Lebanon

Art – Creativity’s capital

by Executive Staff
written by Executive Staff

Beirut explodes every now and then, often with tragic consequences. This past year, though, Lebanon witnessed a different and welcome kind of explosion: that of its contemporary arts scene. The opening of the Beirut Art Center, along with several smaller galleries such as The Running Horse – Contemporary Art Space and the Maqam Art Gallery, signals the development of Lebanon’s historically vibrant art market into a regional cultural center different from, but no less important than, the commerce-heavy hub of the United Arab Emirates.

“It’s a completely different new market here,” said Joy Mardini, the manager at Naila Kunigk’s Espace Kettaneh Kunigk, the Beirut sister gallery of Munich’s Galerie Tanit. “It’s booming, in parallel with Dubai, Abu Dhabi, and Qatar,” Mardini said, referencing the major arts institutions and fairs that have opened, or are planning to open, in the Gulf.

The international auction house Christie’s opened a salesroom in Dubai in 2006, kicking off with an inaugural sale in May of that year. The opening was significant because it was the first auction in the Middle East of international and contemporary art in Christie’s history, and the first time the auction house featured a modern and contemporary Arab and Iranian art section. The auction pulled in over $2.2 million, and subsequent auctions set records for artists including the Lebanese painter Paul Guiragossian, whose “Le Grand Marché” sold for $230,500 in October 2008, a world auction record for him. In March of this year, rival auction house Sotheby’s held its first Middle East auction at its new Doha office.

Art Dubai, a fair that now features 70 galleries, more than a quarter of which are based in the Middle East, launched in March 2006. The Sharjah Biennial also held its ninth edition in March, and several museums including a Louvre and a Guggenheim are scheduled to open in the region within the next decade.

Although the recently constructed infrastructure in the Gulf has had ripple effects in Lebanon, local Lebanese art brokers distinguish between the bubble that, by most accounts, has burst in the Gulf, and Lebanon’s steadily evolving art market.

Creativity’s costs
Natalie Khoury, director of the Beirut branch of Hamburg’s Galerie Sfeir-Semler for the past four years, said this is reflected in retail prices, which have grown at an even pace, in contrast to some of the record-setting prices achieved at recent auctions in the Gulf.

“[Now]they’re almost the same, and have been growing with the reputation of the artists,” she said in reference to Beirut’s prices vis-à-vis the Gulf. “We never had speculation like with the Iranians. The Lebanese artists established their careers very slowly and in a very balanced way.”

“Prices have increased, but not drastically. The prices have evolved with the careers of the artists,” she said.

Fadi Mogabgab, of the Fadi Mogabgab Gallery in Gemmayze, has been selling art in Lebanon for over 15 years, first alongside his sister Alice Mogabgab’s namesake gallery, and later on his own. He attributes the relative stability of the market to the distinct nature of his mostly local clientele.

“Because here in Lebanon we have culture and taste, people are very demanding,” he explained. “They are not necessarily following the trends of the big auction houses.”

Lebanese artist and collector Elias Maamari agrees.

“Today anyone with two pennies to rub together is buying and calling themselves an art collector. As soon as you have more paintings than walls, you’re a collector,” he noted.

Maamari, who trained as an architect, has also entered the art market through the other side of the looking glass, as an artist. His first publicly displayed piece, a cold cathode and rusting steel sculpture called “You are here for now,” was shown at the Scope Art Fair during Art Basel this year in Switzerland. It was priced at $78,290, but price, he said, can and should be irrelevant.

“You can buy art for $5,” said Maamari. “And sometimes that’s the most interesting stuff.”
More interesting to note, he said, is the relationship between the financial industry and the art market.

“They’re in bed together. They have to be. Look at the people collecting art today. The big collectors in Turkey, Russia — they’re a very small minority of individuals, and they’re the wealthy captains of industry, as they were historically,” Maamari said, citing the Frick Collection, which is housed in a museum in New York.

In Lebanon, though, there is an emerging group of young collectors, who, along with major Western arts institutions, are prying the market wide open.

Khoury of Sfeir-Semler gallery sells pieces to museums such as the Museum of Modern Art in New York, and the Hamburger Bahnhof in Berlin. As far as private collectors are concerned, she said most of them live outside Lebanon, but are Lebanese. While corporate collections are still not a major factor in their business, they are reaching new regional buyers through fairs like Art Dubai.

The art appeal
A 29-year-old New York-based Palestinian-American collector who often purchases art from Sfeir-Semler gallery on her trips to Lebanon told Executive that despite the frenzy in the Gulf, she has observed the prices of her favorite Lebanese artists, such as Walid Raad, remaining fairly reasonable.

“You’ve seen maybe a 20 percent increase in value over the past few years,” she said. “It’s not like it’s doubled in value. There have been fluctuations in Dubai, excitement and hope, but none of those galleries represent the famous Lebanese artists.”

Saleh Barakat, who says his Agial Gallery in Hamra was the first to open in Beirut after the civil war, remembers that when he started, “Only old rich people and relatively established collectors came to this gallery.”

“Now it’s much younger people [who are buying],” he said. “I think it has to do with the evolution of the economy; with the e-economy, and telecoms, these industries make young people richer.”

“The market evolves, collectors evolve, and I am evolving,” he continued. In addition to promoting young, emerging artists at Agial, his newest project, Maqam Art Gallery, is exclusively focused on Lebanese modern art. It opened in early 2009 with a show of Lebanese landscape paintings.

“The international light is only on contemporary art” from the region, said Barakat. “They are completely neglecting Lebanese modern art.”
Jim Quilty, a journalist for The Daily Star who has covered the regional art scene for the last decade, says the art market is a “fickle thing.”

“It’s about trends, what’s new, what’s sexy,” he said. “People become aware of an artist or two artists that hail from a certain region, and PR takes over, and it becomes ‘a thing.’ Artists can be working unrecognized for years and years, and then the PR people take over and decide that something exists.”

Local flourish
Although it may be a passing fad, the international appetite for Middle Eastern art, as manifested by shows like the Saatchi Gallery’s “Unveiled” in London, is nonetheless encouraging local arts initiatives to flourish.

Sandra Dagher, a co-founder along with artist Lamia Joreige of the Beirut Art Center, a non-profit gallery that opened this year in the city’s Karantina district, acknowledges the link between her institution and the commercial galleries that operate nearby.

“Even though the space is totally non-commercial, it’s an advantage for artists to make exhibitions in a center like this, and could raise their prices,” Dagher said. Dagher, who ran the avant-garde gallery Espace SD from 2000 until 2007, found the non-profit model more workable for her vision of promoting contemporary art.

“I realized that to be able to help with production of less commercial art, I didn’t want to depend on commercial issues,” she said. “When you want to be sustainable and dependable, you shouldn’t be a private company.”

The center is funded by private individual donations, a few corporate sponsors, and organizations like the Prince Claus Fund of the Netherlands. A bookshop and café produce additional revenue, and as Dagher said, the massive, airy space is also available to rent for events.

Her disappointment with the commercialism of the Lebanese art market was echoed by some gallerists, who complain that it is often difficult to sell some of the newer media, such as installations and video, in the local market.

Twenty-three-year-old Lea Sednaoui, who opened the Running Horse gallery in Karantina, said that often buyers are reluctant to spend big on an unknown name.

“They need to know what they’re buying,” she said. Nonetheless, she has had relative success with her two first shows, one of the Swedish painter Sigrid Glöerselt, and another of Lebanese photographer Karim Joreige. Joreige’s show was already more than halfway sold out as Executive went to print.

Sfeir-Semler’s Khoury agreed that pedigree plays a role, citing one popular conceptual artist whose work is part of major museum collections.
“A lot of people are asking about established Lebanese artists, i.e. Walid Raad. We sell a lot of Walid Raad. When people want to buy contemporary art from Middle East, he’s one of the artists they want to buy.”

She also cited medium as a factor, which in an era of large-scale installation and video work, may be problematic.

“Generally, videos are really hard to sell,” Khoury said. “It’s much easier to sell photography and painting.”

Barakat agrees that the big names are the easiest to sell, but this phenomenon is normal.
“Of course in every part of the world you have super stars and less established artists. Here it’s [conceptual artist] Walid Raad, [painter] Nabil Nahas, [painter] Ayman Baalbecki,” he says. The works of the latter two are both available through his galleries.

Fadi Mogabgab, though, insists that Lebanese have an open mind when it comes to art.
“I have sold things here I couldn’t sell to the French public,” he said. “Here they are more curious. They want something artistic, not just to match the carpets.”

As Elias Maamari points out, art has “a lot to do with money and very little to do with good taste… Money is the universal currency and good taste is very subjective.”

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Lebanon

Rest & recreation – The beach life

by Executive Staff
written by Executive Staff

It’s an obvious business proposition: buy beach front property, wait for the sun to come out, and charge $20 a day for entry. And from mid-July through September, as long as there is heat to beat, Lebanon’s beach clubs are packed with tanned, oily bodies frying themselves to golden perfection.

As competition for customers intensifies, beach club owners are offering new, innovative incentives and programs to lure clients to their particular strip of sand. Furthermore, some are adding facilities to make their clubs year-round destinations, maximizing profit on some of Lebanon’s most expensive beach front property.

Club Senses in Kaslik sits near the coastal highway, 20 minutes from Beirut, drawing customers from the capital and nearby towns who want a quick escape from the urban heat. It’s a massive black building, with several floors of gym equipment, 40 exercise classes per week, an indoor pool with panoramic view and a large spa. While there is no beach access, it has two swimming pools, one of them for children. Last year, the pools were only for members of the gym, who pay a monthly ($165), quarterly ($462), half-yearly ($890) or yearly ($1,788) membership fee to use the equipment and take classes.

This year, the club’s management opened up the pool area for non-members. Although open for only a year, according to Shyrine Yaghi, Communication Manager at Club Senses, the laid-back, somewhat New Age feel proved extremely popular, especially with local Lebanese.

“Tourists are more likely to go to touristic cities,” she said. “But at Club Senses, it’s more like a resort. We’re not promoting it as the city of Kaslik. Last year we had a good experience with the beach club, so this year we’ve developed more space and a certain strategy to contain the 600 to 700 people who come on the weekends.”

In Byblos, Eddé Sands, one of Lebanon’s favorite beach resorts, is upping the ante, faced with increasing competition from places like Club Senses. In addition to their tropical outdoor spa, Eddé Sands opened an Ayurvedic spa this past year, the first of its kind in the country. Two Indian doctors trained in Ayurveda, an Indian science of healing, offer treatments, massages and consultations for specific ailments.

Eddé Sands is also looking to capitalize on the exclusivity angle, offering for the first time a silver “Presidential” tier membership, which for $1,430 comes with a host of benefits, such as free massages, free meals for two at all of the resort’s dining outlets, and a 15 percent discount at the spas. The regular purple ($411) and gold ($847) memberships are also now offered for families, rather than just individuals. And instead of one entrance for everyone, Eddé Sands also split the experience in two, with a VIP entrance that goes directly to the cabanas, bungalows and circular VIP pool, and a separate entrance for families and day-pass beach goers.

Like Club Senses, Eddé Sands is looking to make the resort a year-round destination. The memberships, which used to be valid until the end of September, are now valid through the end of the year. A massive new ballroom, over 700 square meters and seating up to 640 people, will host weddings and parties all year long. The resort’s traditional Lebanese restaurant, Layal al-Zaman, was the scene of New Year’s and Valentine’s Day parties last year, and can be kept open for winter dining.

Then there’s the beach club that’s opening this winter. Hotel Byblos-sur-Mer, owned by Alexy Karim, is set to re-open around Christmas this year, so he can catch some holiday tourists or Lebanese on a trip back home who are looking to spend a few days by the sea and explore Byblos’ old town. Located at the edge of the port and built in 1964, it ironically had its heyday during the civil war years, when many Beirut residents left for the relative peace of Byblos. But then the capital came back to life, with its new downtown and fancy hotels, and Byblos was, as Karim puts it, “forgotten.” He is looking to bring the hotel back to its former glory minus, of course, the circumstances that made it so popular.

Karim is also the owner of Dar l’Azrak, a seafood restaurant perched on a cliff in the town of Amchit, south of Batroun. With seven years in the seasonal food and beverage industry, he is keen to move onto a project with a slightly longer window of opportunity.

“We work all year just to make these three months,” he says, referring to the high summer season. Karim shudders to think of the summer of 2006, and calls 2008, when Lebanon’s government was pieced together just a month before the season began, “sort of a miracle.”

The four-story hotel will have 22 suites, eight rooms and a massive rooftop presidential suite with a 400 square meter terrace. Room rates will begin at around $200 for a 30 square meter deluxe room, and will climb into the thousands for the 160 square meter presidential suite. With high-speed Internet and two conference rooms, as well as a small spa on the third floor, Karim hopes to make it a corporate destination during the low season.

“There are two hard months, February and March. We have a low season like everyone else, when we will focus on corporate things, seminars,” he says. “But after February and March, you have Easter, and then springtime comes,” at which point he expects business to take off.

For summer 2010, he’s planning a beach club and pool just across the road from the hotel. Comprising 2,000 square meters, the U-shaped outdoor area sits just adjacent to the port. A finger of land that juts into the Mediterranean will house a seafood restaurant, also called Dar l’Azrak, and the rest of the little strip of coast will have a lounge pool, deck and snack bar.

“I’d rather give my guests nice clean water to swim in the sea than focus on a big pool,” says Karim, referring to a plan to pipe the hotel’s wastewater back into the municipal system for treatment, rather than letting it run into the sea. At the other side of the U is a raised wooden deck; this area will turn into a bar and lounge once the sun sets.

“It’s not wild like Eddé Sands, more of a chill out place, with jazz, blues, Cuban music. You can moor your boat and come spend the day, and then continue your evening after dinner at the lounge,” he explained. Guests will also be able to catch music from the Byblos Festival, whose stage is on the other side of the port.

“We’re targeting not teenagers but executives. Young executives,” said Karim, who is in his late 40s, “like me.”

The phased opening will help him iron out any kinks in what is his largest project to date, while not missing any of the seasons.

“I could have opened the beach this year,” he said, “but the hotel would not be done. I like to fix one thing at a time.”

“When you open it, that’s the hardest thing,” Karim continued. “It takes you two or three years to adapt, upgrading everything yourself. This way, we can fix any problems during the low season stages.”

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Lebanon

Telecom – Dialed with good intentions

by Executive Staff
written by Executive Staff

Lebanon’s telecommunications industry has seen some progress in the last year, mainly due to efforts aimed at reforming the sector. One of the most positive developments is that Law 431 has actually begun to be applied. The law, in theory, lays out a roadmap for how the telecommunications sector should be reformed by giving it a corporate style structure, the goal of which is to prepare the sector for possible privatization.

Law 431 also created an entity responsible for carrying out and overseeing the reforms, called the Telecom Regulatory Authority (TRA). Recently the TRA’s mandate has put it in conflict with the Ministry of Telecommunications, with both sides struggling to assert their authority over the regulation of the telecom industry. It doesn’t help that the ministry and the authority appear to be backed by parties from opposing sides of the country’s political divide.

The conflict came to a head earlier this year when the TRA made two decisions that the ministry perceived as overstepping its mandate.

Simply called “Decision Number 1,” the TRA ordered that all mobile numbers for MTC start with the prefix “71” and all numbers for Alfa would start with “72.” The point of the decision was to shed light on the actual cost of calls between networks, since it’s more expensive to call an Alfa number from an MTC Touch phone, or vice versa, than to call a number on the same network.

“Decision Number 1 gives transparency to the end-users and makes it easier to know whether they are calling a subscriber who is on the same network or on a different network, because there is a difference in terms of tariffs,” said Kamal Shehadi, chairman of the TRA.

Also included in “Decision Number 1” was a TRA order to issue one million mobile numbers to each of the two mobile network operators. The decision went directly against the ministry’s policy of approving and handing out numbers for MTC and Alfa in batches of 100,000, thus giving the ministry control over the amount of mobile numbers in the market and keeping the operators on a tight leash. The Ministry of Telecommunications contested both parts of “Decision Number 1” on grounds that the TRA was overstepping its authority, and Alfa went ahead and started issuing 71 numbers. The Ministry of Telecommunication and Alfa declined to comment for this article.

The dispute was brought before Lebanon’s highest court, the Shura council, and in mid-July the court issued a ruling backing the TRA decision. The court said that under Law 431 the TRA was within its legal mandate to issue “Decision Number 1.”

The allocation of the numbers is part of the implementation of a “National Numbering Plan (NNP).” The numbering plan would, in theory, allow for better management of the mobile networks, and is part of the planned reforms of the sector. But the numbering plan’s budget comes from government coffers, and is called the “numbering fee.”

The second decision made by the Shura council was to suspend the implementation of the numbering fee that would be paid to the TRA to implement the national numbering plan. In May, the current care-taker Telecommunications Minister Gebran Bassil issued a policy paper for the plan, where he envisioned the TRA to be “guided to work on an NNP,” thus outlining his support for the plan but not allocating the task to the TRA.

If Bassil’s policy paper is anything to go by it seems that these decisions won’t be the last points of contention between the minister  and the TRA. The section of the paper that deals with the TRA uses language that asserts the ministry’s authority over the TRA. The paper then states that the “TRA is bound to fulfill all its duties and responsibilities under the minister’s supervision, following all ‘general rules for the Regulation of Telecommunications Services in Lebanon’ set out by the minister.”

While all this may seem like the TRA and the ministry are in a state of perpetual tug-of-war, Shehadi insists that this is not the case.

“This is not a turf war,” he said. “The TRA’s position is based on its desire to have a full partnership between the TRA and the Ministry of Telecommunications… based on the law and the respect of the TRA’s independence.”

Liban Telecom
Liban Telecom is intended to be a government-owned body with a corporate framework that eventually replaces the telecommunications ministry. According to Bassil’s policy paper, when launched, 40 percent of Liban Telecom shares will be offered to the Lebanese public (33 percent minimum) through an initial public offering in the Beirut Stock Exchange.

“The delay in establishing Liban Telecom is creating a delay for the overall package of reforms that is called for in law 431,” Shehadi said.

For this to happen, however, a new cabinet will first have to ratify the decision — and this cabinet has yet to be formed.

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Companies & Strategies

Ogilvy Group – Ralph Clementson (Q&A)

by Executive Staff
written by Executive Staff

Ralph Clementson is the general manager for the advertising agency Ogilvy and Mather, in Europe, Africa, and the Middle East. He is also on the board of Memac Ogilvy, the company’s Middle Eastern partner. Clementson was in Beirut last month for the Memac Ogilvy management meeting, and he spoke with Executive about the opportunities and challenges of new technologies and why the future lies in Iraq.

E It seems like the mood at Memac Ogilvy has been pretty upbeat. I’m surprised to hear that.
It is upbeat! The environment is tough, but this is a high growth region compared to France or Germany, or even the States.

E Why is that? Because there’s so much untapped potential?
It’s because of a number of things. The first thing is there are a number of markets which are still about to open up, which as yet are untapped potential. If you think of North Africa, Algeria is opening up for marketing very fast, and Libya is going to be the next market which opens up. And then if you think about the Middle East itself, Syria is opening up fast, and the next one will be Iraq. Think of the untapped potential that will be out there. It’s huge.

E Iraq, really? Are there any ad agencies there now?
They’re starting up. There are now several ad agencies in Iraq, and they’re supporting clients who are beginning to think what they can do to market their products over there. Cigarettes are still sold over there, and beers, and so on, so there’s plenty of potential there. It’s just everybody is getting onto the map, it’s still a little bit early, but give it another three years, that’s a huge potential.

So, if you look at this region, there’s a potential for development through opening up the markets, but it’s not just that. We’ve also got reasonable levels of inflation. Inflation is running at five to eight percent in quite a bit of the region, and inflation actually means growth if you think about it. The difficulty is delivering profit, for the revenues will grow as well as the costs.

E In other words, you think longt-erm.
Right. You think long-term.
The third reason is we’ve not got great penetration in various disciplines. If you just take the technology aspect, the Gulf is hugely interested in technology. I mean the number of people with two mobile phones here is enormous.

E Is technology the answer? Is that what everybody in advertising is talking about?
Yes. Every discipline of communications is interested in the impact of the digital world on their businesses. It’s changing the medium. And so, given that you’ve got a high level of technology, particularly in the mobile environment, it represents some really exciting opportunities. And in fact, probably, this Middle East world is more sophisticated in terms of its technological understanding, and particularly the youth population, than in quite a few of our western European markets.

The real problem, though, is that it’s a new technology, and it’s safe to say that to date the commercial model supporting the mobile environment is not fully worked out. So when you’re talking about communications in this space, it’s still got to be developed in a significant way, but this’ll be one of the regions in the world where it is developed.

E What do you mean that the commercial model isn’t worked out yet?
If the kids are watching their little iPhones and they’re watching their films on the iPhones, you no longer have commercial breaks necessarily. They’re no longer watching TV.
So what you’ve got is change in viewing habits, and the quest then is how do people make their money in pushing content out into this environment?

E Not a lot of people realize that YouTube doesn’t turn a profit, for instance. 
People have got to get the commercial model worked out. They still haven’t. But what’s interesting is that the Gulf is going to be at the forefront of this, and it’s going to make for an exciting environment in the next five years.

E Are you saying, though, that the advertising world hasn’t figured out what to do with the Internet at all? 
No, not at all. What I’m talking about is mobile TV. In the very specific area of mobile TV, I think the commercial model is still being developed. And that’s really the only area of technology that’s not been developed. And because in the Gulf there’s a lot of mobile telephones, this is actually quite important. But the digital, the interactive world, is very well developed, and we’re leading in that.

Obviously, with iPhones and the like, as the Internet and the mobile become one and the same, we’ll be partnering all our clients as they evolve into that new space. But it is a new space and it’s going to be very important here, and exciting.

E Who are the big losers in all this?
Well if we talk about the disciplines of marketing, I think what’s quite clear is traditional advertising is on its way down, because spending is shifting. The traditional advertising and offline direct mail is losing out, and interactive activity is going up. Now it’s all part of the same discipline: instead of doing an offline direct mail to someone’s house, you’re putting things online which previously would have gone in the mail.

And also, especially in the current economic environment, it’s evident that what’s going to be seen is a move towards promotional activity, where people are making cost offers on their products. So it’s those sort of moves — slightly less on advertising and direct mail, and more online and more informational type activity.

E Sometimes I wonder, with all this talk about technologies and delivery-methods, isn’t there nothing better than a clever 30-second spot? Isn’t that still the pinnacle of advertising?
The pinnacle of advertising remains the ad that sells, rather than the one that makes you laugh. It may be that one is the other, but actually the pinnacle remains the ad that sells. Particularly with clients today. They’re more and more focused on the return they’re getting from the money they’re spending. No marketing director today can go to his board and claim loads of money unless he’s able to go back and say, “Here’s the return on what you’re investing in.”

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Lebanon

Nightlife – The party parade

by Executive Staff
written by Executive Staff

The festival season is in full swing. American rapper Snoop Dogg is scheduled to play Beirut in August. Visits by Michael Bolton and Paris Hilton, despite one’s personal feelings for the crooner or the spotlight-hungry heiress, are indicators that Lebanon’s summer season is, so far, the most secure since 2004.

The country is expecting “the best tourism season we have ever seen,” says Nada Ghandour, director general at the tourism ministry. According to figures released earlier this year by the ministry, the total number of tourists in 2009 is expected to reach two million, with the majority arriving in the summer months. And Lebanon’s political stability translates not just into a party, but also into cash flowing into the coffers of the country’s quickly expanding nightlife industry.

“Given the amount of people that there are going to be [in Lebanon], everybody will benefit from the season, that’s for sure,” says Oliver Gasnier-Duparc, co-owner and manager of Behind the Green Door, a popular lounge bar in Beirut.

Bars and nightclubs began lighting up Beirut’s nightscape in the mid-1990s on one particular street on the fringes of Beirut’s central district, Monot Street. The allure of untapped market space supplemented by the unquenched thirst of a city without a vibrant nightlife was the perfect recipe for an industry boom. Monot came of age around the turn of the century, with new bars and nightspots sprouting almost weekly.

The phenomenon gave birth to a business model that has been replicated by entrepreneurs looking to make a quick buck.

“You would have a group of five to 10 friends who were ambitious and party animals, and thought ‘let’s each put in $10,000 and open our own bar, and if each one of us brings in just five people every day we will fill up and make money,’” says Ziad Kamel, co-owner of bars Gauche Caviar and Cloud 9 in Beirut’s trendy Gemmayze district. “You see a lot of these kinds of places shutting down and selling off.”

The bars eventually closed and the Monot of today is a skeleton of the once lucrative nighttime hotspot.

“Monot boomed around 1999 to 2000 and now there are only a couple of places left which were the original ones,” says Mark Mouraccade, a long-time bar manager and co-owner of Ferdinand’s bar in Beirut’s Hamra district.

The neighbors were one reason the district ceased to be the epicenter of Beirut’s nightlife — noise complaints forced many clubs to shut down. And then there was the nightlife migration to an older, quainter neighborhood a few blocks away: Gemmayze.

Gemmayze was once a quiet residential area but now has more than 90 bars and restaurants operating in the district. Makram Zeen, president of the Gemmayze Development Committee (GDC), a collective of bars and restaurants in the district, estimates that total yearly revenues of all the bars and restaurants in the area comes to $36 million, or around $400,000 a year for each venue. Zeen, who also owns Le Gardel pub and La Estancia restaurant in Gemmayze, claims the hospitality sector in the district has created between 1,200 and 1,400 jobs and has generated $15 million to $16 million in investment.

The total revenue generated by the nightlife industry in Lebanon is currently not available. When Executive asked Paul Aris, head of the association of restaurants, bars and pastry shops for figures relating to the industry, he laughed and said, “Figures? You must be joking. Even the Ministry of Tourism waits for General Security to give it figures.”

Real estate on the rise
While the nightlife industry has become a welcome addition to Lebanon’s economy, the economics of proximity have also galvanized the real estate sector in areas like Gemmayze and Mar Mikhael. Property in the Gemmayze area is being sold at around $3,000 to $3,500 per square meter, a significant increase from a few years ago, according to research conducted by real estate consultants RAMCO.

“Real estate in the area was being sold for peanuts,” says Zeen. “Now, because of us, the real estate value has increased three-fold.”

While the rising price of property may be one reason most bar owners in Lebanon prefer to rent rather than own, there are other more technical issues to consider. “It’s very complicated to buy properties because usually a building is owned by 15 or 16 people,” says Paddy Cochrane, a bar owner whose family also owns property in Gemmayze.

Sensible or not, the inability or reluctance to buy property has left bar and restaurant owners grappling with soaring rental costs by landlords eager to capitalize on the industry boom. A source who advises bar and restaurant owners on administrative issues said that when one of his clients wanted to renew their rent in Gemmayze, the landlord increased the yearly rate from $40,000 to $120,000.

“There are no rent ceilings imposed by the government,” says Kamel, who is also the treasurer and head of marketing at the GDC. “So if you rented five years ago in Gemmayze for $200 per square meter per year — which you could have easily done — now that your five years are up, the landlord can say ‘you know what I want is $800 to $900.’ [Rent] goes up 400 to 500 percent and all of a sudden it is not feasible for you to run your business.”

The other Gemmayzes
At present the cost of renting a venue for a bar or restaurant in Gemmayze can be “over $900 per square meter [per year],” according to Zeen. As a consequence many entrepreneurs looking to open a nightspot are opting for the adjacent district of Mar Mikhael. “The place was cheap,” says Gasnier-Duparc of Behind the Green Door, who opened last December at the beginning of the Mar Mikhael district. “Most of the people opening up here are doing so because it is cheaper.”

Right now the going rate for a bar or restaurant venue in Mar Mikhael sells at around $450 per square meter per year according to various sources in the nightlife industry.
Another up-and-coming venue for new bars and nightlife is the Hamra district, which housed many bars and restaurants before and shortly after the Lebanese Civil War.

“I ran away from Gemmayze to open here,” says Ferdiand’s Mouraccade. Despite having to pay less rent than bustling Gemmayze, Mouraccade opened his bar in Hamra because he believes the area is “experiencing a revival” and offers a more sustainable business model than other locations. “Hamra is different from the rest because you don’t feel the effect of high season or low season as much,” he says.

Haytham Nasr, who owns and manages the Juniper bar in Gemmayze, believes that because of the district’s increasing costs, entrepreneurs looking to enter the market are now considering other areas. “Any bar owner should maintain their rent at a maximum of 5 to 10 percent of annual revenue and make the initial investment back in a year,” he says. “I don’t see how they are going to profit in Gemmayze.”

Nasr’s new project, called “myBar,” is set to open on the outskirts of Gemmayze around the end of this year. The project is unique in Lebanon because of its business model, operating somewhat like a private equity fund or a public company whereby investors buy “barnotes” that are valued between $2,000 and $20,000 and carry dividends of 0.2 to 2 percent. Nasr’s expected return on investment for co-owners is 274 percent. So far the project has raised more than $650,000 and intends to raise $1 million. “We are very confident that we will reach the $1 million and we are closing off funding in six to eight weeks,” Nasr says.

Saturation point
Although the nightlife industry is currently booming, not all the news coming out of the sector is good. The sheer number of venues opening up has created a substantial increase in the supply of nightspots while rising costs are forcing weaker business models out of the market space.

“Lots of people see that the market is booming, they think it’s easy, open up, and after six months they see that they are not making money and they sell it,” says Mouraccade. Chafic el-Khazen, co-owner and manager of Sky Bar, one of Beirut’s most prestigious sea-side rooftop venues, agrees.

“You know the Lebanese: It’s all about ‘copy-paste’ so there is no creativity,” he says. “The market is over-saturated because it is a lucrative business and everyone will try to get into this industry to make more [than] a little money.”

When a bottle at Sky Bar costs a patron between $200 and $3,000, more than ‘a little money’ becomes a lot of money. Still, Khazen insists that the prices are not unreasonable given the costs he has to cover, which include “over $750,000 a year on fireworks and entertainment.”

For now the alcohol and the money seems to be flowing in Lebanon. However, the industry’s growth is highly volatile and connected to the political situation in the country. “If I showed you a graph of my businesses, in terms of sales and revenues, it looks like a heartbeat,” says Kamel. “Every single time there is a dip, the reason for that dip is political instability and that is true of all the businesses here.”

If the political situation in the country remains relatively stable however, the growth of the industry will show no sign of abating. “It really doesn’t matter who is in power as long as there is stability, security and both parties are in agreement, then everyone benefits,” says Kamel. “This is what the Lebanese have to get into their heads.”
 
Neighborhood party
But the sector could benefit from an overhaul of regulations that have caused problems as the nightlife sector has blossomed.
“Gemmayze is a residential area” read the signposts that line the streets of Beirut’s Gemmayze district, where some bars and restaurants operate till the early hours of the night.

The loud music, gridlock and rude valet-parking attendants have pitted angry and politically connected Gemmayze residents against equally connected bar owners. The result is that no one has the connections to trump the other, and the law is weak: the regulations regarding the nightlife industry date back to the early 1970s. Thus, a multi-million dollar industry that is a major pillar of the all-important tourism sector suffers from ineffective regulation at almost every level.

“There is nothing in Lebanese law that constitutes a bar and this is where the issue lies,” says Juniper bar’s Nasr.

Now that the nightlife industry is booming and entrepreneurs are eager to enter the market, the economic growth seems to have overstepped the ability of local authorities to effectively regulate the sector within the confines of the old laws.
“You have so many places that open without any licenses and don’t abide by any regulations or law,” says Sky Bar’s Khazen.

Nobody’s law
The existing law that governs the restaurant sector classifies establishments as either restaurants or nightclubs. The law also prohibits nightclubs from opening in residential areas or within 100 meters of a religious building. As a consequence, many bars located in residential areas operate using a restaurant license without actually serving food but having to fulfill all the requirements of Lebanon’s antiquated restaurant laws. What’s more, this also places the establishments at the mercy of the evaluation of inspectors from the tourism ministry or the municipality.

“It’s very hard to meet the requirements that were set in the 1970s for a restaurant,” says Gauche Caviar and Cloud 9’s Kamel. “You are in this gray area which allows the government to blackmail you to decide whether you are legal or not, which results in corruption, bribery, bad regulation and places being shut down that thought they were safe.”

One of the main causes of these ailments is the process by which restaurants obtain their licenses. Licensing proceeds in stages with the first stage constituting a “feasibility study,” says Nada Ghandour, director general of Lebanon’s tourism ministry, one of the government bodies charged with regulating the sector. Bar owners apply to the ministry in order to receive a first stage license on the condition that they will actively seek a second stage license to make them completely legal.

“The first stage [license] is pretty easy to get but almost nobody has the second stage [license] and nobody knows why,” says Ferdinand’s Mouraccade. “We apply and we wait and wait.”

The official line
Tourism ministry Director General Ghandour says that it is not the ministry’s fault that establishments do not receive their final licenses, and lays the blame on Lebanon’s building code implemented by local municipalities and the intransigence of owners.

“They take the first stage license… open and say ‘merci, au revoir ministry of tourism. We don’t need you anymore’,” she says. “The [other] major problem in Gemmayze and Beirut is the building law, because the places that are open in the old buildings are not places that were made to become restaurants.”

In order to “help” the establishments, Ghandour has in the past given out “temporary secondary licenses.” A legal expert who spoke on condition of anonymity says the practice goes against legal procedures. “The secondary license is your final permit so legally it cannot be temporary,” says the source. “The first stage is ‘temporary.’”

 Local municipalities also regulate the health and safety of Lebanon’s bars and nightclubs. However, even these important issues seem to have been neglected.

“The law states that the straws at the bar must be protected but nobody does it and for fire, nobody checks,” says Gasiner-Dupar of Behind the Green Door. “They always find something, but after that you deal with them [financially].”

The lack of adequate legislation and enforcement to regulate the sector finally culminated in the ongoing dispute between Gemmayze’s local residents, bar owners and government authorities. After several protests in April 2008, one of which featured residents in pajamas blocking traffic and demanding their right to sleep peacefully, the former Tourism Minister Joe Sarkis finally acted, issuing a decree imposing a curfew on all bars and restaurants. The move required many establishments to close during some of their most profitable hours of operation, substantially hurting their businesses.

 Kamel claims that the law was completely illegal because it was only applied in one area of the country and was enforced without the consent of the interior ministry and the municipalities, who are responsible for imposing closing times.

“These fanatic residents got together and lobbied against the minister,” says Kamel. “The main people who are bothered are the people on old rent and not benefiting [from the establishments]. If the real residents of Gemmayze, who are the landlords, are bothered then why are they renting the space to everyone?”

During that time, many bars and restaurants were forced to close or threatened with punitive action because they lacked second stage licenses or didn’t have any licenses to begin with. The curfew lasted for around two weeks and eventually dissipated, much to the distress of many local residents and organizations.

“We managed to calm them down for a week or so but they just come back and its worse,” complains Georges Abi Khalil, head of management and coordination at the Gemmayze Development Association (ADG), a local non-governmental organization that works on the preservation and development of the Gemmayze district.

Earlier this year, the current tourism minister, Elie Marouni, along with Interior Minister Ziad Baroud, issued a joint decree reinstating the curfew across Lebanon.
The move set off a wave of protests from local bar, restaurant and nightclub owners who blamed the lack of law enforcement in Gemmayze by local police.

No controls
“The street is the busiest street in Lebanon and we don’t even have one security officer in the street, not one traffic cop,” Kamel says of that time. “We don’t have the support of the government to stop double parking or cars going up one way streets and these are all causes of noise.”

After the curfew was reinstated, a delegation of nightlife industry owners visited the interior and tourism ministers and pleaded with them to reconsider. Reports then surfaced about the interior minister standing on the main road in the Gemmayze district asking party goers to reduce their noise levels.

“We saw him stopping cars, himself,” says Kamel. “Imagine the minister of interior peeps in your window and asks you to lower the music. People apologized to the minister and put their music down.”

Around two weeks after the reported policing by Minister Baroud, the interior ministry issued a clarification to the decree stating that the curfew did not apply to establishments that sound-proofed their bars and restaurants. The party was on again, but the problems didn’t disappear entirely.

On July 10 some residents of the Gemmayze district staged another protest in the main street demanding tougher regulation of establishments.

Problems to solve
“A decision has been taken by the Ministry of Tourism and the Ministry of Interior to let them [entrepreneurs] open as many bars as they like,” claims Fadia Kiwan, a local Gemmayze resident who took part in last month’s protests. The protest eventually turned violent when another local resident, Hadi Souaid, claims he was attacked and beaten by the entire staff of a local bar in Gemmayze. “When the police arrived they did nothing,” says Souaid.

In an attempt to pacify the situation, the Gemmayze Development Committee (which represents the bar owners) has issued a 15 point plan to address the issues facing the district. One of the most important of these is the problem of parking an estimated 1,800 cars that enter the district on any given night. To address the problem, the GDC and the tourism ministry have been lobbying to open the Charles Helou station’s three-floor parking lot and turn it into parking space for Gemmayze’s residents and visitors. Minister of Transport Ghazi Aridi has agreed to the proposal in principle but bar owners say the ministry of transport has yet to act.

“All we hear is talk and empty promises,” says GDC president and local bar owner Makram Zeen.

For now the regulation of the industry remains in disarray and, from the lengthy list of reforms Lebanon’s post-war governments still has to implement, it doesn’t seem likely the sector will receive much attention from any new government. “We are in Lebanon,” says Khazen. “Before [improving the regulation of] this industry, there are so many other things that are [so] much more essential that [Lebanese] need to do.”

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Resolved to no resolution

by Nicholas Blanford
written by Nicholas Blanford

The series of subterranean explosions that shook Khirbet Selim in mid-July merely seemed to confirm what everyone knew but preferred to ignore — that Hezbollah has amassed arms and munitions in the border district patrolled by the United Nations Interm Force In Lebanon, despite UN Security Council Resolution 1701.

There had been past hints. In May 2008, an armored patrol of Italian peacekeepers came across a tractor and trailer driving between the villages of Jabal Butom and Siddiqine in the south in the middle of the night. When the patrol turned around to follow the truck, two Mercedes overtook the UN vehicles and stopped between them and the fleeing tractor, blocking the road. A tense stand-off ensued until the Lebanese army arrived on the scene, by which time the mysterious tractor had disappeared.

The Khirbet Selim explosions apparently emanated from an underground Hezbollah bunker stuffed with weapons and ammunition. Hezbollah said the blasts were from old Israeli munitions dumped inside the building, although no explanation was given why the arms were being stored in the first place rather than destroyed by the Lebanese army. What triggered the blast is unknown, but it is not the first time that a suspected Hezbollah arms dump has accidentally exploded. One blew up in a garage outside a village near Tyre in 2004, apparently caused by a short circuit in the building’s electrical wiring. A year earlier, a huge explosion rocked the eastern Bekaa when a suspected arms cache exploded. Hezbollah said that it was a controlled blast of old Israeli land mines collected from the south.

The Israelis, predictably, seized upon the Khirbet Selim explosions to demand a tightening of Resolution 1701 to grant UNIFIL authorization to search at will buildings suspected of containing weapons. Presently, UNIFIL’s principal mandate is to support the Lebanese state in implementing Resolution 1701, rather than acting unilaterally. Although the resolution leaves some wiggle room for UNIFIL to undertake some independent action, the tone of the document calls for the peacekeepers to assist the Lebanese army in fulfilling the provisions of 1701. And that is how it has been interpreted by UNIFIL itself.

“We are here to help the Lebanese army implement Resolution 1701, for the interest of the southerners,” UNIFIL spokesperson Yasmina Bouziane told Al Balad newspaper.
The Khirbet Selim incident doubtless will feature in the UN secretary general’s next report on the implementation of Resolution 1701, but the Israelis will not get their way.

There are two reasons for this. First, UNIFIL, frankly, does not want the headache that comes with the authority to search houses in its area of operations. Such a step will bring it into direct confrontation with Hezbollah and the local people of the south. The throwing of stones at French peacekeepers who attempted to search the facility that blew up in Khirbet Selim is just a small taste of what UNIFIL could expect if its mandate was strengthened. UNIFIL is able to operate in south Lebanon because of the goodwill of local residents. That has been the case since the UN mission arrived in Lebanon back in 1978. If UNIFIL loses the support of the local population, it might as well pack up its bags and go home. It does not mean that UNIFIL has to compromise to the extent that it overlooks the obligations of 1701, but it does require a healthy dose of realism when it comes to finding the best means of fulfilling its mandate.

Secondly, it is hard to take seriously Israeli grievances with Hezbollah’s alleged violations of 1701 when Israel continues to flout the resolution on a near daily basis with its overflights in Lebanese airspace and its continued reluctance to withdraw from the northern end of Ghajar, the border village split by the Blue Line.

The bottom line, which Hezbollah and the Israelis tacitly recognize in each other despite the accusatory rhetoric, is that neither side is going to allow a UN resolution to impede preparations for what both believe will be an inevitable future conflict. That’s why the Israelis still fly drones and jets over Lebanon, cling to northern Ghajar and ignore advice to pull out of the Shebaa Farms.

After all, Hezbollah can argue — with some justification — that it was not Resolution 425 of 1978 that finally forced the Israelis to leave south Lebanon, but the actions of the resistance. Similarly, Resolution 1701 will not prevent a fresh war from erupting if such circumstances arise.
Any preparations Hezbollah is undertaking, both south and north of the Litani, are in line with its conviction that another war with Israel is inevitable, if not imminent.
“As an Islamic Resistance, we underline the importance of preparedness due to our belief that Israel is treacherous and always plans wars when it has the opportunity,” Sheikh Naim Qassem, Hezbollah’s deputy leader, told me in a recent interview.

The Israelis have learned the lessons from the 2006 war and are finding new means of dealing with the threats posed by Hezbollah. Hezbollah, too, has undergone a post-action assessment and drawn up new battle plans which it hopes will keep it one step ahead of its Israeli foe.
“Hezbollah has been absorbing the lessons of the July [2006] war,” Qassem said. “We have developed the positive aspects [of the military performance in 2006] and dealt with its negative aspects. I can say that the preparations of Hezbollah today, at all levels, are much better than they were before and during the July aggression.”

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

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Lebanon

Prostitution – The business of sex

by Ben Gilbert
written by Ben Gilbert

 

Lebanon’s beaches, nightclubs and hotels are packed this summer with visitors spending cash and enjoying all the country has to offer, including the sexual services of women.
One of the main outlets for such activity is the ubiquitous super nightclub business. There are around 130 licensed super nightclubs in Lebanon, where women from the Ukraine, Russia, Morocco and the Dominican Republic work as “artists.” Lebanese women are prohibited from working in these establishments, and “families” are not allowed to enter — meaning Lebanese women cannot enter, even as customers, although foreign women can.

The nightclubs’ owners characterize their sector as a legitimate and legal business model that presents entertainment and brings women and men together. The super nightclub business is regulated by the government, with permits given by the Ministry of Tourism and oversight by General Security. The super nightclub owners are represented by a lobbying group that includes other, more benign sectors of the tourism industry: the Syndicate of Restaurants, Cafes and Pastry Shop Owners.

But super nightclubs also serve as a platform for prostitution outside the venue’s walls — sometimes only as far away as an adjacent hotel. The club may or may not take a direct role in arranging and profiting from their female employees’ illegal activity.

How it works

In mid-July, a 21-year-old prostitute from the Dominican Republic danced onstage at a super nightclub in the Maamaltein district of Jounieh. She wore white denim-shorts cut just below the crotch, stiletto heels and a tight t-shirt that stopped just above her navel. She also wore braces on her teeth. Let’s call her Julia.

Men are not allowed to speak with artists like Julia at super nightclubs unless they pay for it. Customers pick the woman they want to talk to by walking through the club or seeing the woman dance or perform on stage. Many clubs offer a “cabaret” beginning at midnight, where women perform dance routines to European and Arabic music and swing on polls dressed in a variety of tight, low-cut and short-skirted costumes.

In order to speak with one of the female artists, a customer must order “champagne” or “picolot,” and select the woman he wants to sit at his table. The champagne has nothing to do with a bottle of alcohol: the term is merely super nightclub-speak for having one of the artists sit at a customer’s table for exactly an hour and a half. A “picolot” is similar “code” for having a woman sit with a customer for a half hour. Champagne usually costs around $60 to $80, and a picolot around $30 to $35.

A customer may negotiate one or two drinks to be included in the cost of the champagne. A picolot usually includes one drink. The super nightclubs are not cheap places to grab a drink without sitting with a woman: an Almaza beer costs $11.

Once the women are ordered, they arrive at the customer’s table, sit down and strike up conversation. A waiter brings drinks. Few of the women speak English, but as one of the female “artists” at a super nightclub said, “many Lebanese speak Russian.”

Often the women immediately initiate physical contact with a customer by putting a hand or arm on the man’s leg. Kissing is permitted in super nightclubs, as is light petting, but anything beyond that is strictly prohibited by most clubs, since it could get them in trouble with General Security.

But with the purchase of “champagne,” a customer also purchases the right to make a “date” with the woman, supposedly with her consent, within a week of the purchase.
The date is often code for sex. When an Executive staff member visited a super nightclub posing as a customer, Julia, the Dominican artist, made it very clear what services she could provide beyond dancing and sitting with customers.

“Sex costs $100 for three hours,” she announced bluntly. “Talk to the manager if you want to set a date.” When asked if it was possible to set a date that night, she said no, customers have to wait until the next day.

General Security regulates super nightclubs and, according to owners, no sex is permitted in the club. It’s also risky to allow a woman to leave with a customer at night. Lebanese government regulations require that Julia, like other artists in Lebanon, be in their workplace — the super nightclub — from 8pm to 5am. General Security and police can enter at any time and demand to see any of the artists.

At 5am, the artists must return to their hotel, where they are not allowed to leave until their “free time,” which is 1pm to 8pm daily. This free period is when the women can meet up with their customers from the night before. General Security requires the “telephone number and the car’s registration card of the person accompanying” the woman be noted at the hotel’s front desk, but beyond that, the woman and man are not monitored.

By law, Julia and her colleagues can only be taken out on “dates” during their free hours. But she hinted that perhaps other arrangements could be made. “Are you staying at the hotel?” Julia asked, referring to the same hotel, just above the super nightclub, where she and her colleagues live.

The business

Super nightclubs come under a variety of different regulations and legal authorities, including the Ministry of Tourism, General Security and the Internal Security Forces. According to Toros Siranossian, who represents the super nightclub owners in the syndicate of restaurants, nightclubs are licensed by the tourism ministry depending on their purpose: there are legitimate discos and nightclubs with a DJ, bars and super nightclubs that only feature a band, singers and a show, where women don’t sit with customers (the “family is allowed to enter these,” says Siranossian), and super nightclubs where the artists sit with the customer.

The vast majority of super nightclubs are of the latter category.

Customers rarely arrive to the super nightclubs in the Maamaltein district of Jounieh before midnight. Before that, artists like Julia sit around in groups, sipping drinks and eying the men who walk through the door. But by 3:00 a.m., the parking lot is full, and the men keep coming. License plates from Syria and the Gulf stand out in a parking lot filled largely with vehicles bearing Lebanese plates.

A super nightclub owner, who spoke to Executive on condition his real name not be used — let’s call him “George” — said his club usually has between 15 and 25 women per night. On average, 10 to 30 customers come in every evening. They mostly order women for champagne.

“I usually make $10,000 to $12,000 a month in profit,” said George. But in the summer, with Lebanese expatriates back home along with thousands of tourists, he says he usually makes more, ranging from $15,000 to $20,000 a month.

With 130 clubs in Lebanon, that is equal to around $23 million in profit for the minute sector per year — and that’s only the legitimate revenue.

A permit for a super nightclub is a one-time cost of $1,000. Nightclubs pay the women anywhere from $800 to $1,200 per month, depending on their ability to dance and perform. A woman also receives $5 for every “champagne” she is hired for, and $3 for every “picolot” sold to her customer. They can make up to $400 or $500 a month extra from the ‘bottles’ they sell, according to the nightclub owner.

Owners must deposit around $650 at General Security for each woman. Clubs must also pay around $2,500 per month for the hotel where the women live.

There are “two to four women per room, each one gets a bed, and some hotels have seven different clubs renting out the hotel rooms,” said a Lebanese man who will be called “Charbel” for the purposes of concealing his identity. Charbel is intimately familiar with the business because his family owns a super nightclub. Like many involved in the super nightclub business, he is also a frequent customer of many different clubs.

Charbel says other costs associated with running a super nightclub include bartenders, waiters, bouncers, drivers and managers for the hotel.

“We work in two shifts,” said George. “The first shift is at the club. The second shift is at the hotel.”

All these expenses cost him around $40,000 per month, including the hotel, the registration for the artists, electricity and insurance.

The nightclub owner says most of his customers are Lebanese (they like blonde women, he says), and older: He estimates 80 percent of his clients are between 50 and 60 years old.

“They like the company,” said George. “It refreshes their memory. Some are married. Some are divorced. Some don’t have partners. Some are shy. Some are lonely, and they come because don’t know how to build relations.”

Few struggling college students or construction workers can afford to be a regular customer at a super nightclub. Just talking to a woman and getting the right to take her out, costs between $60 to $80. Add onto that food and gas for a date the next day. If the man wants to have sex, he needs to rent a hotel room, and to fork out $100 to $200 to the woman.

The biggest competition between the clubs is for beautiful women. “I don’t care if you have a laser show, or how nice your chairs are,” the owner said. “The customers are coming for the ladies.”

To guard their investment, super nightclub owners keep a tight leash on their “product.” Club owners take their female employees’ passports. It’s regular practice for owners to lock the doors of the hotel between 5am and 1pm. Charbel says the women working for his family aren’t allowed out of the hotel for more than 30 minutes during their 1pm to 8pm “free time,” unless they have a date. Charbel says the restriction on the women’s movement is necessary.

“We are restricting movement for our own benefit,” he said. “Maybe she has a boyfriend and he doesn’t have the money to go out. He’ll come and pick her up and we won’t get our $66 for champagne.”

“If you don’t control everything, you will lose money. When dealing with women you have to control them. If you let them do what they want, you will end up with nothing.”

When asked if he’s essentially a pimp, George said absolutely not. He said he has no control over agreements and arrangements between customers and the women at his club. He sees his club as the facilitator, “like the computer linking two people together on Internet chat rooms,” he said.

Both Charbel and George said it’s not unusual for a client to fall in love with one of the nightclub’s employees. George boasts that 70 of his customers have married women from his club alone.

Eastern Europe to Lebanon

Club owners find women from around the globe through the use of what are called “impresarios.” These are the middlemen, the agents who find women in their home countries and arrange for them to come to Lebanon. George says he pays an agency based in Eastern Europe between $200 and $400 a month to find artists.

“There are thousands of agencies,” he said. “They send us photos and a CV by email, saying where the girl worked, what kind of dance she can do.”
Charbel says an owner has to be careful.

Lebanon trafficking in persons report 2009 – from the United States Department of State
Lebanon, Publication Date 16 June 2009

“The General Security reported 47 complaints of physical abuse, rape, and withheld earnings of foreign women working in adult clubs in 2008 – complaints that may have involved conditions of involuntary servitude. Most were settled out of court and the victims deported. These cases were hampered by a lack of resources; court backlogs; corruption; cultural biases, particularly against foreign women; bureaucratic indifference and inefficiency; difficulty proving cases of reported abuse; and victims’ lack of knowledge of their rights. Given the significant hurdles to pursuing criminal complaints in the Lebanese court system, and in the absence of alternate legal recourse, many foreign victims opted for quick administrative settlements followed by mandatory repatriation.” 

“Moreover, the government pursued policies and practices that significantly harmed foreign victims of trafficking. For example, authorities required that women recruited for prostitution under its “artist” work permit program be confined in hotels for most of the day and summarily deported them if they complained of mistreatment.”

“They’ll tell you the picture was taken one week or three months ago, when in reality it’s three years. The best way to bring nice women is to send someone to find them. But you will accept the pictures if you’re in need of women.”

Charbel says the women pay for their own plane ticket, which from Moscow costs between $600 and $1,000. The super nightclub pays the visas (between $200 and $350) and medical costs, which include a periodic mandatory pregnancy and sexually transmitted disease test. The cost of the medical test is around $250.

Artists’ visas are granted by General Security for up to six months. When she completes her contract, the artist is required to stay outside the country for the same period she was in Lebanon. Most club owners prefer the women stay up to three months, then return in three months, so they can create return customers.

Charbel says there are currently more women willing to come to Lebanon to be artists because of the financial crisis. But an increase in the number of willing artists has not brought wages down.

 

Prostitution or entertainment 

George and Charbel both say women in their clubs are never forced to go out with men, or to have sex for money.

“We don’t force women to make relations [have sex], that’s dirty,” the owner said. “It’s an agreement between you and the woman. We are providing a show, a drink and we are not pushing them to do anything.”

“In prostitution — you pay and you [have sex],” he said. “In our system, this woman signs a contract, it’s her own will. It’s forbidden for us to sell her — what she does is an agreement between a couple.”

There have been reports that women who have arrived in Lebanon from Morocco and Eastern Europe to work at super nightclubs are surprised to find out the business is a cover for prostitution. But Charbel says that in the past this used to happen, but not now.

“They know why they’re here,” he said. “People know what coming to Lebanon means. The women lie to their parents about which country they’re coming to. A woman I know tells her family she is in Hong Kong.”

Charbel says women will not have sex with a customer for under $100. “At the good super nightclubs woman will take $200 for sex.”
Super nightclub owners are quick to point out that although the women may be selling themselves, they’re making good money. If they spend two hours with three customers during their free time, and charge $100 per customer, they’re making $300 a day on top of their salary.

Charbel acknowledges the women who come to Lebanon to sell their bodies must have come from terribly desperate conditions in their home countries, but he says business is business.

“I feel sorry for them. They have good hearts,” he said. “But it’s like a circle. The woman brings the customers, we get the champagne money and they get their money.”

Betraying some of the national stereotypes super nightclub owners associate with their employees, Charbel adds that Eastern European women “love sex. They were born with a hunger for sex.”

“The first reason they come to Lebanon is for the money, the second reason for the sex. They enjoy it,” he said, adding that he has sex regularly with several women from super nightclubs.

Illegal but condoned

It is not widely known that prostitution is actually legal in Lebanon (see Lebanese Law of 2/6/1931), but the government has not issued a license for a legal “brothel” since the beginning of the civil war in 1975. At that time, all licensed brothels were located in downtown Beirut, near Martyrs’ Square in the Zeitoun district, famously featured in the film “West Beirut.” All the brothels were destroyed during the fighting.

Super nightclubs have filled the void left by the brothels, to a degree. According to Siranossian, who represents nightclubs to the syndicate, the super nightclubs were once legitimate establishments during Lebanon’s “golden” years of tourism in the 1960s. Back then, cabarets and super nightclubs featured real performers and artists: belly dancers, singers and musicians.

“But the war came and they all closed,” Siranossian said. “When the war finished in 1992, [the super nightclubs] wanted to reopen. But there was no business. So they couldn’t open in a clean way and bring artists without [the artists sitting at the table with customers], because they will lose money. So they were obliged to open [in their current form].”

Street level sex industry

Despite its seediness, the world of super nightclubs does appear to be a clean, transparent and well regulated industry compared to the plight of street-level and red light bar prostitutes. These women sell their bodies for anywhere from $2 to $30 dollars for sex. The red light bars mainly operate in Hamra. They are also licensed in a similarly complicated fashion as the super nightclubs, but basically “bar” means brothel, in the traditional sense of the word. News reports have documented how the system works, with a “Mom” running a number of women in the “bar” who service men on a walk-in basis.

“They have small secret rooms in the back,” said a source who works with prostitutes, and didn’t want their name used in this story. “So when the customer likes one of them, it’s very easy to take them to this room.”

An award-winning investigative report in An Nahar newspaper on November 27, 2008, said the women are mostly Egyptians, Syrians and Sudanese nationals. The bars are able to operate because the bar owners pay police to overlook the real nature of the establishments, according to those familiar with the business.

Then there are Lebanese women who sell sex on the streets, or out of a hotel or rented apartment, with or without the guidance of a pimp. One former Lebanese prostitute who spoke with Executive said she started selling her body on the streets of the Maamaltein district after she ran away from home at the age of 18. She ran away because her father used to rape and beat her. As a prostitute, she charged $20 to $30 for one or two hours of sex. She got out of prostitution thanks to Dar Al Amal, one of the few organizations in Lebanon working with prostitutes. Dar Al Amal works with around 60 women from three different centers around Lebanon. They also have a presence in all the women’s prisons.

“We are working with the poorest of the poor,” said the Hoda Kara, director of Dar Al Amal. “We are working with women from dislocated families, who were in orphanages, or [worked as] domestic laborers in houses. They have been abused, exploited, mistreated and violated.”

It’s a similar situation in the Palestinian camps. A report in Al Akhbar said women in the Sabra camp charge between $6 to $20 for sex while fellatio costs as little as 3,000 Lebanese lira, about $2. Dar Al Amal’s Kara also says the law is unfair to Lebanese women caught working in prostitution. If a foreign prostitute is caught in Lebanon, she will be deported. If a Lebanese woman is caught with a client in Lebanon, she will be arrested and put in jail. The man will be released, she says. Kara says that especially at this time, prostitution at all levels of society is a “very big business” in Lebanon.

“Because of the tourism here… there is demand,” she said. “And when there is demand, there is supply, for these women who are very poor, who need money, who are not supported [and] because they don’t have any other solution.”

Licenses for super nightclubs existed before and during the war, but the last ones were issued between 1993 and 1997, says the nightclub owner. Prior to his establishment becoming a super nightclub, he says it was a high-end dinner club, which he renovated for $1 million in the 1990s. But business dropped off and he needed money, so he rented the space to a man who wanted to open a super nightclub.

Although prostitution is illegal without a license, General Security gives “implicit consent” to unlicensed prostitution, according to the United States Department of State’s 2007 Trafficking in Persons Report.

The trafficking report says that in 2006 the number of visas issued by the Lebanese government to “mostly eastern European women to work in adult clubs as artists,” numbered 4,210. The trafficking report is the only concrete figure for the number of artists’ visas issued in recent years found for this article. Executive asked General Security to confirm this number, and to provide the number of artists visas granted in 2008 and so far in 2009, but officers were unable to provide the statistics by the time the magazine went to print.

Lebanese General Security commits a significant amount of manpower to regulating the industry. The General Security headquarters contains an entire artists “section.” The guidelines for “artists” in Lebanon can be read in English and Arabic on General Security’s website.

The artists are handed a booklet upon arrival at General Security, outlining their rights and responsibilities. General Security declined to provide a copy of the booklet to executive’s staff.

But according to news reports and people familiar with the booklet and the regulations, the booklet details the rules an artist must follow while in Lebanon. The booklet also contains an emergency phone number to call if the women are physically attacked, raped, held against their will or forced to do anything they don’t want to do.

A necessary state of seediness?

Given Lebanon’s other overriding problems, it’s not surprising there would be loopholes and problems with the regulatory system of super nightclubs. The 2009 US Trafficking in Person’s report said General Security reported “47 complaints of physical abuse, rape, and withheld earnings of foreign women working in adult clubs in 2008.” Those were complaints that “may have involved conditions of involuntary servitude.” Most of the cases, the report says, “were settled out of court and the victims deported.”

The report said if women complain about their conditions, they are “summarily deported.”

General Security and the Ministry of Justice were unable to provide the number of complaints by artists in 2007 and 2008, and did not respond to requests for information or an interview about the subject.

Super nightclub owners say the accusations of human trafficking are unfounded. Even the US State Department acknowledged that few women arriving in Lebanon to work in super nightclubs are unaware of what the job involves.

“Most of the women entered the country knowing that they would be working in adult clubs,” the 2009 trafficking report said.

Although Siranossian says he dislikes the super nightclub business that focuses on hooking men up with women, he justifies Lebanon’s super nightclub system by comparing it to the rest of the Arab world, where prostitution has no oversight.

“Here in Lebanon we closed the brothels, so now customers go to super nightclub[s] where they can take a woman out the next afternoon,” he said. “This is nothing. The most important thing is that the owner of the super nightclub doesn’t sell the woman.”

Siranossian calls the super nightclubs a “fantastic” solution to the problem of prostitution, because it allows the government to regulate and oversee the industry, somewhat akin to the way escort services operate in the US or Europe.

Charbel verifies this, noting that police usually stop in three or four times a week. “They’re checking to see if the woman is in the club, and hasn’t gone out with a customer,” he said.

Even then, it appears that circumventing the law is relatively easy. Police corruption in Lebanon is nothing new, and several people acquainted with the industry said that in the past, law enforcement has often looked the other way if enough money is offered.

“The law was permitting us,” he said. “When the police come, we’d pay a lot of money, and they’d forget everything for one week, two weeks,” he said. “But they’re putting too much pressure now. They refuse to take the money.”

Customers pay much more than usual if the woman goes out with them during nightclub hours, Charbel says. The average price would be $300 for the woman, paid directly to the super nightclub. She charges her own amount on the side. It’s a practice some owners say they are disgusted by.

“Some places are like a bordello, some are like pizza delivery,” George said. “They give super nightclubs a bad reputation.”

But it’s a risky business to break the law. If the police won’t take bribes and the nightclub owner gets caught with women outside the club during working hours, the club can be closed down for a month. The women can be deported.

Still, the employee and others familiar with the business say bribes, and connections to powerful politicians, make laws that regulate the super nightclubs hard to enforce all the time.

“Anyone who opens a super nightclub, for sure if he doesn’t have support at a high level, it’s not easy for him,” said one person familiar with the business, who did not want to be named. “If the [super nightclub] took this permission and they pay money, they can do what they want to do.”

But the nightclubs do appear to get into a lot of trouble with the police. Siranossian has represented the nightclub owners for years in the syndicate, and has sometimes been the industry’s envoy to General Security.

“There are many problems,” he said. “If the woman comes back late to the hotel, or if the owner sells the woman from the club… there are so many problems.”

Siranossian says if the syndicate just took care of super nightclub problems, he would be at the General Security every day, all day. The high maintenance nature of the sector appears to be a source of friction between the syndicate and the super nightclub owners; Siranossian says only 10 of the clubs pay their dues to the syndicate. He also says that due to the changing nature of Lebanon’s tourism industry, he expects clubs to close down, or switch to more legitimate nightclubs in the next few years.

Charbel on the other hand says he’s actually looking to open his own super nightclub somewhere north of Beirut. He says it’s “easy money” but it goes too quickly. “There are too many expenses.”

With the global recession continuing, it seems likely the wages required to bring young women to Lebanon will remain steady. However, the industry depends on cheap labor. The minute the price goes up, or better forms of employment can be found in other parts of Eastern Europe, super nightclubs will have a harder time surviving.

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Kurds and the oil curse

by Ranj Alaaldin
written by Ranj Alaaldin

Sitting on one of the world’s biggest reserves of oil, Iraq continues to be presented with a still difficult-to-answer question — are its vast hydrocarbon reserves an asset or a curse? The country has the third largest proven oil reserves in the world, with an estimated 112 billion barrels. But while Iraq’s oil is relatively easy and cheap to extract, tapping into these reserves is being impeded by political, technological and financial constraints.

In June, eight oil fields were made available in a televised auction, the first major tender since the 2003 US-led invasion. This, however, proved to be a rather embarrassing event as some 41 oil companies that had been invited to bid backed out, including ExxonMobil and other major players. Just one contract was allocated, a 20-year contract to BP and China’s National Petroleum Corporation to develop the 17 billion barrel Rumaila field.
The principal reason for this disappointing result could be put down to the current climate of uncertainty in Iraq amid security and political problems. But in reality, international oil companies were unwilling to bid due to the terms Baghdad offered and the lack of regulatory clarity.

The federal government in Baghdad and the Kurdistan Regional Government (KRG) are still, for example, yet to pass an oil law that provides for revenue sharing, production and exploration of Iraq’s oil. The stalled law is being opposed by the KRG because it gives too much control to Baghdad, contrary to the intentions of the Iraqi constitution. Concerns stem from more than 70 years of financial dependence on Baghdad, tainted by deprivation of both people and land in the Kurdish areas.

The KRG, during the two-year impasse over the proposed law, has enacted its own oil law, developed Kurdistan’s resources (Kurdistan holds an estimated 45 billion barrels of oil reserves), and independently signed more than 20 exploration and development deals. The federal government deems these illegal and void since, it argues, all contracts must be submitted to Baghdad. But the failure to pass the hydrocarbons law has hindered foreign participation in the energy sector and therefore development of Iraq’s dilapidated oil infrastructure.

There is also a level of intricacy surrounding it all. The oil ministry offers international investors a service contract whereby companies receive a fee for the oil that is produced as opposed to a share of the oil itself. In contrast to the terms offered in other parts of the region, oil companies that invest in Iraq will have to be content with a lack of ownership over the oil they produce and an inability to benefit from fluctuations in oil prices.
Then there is uncertainty over the regulatory environment, given the lack of transparency as to whether any deals will be ratified and implemented.

The KRG, however, does provide ownership over physical barrels of oil. Baghdad rejects this model, rendering illegal any contracts concluded pursuant to this format, and blacklists any companies that do so. The tussle is also a legal and constitutional one. Looking at the constitution, Article 111 states that “oil and gas are owned by all the people of Iraq in all the regions and provinces.” Oil and gas ownership, however, is not within the exclusive powers of Baghdad. Articles 115 and 121(2) give regions like Kurdistan legal supremacy on matters outside the exclusive powers of Baghdad. In the absence of any provision explicitly suggesting otherwise, Article 111, or federal government control over oil, is therefore subject to the laws of the Kurdistan region.

In any case, economic realities may force Baghdad’s hand. For example, in May the federal government allowed the export of oil extracted from the Tawke and TaqTaq oil fields, despite oil being extracted from those fields by the KRG in accordance with the production-sharing contracts it prefers. A production of 40,000 barrels per day (bpd) from Tawke and 40,000 bpd from TaqTaq promises to provide a potential $5 million per day (at $50 per barrel).

More than 90 percent of Iraq’s development is dependent on oil revenues. Iraqi Oil Minister Hussain al-Shahristani has been lambasted by the parliament for his ministry’s failings and languishing production, currently 2.4 million bpd and lower than pre-war levels. The country has a dilapidated oil infrastructure in desperate need of rapid reconstruction; its state-owned oil companies are also in need of increased investment and trained staff. Some experts have suggested that more than $40 billion is needed to put oil infrastructure back on track. Pragmatism should therefore pave the way for increased investment.

Strategic nous dictates that international investors make it to Iraq before others, so all eyes will be on the next tender when more than 13 yet-to-invest companies will be invited to re-submit bids for the seven remaining contracts. Investors will also be closely watching the ongoing wrestling match between the KRG and Baghdad.

Ranj Alaaldin is a Ph.D. candidate at the London School of Economics focusing on post-invasion Iraq

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Lebanon

Real Estate – Demolishing heritage

by Executive Staff
written by Executive Staff

During Lebanon’s civil war, bombs and rockets wiped out a substantial portion of the country’s architectural heritage. The war ended and the shooting has stopped, but the destruction of historic buildings has not. Every day, demolition teams tear down old houses and bulldoze hundred-year-old gardens. Tall concrete towers replace the houses, overshadowing the few historical neighborhoods Beirut has left.

Heritage activists are trying their best to preserve the few old ‘Lebanese houses’ still standing in Beirut. But their efforts are largely in vain, as there is no law to protect old homes and preservation is low on the list of priorities for the country’s politicians.

“We have failed,” says Fadlallah Dagher, an architect and a member of the Association for Protecting Natural Sites and Old Buildings in Lebanon (APSAD).
 
Too few on the list
Activists have lobbied the government to enact a heritage law, but so far they have not succeeded. The only law issued dates back to 1933, when Lebanon was under the French Mandate, and protects buildings constructed before 1700. Activists say this law is better than nothing, but does not protect the majority of Beirut’s old buildings.

“This law is very old and outdated, buildings [built before 1700] are very few,” Dagher says. “We do not have any legal support, the only thing we have is the famous list of buildings that should not be demolished.”

In 1999, the government issued a directive listing 220 historic buildings protected from demolition — unless the minister of culture says otherwise. Kahtib & Alami, an architectural and engineering consulting company, created the list, which groups historical building into five categories: A,B,C, D and E. “A” refers to buildings in very good condition, and “E” is the classification for those buildings needing significant work. Buildings classified as A, B or C are protected, while D and E can be torn down freely.

In 2007, parliamentarians drafted a law to reinforce the 1999 directive. It passed through the council of ministers and then disappeared, and is now assumed to be gathering dust on parliamentary shelves.

Mona Hallak, an architect and a member of APSAD, says the 1999 listing is the “worst thing that ever happened” to protecting old buildings, because the study classifies many buildings as D and E, although they are still in good condition. She also says the study concentrates on individual buildings, rather than whole clusters and neighborhoods, which are more important to preserve.

Demolishing an A, B or C building requires the approval of the minister of culture, and it would appear some ministers have been happy to grant permission. Hallak says that when Mohammed Youssef Baydoun was the minister, developers tore down around 22 of the B and C buildings. Since then, Hallak says no one has removed any buildings from the list. The Directorate General of Antiquities (DGA), a division of the ministry of culture, holds the protected buildings list. The DGA declined to comment for this story, saying the issue is “hard and complicated for us.”

Political pressure plays a major role in determining whether a developer can demolish a heritage building. Whenever a historical site is torn down, whether it is on the list or not, activists begin to send letters to different government officials at the Beirut municipality and the prime minister’s office, in order for the work to stop. But they seldom reply, and the demolition normally continues regardless.

 “Without the law, it is just a bit of pressure here and there,” says Hallak.
While A, B and C buildings are somehow protected, heritage activists are trying to fight for the remaining — those listed as D and E and those which are not listed at all. Activists are also trying to safeguard the historical image of some neighborhoods like Gemmayze, which is slowly being torn down, and soon will only host contemporary towers and buildings.

“In 50 years there will be nothing but tall buildings,” says Hallak.

Gemmayze losing identity
The Gemmayze area is one of the few neighborhoods in Beirut where the architectural history of the city is still preserved en masse, and its residents, with the help of some architects, are trying to keep it that way. However, the neighborhood faces a dilemma found in much of Beirut: developers tear down heritage buildings only to replace them with high-rise towers, which activists say destroys the area’s historical image.

Among the most recently demolished historical structures is the Medawar Khan, an Ottoman era roadside inn built from stone blocks and snuggled into the hillside at the bottom of Gemmayze near Beirut’s port. The khan, the last one in Lebanon, at one time hosted merchants and traders after long days of traveling to Beirut. In July, the DGA found out about the destruction of the khan. It sent two formal requests to the Beirut municipality and to the administrative governor of Beirut — one on July 2 and the other on July 7 — asking for the demolition to be stopped immediately.

But it was too late. The structure was not on the government’s list, the DGA could not act by itself since it does not have its own heritage police staff, and the municipality did not reply in time. By mid-July the khan was gone. Lot 146 (where the khan was) is owned by a Lebanese company called Consilium for Investment and Real Estate Development, which is foreign-owned.

Other historical buildings are also being torn down. For example, Makram Zeeny, president of the Gemmayze Development Committee, says the building were he lives on Nahr Ibrahim street in Gemmayze is being evacuated. The developer who bought it will tear it down. Zeeny says the building was constructed in 1927 and might be listed as a D-building so that it can be demolished later, even if it is still in good condition. Two other buildings on the small Gemmayze street are already empty and will also be torn down. A local said that the works started on July 21.

Since these buildings are not listed, or listed as D and E, there is nothing activists can do in order to stop their demolition. Even the DGA has no power to stop their destruction. Thus with no law, heritage activists can only sit and watch large parts of Beirut’s history being turned into dust.

“There are so many beautiful D and E buildings that are being torn down,” says Hallak.
“Slowly, we are losing everything we have.”

Neighborhood growing tall
Architects say it is more important to preserve a cluster than it is to safeguard one building.

“Tearing down a building is terrible… but what is worse is what is going to be built instead of it or beside it,” says Hallak.

For that reason, the APSAD is lobbying for a law that sets construction standards for historical neighborhoods.

“We were demanding a new construction law… but no one wants to review it because it is hard and complicated, especially in Beirut,” says Dagher from APSAD.

In 2006, the Director General of Urbanization (DGU) — the government body in the Ministry of Public Works and Transportation responsible for urban planning — issued a directive to set the construction standards for Gemmayze, so new construction would blend with the neighborhood’s traditional image. To the surprise of all the activists and Gemmayze’s residents, tower permits given before the directive was issued were exempted — although that was the reason why the area was put under study in the first place. Residents submitted a petition to outgoing Prime Minister Fouad Saniora and the former Minister of Public Works and Transportation, Mohammed Safadi, requesting a reversal of the decision. But construction permits were given, and the towers were built.

In a 2006 statement, Joseph Raidy, the president of the Gemmayze Development Association (ADG) said that issuing a directive that applies only to certain segments while exempting the others only happens in a “Banana Republic.”

The government also commissioned a study of the St. Nicolas Stairs in Gemmayze in 2001. But according to Georges Abi Khalil, head of management and coordination at the ADG, no one is abiding by the directive. Many developers are building more stories than is allowed, then going to the municipality to compensate for the ‘mistake’ by paying money.
“The building beside us [on the St Nicolas Stairs] is listed, but they built two more floors, which is illegal,” he says.

Khalil also says archeological remains were found below a new building that hosts a restaurant on the stairs, but the developer ignored them.

“We filed many lawsuits… we stopped their work for six months… but nothing happened,” he says. “There was also a small road between the two buildings, which was there for 70 years, and they closed it.”
 
Paving over history
Back in the 1960s and 1970s, the Lebanese authorities planned two new roads in Ashrafiyeh; one in the Sodeco area, and the other in the Hekmeh area — both areas rich with historical buildings and beautiful gardens. The decree for the road in Hekmeh was signed again in 2008 by the caretaker Minister of Interior Ziad Baroud, outgoing Prime Minister Fouad Saniora, Lebanese President Michel Sleiman and other concerned parties.

However, according to Shafik Milan, the head of the general planning committee at the Beirut municipality, there is nothing new happening with this project. He thinks that it is very hard for this road to be built because of its very high cost, and the many buildings and gardens that would need to be destroyed.

“The road should be done before buildings come up, and not after,” he says. That is good news to the APSAD, who launched a campaign on March 20 against the road in the Sodeco area, which passes through Tabet street and would demolish seven heritage buildings.

Jack Tabet, the owner of the Tabet Palace, says unfortunately there is nothing he can do if the government decides to build the road. A third of his garden would be destroyed, and the foundation of his 13th century property will be damaged.

APSAD is trying to propose an alternative to this plan by shifting the road so that it includes the large parking area on the other side of the street, thus sparing historical buildings.

Dagher says that since the buildings included in this plan were frozen because the Lebanese government acquired them, Lebanese citizens should take the opportunity to safeguard the cluster and replace the road plan with an alternative. It is yet to be known whether the plans will go through.

Economic repercussions
Historic buildings not only hold sentimental value, they are also economically viable. Nada Sardouk, director general of the ministry of tourism, says the loss of Beirut’s history is having a negative effect on tourism. She also says that whole clusters should be preserved, and not only individual buildings.

“If I was the head of the Beirut municipality, I would have asked the government, the municipality and the ministry of finance to give municipalities incentives and say: ‘go ahead and buy these houses or go and be sponsored by a bank.’”

As a next step for heritage activists, they say they will wait for the new cabinet to be assigned, and will then push the parliament to pass the law to protect buildings of historic value. Even though the law took 10 years to be drafted, hopefully it will not take as long to be approved.

“If they will approve it, it will be great,” Hallak says. “If not, we will keep up the pressure.”

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Iran rifts in a dangerous time

by Gareth Smith
written by Gareth Smith

Ironically, Iran’s reformists have long feared a scenario in which a conservative government would first crush them and then reach an agreement with the United States and reap the domestic political benefits.

Could an agreement with the US, defusing tension over Tehran’s nuclear program, result from June’s presidential election awarded to Mahmoud Ahmadinejad with 63 percent of the vote? Could a deal be delivered by a single-minded, unified right wing in control of Iran’s organs of state?

In theory, yes. In practice, it is hard to see Iranian politics being so malleable, even if Ayatollah Ali Khamenei, the supreme leader, has emerged from the post-election protests still in charge.
While much of the American media has detected a military coup in the election and its aftermath, the claim is unsubstantiated. Even if Iran’s Revolutionary Guards Corps has increased its influence in recent years, overall control of the state lies with a group of clerics and non-clerics, civilian and military, who are subject to factional pressures and various vested interests. Iran is not North Korea.

But it is equally hard to believe the push and pull of factions will ease the chances for engagement with the US, even as the threat of an Israeli military attack increases.
On July 17, Ali Akbar Rafsanjani, veteran of the 1979 revolution, gave a sermon at Friday prayers in Tehran calling for unity, the release of detainees and the easing of restrictions recently imposed on the media. He echoed the argument from reformists and senior ayatollahs that complaints about the election should be addressed more thoroughly than the perfunctory official enquiry.

Rafsanjani is no liberal. Rather he has long been concerned by the international challenges facing Iran, and now believes its ability to resist them is weakened by internal strife.
Many others within the elite are just as restive. Ali Larijani, parliamentary speaker, was one of the first conservatives to question the conduct of the election. The conservative-controlled parliament can be expected to resist at least some of Ahmadinejad’s nominations for ministers after his inauguration this month for a second term.

None of this offers a propitious backdrop for talks with Washington. The shift to the right has over several years increased the influence of those most skeptical of engagement and removed those best placed to conduct it.
Many of Iran’s best diplomats — whether professionals or those more or less allied to Rafsanjani — were removed by Ahmadinejad in his first term. The team that conducted the 2003 to 2005 talks with the European Union, during which Iran suspended uranium enrichment as a “goodwill gesture,” has long been out of favor with those who are now in power.

During the presidential campaign, Ahmadinejad attacked those talks, even though they were endorsed by Ayatollah Khamenei. Conservative newspapers, including the state-owned Kayhan, have long argued against negotiations with the US, even though Ayatollah Khamenei in March accepted the possibility if Washington should “change its behavior.”
In seeking an interlocutor in Tehran, the US has long known it must talk to Ayatollah Khamenei, but President Barack Obama can hardly relish dealing with an Iranian leader facing an internal power struggle.

At the same time, the US president faces an American right and Israeli lobby energized by the well-publicized crackdown in Iran, which they say proves the Iranian regime is dangerous. Twitter-armed liberals and feminists in the Democratic party are just as outraged.
American law-makers are discussing an autumn deadline for tougher sanctions if Iran does not agree to talks, and public opinion is far more likely now to accept Israeli strikes.

None of this means successful engagement is impossible. Both Obama and Secretary of State Hillary Clinton have calmly insisted that nuclear talks between the leading UN powers and Iran should continue.
In a rare positive sign, the new head of Iran’s Atomic Energy Organization (AEO), appointed in mid-July, is Ali Akbar Salehi, an American-educated nuclear physicist. The vacancy arose after the resignation of Gholamreza Aghazadeh, reportedly disgruntled with the election.

Salehi, who holds a doctorate from the Massachusetts Institute of Technology, was the Iranian representative to the International Atomic Energy Agency (IAEA) between 1999 and 2004, including the period of the talks with Europe decried by Ahmadinejad. In 2003 Salehi signed, on Iran’s behalf, the additional protocol allowing snap IAEA inspections. His appointment to head the AEO will have been approved by Ayatollah Khamenei and seems unlikely to have been the president’s initiative.

But since Salehi left the IAEA five years ago, Iran has installed in its Natanz plant around 7,000 centrifuges, the devices used for enriching uranium, while the UN Security Council has passed four resolutions demanding Tehran halt enrichment.

The planned expansion of the program will widen the gap between Iran and the US. And the further each must go to compromise, the harder it will be to manage the process domestically. With recent events, Ayatollah Khamenei leans more than ever on those who believe Iran can and should confront the ‘Great Satan’ in Washington.

Gareth Smyth is the former Financial Times correspondent in Tehran

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