
drinking water, proper plumbing infrastructure, toilets and latrines, etc.) and accommodating children with physical and mental/learning disabilities.

As per initial assessments and estimates by the UN and MEHE, around $42 million are required to respond to the rehabilitation needs of public and private schools, universities, and public TVET facilities for rehabilitating and reconstructing the damaged buildings. Around $22 million are also
required to ensure access and connectivity to remote learning for students and teachers affected by the Beirut blasts.

As of early October 2020, funds have been committed by diverse partners including UNESCO, UNICEF, Education Cannot Wait, the Swiss Agency for Development and Cooperation, Education Above All, and others. The UN Office for the Coordination of Humanitarian Affairs (OCHA) also launched a Flash Appeal for immediate humanitarian response, including for the support of rehabilitation and education facilities under the Beirut Blast Response.

Long term implications and damage

In addition to coordinating UN efforts to support education in Beirut, UNESCO will also directly support the rehabilitation of schools, thereby supporting at least 30,000 students to access safe learning environments, with funds it has already raised through the international initiative, Education Cannot Wait (ECW) over an 8-month period running between October 2020 and June 2021.

It is important to realize that the negative impact on education goes beyond the physical damages of structures, equipment, and furniture, but encompasses a complex web of long-term implications, including post-traumatic effects on learners, increased risk of school dropout, and increased vulnerability of marginalized children including those living in poor households which can no longer afford to cover school fees or even the remote learning devices, not to mention those who are refugees, and those who have special needs or learning difficulties

Children and youth who have been affected by the Beirut explosions may have suffered physical losses, including accessibility tools (electricity and
internet connection) and electronic devices, which may hamper their access to and participation in education in the academic year 2020-2021, which may largely be online due to Covid-19 precautions.

Accordingly, and in addition to the immediate physical rehabilitation and refurbishing of the schools, UNESCO is also supporting the distance learning and psycho-social support (PSS) systems, especially as MEHE has announced blended learning (combination of in-school and on-line) in Fall 2020. For example, UNESCO will develop and distribute distance learning toolkits to teachers and students, secure tablets to vulnerable teachers who cannot afford them along with user-guidance manuals, and train educators and teachers in distance learning methods and tools, especially on-line teaching.

In addition, UNESCO, with financial support from the King Salman Humanitarian Aid and Relief Center (KSRelief), has developed a programme called “Endi Kodra”, which means “I have capacity”, targeting more than 300 elementary school children and their parents, who were exposed and affected by the Beirut explosion. The objective of this programme, which started in October and is on-going for at least the next 3 months, is to support these children and parents in coping with, and recovering from the traumatic experience and learning to deal with the stress, anxiety and fear.

UNESCO is also planning on developing training programmes and toolkits that target teachers in particular, in order to build their competences in providing psycho- social and emotional support to the students affected by the explosion and who may suffer from post-traumatic impacts.

Ultimately, education remains an essential dimension for the reconstruction of the social, economic and political fabric of Lebanon. Rehabilitating the academic institutions and improving the overall learning environment is one of the basic conditions for the rightful access to education, fighting for a
brighter future for the generations to come.

October 28, 2020 0 comments

Opinion poverty Special Report

Why direct support is more efficient than subsidies and how to transition

by Haneen Sayed October 28, 2020

written by Haneen Sayed

Before the Beirut port explosion, which took the lives of close to 200 people, injured thousands, and destroyed swaths of the capital, the Lebanese people faced a deteriorating economic and social situation: the banking crisis, the COVID-19 pandemic, and a 10-year humanitarian crisis caused by the unprecedented influx of displaced Syrians.

The pre-explosion economy was already in a severe contraction, with real GDP growth in 2020 expected to be well into the negative double digits. Job losses were very high with more than 220,000 jobs temporarily or permanently lost between October 2019 and February 2020, according to local publisher Infopro. More recent results from web-based surveys conducted in April-May 2020 by the World Food Programme showed that one out of every three Lebanese has been pushed into unemployment, while one in five respondents faced income reductions.

The severe contraction of the Lebanese economy is estimated by the World Bank to result in more than a doubling of extreme poverty to 22 percent in 2020 from 10 percent in 2012, and an increase in overall poverty to 45 percent in 2020. This translates into approximately 1.7 million people (350,000 households) falling under the overall poverty line, of which 841,000 people (156,000 households) will be under the extreme/food poverty line.

To partially mitigate the impact of the crisis on households, the Banque Du Liban (BDL) allows wholesalers and the government to import wheat, medication, and fuel at the rate of LBP 1,507 per USD for 85 to 90 percent of the value of the items (versus the market rates). In May 2020, a basket of key essential food and non-food commodities was also included in the subsidy scheme, providing the rate of LBP 3,900 for 100 percent of the value of the items. The cost of this scheme in 2020 – being the difference between the BDL rate and that of the black market – is estimated by the BDL to be in the billions of dollars, creating a drain on scarce foreign exchange reserves.

In addition, the Government of Lebanon (GOL) has been running other subsidy schemes prior to the economic crisis to ensure basic services to portions of the population and support the income of specific economic groups. These included, but are not limited to, the annual budgetary transfer to Electricité du Liban (EDL), wheat (price) subsidy, interest rate subsidy, rent subsidy, tobacco subsidy and other in-kind subsidies. The average annual budgetary transfers to EDL alone over the past decade averaged 3.8 percent of GDP.

By contrast, Lebanon spends very little on social safety nets (SSN) for the poor and vulnerable. In 2020, such programs are estimated by World Bank staff to reach no more than 0.35 percent of GDP – far less than the 1-2 percent that most countries spend.

Direct support to families versus general subsidies

Governments do often use generalized subsidies to lower cost of living for poor households and to shield households from price fluctuations – hence, Lebanon is not alone in its approach. However, subsidies are a blunt and inefficient instrument. They can be regressive, benefiting the rich more than the poor. IMF studies show only 7 percent of fuel subsidy spending in poor countries benefits the poorest quintile of households, while 43 percent benefit the richest quintile.

In Lebanon, only 24 percent of the poorest quintile own motor vehicles versus 80 percent of the richest quintile, according to Household Budget Surveys administered by the Central Administration of Statistics in 2011 and 2012, hence much of the gasoline subsidy is consumed by the rich. Subsidies are also unpredictable on state budgets, prone to leakages, and difficult to target. They can also have distortionary effects on economic incentives.

International experience shows that a shift in government expenditures from generalized subsidies to direct support to the poor could result in an improvement in public welfare. Hence, the recent policy direction of the Government of Lebanon and the BDL to shift away from price support (FX subsides on commodities and price controls) towards direct transfers to households through a social assistance program is a step in the right direction. The price supports are unaffordable during the current crisis and are inefficient as policy instruments to help the poor and vulnerable.

However, the shift must be planned in advance and well implemented. To do so, several steps need to be taken in advance. Firstly, an assessment of the size of the price subsidy in question and understanding who benefits from it is needed. Secondly, the impact of the subsidy removal on households, especially of the poor and near-poor, and on businesses needs to be understood. Thirdly, it is critical to understand the readiness in terms of adequacy and efficiency of the existing social protection system, and social safety nets (SSN) in particular such as the National Poverty Targeting Program (NPTP).

Finally, to ensure the reform is implementable, financing of the fiscal cost of the alternative compensation scheme needs to be ensured. With high level commitment, the four steps, if commenced immediately, could be achieved in 6 months.

In Lebanon, the removal of subsidies must be accompanied by a large scale-up and strengthening of Lebanon’s SSN program such as the NPTP to reach at least all the 156,000 extreme-poor households. While the NPTP has demonstrated the ability to channel targeted social assistance to poor and vulnerable Lebanese households in the form of e-card food vouchers and health and education benefits, its impact is limited by low coverage of the poor and underfunding.

The current NPTP provides e-card vouchers to 15,000 households, and health and education benefits to around 43,000 households representing only 1.04 percent and 4.5 percent of all Lebanese households, respectively, already short of the estimated share of extreme poor and poor households even at pre-crisis levels (16 percent and 37 percent, respectively).

But reaching only the 156,000 extreme poor households with social assistance will not be sufficient to cushion the impact of price increases brought on by subsidy reform on the Lebanese population. Lebanon
may also need to consider a broad-coverage SSN program that will reach the middle class (between 60-80 percent of the population). To achieve this, several critical considerations need to be taken into account.

Firstly, Lebanon needs to invest in building the systems that must underlie an effective and transparent SSN program. A key feature of such programs is the development of a national integrated social registry – based on a unique identifier – which would serve as a gateway for people to be considered for inclusion in one or more social programs based on an assessment of their needs and conditions. Such a social registry could reduce transaction costs and increase access for citizens, produce cost-savings and efficiency of user programs, and serve as a powerful platform to coordinate social policy.

In addition, a robust grievance redress mechanism that receives citizen’s complaints and addresses them adequately must be in place. Furthermore, third-party monitoring of the program and stakeholder engagement is important for transparency and credibility of such programs.

The vital role of communication

Secondly, a well-prepared communication and out-reach campaign must precede and accompany any subsidy reform program (i.e. transforming the subsidy into a broad-coverage SSN program). International experience
demonstrates that well-planned and consistent communication is critical for successful subsidy reforms.

Making effective use of available channels to provide transparency and clarity on the role of the program, its objectives, operation rules, and results, are necessary to tackle information asymmetries and concerns of different sectors of the population. Reforms can succeed only if an informed public accepts and supports the reform’s rationale. Clearly communicating who will be impacted, and how, is vital to generate public buy-in.

Finally, and maybe most importantly, the SSN program must be adequately funded through the GOL budget. This poses a particular challenge for Lebanon at this juncture as there is no room in the budget for additional spending. Hence, it is critical to embed subsidy reform in an IMF program where reforms will be committed to and where re-prioritization is made from wasteful spending to the much needed SSN program. International funding can help fill the short-term funding needs until Lebanon can create the fiscal space in the budget to self-finance its SSN program. Ultimately, there is no other path than for Lebanon to undertake much needed reforms that will reduce poverty and bring social stability

October 28, 2020 0 comments

Opinion Overview poverty

The many new faces of Lebanese poverty

by Thomas Schellen October 28, 2020

written by Thomas Schellen

No wonder the Lebanese would rather be Swiss. In a world where global average wealth, according to the 2019 global wealth report (GWR) by Credit Suisse, has approached $71,000 and the average net wealth of the Swiss was said to be top of the world at $565,000, the disparity between the average net wealth of a Lebanese adult and that of a Swiss adult would have been well over half a million dollars, with the Lebanese average net wealth estimated at $23,056 according to Credit Suisse’s GWR’s report at the end of June 2018.

The main conceptual problem with such a dream when for the sake of the dream, not considering practical and legal barriers that any foreigner faces when seeking Swisshood – is the distorted perception of the fortune of the Swiss as demonstrated by a distance between their wealth and the fact that wealth and happiness are not synonymous or positively correlated.

Concretely, a wealth-seeking dream of being Swiss would have been compelling when conditioned on biased looks at the world’s most boringly rich countries. Swiss average net wealth per adult, defined as sum of financial and non-financial assets minus debt, according to the 2019 GWR was $565,000 by mid of last year, 55 percent of which in financial assets. Median wealth – the line separating the richer half from the less affluent half in the population – by end June 2019 was just below $228,000, or about 40 percent of the mean wealth per adult. Although the bottom of the
wealth pyramid in Switzerland in the World Bank’s new Poverty and Shared Wealth 2020 report did not show anyone in Switzerland living below the $1.90/ day international poverty line (IPL) – small surprise in a country whose statistics agency sees the relative poverty line above $80/day for an individual.

Happiness: the timelessly venerated quest

A time-tested aspect of the poverty/wealth conundrum is that the sole orientation towards financial wealth and accumulation of net assets does not directly correlate with happiness and well-being. For the archetypical utopian Thomas More, the dream of 7 society was the “wise and good constitution of the Utopians, among whom all things are so well governed
and with so few laws, where virtue has its due reward, and yet there is such equality that every man lives in plenty.”

Whereas More’s views in his Utopia – such as the abolition of private property – overall contain much that disables them as recipe for constructing a society, many studies with the best-available surveying and
modeling methodologies of the 21st century support the idea that the theist intellectual More was not entirely wrong when he expressed his conviction that a nation cannot be governed justly or happily “as long as there is any property, and while money is the standard of all other things.”

For example, a recent story based on data collected by an online job search platform claims that incomes in the 25 happiest states in the United States are on average between $35,000 and $70,000 and that seven out of the ten happiest states are in Midwestern/ Northwestern landlocked areas of the USA.

More serious findings of the latest World Happiness Report on happiness in cities and countries, show that it is not the weather, but also not money
or homogeneity and small populations size that explains why Europe’s Nordic countries are consistently rated among the happiest in the world. It is rather a combination of political rights, democratic and social trust, equality and social safety with autonomy, freedom, and self-reliance that exists in those societies. Perhaps surprisingly to some, Lebanon is not at
the bottom of the 2020 happiness rankings but in the lower midfield.

All annual global surveys of happiness and wealth factors will very probably be beaten over their heads by the world’s changing socio-economic realities inIn short, global poverty is predicted to increase, inequality is expected to increase, labor pressures and job destruction will universally distort societies, and the poor everywhere will be the ones to suffer most.

“Poverty reduction has suffered its worst setback in decades, after nearly a quarter century of steady global declines in extreme poverty,” opens the World Bank’s aforementioned Reversals of Fortune report on Poverty and Shared Prosperity in 2020. According to this perspective, new poverty will afflict better educated and more urban populations when compared to the
old rural poverty concentrations in the pre-Covid-19 world. Poverty is projected to push between 88 and 115 million people worldwide into extreme poverty within the current year and be driven into an indeterminate future by convergence of three risk factors, the COVID-19 pandemic and associated global recession; resurgence of armed conflicts; and climate change, which the report characterizes as “a slowly accelerating risk that will potentially drive millions into poverty”.

“Findings about the new poor have important policy implications, in particular for the design of safety nets and for measures to rebuild jobs and strengthen human capital in the recovery phase,” the report admonishes
under a more granular view, indicating that countries facing social safety net (SSN) challenges may need to ramp up support to poor households
that are already covered by SSN programs, but that these same countries might struggle to activate such nets for people in urban informal sectors who are hit by job and income losses.

On the bright side, the immense attention to poverty that has been expressed by the United Nations, World Bank and International Monetary Fund; the political and economic forums of developed countries; and a plethora of multilateral development agencies and civil society organizations, represents a groundswell of interest and attention to poverty
problems in the neoliberal capitalist world of the 21st century that may alter geopolitical processes and development trajectories.

Wealth and poverty in this sense are sides of the same monetary coin. For the longest time the default state of human living conditions was some form of subsistence economy that usually was almost, or totally, moneyless and minimalist in terms of market interactions until the market, profit and money focuses of the capitalist mindset gradually took over (subsistence
farming persisted could be found in Europe and the United States well into the 20th century). It could be fatal at the current juncture to forget that poverty, like wealth, is a construct of social organization that is anything but inevitable.

The changing faces of poverty

The issue of increasing poverty in Lebanon has commanded significant attention in the past twelve months: the difficulty to access liquid cash; the implications of inflation; the uncontrolled indexing of many goods and services; the skyrocketing US dollar exchange rate on the unsupervised market; job losses and pressures on day laborers in the informal market;
job destruction through bankruptcies and company closures in the formal economy – all weigh heavy on the national psyche. It is not really worth repeating that these burdens have been exacerbated by the COVID-19 driven global recession, as well as local lockdowns and responses to the pandemic.

In this context, the oft-repeated headline assessments of rising national poverty are of very limited use for understanding and charting courses to remedy either imported refugee poverty, newly revealed urban poverty that has apparently been on the increase for years, or long-standing rural poverty in Lebanon.

A neglected aspect of the poverty narrative in Lebanon is that according to an elaborate study, the regional poverty impact of the Syrian conflict was
most pronounced in Lebanon. “Poverty [in Lebanon] is 7.1 percentage points higher in the counterfactual than the actual outcome,” said the paper.

Beiruti urban poverty, in previous years, seemed to be more of a hidden poverty in the sense that many people, according to observers from longer-established charities and NGOs, were concealing their real state of need and destitution. Until this summer when escalating poverty forced the former middle class to reveal their destitution. Moreover, Lebanon’s fate was rocked once again and most brutally into total awareness of the spectre of Lebanese poverty on the evening of August 4, 2020. In this context, the first measurable result of the spike in Lebanese poverty has been the humanitarian response that was implemented over two months in the direct aftermath of the disaster. On the international and macro levels, this response found its first prominent expression through the pledging of nearly $300 million in assistance at the French-organized International
Conference on Assistance and Support to Beirut and the Lebanese people on August 9. A notable further international expression of support soon
after came from UNESCO’s global appeal for emergency responses to save Lebanon’s health, cultural heritage, and education capacities.

Spike in humanitarian aid

Meanwhile, tangible and measurable on-the-ground aid was documented by the United Nations’ Office for the Coordination of Humanitarian Affairs
(OCHA), starting with a first situation report on August 7. The OCHA numbers are as follows; over more than two weeks after the port explosion, 200 food parcels were supplied by the World Food Program to communal kitchens in the worst affected areas, facilitating distribution of some 3,000 warm daily meals .By the end of August, over 50,000 hot or ready-to-eat meals were distributed in 11 neighborhoods and the number of persons in need of protection services was estimated by OCHA partners at 152,200.

One month later, the number of distributed meals was stated as more than 92,000. Of the identified 152,200 needy individuals, 47,500, or slightly over 31 percent, have been reached by OCHA protection partners as of September 23. Maps published by OCHA one month after the disaster showed the approximate areas of extreme economic vulnerability and humanitarian responses by organizations that partnered with OCHA. Humanitarian disaster response by its emergency nature is not ever a glass that is half full but always a jug that is never full enough.

However, these OCHA numbers are an indicator of compassionate actions that in all likelihood is unable to capture the full extent of this altruism and solidarity. This is the implication of a multi-tiered stream of support – one part coordinated with international help, one part organized through local volunteerism and local NGOs, and one part informal and based on family,
clan and neighborhood human networks. Informal support has been observable in a myriad of daily anecdotal incidents around the affected area and cannot be fully quantified and measured, however much a hypothetical or practical observer might have tried.

Local responders also coordinated their efforts more formally through several initiatives, an example being the Ground-0 Relief Committee that was initiated as an active civil society organization within ten days of
the explosion. Young Ground-0 volunteers from mid-August onward were combing the streets of Achrafieh, giving out aid, collecting information on needs of area residents and receiving applications for specific support
such as home repairs and reconstruction.

Challenges of fighting poverty

“Ground-0 focuses on emergency relief in addition to the response to protect the most vulnerable and work on long term reconstruction and recovery,” explains the new initiative’s chairperson, former minister
and well-known media personality May Chidiac.

Chidiac tells Executive that Ground-0 partnered with several local and international NGOs and entities that have long experience addressing vital needs for development, reconstruction, and humanitarian assistance, including health assistance. In this regard, Ground-0 delivered meals and foodstuffs to families and individuals, first-aid and medical assistance in
addressing about 1,500 injuries in the first week after the blast, additional medications and mental health support for traumatized children, and a rehabilitation plan for damaged dwellings.

“But fighting poverty is difficult,” Chidiac continues. “It is not a simple job, because it needs transformation and change.” She elaborates that this participatory and collaborative approach requires firstly to create a common goal to fight poverty and create jobs under a multi-stakeholder
approach. This approach should be inclusive of private, civil society, and public and municipal stakeholders, and entail work on a national roadmap strategy of trans-sectarian and corruption-proof “well-defined organized collective actions”, she asserts.

Juxtaposed with the initiatives of long-standing charities, international NGOs, newly formed civil society initiatives, and informally acting volunteers, is the absence of a national, governmental, strategic
action plan that addresses poverty and labor.

Executive is presenting a lineup of insights from the best researched international stakeholders in poverty mitigation among Lebanese, resident Palestinian, and Syrian refugee populations on the following pages.

October 28, 2020 0 comments

Beirut Port explosion Opinion Special Report

The role of the diaspora in healing Lebanon

by May Nasrallah October 28, 2020

written by May Nasrallah

The sudden economic and financial collapse, the scarcity of resources, the social unrest exacerbated by a political crisis, all these have left Lebanon facing the abyss of a failed state and the impending disintegration of the country’s social fabric. The currency is in free fall, prices of basic goods are skyrocketing, there are liquidity shortages, in efficient governance, scarcity of jobs, collapsing educational and healthcare systems, failing institutions… and the list goes on. Living conditions have become untenable. More than 50 percent of Lebanese are currently living below the poverty line.

The August 4 explosion of the Beirut Port exacerbated the situation to an even more dire level. For many Lebanese this was the last straw, and many families have thrown in the towel as a new wave of emigration has started with hundreds of thousands leaving over the past two months alone. A heartbreaking conclusion for many, and a deep loss for the nation.

Lebanon has had a long history of emigration. So much so that the population of 4 million in Lebanon is known to be far trumped by its diaspora, which is thought to top 16 million (including multiple generations). Hence, its magnitude and impact on the country and its economy is substantial.

The Lebanese diaspora has proven to be versatile, adaptable, capable, hardworking and driven. In many industries, such as finance, consulting, medicine, education, industry, design – to name a few – they have risen to the top of their fields. As an example, members of the Lebanese International Finance Executives (LIFE) organisation alone amass over 850 such leaders, globally.

The diaspora stands as a source of pride to the Lebanese, and their impact is felt in the country with an average of $7 billion to $8 billion of remittances per annum sent to Lebanon. This has spurred the massive growth of the banking sector over the years and supported the economy for decades. By October 2019, the total deposits in the banking sector reached north of $175 billion against a GDP of less than $50 billion, representing the highest deposits/GDP ratio amongst all emerging markets and amongst the highest in the world, peaking at over 400 percent.

Today, Lebanon is a broken country. What can the diaspora do? And what is its role in supporting the rebuilding of the country and the redesign of what a new sustainable Lebanon could look like? As we look at numerous efforts supporting the provision of aid to Lebanon, there is no doubt that Lebanon’s strength and resilience lies in its people, not its failing governmental institutions and its corrupt political “leaders”. In the aftermath of the Beirut blast, the Lebanese people, from all regions, backgrounds and walks of life, mobilised to support their fellow citizens, to rescue, to clean and to aid, tirelessly and selflessly.

The diaspora mobilises

The diaspora has also mobilised globally. Even before August 4, relief efforts were being organized to respond to the humanitarian crisis that Lebanon was facing, and to address the increasingly acute levels of poverty resulting from years of economic deterioration. Funds were raised and disbursed for food, medicine and overall support.

In the aftermath of the blast, millions of dollars were collected to support the people of Lebanon. Many Lebanese rushed to support NGOs that took over the responsibility of relief efforts to compensate for the gap created by an ineffective government without a crisis management plan.

LIFE, a non for profit organisation established 10years ago to bring Lebanese professionals in the diaspora together to support each other, the next generation, and Lebanon, actively worked on several relief initiatives over the past year.

Last November, LIFE hosted a “Solidarity Dinner” in London, raising more than $1.7 million in donations to expand its scholarship programs, focusing on supporting university education for the Lebanese youth with most promise and in most need.

Subsequently, with the growing economic and financial crisis, LIFE launched two emergency social and humanitarian funds to support the provision of food, medication, and other necessities to the most vulnerable communities across Lebanon, working with well vetted NGOs in Lebanon.

Following the explosion on August 4, in a desire to leverage the collective strength of the Lebanese diaspora, LIFE partnered with other like-minded organizations such as Social and Economic Action for Lebanon (SEAL), LebNet, Jam hour Alumni(US/Europe) and Kuwait-America Foundation, to form the Beirut Emergency Fund 2020 (BEF). Inits fundraising appeal, BEF focused on supporting hospitals and NGOs working on shelter and medical needs; physical and mental health; and the rehabilitation of households and SMEs. By the end of September, over $8 million had been collected, and disbursements are still underway to meet the ever-growing needs.

Moreover, many Lebanese professionals reached out to their global firms and employers, urging them, either through their corporate social responsibility budgets or through matching programs, to donate money to Lebanon relief efforts.Various LIFE members organised through their respective organizations and contacts donations of medical supplies and equipment that were delivered to their intended recipients, such as hospitals in Lebanon. This collective effort has lead to tens of millions of dollars of donations being sent to Lebanon in both cash and in kind.

While humanitarian and relief efforts are of extreme importance in today’s deteriorating situation, the diaspora also has an important role to play in the longer term development of the country, one that will ensure that Lebanon has stronger foundations on which to build its future. This includes advising on a roadmap for the revamping of the economy, restructuring the banking sector, supporting the reconstruction of the infrastructure through their respective expertise, supporting reforms and the development of vital sectors such as electricity, water, energy and telecommunications.

As important as these initiatives are, they cannot bear fruit without the necessary legal, administrative, governmental, institutional, judiciary and security frameworks, which are currently missing. A new civil state needs to be built bottom-up, and the diaspora has an important role to play in supporting the Lebanese on the ground map out the path to a well-governed, well-structured, new Lebanon.

Next steps to avoid stagnation

The diaspora can further help through continued pressure points on the international community and local power brokers to accept structural and fundamental reforms, leading to much needed external funding under an IMF plan. This is the only path to a real turn around in the economy, to stop the hemorrhaging, and to save the Lebanese people from certain disaster.

In the interim, we must continue supporting those in most need. In particular, the young, the backbone of our country and its future. Our youth need to believe in a brighter future and the diaspora has an equally important role to play in supporting education, mentorship, job creation, and job placements.

Moreover, attention should be paid to job creation in Lebanon. For example, promoting Lebanon as a hub for outsourcing services, working with tech companies and VCs to boost entrepreneurship, supporting nascent local businesses, such as art, handicraft or fashion, as well as social enterprises. This, of course, on top of ongoing support to boost the industrial and agricultural sectors through provisions of export currency, necessary materials and markets.

To this end, LIFE has further launched a support program for technical trainings, coding skills, and employ ability, targeting hundreds of young Lebanese working with local organisations. Another example, Jobs for Lebanon, a global reaching hiring platform, has called up on the diaspora to employ local talents. These kinds of initiatives aim to help create long-term stability in an otherwise deteriorating economy.

We are undoubtedly facing an untenable situation in Lebanon, and many are starting to lose hope fearing the worst. But I believe that if the Lebanese in the diaspora continue to volunteer their time, capabilities, means and resources, we can be a catalyst for much needed change. Change that can turn the dial on creating a better future for our compatriots and ultimately, our country.

October 28, 2020 0 comments

Diaspora Leaders Opinion Special Report

The search for Lebanon’s new diaspora

by Thomas Schellen October 28, 2020

written by Thomas Schellen

Two months after the Beirut blast and one year into political and economic disruptions of local identities, the people of Lebanon are finding themselves divided in yet another invisible way. Some of the better-to-do individuals and families are proclaiming ‘never again’, and mean that they already have, or are seeking, to emigrate; their economic realities and very existences – homes in upscale Beirut, residential developments in the downtown, and the Achrafieh district, literally shattered.

Cuddling his infant son in the lobby of a midmarket hotel in Verdun in late August, Ahmad is a chance encounter and example of such an émigré. Giving only his first name, he says he left his home in the Saifi Village after it was destroyed in the August 4 explosion, will move within days to join a family business in Western Africa, and intends to never come back or create emotional bonds to his ancestral land in his young children.

The people on the other side of the 2020 divide appear to fall into one of two categories: the many comprise the first category of people – a national majority across all communities and religious affiliations – who have the burning desire to live in an easier and more secure country, but lack the top educational credentials or economic means to leave. The others – perhaps looked upon by their peers as the committed Lebanese, the idealists or just the fools – constitute the apparent minority who refuse to give up on Lebanon.

But those who depart and those who stay for one reason or another are not all the people that one must qualify under the category of Lebanese. By popular reckoning in this country over many years, the largest category of Lebanese is the diaspora. The diaspora is an allegiance group to Lebanon that left the country as fortune hunters or brain-drain, career seekers at some point from the late 19th century up to – but not necessarily including – the current traumatized wave of existentially disgruntled political leavers, and disgusted economic emigrants.

A no longer narrowly defined term in today’s context of global refugee movements, the word diaspora has for about 2000 years been associated with the dispersion of a people from their land of destiny – forced emigration under ideologically, politically, or religiously oppressive systems. Under this religious concept of divinely determined, involuntary migration, the dispersion and banishment of chosen people led to the creation of the diaspora as an identity which, for a long time, was theologically connoted and overwhelmingly understood to mean the Jewish Diaspora.

The use of the term diaspora in the age of the global mobility revolution (in the sense used by Venezuelan thinker and global influencer Moises Naim) has gradually widened in academic research to include more than a dozen diasporas or emigrant groups with diverse political, ideological, economic and even corporate determinants. However, if one wants to differentiate the diaspora from expatriates or migrants, the proper hallmark may be their attachment, reasonable or unreasonable, to their ancestral land.

Expectations versus reality

This attachment could be romantic or even reach the level of allegiance to a myth that has little semblance to the territory in question. But more importantly, self-understanding of diaspora would involve a personal commitment to the support of one’s distant family relations, non-kin persons belonging to one’s community in the ancestral land and, if needed, economic restoration of the homeland at large. In this sense, the Lebanese migrants who left their villages as much as 130 years ago and moved to Australia, the Americas, and Western Africa, formed the Lebanese diaspora long before the Lebanese conflict of the 1970s created a wave of emigration to prominent destinations such as France, Canada and other developed countries.

Public declarations (if less so, actual policies) did not tire in declaring the importance of links to the diaspora and of diaspora-generated economic inflows through remittances, savings, and investments into real estate and business ventures, as well as human capital inflows through highly-qualified “brain-drainers” who returned to Lebanon after successful careers of one or several decades abroad.

The visible and measurable benefits of diaspora involvement for creating greater productivity, however, do not live up to the high expectations, and the role of remittances has been questioned. “While remittances have helped the Lebanese economy absorb shocks, there is no evidence that they have served as an engine of growth,” a 2018 IMF paper observed.

Furthermore, efforts for better organization of the diaspora outreach were proclaimed in the 2010s, as the Lebanese Diaspora Energy (LDE) series of conferences was instituted under the initiative of the Ministry of Foreign Affairs with objectives to “celebrate” diaspora success, “promote” Lebanese heritage, “establish” connections and “explore” new [economic] opportunities.

The last emigration wave

The six years of LDE activity have produced conferences, dinners, seminars and social events galore, in Lebanon as in foreign locales with high concentrations of expatriates and Lebanese- descent persons. The tangible gains of such diaspora outreach efforts, however, seem to have been at least partially nullified by systemic shortfalls and political entanglements, just as the countless suggestions for growth strategies and structural reforms in papers authored for international development institutions fall on barren soil.

Inversely, in the aftermath of the catastrophic Beirut port explosion, the humanitarian assistance and good will provided to Lebanon saw an immediate increase and included those coordinated by diaspora organizations. Executive, investigating the state of the Lebanese diaspora’s outreach to the local community post-port explosion and financial collapse, under a sponsorship collaboration with the Konrad Adenauer Stiftung Foundation, finds that the generous outpouring of support far exceeded traditional, or regular, ties between the diaspora and the afflicted, local community.

The current and latest wave of traumatized, emigration-seeking Lebanese may not be enticed into an easy affinity with their country of recurring shocks and political disappointments – or may not be willing to support and invest in this country before reforms have proven successful over many years. A redefinition of the Lebanese diaspora, and ways to remain meaningfully connected to it, may be the need of the next few years.

October 28, 2020 0 comments

Beirut Port explosion Q&A Special Report

Q&A with notorious cyclist Lance Armstrong and investment tycoon Tom Barrack

by Thomas Schellen October 28, 2020

written by Thomas Schellen

Diaspora as a state of mental allegiance

Viewing the cityscape of Beirut’s Achrafieh district is like an invitation to rethink the meaning and the importance of the Lebanese diaspora, in a time where the capital and the entire country is in desperate need of support, including monetary assistance along with human sympathy and encouragement. Both these angles appear to be touched upon by a private initiative by American-born entrepreneur Tom Barrack, the Lebanese-at-heart global specialist in investing in distressed assets, debt, and (as of late) new digital infrastructures, who came to Beirut together with one of the most successful – and controversial – athletes in the annals of the Tour de France, seven-time winner Lance Armstrong, who was later stripped of his trophies. Executive sat down with them to take account of Lance Armstrong’s bicycling support for Lebanon, exactly two months after the Beirut Blast, and to extract economic perspectives from a conversation with Tom Barrack as one of the most prominent financial outliers in the Lebanese diaspora.

Was it your being part of the diaspora that motivated you to come to Beirut and sponsor the Bike for Beirut event with participation by bicycling legend Lance Armstrong, or was it more the general humanitarian impulse that made you say I want to do something for a city that has been exposed to such immense suffering?

Tom: Lance, who was so gracious to join me will give you his view. For me, [my connection to Lebanon] absolutely has always been more than diaspora. As a young Lebanese-American growing up in a normal family in America, I was always feeling that I had something different. What was different was this Lebanese DNA combined with the freedom and the system of America… I left my heart here and at each intersection of crisis, I am trying to help and participate in some small way, or tell the Lebanese story, or even encourage the other diaspora [members] to come home and feel it. So when this unbelievable (voice turning misty) crisis happened, [I was] feeling totally helpless and saying what else can go wrong. It is almost apocalyptic, a pandemic, a famine, a financial collapse which your magazine understands as I can see, and then one of the greatest disasters ever in history. It is mind-boggling to see how this all could occur. I felt helpless.

One thought that came to me was that Lance has been a friend of mine for 15 years. So in thinking about how to draw attention from the world outside and how to create hope among people inside Lebanon who are feeling despair, especially young people [who would be part of] the brain drain, was to take the best athlete and the best character that I knew, who had fought through hardship to succeed, and more hardship and then succeed again, to say it can be done. Lance always says that we are driving for ward but [the road] may not be straight. That was the idea [of doing this Bike For Beirut event], and to use whatever way we could use, and whatever small influence I have with the diaspora and the general financial community in the outside world, to draw attention [to the fact] that we need help.

Lance, you do not necessarily carry Lebanese DNA unless it were perhaps by a distant Scandinavian linkage. What attracted you to the idea of coming to Beirut at this moment in time?

Lance: Obviously, my friendship with Tom and his history here. But at the high level, I just like going to new places.

Do you have any first impressions to share from seeing Beirut now, as a first-time visitor in this catastrophic situation after the blast?

Lance: A lot of impressions. I kept hearing about just the psychological toll of the financial crisis, the blast, etcetera, etcetera. But we were perhaps fortunate in that [our first impression was how] we came from the airport to here. [Thus], until we walked the site [of the blast], we already sensed a certain optimism among people, which is incredible. It speaks to this country, which is a country that has been tested for a thousand years. It is in their DNA.

Did that first link for you, Tom, come from your parents, as one might naturally assume, or was the link created somewhere in the community where you grew up?

Tom: It was definitely my parents. We were a very modest family. My dad worked 20 hours a day for seven days a week and my mom was so selfless and generous. It was really my parents instilling those values: generosity, hospitality, selflessness, pride, commitment and adaptability. If you look at this, [pointing to the Beirut disaster scape] how could any community in the world adapt so quickly in the midst of crisis?

Did you have other role models that you strove to emulate in your life, role models in the business or political sense? There were for example seven very distinct Republican presidents in the United States between the time of your formative years and today. Was any one of them your personal hero?

All my heroes have been cowboys, which is why I love Lance. He has certainly been one of the greatest athletes and is one of the greatest human beings. [Among American presidents], I think President [Ronald] Reagan. President [Donald] Trump I love as a personal friend, but politically, we can talk about it. With President Reagan I was 30 and he was such a man. He was just a [speaks with emphasis] MAN. When you were in his presence, you felt like you were the only star in the galaxy. He had that unbelievable tolerance and kindness. And when you look at what he and Maggie Thatcher did with regard to the free world and the Berlin Wall, it was just amazing. I was 30 and I was in awe of the internal strength. Not of politics. I learned that. I was never really involved in politics.

But you had a political role in the Reagan administration?

Yes. But I had a political role because I worked for a law firm, and that law firm was one of the big law firms for the Republican Party. Actually, when I came [to the Middle East] for the first time I was a finance lawyer at this firm. So they drafted me later to join the administration and I thought what a fantastic way to pay back. I was 30 and I was way over my skies, I should have been in a grocery store packing oranges, and here I was living the American dream. What I learned [working in the administration] was that politics is a much different arena, and I didn’t love it. I loved him but I didn’t love the process.

You had more than 20 years of growth in business at Colony Capital between 1991 and about 2013. Following that, you had about seven lean years, almost like what the biblical Joseph was speaking of when interpreting Pharaoh’s dream. Lebanon right now looks to be in a situation of having entered some very lean years. Do you have advice to the Lebanese as to how to mentally manage this situation of hardship and with what attitude to best survive these lean years?

It is a great question. I would not be so presumptive as to assume that I have a real solution. I think part of this solution is [the example shown by Lance: what you can do with hope and courage and pushing through comfort barriers when you are in a dilemma. My diminutive Lebanese mother always used to say that God always chooses the hardest and most special stone, to chisel and hammer and beat into beautiful sculptures, and this is Lebanon.

I think [Lebanon’s confessional political] system has outrun its usefulness – so what is the answer? I think we have to stop the brain drain. If you people leave – meaning the intelligentsia and the young people – and lose hope, we are going to be in this abyss for a long time. To me the answer is what President Macron has been proposing. We need technocrats and great economists in the government to first fix the financial situation. The situation is dire. But no one is going to intervene to help while this parochial confessional system is perceived to be manipulating [the system]; and unless those leaders do the right thing and … pull back politically, [and] let real technocrats come in with the [International Monetary Fund] and the World Bank, and with President Macron and France bringing in America…

Lance Armstrong and Tom Barrack at Bike for Beirut. Proceeds from the event went to Beit El Baraka, Offrejoie, Heartbeat, and the Lebanese Red Cross.

Would you have any advice to the Lebanese people or government on how to negotiate with the IMF or the international community?

My advice would actually be President Macron’s advice. I have great respect for him and have discussed with his team on how we can help, including [the question of] how the USA can be involved in help; that is very difficult at this time. I think his path and suggestion is the right answer, he has the most imminent knowledge of all the delicacies of Lebanon and also has the tapestry of the rest of the neighborhood. The difficulty is [that] the US views Hezbollah as a terrorist group. We view Hezbollah as a political party. Thus this dialog becomes difficult. President Macron can be the intermediary and say, move the politics aside, kick the can down the road, we are not going to fight that battle – we have to fix the health and safety of the people and we have to have a financial structure that works.

By the track record of Colony Capital as a private equity group, you are a very successful person in dealing with distressed assets.

If I were to describe Lebanon as an overall distressed asset today, would you be willing to buy into this asset? That is such an interesting question. As best as I can tell, this is the oldest city in the world, before Jerusalem, before Athens, before Rome, it has seven thousand years of history and was destroyed to the ground seven or eight times, and the Lebanese and their DNA cousins are maneuvering all over the world from the Phoenician era until now, survive, adapt and prevail everywhere – everywhere but here. How can this be? I go to Africa and find [Lebanese expats] my age, the second generation and the third generation, who are business people, doctors, philanthropists, politicians, musicians. The best in class everywhere, in Africa, South America, Australia, and America and can’t do it here. I don’t know if the politician is good or bad, it doesn’t matter, it is not working. So to me, it is not a distressed asset, it is a distressed situation.

One paper put out by the Association of Banks in Lebanon described the country as asset rich and cash poor. A fund for holding public assets through one or more mechanisms was an element common to many economic rescue proposals that were put forth in the first half of 2020, including the one of the ABL and the one of the Lebanese government. Would you see a trust fund as a good way to go forward for the country and appeal to investors?

With all respect, Lebanon certainly is asset rich and people have looked and said we have an oil and gas opportunity on the border with Israel, we have an electric company that is out of control and can be privatized, the list goes on and on. That is all impossible without a reliable and predictable legal system that does not have the pangs of corruption and [the parochial interests of] these confessions. No private equity group is going to come in and take over the electric company and say we will put meters to all the houses and go around collecting money and not [bribe] anybody. It is not going to happen. You don’t have a legal system that can ensure trust until there is a way for the bureaucracy to sustain itself.

Would you yourself invest for example in Lebanese real estate, Lebanese wine, in Lebanese entrepreneurship, perhaps in startup companies, or into any other sector in Lebanon?

I think that honestly I am not smart enough and flexible enough to operate today within the confines. We have an office here that is manned by some of our best people. They operate outside of Lebanon but [the country] is way too complex for an American investor to be able to properly invest within the confines of Lebanon. The truth is that I can’t compete with flight capital that comes from Africa with no tax base that is looking for safety and a home and is not really worried about return. We have looked at projects, everywhere and every kind of project, and institutional money is not safe in Lebanon.

Would you ever be interested in investing in a Lebanese media enterprise?

If you look at what is happening in media and the disruption in those businesses, it is a very interesting place. But again, the investments have to be outside of the confines of the system that we are dealing with today. You guys are just trying to figure out how to live with lollars, so can you imagine a private equity firm coming in and saying let me invest a few billion dollars and try to figure out what to do with it? Impossible.

For a comprehensive view on your perspectives on the region, allow me to ask you about your perception of the changes in the Middle East. In particular, how will the rapprochement between the Gulf countries and Israel in your opinion affect Lebanon as we will go forward?

I am the greatest cheerleader for the Abraham accord [the agreement signed in September between the United Arab Emirates and Israel]. I think it is the best piece of Middle East legislation in the last 100 years. President Trump and Jared Kushner deserve a lot of credit and Mohammed Bin Zayed [the crown prince of Abu Dhabi] is a Bedouin genius. Why? Because laying this foundation of an Arab- Israeli alignment puts the Palestinian situation right back in Israel’s lap. It is no longer an Arab problem. It is an Israeli problem. And following behind it, as Bahrain and Oman have done, with Saudi Arabia tacitly, as [Mohammed Bin Salman, the crown prince of Saudi Arabia] is allowing the planes to fly over, starts creating the fabric that the world needs.

When we are talking about the Middle East, we all know that there is no such thing as the Middle East. Each one of these countries is its own separate nation state that is complex, so for little Lebanon, a lot relies on November 3. President Trump is a close friend and I love him as a person – I don’t love everything that he says – and I also know Joe Biden very well and I have great respect for him. Whatever the direction of the election results will be, the world will be fine. But I think it will be a very different story [for Lebanon and the Middle East] under a Democrat American regime because the focus will probably shift back toward an Iranian oriented joint operational agreement. A shift from the Sunnibacked Saudi regime to a Shia-backed Iranian regime [will] impact all of us. I don’t know whether that is good or bad, I think Lebanon survives fine in either situation, but the Abraham accord and the steps of starting to align these interests can only be good for Lebanon. And in all of the border disputes, I think the next thing that you will see is resolutions of borders which is another element of hope for the world, for the Lebanese.

Facilitation of more constructive direct contact between people is a concept that has been praised as ameliorating relations in protracted conflict setting. In your opinion, could the new agreements on Arab-Israeli rapprochement be a boon factor for Lebanon, or would that be vain thinking?

I think it absolutely can and I think it relies, as we always had, on the youthful Lebanese, educated Lebanese that have gone and been bridges of contact everywhere. As we all know, for every dollar that is made in the Gulf there is some Lebanese making a nickel. In Africa and South America it is the same thing. We have to keep our young people in place. That is when we talk about assets, to me, that success and ability [of the Lebanese] to move through all these cultures, is that bridge. But if we lose this right now, it is going to take a long time to come back.

And is it correct to say that you, as person of Lebanese ancestry, were a catalyst at the starting point of the process in the recent rapprochement between Americans and Saudis? Is that an overstatement or do you claim that role?

I take a portion of the claim happily, because I was part of President Trump’s transition program. At that time, most of the Arab countries did not know him. Nor had they expected that he would be president. I had the honor of having relationships Q&A with most of the families in the Gulf and some of the great ambassadorial extensions they had in the US. I was thus happy to make those introductions. [These Arab representatives] were impressive in the way they approached the new president with a new canvas, because rightly or wrongly, they had been frustrated with the Obama administration and the Muslim Brotherhood issue that was so confusing. So from the Arab side, especially the Emirati and Saudi Arabian side, they thought this is a new canvas. Perhaps America won’t help us but we now have an opportunity of explaining to them a different point of view. They did this brilliantly and Jared Kushner weighed in with the president and with engineering the beginning [of this new relationship]. They did all the heavy lifting and they deserve a tremendous amount of credit.

Did you introduce Jared Kushner to Donald Trump?

Not to Donald Trump. Jared married Ivanka and I met Jared when he came into the family. I think it is a printed fact that I introduced Jared to [UAE ambassador to the US] Yousef Al Otaiba and Mohammed bin Zayed which in turn led to Mohammed Bin Salman.

Is it correct that you are in the process of stepping back from the proactive role at Colony Capital that you had for the last 30 years?

Thank God I put myself out of a job. As of this July, I appointed a new CEO, Mark Ganzi. We acquired his company, called Digital Bridge. I came back as CEO two years ago with the stated intent of doing two things: switching from legacy assets to digital business and finding myself a successor. Thanks to our great teams all over the world, we transitioned about 100 billion dollars from legacy assets to digital assets and are about 50 percent digital now, [in assets such as] radio cell towers, data centers, fiber optics, logistics out of hotels, industrial, retail [etcetera].

By the official records, you are now 73 years old, which this year seems to be the best age to be at in American politics and just the right number to be in the political game as far as candidates for the US presidency. You have stepped back from your corporate role. Do you have political ambitions?

Zero

Can we hope to see more of you in Lebanon then?

Inshallah, I hope so.

October 28, 2020 0 comments

Corruption Economics & Policy Entrepreneurship Executive- Special Reports Hospitality & Tourism Special Report

Executive Magazine’s September/October issue

by Executive Editors October 21, 2020

written by Executive Editors

Dear stakeholders in Lebanon’s return, dear friends with discerning minds, and all readers of Executive,

We are proud to present you with the best-ever socioeconomic issue of Executive Magazine at this decisive moment for our country’s social and economic development.

Our September – October 2020 issue is available to read online or for download and awaits your comments and inputs as of this moment.

As always, we will be uploading the articles in this important issue also individually on our homepage. We will share them on our Facebook, Twitter, LinkedIn, and Instagram pages. Please feel free to share the entire pdf issue or individual stories with your personal and professional networks.

We thank you for all your passion and investments to rescue Lebanon and applaud your determination.

Executive Editors

October 21, 2020 0 comments

Banking & Insurance Business Business Development Finance Q&A Q&A

Lebanon’s Last Chance to Preserve and Create Jobs, is Now

by Thomas Schellen September 25, 2020

written by Thomas Schellen

In the context of Lebanon’s existential crisis, Executive inquired about the country’s new economic and social barriers – a mountain of problems formed around a nexus of ginormous poverty, towering unemployment, and a colossal need for investment that appears impossible to scale. In seeking to chart new financial and economic pathways, Executive sat down with Romen Mathieu, co-founder and managing partner of EuroMena Funds.

From your perspective as an expert on management and investment, is there any potential to create new employment opportunities in Lebanon now, or would we be chasing a vain dream to think it possible?

I do not think the question today is if the country is able to create jobs in the forthcoming period or not. The real question is: is the country able to preserve existing jobs? [We need to] forget about creating new jobs and find ways to preserve jobs. With regard to our situation, I believe that we are today in the heart of the storm. The government was due to be formed last week. It didn’t happen. Ad hoc we are hoping that the government will come up [within days]. The worst thing that can happen is that this government does not show up for the coming month. If we live in a country that will have no government in the coming month – which is a possible scenario because in Lebanon anything is possible – and if we see the first rains [of the winter season] and nothing done, I think the country will be in a catastrophe mode.

What would this scenario of no government imply and what do you see as the better alternative scenarios?

So if there is no government in the month [of October], I think the harm of the coming 30 or 45 days will be tremendous, even if one month from now we have a good government. It will take years to get back to where we are now – which by the way is much lower than where we used to be. If there is a government, and a respectable government as per international standards, [meaning] an independent government that will be able to pull in very quickly the IMF, Cedre, and the international institutions that can bring money and confidence back to the country, then the country will be able to preserve the existing jobs at least for the coming three, four, five months and then eventually be able to create new jobs afterwards.

We today have this small window, and what I am saying now is valid for hours. If tomorrow we have a bad, politicized government with the same political parties as before, or if we have no government, what I am saying

[about preserving jobs and starting to rebuild]

makes no more sense. But if this 5 or 10 percent chance that we still have to an appointed prime minister with the support of France, who is able to put together a respectable government with real experts, one that is capable to bring in confidence from the international institutions, and money, if that happens, then in the coming months that government will be able to keep [alive] the jobs that are here now and eventually be able to start creating new jobs. Then Lebanon would have reaped the only chance to come back on the map, have our own existence and be a country again. This is my position.

Do you regard the need for using this small window to start a recovery more as a mental challenge or a financial challenge?

I am not sure that [the problem] for Lebanese people is mental. I am 50. I have lived 42, no sorry, 47 years of my life in war or a warlike situation. I never knew a Lebanon without a war or a crisis. So my mental [constitution] is very strong. I can assure you. [If we take the situation] after the Beirut blast – and I was there; my family was in it – I am not sure if there are many countries that could [make a comeback] up after that. It is a major catastrophe, and yet, insurances are not paying, the government is absent, and officials are not to be seen. And yet, people are starting to build back, shops are opening back up, etcetera. It is not a question of mental [resilience]. No one can say that the Lebanese population have a weak mental constitution. I am sure that we have the most powerful mental [resilience] in the world.

So the urgent challenge is financial?

What is missing now is solid ground on which to build. If money and support does not come before the first rains to Mar Mikhael, Geitawi, and all those areas, if the port facilities and logistics companies are not supported very quickly, and if the hotels, restaurants and service companies and all this are not supported very quickly to build back, you will have tens of thousands of jobs that will be erased completely. [This is] because these young people that were working there are today either already out [of Lebanon] or applying to be able to leave at the first occasion. And once they leave the country this time, you will not fool them again – they will not come back. So [the challenge] is about bringing very quickly the financial support to these companies, small SMEs, to be able to reopen shop, bring back their employees and start [operating].

How is that best done from your perspective as a private equity player?

We as EuroMena [Fund] have proposed an initiative to our DFIs, our development finance institutions that are our shareholders – International Finance Corporation IFC, the European Investment Bank EIB, [France’s] AFD Proparco, [Germany’s] KfW [Group], the CDC [Group of the] UK, all of these. We told these DFIs that the businesses which we are talking about do not want grants. Grants are for individuals who have no one to help them. A business in Lebanon doesn’t need a grant. It needs support. These businesses, most probably, each would need a very-long-term loan with a small interest rate and the possibility to convert [residual debt] into equity. If whatever remains of this loan is not paid back after six or seven years, it is converted into [lenders’] equity in the small businesses. And then we would have a premise for building a stock market for SMEs in Lebanon. That will create liquidity and create the ability for these small companies to take money from the stock market, bring in new investors, etcetera. This is what Lebanon needs today.

This is the proposal that we are working with today with our institutions, in order to be able to take [such long-term lending] very quickly to the largest number of companies. I do not know if it will happen; it depends on the availability of funds, and this means it mostly will depend on if we have a respectable government or not. If we do not have a respectable government, not one dollar will come. If there is a respectable government, there are huge funds that are willing to come to Lebanon with large amounts to support the economy, sustain the existing jobs and create new jobs.

How far has your proposal been developed? Is this still in the design phase or have the international funds and DFIs received it, and have they responded?

It has been received and has generated a very good echo. I think it now is about waiting to see which track the country will take. Will it take the dark track – then there is nothing – or will it take the track of light? Then we definitely will have the support that we and others can bring. We as EuroMena are committed to [deploy] all the necessary efforts and all the needed human resources to be able to in the first stage maintain [jobs], and then create the largest number of jobs possible. This is how we will keep our Lebanon standing up.

Would you have a target number for how large this investment fund should be as maximum or would need to be as minimum?

There is no minimum and no maximum. We know the amounts that are needed. It will take from 50,000 to a few hundred thousand dollars per company, for tens of thousands of companies. When you have a situation like this, whatever comes is welcome and whatever comes, you employ very quickly and put it to work.

Read the complete interview, including more details on the solutions in the concept outlined above, in the Executive September/October issue. Keep your eyes peeled.

September 25, 2020 0 comments

Beirut Port explosion Overview Overview

Reversing the Trend of Emotional Lows: The Case of the Beirut Explosion

by Executive Contributor September 23, 2020

written by Executive Contributor

“The impact of a traumatic event of this intensity and scale goes well beyond what the eye can see. It is therefore important to acknowledge that victims of this traumatic event are not only limited to survivors of physical injuries, as victims include responders and witnesses who might also exhibit psychological and emotional distress. In other words, if you are a person (not even a Lebanese citizen) with ties to Lebanon, its community, or select individuals, you could very well be impacted by the Beirut Blast. In the aftermath of this disaster, we are therefore looking at a very wide group of victims who has a high likelihood of manifesting various forms of psychological reactions to the trauma.”

In this in-depth piece, Booz Allen Hamilton covers the five typical phases of emotional response to disasters in the context of the August 4 explosion in Lebanon, and how to counter emotional lows.

Make sure to read the full report here.

September 23, 2020 0 comments

Job posting Jobs

Executive is hiring!

by Executive Contributor September 2, 2020

written by Executive Contributor

Executive Magazine is looking to hire a new sections editor.

The new sections editor will take responsibility for researching and writing analytical pieces that satisfy the highest journalistic standards. She/he will contribute to special reports for our coverage of new economic sectors in Lebanon, as well as traditional economic pillars that continue to play important roles in the Lebanese economy, from hospitality to trade and entrepreneurship.

Role/Responsibilities:

Research and prepare questions and interview stakeholders in the public and private sectors.
Conduct in-depth background research to further develop content related to the stories covered.
Based on story pitches, conduct interviews and research agreed upon in the magazine’s weekly editorial meetings, write articles to be published in the monthly publication and Executive’s online platforms. Monthly story output will be a minimum of four articles per month at average length of 1,200 words.
In collaboration with the editorial team, develop an average of three annual special reports pertaining to, but not restricted to, education, hospitality and tourism, healthcare and labor issues. The reporter is responsible for writing some of the articles in the report and for suggesting external experts in the field for contribution articles.
Participate in weekly editorial meetings to agree on future content and discuss the magazine cover art and illustrations.
Engage in wider team meetings where household issues and potential directions for the magazine are shared.
Be a part of the editing process through reading and offering feedback on colleagues’ articles during the writing stage, and proofreading content during final readthroughs.
Take point on longer term collaborative projects with local and international partners, including special report focuses, investigative projects, roundtables, and economic roadmap development.

Essential:

Fluency in English
Proven track record for in-depth reporting on economic issues
At least six months of continual experience in a professional news organization
The ability to work to deadline and within a small team
Strong understanding of Lebanese economic and policy issues
Ability to engage with reader comments and feedback

Desired:

Fluency in spoken and written Arabic
Multimedia skills, including audio and video production
A wide contact base in Lebanon

This is a full-time position based in Beirut, Lebanon. Salary is DoE.

Those interested, please send a CV and short cover letter (no more than 500 words) citing sections editor in the subject line to [email protected]

September 2, 2020 0 comments