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Pirated intellect bedevils WTO

by Riad Al-Khouri July 1, 2009
written by Riad Al-Khouri

Lebanon first applied to join the World Trade Organization in 1999, but now, a decade later, the country’s accession is still not a done deal — a time lag far longer than with most other past or current applicants.

At WTO meetings on Lebanon’s accession, an often raised issue is the state of intellectual property rights (IPR) in the country. Respect for IPR is a key condition of WTO accession.


The United States Trade Representative (USTR) placed Lebanon on a “watch list” in 1999 and then downgraded Beirut to the critical “Priority Watch List” in 2001 where it remained until 2007. It then upgraded Lebanon back to the watch list in 2008, and in its 2009 annual review, the USTR maintained Lebanon on the watch list.


Other Arab countries on the 2009 watch list include Egypt, Kuwait and Saudi Arabia. Though piracy-related losses incurred in Lebanon by copyright-based industries are estimated to have risen last year, Beirut nevertheless made progress in 2008. For example, concerning the problem of cable piracy, about 80 percent of the approximately 700 pirate operators last year signed up to become legitimate providers.


Yet, as a cursory look around Beirut and the rest of the country will show, there is rampant piracy of books, music, films and software in Lebanon, as well as a growing problem of counterfeit pharmaceutical products on the local market. Though Lebanon was one of the first countries in the region to have IPR laws, many of which have also been updated and improved over the past decade, a main obstacle is that such measures are not properly enforced. Lebanon is a signatory to several international agreements relating to IPR, but is unable to properly implement basic anti-piracy measures.


In 2000, the Lebanese government issued a customs law that prohibits the export, import, and stocking of goods infringing copyright. Punishment imposed by the country’s IPR law includes confiscation of illegal products and closure of stores in violation, but such measures are not taken often enough. Even when they are taken, they do not exact an appropriately tough punishment. For example, it is illogical to impose a $700 penalty on a shop owner who has been caught stocking thousands of illegal copies of dvds worth many times such a derisory amount. This leniency does not deter pirates.


Lebanon’s reputation as a haven for piracy is also partly due to a lack of awareness. The state has a role to play in enforcing intellectual property rights by creating awareness among the Lebanese people on the importance of such measures. It is insufficient to simply enforce the law; people should also be informed about the issues involved. Experts (mainly from Western countries and companies) come to Beirut to address businesses, the general public, the media and information technology companies on the need to respect IPR. Promoting the benefits of using legal software and other IPR goods focuses on awareness and education more than on enforcement; yet, the going is tough in an atmosphere of economic difficulty and lack of respect for authority.


Respecting IPR is a basic condition for joining the WTO. Lebanon acquired observer status at the WTO shortly after passage of the 1999 Copyright Law, but even if WTO admission was not on the table, IPR enforcement in the country would be a boon to the country’s many artists and other innovators. Sectors dependent on intellectual innovation are crucial to the Lebanese economy. Lebanon is among the top Arab countries when it comes to intellectual innovation. Copyright industries in Lebanon account for 4.5 percent of the country’s employment, generating more than half a billion dollars annually from sectors including publishing, music, theater, video, radio, television and software. A proper IPR culture would be good for all of these — as well as help in getting Lebanon admitted to the WTO.

Riad Al Khouri is senior associate consultant at the William Davidson Institute of the University of Michigan in Ann Arbor

July 1, 2009 0 comments
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Hezbollah killed JFK

by Peter Speetjens July 1, 2009
written by Peter Speetjens

Most people will be familiar with Joseph Goebbels’ famous line: “If you tell a lie big enough and keep repeating it, people will eventually come to believe it.” Yet what they may not know is how the late Nazi Minister of Propaganda advised to deliver the message: “Think of the press as a great keyboard on which the government can play.”

Propaganda is as old as war itself and the media play an essential role in the battle for ‘hearts and minds.’ One way to prepare the public for a justifiable future war is to create an image of evil through a constant flow of negative information. Ever since the days of bows and arrows, enemy troops have been accused of killing women and children, a strategy that still proved effective in the run-up to the 1990 Gulf War.


Then, nearly all American media ran the story that Iraqi troops had stolen incubators from a Kuwaiti hospital, while leaving the babies for dead. Only after the war ended did it become clear that the story was false and had been scripted by Hill and Knowlton, a public relations firm hired by the Kuwaiti government to help prepare America for a “just” war.


Seeing this and other examples, not in the least the US invasion of Iraq, the media should be aware of the fact that the powers-that-be have an interest in playing them “like a keyboard.” Yet in their eternal race for scoops and ratings, the media are often all too willing to swallow the sensational.


Take for example the flurry of articles regarding Hezbollah that have appeared over the past year. If we are to believe every single report, Lebanon’s Party of God smuggled missiles to Gaza, plotted to bomb Egypt, established terror cells in Venezuela and is part of the Columbian cocaine mafia.


Among more recent reports was a May 24 article in Germany’s Der Spiegel which claimed — based on anonymous investigative sources — that Hezbollah was involved in the killing of Lebanon’s former Prime Minister Rafiq Hariri. The news was trumpeted by media opposed to Hezbollah, even though the international criminal court denied having talked to any journalists and the same accusation had already been published by Le Figaro in 2006.


The article’s author, Erich Follath, who in 1983 wrote a book on the Mossad, even had Hezbollah’s fiercest opponents laughing when he claimed that the motive for the murder was the fact that “the billionaire [Hariri] began to outstrip the revolutionary leader [Nasrallah] in terms of popularity.”
In March, the media reported that Israeli jets and drones had, in January, bombed a convoy in Sudan which was allegedly smuggling rockets and missiles into Gaza. Anonymous Israeli security sources accused Iran and Hezbollah of being the masterminds. Israel did bomb Sudan, not once but three times, yet so far no proof has been given that Hezbollah or Iran were indeed involved.


This news had hardly gone quiet when the Egyptian government on April 10 announced it had arrested 49 members of a “Hezbollah cell,” including three Lebanese nationals, that planned to attack the Suez Canal, the Gaza border and tourist resorts in the Sinai. One Egyptian newspaper reported that two Palestinians amid the 49 detainees had confessed to being members of Hezbollah. Yet what are these confessions worth, seeing Egypt’s proud reputation in the use of ‘enhanced interrogation techniques’?


If we are to believe the media, Hezbollah is not just a regional threat. The Los Angeles Times on August 27, 2008, quoted anonymous American defense sources who claimed that Hezbollah was one among many “anti-western organizations” that had moved “people and things” into Venezuela. According to the source, the development was closely linked to the partnership between Hugo Chavez’s Venezuela and Iran.


The same newspaper was at it again on October 22, 2008 when it reported that Columbian authorities had arrested members of a drug cartel, including the Lebanese “kingpin” and “world class money launderer” Chekry Harb. He allegedly had close links to Hezbollah, yet called himself “Taliban.”


The Hezbollah-into-cocaine story returned in April 2009, when an English language website in Holland reported that Dutch authorities had arrested 17 suspects from a cocaine gang. The report rather vaguely claimed that the gang maintained contacts with “other criminal networks, which in the Middle East support Hezbollah financially.” It also said that the suspects, mainly South Americans, invested their profits in property around the world. No further details regarding Hezbollah or properties being bought were given.


Hezbollah is certainly a force to reckon with, but it is hard to believe that Lebanon’s Party of God is a global threat. Most stories seem to have been spoon-fed by governments and security agencies interested in blacklisting Hezbollah. Meanwhile, the media forgot to ask questions — happily played as a keyboard — and instead complained that people do not read newspapers anymore.

Peter speetjens is a Beirut-based journalist

July 1, 2009 0 comments
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The Dubai delusion

by Norbert Schiller July 1, 2009
written by Norbert Schiller

Sheikh Mohammed bin Rashid al Maktoum, ruler of Dubai and vice president of the United Arab Emirates, likes nothing better than foreign media reports depicting his emirate as the “economic miracle of the desert.” However, since this economic crisis hit, the foreign media has had a field day reporting everything that has gone wrong with Dubai. Headlines such as, ‘Dubai Property Scandal Claim Emerges Amid Media Blackout’ or ‘The Dark Side of Dubai,’ are just some of the stories that have made the headlines lately. In comparison, reporting within Dubai has been relatively tame and, if you didn’t know any better, the local press would have you believe that the economic situation was under control and life was as idyllic as ever. And that’s what the people at the helm want us all to think.

A few days ago, I received an email from a retired friend who until recently was an executive for a multinational based in Dubai:
“I guess Sheikh Mohammed and his marketing and PR [public relations] machine were more than happy to use the press and the [foreign] media to spread the message of the ‘economic miracle in the desert,’ but they should have realized that trying to use the media is a double-edged sword. Journalists love nothing better than a good story and what better story than the broken dream and the broken lives in the desert.”


Regardless of what the government wants you to believe, it’s no secret what is happening. There is no expatriate living in the Emirates who does not know at least one person whose “dream” has been shattered. In fact, most people could probably name a dozen friends and co-workers who were forced to pack up and leave.


For years before the financial crisis, Dubai was awash with money and the mere thought of it suddenly evaporating one day hardly crossed anyone’s mind. Dubai became a phenomenon all by itself, a place where everyone aspired to go to make more money. From the migrant laborer in India to the marketing wiz in the United Kingdom, everyone had their eyes on Dubai. For many laborers, their first brush with reality was having to repay their debt to the agency that brought them here, almost immediately upon arrival. For the well-to-do urban professionals, the first trap was spending money way beyond their means on everything from fancy cars to property. It seemed like everyone was over their heads in debt, punch drunk on the illusion that this was one of the last frontiers left in the world.


My friend was always skeptical about this line of thought and, like many others, viewed Dubai’s rapid growth as a bubble waiting to burst. I can’t recall how many times he endlessly argued at dinner parties, or while out sailing with friends. Often those who boasted about the “Dubai success story” acted as if they themselves were at the top of the food chain. In the same email he goes on: “All along, most of us knew that the Dubai miracle was nothing but an empty mirage. I really pity the suckers who got caught up in the massive real estate scam, which is what this whole mirage in the desert was really all about.”


It’s also no secret that Sheikh Mohammed surrounded himself with people who believed in his dream of transforming the desert into an oasis at any cost. The initial money was there, so too were the investors and the hand-picked team to carry out mission impossible. The list of “miracles” the ruler preformed is abundant and well documented: doubling Dubai’s coastline, building the world’s tallest tower and one of the largest shopping malls and making a ski slope in the desert. But then again, there was no one in the sheikh’s inner circle that was in a position to contradict him if they felt he had gone too far. A few years ago, the CBS program “60 Minutes” profiled Sheikh Mohammed, using interviews with him and his close advisors. Sultan Ahmed bin Sulayem, the chairman of Dubai World, had this to say about his boss: “He’s always asking the impossible, not what you are able to do, but what you cannot do!”


The sad fact is that nobody can really afford to see Dubai disintegrate; too many livelihoods are at stake. Dubai, like the rest of the Gulf states, is a necessity for millions of laborers and workers who come here carrying hopes and dreams of improving their lot. I can only hope that when this crisis passes the leadership of Dubai will come to their senses and create a place that does not only sing its own praises, but looks after those whose sweat and toil have made this emirate what it is today.

Norbert Schiller is a Dubai-based photo-journalist and writer

July 1, 2009 0 comments
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Society

Al Hurra – Joaquin F. Blaya (Q&A)

by Executive Staff July 1, 2009
written by Executive Staff

Joaquin F. Blaya is a member of the United State’s Broadcasting Board of Governors, which oversees US government run broadcasting networks like Voice of America and Middle East Broadcasting Networks, which includes Al Hurra Television. Al Hurra (meaning “the free one”) broadcasts to 22 countries in the Middle East, Iraq and Europes. Governor Blaya had a principal role in developing Al Hurra’s “Al Youm” (meaning “today”), a daily three-hour news and “infotainment” program broadcasting live from five cities simultaneously: Dubai, Jerusalem, Beirut, Cairo and Washington D.C.

The US government has funded the Middle East Broadcasting Network with around half a billion dollars since its launch in 2004, and requested $113 million from the US congress in the 2010 fiscal year budget. Governor Blaya previously served as chairman of Radio Unica, a Spanish-language radio network, and as CEO of the Telemundo Group, Inc., the US’ second-largest Spanish-language television network. He spoke with EXECUTIVE from the US by phone to discuss Al Hurra’s controversial past and its future in the Middle East

E Can you tell us what the mission of Al Hurra is?
I think Al Hurra’s mission is the same mission as all the US international broadcasting networks: to provide news and information in an accurate manner to the world, which people don’t have access to, or in places like the Middle East, Arab countries, where there is access to information but there are some subjects are not discussed on a regular basis, like women’s rights and gynecology and other elements.

E Why is Al Hurra prohibited from being broadcast in the US?
It goes back to the origins of America. The concern among members of congress was that the administration would use it as a vehicle to propagandize the population.

E No matter how the US spins its policies, it has always been viewed with suspicion in the Arab world. Why has Al Hurra continued to exist when evidence suggests that is has failed to penetrate the Middle East’s media landscape?
That is the language that is used by people who oppose the Al Hurra idea. I would offer you the numbers, and I live by the numbers. Al Hurra has up to 27 million weekly viewers, according to AC Nielsen [a US media research company], so someone is watching. And this, mind you, is a region where this was talked about as an American channel. 
In my [experience], people watch what they want to watch, and they particularly seem, in this part of the world, to watch news and information that can be credible. So when people say Al Hurra has been a failure, I say we’ve gone from 1 million [viewers] to 27 million. I don’t think that is a failure. Is there more to be done? Obviously, there is always more to be done. Therefore the importance of [Al Youm]… Al Hurra is not a one trick pony.

E With all due respect, those audience numbers have been called into question by the US Government Accountability Office (GAO) and research done by Zogby and the University of Maryland. Even if the Nielsen numbers are accurate, Al Hurra is getting less than 10 percent of the market. 
The Zogby survey is not audience research. That is where confusion lies, because we are comparing apples and oranges.

E And the GAO report?
No, no, no. This was about three years ago, the year the GAO had some questions based on some of the methodology that Nielsen was employing at the time. That was corrected. Every number you see coming from Nielsen [meets] GAO standards. What I’m saying is that that is old news.

E But President Barack Obama chose to appear on Al Arabiya in his first interview with an Arabic language news channel. Isn’t that a signal that the White House doesn’t have much faith in Al Hurra?
Actually it’s not. The White House is very supportive of Al Hurra, as indicated by the budget, which is what really matters in Washington. I should not express a political point of view, but I think as a citizen. I would understand why Obama would select an Arab channel for this first approach to the Arab world. But… [Al Hurra] had Secretary of State [Hillary] Clinton, Vice President [Joe] Biden, Senator [John] Kerry, this is what we do. One of the strengths of Al Hurra, for obvious reasons, is that they are the experts in Washington, and have access to all these people. So I would not think more of that issue.

E If Obama is appearing on Al Arabiya because it is an Arab network then what is the role of Al Hurra? Isn’t it supposed to be the mouthpiece through which the US government speaks to the Arab world? 
Sure it does, but not exclusively. I’m not a political figure, I’m a broadcaster, but I would think that [Obama] was extending himself to use an Arab-owned based media instead of an American media for his first approach.
 
E How do you make sure that US’s foreign and domestic policy stances don’t enter into the editorial line of the network?
Back to old history of Al Hurra; there were mistakes made, but they were mistakes not in content, but of the programming standards. It is not a good idea to put a speech from [Hassan] Nasrallah or anybody else for one hour on the air. It doesn’t make ‘audience sense,’ it doesn’t make for good programming. The questions was not whether we would put on-air opinions of people who disagree with us, we do that, but we do it in a balanced way.

E Al Hurra’s President, Brian Conniff, doesn’t speak Arabic. The Executive Producer of Al Hurra’s new program, “Al Youm,” Fran Mires, doesn’t speak Arabic and has only visited the region a few times on brief trips. If Al Hurra’s goal is to reach out to 300 million Arabic speakers, then why wasn’t someone who speaks the language and understands the nuances of the culture chosen to run “Al Youm?” 
We have brought in tens of producers and executive producers, but what we needed was someone who had experience putting together these kinds of programs, someone who spent 20 years doing shows like this, an Emmy winning producer. Having said that, we have brought in around 150 Arabic speakers to produce Al Youm who are contributing sensitivity to the issues in the region. Hiring 150 people from the Arab world [who are] professionals is quite an accomplishment.

E We all know about the problems Al Hurra has had in terms of credibility, what are you doing to change this image? 
When I was being [grilled] in [the] US congress… I said that we needed to put a structure in place that was not there, things as simple as an assignment desk.

E That seems pretty obvious…
Yeah, doesn’t it? For people like us who have worked in the [news] business, you don’t need any description of what that means. And Al Hurra didn’t have one. So [as] the first step… we implemented an assignment desk with standards where you know what it is your reporting. So, I cannot overstate the importance of that in Al Hurra, and what it has done to the operation. That’s why in the last two years these issues you were referring to have not occurred. Someone is minding the store, basically. That in itself was the first major step. 
Second, it took over a year and a half to put together “Al Youm,” first, because of complexity of the program, but as important, because of criticism [of Al Hurra] that occurred for those two years; Al Hurra had to reestablish credibility in Washington. So while we were being criticized, I was proposing these changes, and proposing this new window, but it took some time to build that credibility. So this has been a major effort on our part to walk the walk, to put the editorial controls in place, to run professionally, and then build the show in the region. So it goes beyond just a window to America, or world, platform, because I feel as important [as it is] to provide news and information, it’s important to serve as a vehicle so that people in the region can talk to each other, and argue with each other, and bring new ideas.

July 1, 2009 0 comments
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Executive Insights

Lebanon‘s election campaigns brash but empty of content

by Mark Helou & Ramsay G. Najjar July 1, 2009
written by Mark Helou & Ramsay G. Najjar

The authors of Executive Insights have been invited by this magazine to offer their professional opinions and analysis to you, the reader. Executive magazine does not endorse the analysis of Insight authors, nor should the Insights be interpreted as reflecting the views or opinions of Executive or its editorial staff.

Never in Lebanon’s election history have the eyes and ears of citizens been saturated — some would even say jammed — with such an overwhelming quantity of colors, pictures, slogans and counter-slogans. Billboards, TV ads, YouTube clips and Facebook pages were ruthlessly employed to target the highest possible number of potential voters which, more often than not, ended up completely confused by the communication blitz. Now that the party’s over, many questions inevitably come to mind. What exactly led to this frenzy in political messaging, and to this particular type and style of communication? Was this an expression of a healthy democratic political scene or the symptom of an underlying fundamental dysfunction? What positive or negative impact did it ultimately have on Lebanese citizens in the context of the electoral process? And, most importantly, to what extent was electoral political communication reflective of the principle of accountability, which is a pillar of sound democratic practice?

It is no secret that the Lebanese political scene has been characterized lately by intensely polarized opinions, with a high proportion of citizens having already “made up their minds” concerning their vote. However, the existence of neutral or undecided voters coupled with reports that the election outcome would be fateful for Lebanon’s future and ultimately decided by a very narrow margin, kick-started an aggressive all-out campaign. Campaigns aimed to glean the crucial undecided swing votes and galvanize partisan voters, with each camp asking the citizen to “buy its products,” i.e., to vote for its candidates.

Though this analogy between a politician and a product might seem alluring at first, it is ultimately misleading. For although electoral campaigns were characterized by loud and incisive calls for action similar to the ones used to sell consumer goods, the campaigns (voluntarily or involuntarily) overlooked an essential difference between voting and shopping; shopping for a product could be a one-time purchase if you are unhappy with what you have chosen, while the act of voting could shape your life and that of your country for years. The hard-sell style that characterized pre-electoral communication resulted in the drastic downplaying of vital political content and substance which should normally translate into consistent electoral programs, clear political visions and concrete roadmaps. A glimpse at the pre-elections communication landscape indeed reveals the distressing scarcity of such elements.

Loud yet lacking

This void in ideas had a direct negative impact on all pre-electoral communication. An ancient physicist’s idiom tells us that “nature abhors a vacuum.” Unfortunately, nature does not always fill this vacuum in a good way, as the campaign has left us with the unpleasant aftertaste of a void filled by creative yet unsubstantiated slogans and counterproductive polemics. In other words, communication during the elections became an end in itself.

This does not mean, of course, that campaigns were lacking creativity, wit or humor. On the contrary, the ad professionals behind these initiatives demonstrated all these traits in sometimes amazing ways. Unfortunately, the excitement and buzz created by the creative campaigns resulted in the audience losing track of what is truly important, which is the need for consistent political content that has a strong message behind it. The slogans being plastered across Lebanon have thus become the trees that prevent us from seeing the forest.

Ad busting, which was often conducted with virtuosity by all political camps, gives another striking example of this lack of content. The “slogan wars” on billboards and on the Internet became a self fulfilling purpose, and had more similarities with a Byzantine quarrel than with a rational confrontation between ideas and programs which could fuel a healthy debate. Ironically, while the opponents were busy passing the hot potato to one another, they ultimately forgot about the “beef” of their communication and instead tried to compensate for this missing element by over-packaging their messages.

The reasons behind this anemic political substance are many. Without judging whether the political entities involved did or didn’t have any real content to deliver, one can try to explain this deficiency from a pure communication perspective. The first reason can be found in the absence of a communication vision emanating from consistent content which extends in time beyond particular events such as elections. Communicating such content and substance entails the deployment of constant and proactive communication initiatives (interactive websites, university conferences and publications) through which various stakeholders are targeted by consistent and regular messages. The strategy should also account for the existence of two-way communication channels (blogs, YouTube channels, Q&A sessions and town hall meetings) that will ensure that audiences’ concerns and ideas are heard and addressed through continuous dialogue and feedback.

Regular communication efforts would ultimately result in clearly conveying the position of the politician or party, the system of values they espouse and what their future candidates stand for. In the long term, this strategy would gradually build the party or candidate’s image and equity, and result in constant two-way liaising with stakeholders and audiences, ultimately entrenching positive perceptions while clarifying any possible misperceptions that stakeholders might have of the political group or politicians in question.

Masking the empty message

The absence of actual “beef” in their communication strategies has led political parties to entirely rely on advertising agencies in a bid to fill this strategic gap under the pressure of elections. Advertising agencies, in turn, have unleashed their creativity to successfully grab audiences’ attention. However, it is clear that this has generated scattered and ad hoc efforts that ultimately appealed to the voter’s primary reflexes — their ‘instinct’ — as opposed to their ‘mind.’ The lack of proactive and sustained communication has also forced parties to condense their ideas into the forms and channels that best met their tight time constraints, thus overly relying on catchy slogans and noisy billboards that did not express any political depth and, most importantly, did not showcase any realistic promise. Even the now famous “Sois belle et vote” campaign, which represented a much needed attempt to touch on the issue of women’s rights, was limited to a call for action that raised a prejudice and fell short of empowering Lebanese women.

This emotional and instinct-based approach to communication has obviously worked quite well, judging from the high voter turnout. Nevertheless, it remains short-sighted, as its impact is bound to be ephemeral and last only as long as the campaign itself. Moreover, this approach did not uphold a basic democratic principle underlying the concept of elections, which is the voter’s right to hold their politicians accountable for a specific program or vision. As a pillar of the democratic practice, the accountability principle should ideally be reflected in electoral political communication; it should inform citizens and empower them to hold a politician accountable based on his or her implementation of their program rather than on personal considerations, pure instincts and impulses or the politician’s ability to play on people’s insecurities and fears. By instituting a culture whereby politics is driven by programs and visions rather than tactical self-promoting considerations, short-lived alliances and even fear mongering, we would edge closer to a state-of-affairs in which representatives are held liable for their agenda and are voted-in on their ability to fulfill their set promises.

While political communication can become a precious tool in consolidating genuine democracy by promoting accountability, crude calls-for-action can have the exact opposite effect by transforming the democratic voting process into an empty shell and reducing the citizen to a mere ballot with no aspirations or rights. After all that is said and done, only when we elevate the democratic practice above the fray of political infighting and move toward a new social contract based on rights and responsibilities can we prove Oscar Wilde wrong when he said: “Democracy is the oppression of the people, by the people, for the people.”

With the June 7 election behind us, and despite its many imperfections, Lebanon should be proud of the feat it accomplished as it proved to be a role model for free elections when compared to neighboring countries. Lebanon has the potential to mature more and, as such, will remain an example to follow and an authentic and aspiring Arab democracy.

July 1, 2009 0 comments
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Banking & Finance

GCC – A currency shortchanged

by Executive Staff July 1, 2009
written by Executive Staff

Political infighting has dogged attempts by Gulf Cooperation Council states to integrate their economies. Most recently the factious nature of GCC relations has been agitated by the planned monetary union.

With the United Arab Emirates decision in May to pull out, only four GCC members were left to sign the pact on a common currency — pegged to the dollar or a basket of currencies — when they met in Riyadh on June 7. The four members who signed-on were Saudi Arabia, Kuwait, Bahrain and Qatar; notably absent from the signing ceremony was the second largest economy in the GCC — the UAE.

Analysts say the UAE declined to participate due to the May 5 decision by the four other states to locate the headquarters for the prospective monetary union’s Gulf Central Bank in Riyadh. As the second largest economy in the Gulf region, the UAE’s move has created significant controversy and tension between itself and the rest of the GCC states, especially Saudi Arabia.

Pure politics

Eckart Woertz, program manager of economics at the Gulf Research Center in Dubai, believes this quarrel has nothing to do with monetary policies. “It’s a pure political issue,” he said. “Obviously, there is a hurt ego on part of the UAE, [as it] was expecting [to host] the GCC Central Bank and they didn’t get it.”
After the UAE confirmed its plans to stay out of the proposed regional monetary bloc, Saudi Finance Minister Ibrahim al-Assaf said that the location of the GCC Central Bank was non-negotiable.
Meanwhile, UAE Central Bank Governor Sultan Nasser bin al-Suwaidi said, “We are out [of the GCC monetary union] for the moment.”

A week later, UAE foreign minister Sheikh Abdullah bin Zayed al- Nahyan further hinted at the possibility of the UAE rejoining the monetary bloc at a later stage, saying the Emirates would ‘consider’ returning to the union if the terms are altered and other GCC members authorize a joint central bank to be based in the UAE. Such suggestions came as Saudi Arabia made clear that no terms will be amended regarding the central bank’s location.
“There are certainly behind closed door negotiations going on,” said Woertz. “It’s difficult for both sides to compromise without losing face.”

No matter what, Woertz said the UAE cannot declare their return to the union and then expect Saudi Arabia to welcome them with open arms.
“Maybe they’ll find a compromise; perhaps an Emirati heading the GCC Central Bank, but the bank being in Riyadh, for example.”
For now, it seems Bahrain, Kuwait, Saudi and Qatar are not worried about having to cut any sort of deals with the UAE.

Moving forward

But would a monetary union without the Gulf’s second biggest economy — the UAE — or Oman, make any sense? Woertz says the GCC monetary union without the UAE may never materialize.
“Oman’s withdrawal was manageable. But now, with the UAE withdrawing, there is considerable damage,” he said.
Tristan Cooper, a sovereign analyst at Moody’s Investors Service in Dubai, has doubts about the fate of the monetary bloc.

“I am not sure whether it is going to survive [the] setback [of the UAE withdrawing] and I am rather skeptical about when and whether the project will be achieved.”
But the union could go ahead, and set up a situation similar to that of the United Kingdom and the Eurozone in the late 1990s. When the UK decided not to partake in the EU’s single currency, the UK did not become politically isolated from the rest of Europe, as many had feared.
Giyas Gökkent, chief economist at the National Bank of Abu Dhabi, said that like the UK and the Eurozone, economic and political ties will move forward eventually.
The UAE’s decision to stay out of the monetary union is “really not a show-stopper,” he said. 

At the end of the day, the Gulf states still have the common market, which was launched on January 1, 2008. This common market grants national treatment to all GCC companies and citizens in every Gulf state. By doing so, all possible technical hurdles are removed between cross-country investments and service trades between Gulf countries.

Pros and cons

There are benefits and drawbacks for all countries, whether they sign onto the monetary union or not. A single currency allows members to bask in improved efficiency levels of resource allocation and increased access to markets — all of which facilitate investment. Also, being part of a monetary bloc lets members benefit from lower cross border transaction costs; but in the GCC, this gain is limited, as intra-GCC trade is quite minimal. But, without the UAE, the prospects won’t be as rewarding as they could be.
“The UAE’s absence means that the gains to be realized from the currency union will be lower for the bloc as a whole, because the UAE is the second largest economy in the GCC and has the largest banking system,” said Gökkent.

On the other hand, Woertz said by basing the GCC Central Bank in the region’s largest economy, the rest of the union members will be gaining. SAMA — Saudi Arabia’s central bank — is “the most experienced central bank in the GCC,” said Woertz.
In the particular scenario of the Gulf, any disadvantages of a possible monetary bloc seem to be balanced out by the benefits. Moody’s recently reported the union would be adversely affected by the UAE’s absence, but few other factors.

“[M]any of the common advantages of a currency union… are muted in the case of the GCC,” the report said. “At the same time, the disadvantages of a currency union — such as members’ loss of independent monetary and exchange rate policies — are also less applicable, given that the GCC already have fixed exchange rate pegs.”  
However Gökkent is a harsher critic of the monetary union.

“When you undertake a currency union you forgo independence on monetary policy,” Gökkent said. “If the UAE were to go into the GCC monetary union, then they would abandon that policy flexibility and they would give it to this GCC wide body. Policy-making would [thus] be subject to GCC input rather than being made from a UAE-focus.”
Dr. Abdul Rahman al-Sultan, an economics professor at the Islamic Imam Mohammed bin Saud University in Riyadh, kicked up a controversy when he said the GCC monetary bloc is more detrimental than beneficial.  

“The plan to issue a common currency in this scheme is quite different from previous economic integration moves, as its costs largely surpass its gains considering the fact that the GCC countries do not represent an ideal currency zone, nor do they meet any of its criteria,” Sultan said at a conference held by the Saudi Economists Association in the kingdom’s capital in late May. “Instead of wasting their efforts on issuing a common currency in a zone that lacks the minimum currency criteria, the GCC countries should concentrate on completing previous integration stages.”

In the end, the UK has retained its monetary independence while also maintaining political ties with its neighbors, and analysts predict the same of Oman and the UAE if the monetary union becomes reality. The underlying issue seems to be how these events will affect the long-term political relationship between the UAE and Saudi Arabia.

“The move is a blow to GCC unity more generally and could be interpreted as a sign of how the balance of power between Saudi Arabia and the smaller GCC states have shifted over time,” Moody’s Cooper said. “It remains to be seen what the ramifications of the UAE’s action will be for the UAE’s bilateral relations with Saudi Arabia, but clearly it is not positive.”

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Executive Insights

The oath of leadership

by Tommy Weir July 1, 2009
written by Tommy Weir

The authors of Executive Insights have been invited by this magazine to offer their professional opinions and analysis to you, the reader. Executive magazine does not endorse the analysis of Insight authors, nor should the Insights be interpreted as reflecting the views or opinions of Executive or its editorial staff.

A few months back I was sitting in the audience at the Global Competiveness Forum in Riyadh when Angel Cabrera, dean of the Thunderbird School of Management, one of the top 100 international management schools in the world, walked up to the podium.
“I owe you an apology,” he said. This caught my attention as I wondered why in the world this man from Arizona would need to apologize to global heads of states and executives from top corporations.

“I, actually myself and the deans of the top business programs, owe the world an apology for the financial crisis,” he said. Cabrera pointed out that many of the corporate leaders that got us into this mess are graduates of schools like his and other top tier institutions. His lecture went on to point out the flaws in the curriculum that could lead to this type of self-centered and short-term thinking.

As I sat there stunned and admiring his humility it occurred to me to look at the book that is touted as one of the top business texts to see if it was right. My conclusion is that the title of “Good to Great” by Jim Collins should be changed to “Good to Great to GRAVE.”

The companies that are profiled in “Good to Great” and Collins’ other book, “Built to Last,” are held up as examples of success, and we are told to emulate them. But will we? They are leading the way in layoffs, lining up for government bailouts and their stock prices have plummeted. Many of the companies recently went into bankruptcy, were taken over by the government or simply turned off their lights and locked the doors for good. Are these the companies to look at as role models of success? They were. But what went wrong? Dean Cabrera says they all have one element in common: lack of responsibility.

These companies had mastered the game of business, which is putting out quarterly targets and beating them, thus they became the darlings of Wall Street. But in the midst of this they lost sight of society and a larger responsibility than just to their shareholders.
Something different needs to happen and it is not more government oversight. It is clearly time for a new approach that includes reforming management education and creating leaders who are responsible for the actions and impact of their organizations, not just the financial results to shareholders.

In light of questionable corporate practices and the global crisis, it is time for leaders to pledge to be responsible for the life of their organizations and society at large. Borrowing from the ancient practice of the Hippocratic Oath, perhaps all leaders should take an Oath of Leadership:

• I will be competent in my skills and actions while continually striving to improve my leadership.
• I will maintain and strengthen the vision of my organization and strive to create sustainable prosperity in a way that is respectful of the environment and contributes to social growth.
• I will respect the rights and dignity of all people; I will hold accountable those employees whom I have entrusted with leadership responsibility. And I will provide opportunities for their growth.
• I will conduct myself with the highest level of integrity and take responsibility for my actions while laboring for the good of my organization, keeping myself and my leadership far from all intentional ill-doing, especially from damaging the economy, society and environment. And I will oppose all forms of corruption and exploitation.
Being a leader is honorable and requires hard work, skill, rightful behavior, accountability and responsibility. By taking this oath, you are declaring to the world that you will act as a responsible and accountable leader. By putting the oath into practice, you will be respected and make a positive contribution to your employees, shareholders and society.
I make this oath freely and upon my honor. Will you?

Tommy Weir is managing director of Kenexa Leadership Solutions. His latest publication is “The CEO Shift”

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Companies & Strategies

Real estate – The Deyaar survival course

by Executive Staff July 1, 2009
written by Executive Staff

With property prices falling, investors shying away, and lending scarcer than ever, real estate companies and developers are fighting to survive. Deyaar, one of the biggest real estate companies in Dubai, is managing the crisis with a highly refined five-step strategy, says Markus Giebel, the company’s chief executive officer. The most important tenet of the plan is to reduce loan default rates, which have been high — up to 50 percent — since the market slowdown began.

“With this strategy, most developers can safeguard themselves throughout the crisis,” says Giebel. 

Easy payment plan

Deyaar offered its customers the Deyaar Easy Payment Plan (DEPP) which gives them greater flexibility in meeting payment obligations, however, “anybody who says easy payment plans solved the problem is wrong. It has just delayed it. The crisis is way too deep,” says Giebel.

Price reduction

After having eased payment plans, it is time to reduce prices.
“We had a couple of projects that were priced a little bit on the high-side [given] the crisis,” says Giebel. The decrease in construction costs has helped ease Deyaar’s expenses and allowed for lower property prices. For example, the company implemented a 30 percent price reduction on Bristol Office Tower, 25 percent on Bristol Residential Tower, 30 percent on Oxford Tower, and 25 percent on Fairview Residency, all located within Business Bay.

Customer consolidation

If a buyer bought too many units and was not able to handle payments due to the ongoing crisis, Deyaar will buy back some of these units, leaving the buyer able to pay for the remaining units.

Project consolidation

The projects up for consolidation are the ones yet to be built or in their early stages of construction, and constitute 25 percent of the company’s portfolio. These projects are the Deyaar Park, Mirar Residences and Deyaar Enclave.
“We have a couple of projects that we haven’t started [building] yet, but were 100 percent sold. They are in the middle of nowhere in the desert. They will not come up because they will not be as rich as we believed,” says Giebel. Deyaar is offering customers who bought into these projects the option to transfer their ownership to another project or get a refund.

Handling defaults

After implementing all the previous steps, “there will still be 10 to 20 percent of buyers who will default,” says Giebel. For that purpose, Deyaar, along with Dubai Islamic Bank, created a fund which will be between 500 million AED ($136 million) and 1 billion AED ($272 million) for acquiring Deyaar properties from defaulting buyers. The fund has secured $54 million so far from regional investors and will be launched beginning July, says Giebel. It will offer these properties for rent for a couple of years before putting them back on the market. The reason why Deyaar does not sell these projects, as Giebel explains, is that more supply would destabilize the market, driving prices down.
“I cannot be seen driving prices down because we are a publicly traded company… so the fund is a tool to guarantee my cash flow, stabilize the price and make a lot of money for the industry,” he says.

Giebel explains that for a company to achieve or maintain a solid financial position, it must take care of its cash flow and debt. Once that is done, the company will not have to depend on past contracts and projects to secure its position, but will be able to look at new opportunities arising in the midst of the current crisis.

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Lebanon

Reconstruction – The Jewish revival

by Executive Staff July 1, 2009
written by Executive Staff

The dilapidated structure of the Magen Avraham synagogue is nearly all that remains of the Jewish presence in Lebanon. A once vibrant community that numbered in the tens of thousands is now almost non-existent. The few Jews that remain in Lebanon live as discreetly as possible. A new project to raise $1 million, launched by the Lebanese Jewish Community Council to restore the Magen Avraham synagogue in downtown Beirut, holds the possibility of bringing back the community’s presence. Those behind the renovation plan want to reestablish Magen Avraham as a functioning synagogue, and they’ve raised hopes that an overt Jewish presence in Beirut and the Mount Lebanon environs — which has Jewish history that may stretch back as far as 3,000 years — can emerge again.

The Magen Avraham synagogue  — the name means “Abraham’s Shield” — was built in 1926 in what was the Jewish quarter of Wadi Abu Jamil in downtown Beirut. The grandness of the synagogue plans meant that a great deal of money needed to be raised. The Lebanese Jewish Community Council, just after World War I, managed to raise some funds for its construction, but it was considerably less that what was needed for the ambitious project.
While the community kept a very distinct Lebanese identity, the majority were also part of the transnational Sephardi Jewish community. The Sephardi Jews originally came from the Iberian Peninsula (Spain and Portugal) and North Africa and, despite their early geographical dispersal, kept a distinct identity and liturgy separate from the Jews of Eastern European descent, the Ashkenazi, and the Jews who remained in the Middle East, called Mizrahi Jews. Thus, the Lebanese Jews used this Sephradi Jewish network to raise funds for the synagogue. The community appealed to Moise Abraham Sassoon from Calcutta, who donated money toward the completion of the Magen Avraham synagogue, while the land was donated by Raphael Levy Stambouli. Sassoon would dedicate the synagogue to his father.
The synagogue was designed by architect Bindo Manham and was built in the imposing symmetrical style of the Renaissance. When completed the synagogue would be declared the grandest in the Middle East and secured Wadi Abu Jamil as the focal point for the Lebanese Jewish community. Jacques Baghdadi, who grew up in Wadi Abu Jamil and left when he was 18 (in 1970) to the United States, described to Executive what it was like living in the Jewish quarter of Beirut.
“It was very cliquey; it was like living in one big family,” he said. “We had two schools and everyone went to the two schools… so it was a very cocooned area and I have very fond memories of the community there.”

The wider community

Despite the fact that the Jewish community was “cocooned” in Wadi Abu Jamil, there is a historical Jewish presence in other areas of Beirut as well.  One noticeable trace of the once thriving community is the  Beth Elamen cemetery just off Sodeco square that, similar to the synagogue, is in disrepair and overgrown with trees and weeds. According to Georges Zeidan, who wrote an article on the history of the Jewish cemetery in Beirut in French, entitled “Histoire du Cimetière Juif à Beyrouth,” the first Jew was buried in the cemetery in 1829. Now the gravestones lie in tatters.
The Jewish community also had a presence in other parts of Lebanon.
“The first significant wave of Jews to Lebanon came in 1710 when a significant number of Andalusian Jews fled from the Spanish inquisition to the safety of the Chouf mountains,” Kirsten Schulze wrote in her book “The Jews of Lebanon: Between Coexistence and Conflict.”
In Miziara, a village in the mountains above Tripoli in northern Lebanon, Diab Doudib, in his 70s, said Jews had once lived there. “If you look at the patterns of the olive trees, that is not our way, but the Jewish way of planting. They were here a long time ago, but there are no Jews here now,” he said.

 

Family
Origins
Contribution in Lebanon
Where they are now

Safra

Jacob E. Safra was a banker from Aleppo who fled to Beirut when

the Ottoman empire

disintegrated.

Safra opened the J. E. Safra bank in Beirut in 1920. The bank would become  the bank of choice for the Lebanese Jewish community. Edmond Safra, the son of Jacob, was born in Beirut in 1932. The Safra family moved to Brazil in 1952, where Edmond Safra built on his father’s business to accumulate personal wealth of $2.5 billion. Joseph Safra, the son of Edmond, now runs the Safra group and was listed as the fourth richest South American by Forbes, with an estimated wealth of $8.8 billion.

Zilkha

Originally from Baghdad

Credited with bringing modern banking to the Middle East and formed a central part of the commercial and finance activites in Wadi Abu Jamil. The family was among the wave of Syrian and Iraqi refugees that moved to Lebanon in the 1940s.

83 year old Ezra Zilkha inherited Zilkha & sons, a private investment company, from his father Khedouri Zilkha. The family moved to New York in the 1950s. By the 1980s, Ezra was listed on the Forbes 400. Ezra now concentrates on philanthropy and is a board member of the Council on Foreign Relations and a Brookings Institution trustee.

Tarab

Originally from Damascus

A prominent business family in Wadi Abu Jmiel who founded the Talmud Torah Selim Tarab school. The school was located behined the Magen Avraham synagogue and
was demolished in April 2008.

Isaac Tarrab was killed in 1986 in Beirut by The Organization of the Oppressed People on Earth. His son, David Tarrab, emigrated to the US, and now lives in New Jersey where he works as a pediatric dentist. His brother is an attorney in New York.

 Deir al-Qamr was the location of one of the first concentrations of  Lebanese Jews. The Chouf village is still home to the oldest synagogue in Lebanon, but like most of the remnants of the Lebanese Jewish presence, the synagogue is in a ruined state. From the Chouf, the Lebanese Jewish community spread to Saida and Tripoli as they increasingly moved toward commercial hubs.
This migration would ultimately lead the community to Beirut and Wadi Abu Jamil, as the city was becoming an ever-more dominant trading hub at the beginning of the 20th century.
Lebanese Jews would rise to prominence around the world for their business acumen, although unfortunately not in Lebanon. “Being Lebanese and Jewish was a real winner when it came to trade and banking,” George Lati, a Lebanese Jew who left Lebanon when he was a teenager and immigrated to the US, told Executive.
The Latis are a famous banking family whose members still own property in Beirut and exemplify the business success of the Lebanese Jewish community.
“Italy saw an export resurgence in the 1970s thanks to Lebanese Jews [who emigrated] as well as Hong Kong, Mexico, Brazil, Panama, USA [and] Canada, where there were all successful Lebanese Jewish businesses,” he said.
Most famous of all the Levantine Jewish families was the Safra family. The Jacob Safra Bank was a central banking institution in Beirut for many of the Sephardi Jewish families of Lebanon and Syria. Safra’s son, Edmond Safra, was born in Beirut and earned a reputation for being one of the outstanding figures in 20th century banking, and died a billionaire.  The Safra family would move from Lebanon to Italy in 1949, just after Israel declared statehood. Although the Safra family left Lebanon when Israel was created, this was not typical of Lebanese Jews.
“Lebanon was the only Arab country in which the number of Jews increased after the first Arab-Israeli war,” Schulze wrote.
Lebanese Jews were highly integrated into Lebanese society and became the only Jewish community in the Middle East to be constitutionally protected in the proclamation of Greater Lebanon in 1920. Even after the first Arab-Israeli war, the tradition of sharing religious festivals continued.
“In 1951, during the Passover celebration, the president of the Jewish community Joseph Attie held a reception at Magen Avraham synagogue which was attended by Lebanese Prime Minister Sami as-Solh, Abdallah Yafi, Rachid Beydoun, Joseph Chader, Habib Abi Chahla, Charles Helou, Pierre Gemayel and the Maronite Archbishop of Beirut,” Schulze wrote.

The disappearance

A gradual exodus of Jews began with the internal strife in Lebanon in 1958. Jacques Baghdadi, a Lebanese Jew who left the country in 1970, described to Executive how tensions increased after the Six Day War.
“We never felt the threat like in Syria and Iraq. We never felt oppressed, but after the Six Day War you felt in the air a certain bothering feeling,” he said.  “Even though we were born Lebanese, you felt not welcome… so [the Lebanese Jewish community] left… and it was like a sixth [sense]; sure enough the civil war broke [out].”
The decisive moment was the Israeli invasion and occupation of Lebanon in 1982, which was effectively the beginning of the end of the Jewish presence in Lebanon. Robert Fisk, a British foreign correspondent who lived in Beirut during the civil war, wrote in his book “Pity the Nation,” that “incredibly, the Israeli shells even blew part of the roof off the city’s synagogue in Wadi Abu Jamil, where the remnants of Beirut’s tiny Jewish community still lived… The last 10 families to worship there padlocked the door after the Israeli shells came through the roof.”
The Israeli invasion of 1982 left the Lebanese Jewish community particularly exposed to the vicious violence that would occur post-invasion. Wadi Abu Jamil was the scene of fierce fighting, and was first occupied by the Palestine Liberation Organization and then the Amal Movement. The Amal logo is still on the walls of the synagogue to this day, along with torn pictures of the late Amal leader Musa Sadr. Former Associated Press bureau chief Terry Anderson, who was kidnapped in 1985 and held for six years, was reportedly taken into the Wadi Abu Jamil area.
Between 1984 and 1987, 11 leading members of the Jewish community were kidnapped and killed by a militant Shiite Islamic organization called “Organization of the Oppressed of the Earth,” according to Schulze and news reports from the time. The terminal decline of the community began, as did the underground nature of the remaining Jews.
Fred Kanter, whose great-grandfather was a rabbi at the Alliance School in Beirut (a Jewish school system founded and funded by the Rothschild family), articulated the fear of those few Jews who did remain.
“I was in touch with a young Jewish man in Beirut who photographed the gravestone of my grandfather,” Kanter told Executive by email. “When a Jewish friend went to visit Beirut, he was afraid to be seen meeting a Jewish person from the West.”
Executive contacted a number of Jews still residing in Lebanon, but none were willing to talk about the community, even anonymously.
Of those that have left the country, many in the Lebanese Jewish community have maintained a strong cohesion. Jacques Baghdadi said that despite leaving Lebanon nearly 40 years ago, he is still in contact with the Lebanese Jews who he grew up with in Wadi Abu Jamil.
“We see each other in synagogues… there are two big synagogues [in Brooklyn] that are especially for Lebanese Jews… the Lebanese by nature are very clannish people and we hang out with all Lebanese — Christians or Muslims — it doesn’t matter here.”
A testament to the strength of Lebanese Jewish identity is the Maghan Avraham synagogue in Montreal that was set up by Lebanese Jewish immigrants.
The Internet, and particularly social networking sites like Facebook, have also enabled Lebanese Jews to maintain contact. Most recently, the official Lebanese Jewish Community Council website (www.thejewsoflebanonproject.org) has been launched that now gives an official public face to the community. The website was also set up to help raise funds for reconstuction of the Magen Avraham synagogue.
 
Community revival

“Those who don’t have a past don’t have a future,” Isaac Arazi, president of the Lebanese Jewish Community Council, is quoted as saying on the website’s welcome page — ostensibly linking the renovation of the Magen Avraham synagogue to the reconstruction of a Jewish presence in the country.
“It pains me immensely that I have to pass by [Magen Avraham] every day without being able to enter,” wrote one anonymous Lebanese Jew on the website. “If only to view the destruction, to say a prayer (even though I do not know how to say prayers), to stand there and imagine and visualize what the 1940s, 1950s and 1960s were like.”
Mira Elmann and other Lebanese Jews are already discussing how the synagogue will function once it has been renovated.
“The Magen Avraham synagogue will only succeed as a place of worship for the Orthodox Jews. Services must be with an Orthodox Rabbi,” she wrote in an email.
Elmann, a Lebanese Jew who left Lebanon in October of 1968, believes that if the reconstruction of the synagogue is achieved, the Lebanese Jewish community may even come back.
“The only way the Jews will ever return to Beirut would be because of the renovation of the synagogue,” she said. “The Lebanese Jewish community of the Diaspora is looking forward for the day to go back to the new Wadi Abu Jamil.”
Yet, it is unclear whether the synagogue will be rebuilt soon or not, as Executive was unable to interview the head of the Lebanese Jewish Community Council, Isaac Arazi.
An article in Israel’s Haaretz newspaper on May 27 said the renovation of the synagogue was about to start. The article, entitled “Beirut shul [synagogue] to be refurbished, and even Hezbollah’s on board” stated:
“The ruined main synagogue in central Beirut is due to be renovated in the coming weeks, after an agreement between various religious denominations and permission from the Lebanese government, planning authorities and even Hezbollah.”
 
Déjà vu?

If the Haaretz article is accurate, then the reconstruction of the synagogue, and Lebanon’s Jewish community, could come soon. There is good reason for skepticism, however, as it is not the first time a newspaper announced the imminent refurbishment of Magen Avraham.
Haaretz reported that Solidere was to donate $150,000, but cited unnamed sources regarding $200,000 more that had been raised through private donations.
Nabil Rached, Solidere’s press officer, confirmed Solidere’s contribution, but would not say whether reconstruction would actually take place.
“The [financial] contribution is an old decision taken by Solidere for the restoration of each one of the religious buildings in the Beirut City Center,” Rached said. “But the restoration of each religious building is done by its respective community. So it is not a Solidere project.”
Angus Gavin, the planning advisor for Solidere, also refused to comment on the renovation of the synagogue but added that it’s “about time [the synagogue] is reconstructed.”
A Bloomberg article in September 2008 also claimed that $240,000 had been raised, quoting the Lebanese Jewish Community Council President Arazi. Unconfirmed reports  suggested the Safra Foundation put up $100,000 of this money with another unnamed Swiss bank. Arazi refused to name where the money came from, while the Safra foundation has also declined to comment.
Whether the Lebanese Jewish community has been able to obtain the $200,000 that Haaretz reported, or the other funds for the restoration, is doubted by some in the community.
George Lati is among those who throw cold water on the idea: “There just has not been the interest in the community financially to be able to raise the money; the money has not been raised.”
 
History repeating

Like in the early 1920s, when the original synagogue was constructed with the financial assistance of the larger community of Sephardi Jews, a similar approach may be underway regarding the rebuilding. Regardless of whether the Lebanese Jewish community actually has the money now or not, the community council appears determined to see that the reconstruction of the synagogue eventually does take place.
“The plans to renovate the Magen Avraham synagogue are already underway,” the website states.
The community council seems convinced that as long as the Maghan Avraham synagogue remains in its current dilapidated state, so too will the status of Lebanon’s 18th sect.
Jacques Baghdadi told Executive that while the return of Lebanon’s Jewish community is not yet at hand, there is no reason why in the long run the community cannot reestablish.
“There was a time of Jewish persecution in Spain and again you have a Jewish population in Spain, the same in Italy and Portugal… history repeats itself, people come back.”

(Editor’s note: This is the first in a series of articles profiling Arab Jewish communities Executive will publish in the coming months.)

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Companies & Strategies

Brandcell – Joe Ayoub (Q&A)

by Executive Staff July 1, 2009
written by Executive Staff

Aveteran of the communications and marketing field with over 25 years of experience, Joe Ayoub successfully managed Proctor & Gamble’s brand communications for years before taking on the task of managing and restructuring the Intermarkets Agency Network’s offices in Kuwait and Lebanon. He then founded Spidermonkey Communications in 1999 in partnership with the WPP group. Ayoub recognized the need for Levant-based companies to adopt the concept of strategic guidance, and created BrandCell consultancy in 2008 to develop key local and regional clients’ branding strategies in the service, retail and media sectors. Executive recently sat down with Ayoub to get his views on strategic branding strategies in the Levant region.

E Can you explain your conception of ‘strategic branding’ being used or abused in the Levant?
Branding as a philosophy is nothing new. But people use the name for a zillion different descriptions: from describing a corporate identity logo to delivering a complete brand strategy. Unfortunately in the Middle East and in Lebanon specifically, the understanding of the importance of strategic branding, as opposed to design branding, is extremely low, even though the impact of having a good brand strategy is extremely high. This we have seen in the West when it comes to names like Starbucks or Apple. You see that they have crafted a strategy around their brand and they consistently try to improve it and deliver on it time and time again. In Lebanon that delivery, when we are talking about the service industry, is extremely erratic. There is no consistency. Not because the people are not up to it or not qualified, but they don’t have a sort of ‘brand guideline’ to follow that will ensure the right ‘key messages’ that they have to communicate day in and day out to their customer, are being done in a very consistent way which over time, will build this effect.

E Why do you think there has been reluctance in the region to embrace the concept of strategic branding as central to a marketing strategy, and instead focus on disparate messages similar to those we witnessed during Lebanon’s recent elections?
The issue is not that they are reluctant; the issue is that they don’t understand it. This is a role that someone, a consultancy or a specialized agency, is supposed to educate its clients about. The election issue is a very good example of how you see the segregation of incoherent messages within an extremely short period of time.
You see the difference when you look at the West if you followed Obama’s campaign or Sarkozy’s campaign. They take one message and they keep hammering it home over and over. They are adamant to remain focused on a particular point because their strategy is that this is the weak point of their opponent and they have to hit at it. In Lebanon they tend to react to things. If one party launches a slogan or a key message, all they care about is how they are going to respond to this. So they are distracted by their own strategy and the same extends to businesses. If someone claims something about his product and I sell a similar product, I tend to think: ‘There must me something good about this, let me do it. Why should I bother and strategize and dig for my own benefit? Let me consider that we are in the same category and benchmark.’

E What would you advise entrepreneurs in the region to do in order to reap the benefits of strategic branding?
Unfortunately, you cannot teach an old dog new tricks and it costs much more to fix something that is broken or radically wrong than to do it right from the beginning. Entrepreneurs normally don’t have a lot of money because they are starting afresh and have scarce resources. But at the same time, they have the opportunity to do things right as long as they focus on bringing something new to the table. Today, entrepreneurs have to clearly define what business they want to be in.
Even if they are in Information Technology and they want to sell computer solutions, [strategic] branding will help them define whether they are in the business of selling software, hardware, total solutions, supplying material or whether they are a niche brand or a mass market brand. They need to define their territory clearly and then they need to define how they want to position themselves within the competitive landscape and, most importantly, how they are going to translate this into their daily work.

E So what should they focus on?
Entrepreneurs have an important asset they can bank on — their personalities. I really encourage entrepreneurs to put their personal branding up front. They probably don’t have a lot of money. But if they have a charismatic personality, a clear sense of purpose for their company and a long term vision, then they should communicate it. We all know Richard Branson. What sells the Virgin brand more than Richard Branson? What sells Apple’s brand more than Steve Jobs or the stories people circulate about him on a daily basis in the news? Entrepreneurship by definition is a very personalized business and [entrepreneurs] should not be afraid, if they have all these qualities, to brand themselves first.

E In markets where branding is fully developed we have seen brands such as Starbucks employ methods such as store clustering and below-market price cutting to push out smaller niche companies, small to medium enterprises and start-ups and thus  limit avenues for entrepreneurship. What do you think about this argument, and how can you preserve the ability of new businesses to enter the market space and at the same time push
branding to the limit?

In a free market economy you have to accept the laws of this free market. You have to accept the laws of supply and demand and, at the same time, that the best man wins. This is a cycle. Before Starbucks there were others that were famous. Probably the small private neighborhood coffee shop and then Starbucks came and standardized the whole thing. In five or 10 years we might see that standardization is no longer en vogue and probably more authentic local neighborhood touches will become extremely important once again. Branding doesn’t come out of the blue. Branding is a natural reflection of what consumerism is all about. It is about understanding the psychological needs of consumers. Branding is like a human being. A brand is born, it is young, it reaches a maturity stage after a period of growth, and then it could reach a decline or death stage. So we have to look at the brand as a human being. We give it a name, we give it packaging or a dressing like you dress a child; you give it certain values the same way you educate your children, and then you put it on the market as an adult. Then it has to perform. Either it will perform or it will underperform and be left out of the market. If their customers start to feel that Starbucks is overdoing it and it is in a monopoly stage, it will be the customer who will stop it first. No law or anti-trust law can do as much as the veto power of the customer and we have to trust our customer. What will dictate things is the consumer’s own perception of what is right and what is wrong in the free market economy. Whenever you do something out-of-line, the verdict will come from the customer. So managing your brand is like managing your children; you have to really make sure that it behaves, [that] it is constantly polite, constantly performing in its environment, and it’s up to you to manage it properly.

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