By Invitation

Information technology part of healthcare‘s remedy

by Richard Shediac, Ramez Shehadi & Jad Bitar
written by Richard Shediac, Ramez Shehadi & Jad Bitar

As IT makes strides into healthcare, physicians and patients are starting to experience the enormous benefits of having access to medical information where and when it is needed most. Increasingly, enabling the flow of information within a healthcare organization will become a differentiator between providers competing in the GCC region.

Traditionally, healthcare has seen lower levels of investment in IT than other service industries, for example banking. For healthcare providers this has resulted in systems that desperately need modernization to overcome the challenges that have arisen over the years: a disparate mix of software systems that struggle to share information; infrastructure that hinders rather than helps expansion and programs that are not optimally aligned with clinical workflows. As expectations grow of a continuum of care, the systems have increasingly struggled to deliver a truly integrated flow of information. Furthermore, systems have traditionally been designed around provider needs rather than around patient needs. As a consequence of these problems, both patients and medical staff increasingly experience healthcare technology that is below expectations.

However, recent advances in IT are enabling providers to improve the quality of patient care. Healthcare IT now means much more than the traditional isolated computers and unfriendly applications. Increasingly, patient care is exploiting the tools and information that new systems can provide while maintaining a patient-centric approach to their use: software that supports the core medical processes, hardware that allows easy access to information at the point of care and standards that make integration of different systems easier than ever before. Through investment in modern IT systems as well as new facilities, organizations are improving healthcare for citizens to a world-class standard. Essential to the success of investments, however, is ensuring a holistic approach to IT, and that means understanding the strategic goals of the organization and understanding how IT, from technological and organizational perspectives, can help to deliver them.

At the heart of the revolution in healthcare IT is the desire to provide the best possible care to each patient. This has driven the emergence and growing sophistication of the electronic medical record, the EMR. The digital record can hold the full breadth of an individual’s medical history, helping to direct diagnostic and therapeutic decisions when a patient enters the healthcare system. The potential of the EMR is only realized, however, with the ability to distribute the information pervasively within an integrated healthcare network. This highlights the critical relationship that organizations must manage between information and information access — while the EMR on its own is a powerful tool, its combination with networks ensure the tool as available where and when the patient can benefit most.

In this ever-growing technology landscape, IT standards are a key factor in making best use of all the new software and hardware available to healthcare providers. These define the rules of engagement between systems — for example how medical information should be stored and communicated between systems. As standards are gradually being defined, the benefits of their use are increasingly tangible. One impact is of fundamental importance to integrated healthcare networks — the ability to scale the IT organizations. With common standards governing systems design, organizations are more able to grow in IT capacity and functionality as their clinical business strategies demand. Here, the link between IT and business strategies ensures that investment decisions taken at the IT level serve the best interests of the key stakeholders — medical staff and patients.

Together with a growing realization of the importance of IT, the drive towards patient-centric services is a central theme in healthcare organizations across the region. Software that provides simple access to information at the point of care, and hardware that enables communication of date across facilities and mobilizes the access points. For physicians, these developments mean their decisions are better informed; for patients, they provide more personalized care and more streamlined experiences, and for healthcare organizations as a whole, they mean more efficient use of IT and greater potential for growth without the growing pains of old.

As an example of this focus on healthcare IT, a large provider in Abu Dhabi is building a network of integrated healthcare facilities across the emirate. With a major focus on using IT to support the quality of care, the provider and a team of strategy consultants have developed an IT strategy that will support the long-term health and business goals of the organization. This strategy places particular importance on ensuring that technology provides the information and tools needed by physicians, nurses and other staff to provide care that is both high quality for the patient and efficient in its use of the organization’s resources.

While medical staff and patients have always been and will always be the heart of healthcare, the value of IT is starting to reveal itself in the industry and for everyone concerned the improvements are there to see.

Richard Shediac is a VP, Ramez Shehadi is a principal and Jad Bitar a senior associate at BOOZ ALLEN HAMILTON

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By Invitation

Commodities inflation just taking off on a long flight

by Richard Sherwin
written by Richard Sherwin

The world is currently facing some of the most challenging financial markets seen in the last few decades. The subprime crisis and its fallout has helped tip the US into a recession that may have a serious impact on global growth for some time. However, the turmoil surrounding the commodity markets has, until recent weeks, been largely unnoticed and yet events in these markets have the potential to have a far greater global impact than a slow-down in the US.

Over the last 24 months most commodities have witnessed enormous price appreciation as world demand for fuel, raw materials and food has exploded. The price pressures behind the rise in oil prices are well documented and attributed to increasing demand from the emerging markets, notably China and India. Base metals have also benefited from the same demand pressures as emerging economies invest in their infrastructure by building new railroads, airports and even cities. Precious metals have in turn been well supported through a combination of low mine supply, a weak US dollar and gold’s historical safe haven status in times of uncertainty. Agricultural commodities have witnessed price increases due to demands from increasingly urbanized populations and alternative uses such as bio-fuel production.

In fact, the rally in agricultural commodities appears to be in its infancy. Commodities cyclical research shows that compared to previous bull-market cycles, which were not backed by such significant demand drivers as China and India, prices in real terms are still a long way from their highs. In other words, sugar, coffee, cocoa and corn may still be relatively inexpensive.

Commodity prices and a weak US dollar

Until recently investors had accepted that much of the drive behind higher commodity prices was the weakening dollar. The argument went that as commodities are universally priced in dollars, with the dollar weakening, commodities must rise in price terms to offset their value in other currencies. This argument has some merit, but price rises in commodities had slowly been outstripping dollar weakness for 2 years, and if we look at rises since the beginning of 2008 their out performance is startling. So far this year the dollar exchange rate index has weakened 6.3%; consider this against a basket of commodities: gold is +13% stronger, oil +16% stronger, corn +30% stronger, natural gas +35% stronger and rice +63% stronger.

The fight to feed people — governments react

Across the globe, Russia to Argentina and Mexico to China, we’ve seen the impact of tightening commodity markets with either social unrest or imposition of export tariffs to protect national markets. The river for such widespread social unrest has been a real fall in the level of inventories, particularly in food staples. Wheat, rice and corn inventories currently stand at multi-year lows, and with poor harvests forecast in the southern hemisphere and export restrictions from major producing countries, price pressures will likely continue for the time being.

Commodities and a weakening global economy

Investors have also been complacent about commodity price increases on expectations that commodities could sell-off in response to a US or even global recession. Recent JP Morgan Commodity Research analysis refutes this view. Examining commodity returns before and after the onset of the last five US recessions, JP Morgan have shown that commodity indices have on average rallied 15% from the beginning of a recession.

Rising commodity prices and inflation

In fact, the correlation between commodities and inflation is well documented. Anyone witnessing the inflation of the 1970s will know this well. However whilst the commodity matrix has rallied over the last few years, inflation has been remarkably benign. Therefore the final theme that is worth exploring is the potential impact that continued commodity price rises may have on inflation.

One can argue it is less likely that we see inflation as a result of the current surge in commodity prices than in the 1970s. In the 1970s, inflation became entrenched in economies not just as a result of commodity price rises but also because central banks had little autonomy and governments were the drivers of monetary policy. The result was that as monetary policy became a political issue and increasingly arbitrary in nature, inflation expectations went unchecked as governments pushed for growth at the cost of inflation. As a result of those lessons learnt, central banks emerged from the high inflationary era with greater autonomy and in many cases a clear brief to control inflation.

However, no economic cycle is identical to another. There is no doubt that in recent years our belief that central banks would be perpetually able to control inflation has made us complacent to the risks of inflation. Inflation has two key drivers, in-put costs driving out-put prices and consumer price expectations driving wage demands.

In terms of input costs, the developed world has experienced an era of tremendous price deflation due to globalization. Goods have remained cheap because consumers can readily log onto the internet and source the most competitively priced goods globally — in other words price discovery and transparency has become remarkably more efficient. However, given that much of the lowering of prices was due to the origination of goods in the same economies that currently have witnessed massive growth over the last decade, the argument that prices will remain perpetually low is somewhat stretched. In other words, China and India will eventually not be able to pass on negative price pressures. Indeed, as India and China have been the drivers of commodity prices surges, their increasing input prices means that output prices will eventually have to rise.

The other key driver of inflation is consumer expectations. Inflation became so entrenched in the 1970s because consumers became used to the expectation that inflation would continue to rise. This set off a vicious spiral of increased wage demands to counter expected rising prices that could only be met through firms raising prices, and so on. Rising food prices, particularly in the emerging economies where the cost of food is a significant proportion of disposable income will have to lead to consumers demanding higher wages and this may well begin to build in higher inflation expectations and thus the beginnings of an inflationary spiral.

Already news stories have emerged detailing that the Chinese authorities are heavily subsidizing food prices in Beijing to quell any inflationary driven social unrest leading up to this summer’s Olympics. Therefore, it would not take a huge leap of faith to see the beginnings of inflation already taking place in the emerging economies.

When we consider that the emerging economies are potentially most vulnerable to inflation and that the western economies are most dependent on emerging market goods to keep their own inflation stable it becomes easy to see a chain of events that drives inflation higher as emerging economies pass on higher costs. All of this will be driven by a continuing surge in commodity prices.

From an investor’s point of view, commodities as an asset class should have an increasing importance in their portfolio. Commodities are an excellent diversifier of returns in that they have low correlation to global economic cycles and a high correlation to inflation. Given the current economic forecasts of falling growth with inflation pressures they hold an even greater importance.

Indeed, commodities have shown enormous volatility this year and investors should consider most closely any investment vehicle that can capture both the upside and downside of commodity market price movements. A fund of hedge funds which trade exclusively in commodities will give investors access to commodity price movements and diversification of returns from a number of uncorrelated investment managers.

Richard Sherwin is a director of Blacksquare Capital. Blacksquare Capital is launching commodity fund of heedge funds on June 1, 2008.

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By Invitation

10 trends Defining Private Equity in 2008

by Imad Ghandour
written by Imad Ghandour
 
2007 was another stellar year for private equity in MENA. The billion dollar deal milestone has been broken for the first time with the Egyptian Fertilizers Company deal. Fundraising for existing funds remained strong, and the first billion dollar fund was raised. Exits, once a mirage, are becoming more common with 18 exits reported in 2007 up from 6 in 2005.

2008 will be year of opportunities amid global and regional challenges. The impact of the global downturn in the next few months will be difficult for all financial players — including private equiteers operating in MENA. A sober market will make slow the investment cycle – bringing valuations down, but lower valuations will yield higher returns for PE funds over the long term. More risk-averse and better educated investors will make fundraising more challenging, but for those who already delivered returns and gained the trust of investors, tapping into the regional liquidity will be less strenuous. The global slowdown will drive global fund managers to come into the region, in one form or another, creating competition in the short term, but better industry practices over the long run. In such a perplexing environment, we foresee 10 trends emerging.

1. PE investments will increase, and expected to surpass 2007 investments of $3.3 billion. With increasing privatization of public entities and the restructuring and recapitalization of family businesses, the billions raised in previous years will be deployed in more and larger transactions.

2. The number of opportunities will slightly increase, Government enterprises are not being privatized fast enough, and families are maximizing the value of any business they are divesting, and taking maximum advantage.

3. Fundraising will probably be around the $6 billion mark attained in 2007. Petrodollars, corporate profits, and individuals’ wealth will be channeled into all sorts of regional financial assets – especially given the weakening performance of other regions.

4. The gap between existing successful managers and want-to-be managers will widen. In 2005, funds were raised on promises with limited relevant track record. In 2008 and after more than 40 exits, funds will be raised based on established track record. In 2007, established managers found it relatively easy to raise their second fund, but most new managers struggled.

5. Egypt and Saudi Arabia will be attracting far more attention in 2008 than in previous years, and will share the lead with the UAE. In the past, UAE was the leading destination for PE investments. Egypt took the lead in 2007 (the largest two transaction in the MENA region were in Egypt), and Saudi Arabia is climbing quickly in the league table.
 

6. IPO was the only liquidity route foreseen for PE investments. However, there is an increasing number of trade sales, and an increasing acceptance of secondary sales. Today, the full menu of exit options can be contemplated, and with the additional relaxation of restrictions on foreign investments, a larger pool of (foreign) trade and financial buyers will be available.

7. Many global managers will be eyeing the region for an entry. Some, like Investcorp and Carlyle, have taken the plunge with a dedicated regional fund. Others, like 3i and Credit Suisse, are partnering with regional firms. But with the slower pace of closing deals in US and Europe, the global PE machines will be eying MENA region more aggressively.

8. PE investments will slowly shift from building the infrastructure to consumption sectors. In the past few years, and probably in the next couple of years, the focus was and will be on building power plants, water plants, ports, airports, buildings, etc. By 2010, the investment cycle will be reaching its peak, and wealthier families will be boosting consumption. Smart PE houses will start investing in consumer related sectors from now.

9. Most of the transactions so far will be smaller than $50 million. But this benchmark is rising, albeit slowly. Don’t expect too many billion dollar deals in 2008.

10. More talent will be coming to the region, as layoffs increases in the West. However, it will take time for imported talent to get used to way business is done in Arabia.

Imad Ghandour is a Member of the Board – Gulf Venture Capital Association and Executive Director – Gulf Capital

 

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By Invitation

Exorcizing propaganda from communication

by Executive Staff & Ramsay G. Najjar
written by Executive Staff & Ramsay G. Najjar

In every country in the Middle East, there are posters hung or plastered on the walls with the noble-looking picture of one political leader or another. These photos seem to grace every avenue, boulevard and wall in the region and, in Lebanon, they even include slogans celebrating “Victory” or calling for “Unity.”

Some might call this “communication,” but there is a clear divide between communicating and spreading propaganda. Although a form of communication, propaganda is deliberately biased and misleading, with a clear intention to discredit or support the views of a specific group or organization by presenting a slanted opinion most often intended to keep that group in a position of influence and power.

To be a propagandist means being selective and unbalanced in the information presented, exaggerating one side of the story and encouraging instinctive reactions by appealing to the emotions of audiences and seeking their compassion and sympathy, while trying to trigger hatred and fear of their opponents.

Propaganda is certainly not open to discussion and interpretation; in fact, history has witnessed just how political propaganda can limit people’s outlook and rally the masses into a frenzy using fear and intimidation. World War II is the most famous example of this, with both Allied Forces and Hitler and Goebbels using propaganda to varying degrees and outcomes.

In the Middle East, the mass media channels that propagandists have relied on for decades to repeat the same slogans are beginning to die out, with the advent of new technology that competes with the concept of a single ideology or worldview.

As propaganda previously relied on hammering messages through a limited and controllable number of media channels, the dawn of the new media era might have been hailed as the demise of propaganda. Instead, we witness today the revival of propaganda, with countless new channels and technologies breathing new life into it, as it never ceases to adapt, evolve, and become ever more versatile, resilient and let’s face it, cost efficient.

This means that the most effective propaganda today is not the traditional propaganda of the totalitarian leader, but the far more subtle and harder to avoid messages generated even in the nations we consider democracies. New channels of communication are blending with the old. Israeli-edited videos of suicide bombings and scared Israeli children in bomb shelters are uploaded onto YouTube and circulated in emails. These videos do not only show how new technology is propagating political opinion, but are also a powerful emotional weapon used for psychological warfare.

In the US, presidential campaign advertising, well-known for defaming candidates and resorting to personal attacks, is now easily circulated as online video and highlighted by campaign bloggers, from claims that Barack Obama is really of Muslim faith to ones that Hilary Clinton is a puppet of the Jewish lobby.

Regardless of the hype, the effectiveness of this propaganda remains questionable, and although many are fascinated by its power, chances are they will only reap the benefits of propaganda in the short-term. Whether you are appealing to fear, misinforming, or withholding the truth, propaganda will eventually lead to resentment, bitterness and erosion of credibility.

But how does one compete in such a ruthless and hostile propaganda environment? The response is to choose “genuine communication” — communication that appeals to a system of values rather than demonizing opposing parties, and to a people’s aspirations and dreams rather than their fears and instincts; communication that has the guts to say the entire truth rather than hiding behind half truths, that tackles the problems and issues head-on rather than getting lost in generalities, that presents rational arguments rather than engaging in emotionally biased discourse; communication that uses facts rather than assumptions, communication that shares responsibility rather than scapegoating.

Only when we exorcize communication and free it of its many propagandist demons will we gain the sought credibility and create a true partnership with audiences. Only then will communication become effective and far reaching, with sustainable winning results for all stakeholders, and only then will our many issues and problems be closer to resolution.

Genuine communication is the only form of successful two-way communication, and it is of utmost importance, today more than ever, for all propagandists to become true communicators. Communication is a mirror of society, and as society develops and becomes more tolerant and democratic, it elevates the media to become an empowered fourth estate. But the opposite is true as well — working on making our communication genuine and responsible will surely catalyze our societies’ development to catch up and become the tolerant, modern, peaceful, stable, and democratic havens we all dream of.

Ramsay G. Najjar is chairman of S2C

 

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Capitalist Culture

Urban Planning – Education next door

by Michael Young
written by Michael Young

In April, the American University of Beirut hosted a lecture by Omar Blaik, an urban specialist known for upgrading blighted areas around American universities. Blaik, a Lebanese-American, is renowned for his work in ameliorating the neighborhood around the University of Pennsylvania, in Philadelphia, but has consulted with other educational institutions, including the AUB.

Most interesting in Blaik’s approach is his assumption that universities have a proactive economic role to play in their neighborhoods, and must run their affairs like a company. That’s not to suggest he wants them to downgrade their core educational mission too make money. Rather, he argues that such a mission is best served by establishing an adequate social environment for learning. Until a few years ago, the area around UPenn was so dangerous that the university had to cut itself off from its surroundings, undermining its educational objectives.

Blaik has degrees in business administration and engineering, so it’s not surprising his method of reviving university neighborhoods comes through a practical application of several key ingredients, including improved security, a resort to commerce and market forces, use of the university as an functional instrument to reorganize economic relationships in nearby neighborhoods, and the opening up of campuses to their environment, physically, economically, and metaphorically.

This is hardly a new concept. Urban thinking in the 1950s and 1960s was mainly driven by government-mandated planning and implementation, its principal aim being the removal of slums. In cities such as Chicago, Washington, Saint Louis, and others, poor areas were razed to the ground and replaced with modern structures, including low-income housing projects. But slums, in their own way, had much more vitality than what came afterward: personal networks dominated, commerce was evident, people walked the streets, and, though poor, neighborhoods were organic. When these complex systems were forcibly replaced by alienating high-rises from which commercial activity had been mostly zoned out, what ensued was the disintegration of social relations, as people no longer walked or lived in the street (because, in the memorable words of writer Jane Jacobs, there were now “promenades that go from no place to nowhere”), and, as a result, a sharp rise in crime, ensuring commercial activity remain hobbled.

The destructive impact of modern city planning has been well recognized, and more sensible planners like Blaik are the result of this. In striving to shape outcomes in their environments through specific, limited interventions, they display considerable skepticism toward the grand urban notions of the 1950s and 1960s, aimed at creating entirely new entities. These “post-modernists,” or perhaps the “post-post-modernists,” if one can call Blaik and his generation that, also accept that urban environments must be allowed to develop naturally.

In his presentation, Blaik discussed ways AUB might reach out to its environment. The university faces a different set of problems than UPenn did. There is no crime around the AUB. In fact its vicinity is one of the most prosperous in Beirut. But that’s precisely the difficulty. Just as a university may be unable to open up to crime-ridden areas, it can find similar obstacles in secure, wealthy ones as well. Income differences can mean that faculty members and students are unable to live near the institution. High-income buildings rope the university off from more accessible surroundings further afield. In this way, the AUB and Lebanese society can find it harder to interact.

The irony is that for a long time, particularly during the war years, the AUB benefited, at least in terms of its public image, from being cut off from the rest of Beirut. Why? Because that isolation became a part of its mystique, its claim to be an elite institution. But also, when the capital descended into violence the AUB was a splendid, green island of tranquility in a decaying city.

Yet as Blaik remarked, a university must be a living organism in the living organism that is the city. For AUB, or any university, to be closed in upon itself, fortress-like, is to defeat the purpose of an educational mission. That’s why one of Blaik’s most striking recommendations was that the AUB find a way to remove the wall dividing itself from the streets outside. Just as significant was his advice that the university expand outside its walls and shape the environment immediately around, buying property and reworking it to favor contact with the city.

For a long time much of modern urban planning was implicitly directed against capitalism. Markets were seen as generating inequality, so urban environments were unnaturally bent out of shape to impose more egalitarianism. Blaik and others are relevant because they don’t shy away from enlisting capitalism on their side, even if they accept some controls to soften the impact on the most vulnerable. That’s why they are succeeding where their predecessors failed.

Michael Young

 

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The barriers between us

by Paul Cochrane
written by Paul Cochrane

In an era when freedom, democracy, free trade and globalization are the mantras of the day, there’s a good deal of construction going on that runs counter to these overly bandied about terms — Walls. Or fences, or ‘separation barriers’, ‘peace walls’ or ‘apartheid walls,’ depending on your political perspective, as well as how rigidly you hold to the proper definitional terminology of structure. But we can all agree such structures are meant to keep people out. That’s been the purpose of walls ever since stones or logs were piled together to ward off the neighboring tribe.

Walls have left us with some great historical monuments, but since the Berlin Wall came down to much fanfare in 1989, walls were supposed to be confined to history. Instead more are going up, though none with the aesthetic grandeur of the Great Wall of China. Concrete, sandbags, pipes, barb wire and metal fences, along with the added extras of no-man’s lands, landmines and electronic surveillance, are the materials of the times.

But just as I asked myself while perched on the edge of a vertical drop when camped out on the Great Wall “Why on earth did they build this when there is the natural deterrent of mountainous terrain?” Questions in the same vein can be asked about the Middle East’s barriers.

Unlike the rationale of the Chin and Ming dynasties to build a wall that was practical but also signified dynastic might, the Middle East’s barriers are solely to keep out terrorists, migrants and other undesirables.

There is the 2,410 kilometer long sand and stone barrier built in the 1980s by the Moroccans to keep Polisario guerrillas out of the Western Sahara that Rabat claims as its own. Fences divide Kuwait and Iraq, the UAE have erected a fence with Oman, ostensibly to thwart immigration, and most famously, the “security fence,” as the Israelis call it, cuts like a scar through the West Bank. There are also the blast walls of Baghdad, and the occupation forces’ construction of a five-kilometer long wall to divide the Sunnis and Shias in the capital’s Adhamiya district.

Then there are other more specific walls, such as the one around the tourist and diplomatic hobnobbing hot spot of Sharm el-Sheikh, and the Egypt-Gaza fence that Hamas enjoys breaking through every now and again.

“Good walls make good neighbors” is the oft used mantra to justify such barriers, but the problem is that what are originally intended as temporary measures often end up being more long term. Such was the case in Berlin, lasting 28 years, and in Belfast, where more “peace walls” have gone up since the Good Friday agreement that ended ‘the troubles’.

Walls can keep people out, but as the defenders of a castle under siege know very well (and as the French discovered in World War II after spending 3 billion francs on the supposedly impregnable Maginot Line), all it takes is for someone to use the back entrance and the barbarians can swarm in.

Such barriers not only divide people and stifle attempts to nurture mutual co-operation, but are also an environmental nightmare for wildlife and limit the movement of nomadic tribes, particularly in the case of Saudi Arabia and its neighbors.

Indeed, walls are more like taking medicine to tackle the symptoms of a virus rather than seeking out the root cause of the illness, which in the case of barriers are invariably due to economic disparity and/or occupation.

The Gulf’s fences are not so easy to pigeonhole, especially as the Gulf Common Market (GCM) that went into effect at the start of the year, and which is based on the European Union model, is supposed to allow the free movement of people within the GCC. Saudi Arabia’s recently announced plan to “improve security” along its 6,500 kilometers of borders include two GCM members as well as two aspirants, Yemen and Iraq.

As Ahmad Hammauda, manager of a Kuwaiti logistics firm told me, “all this putting up of walls is not good for removing borders.”

But it is clearly good money, at least for defense contractors, who’ve been having a field day since “the global war on terror” was announced. Saudi Arabia is to spend a whopping $10-15 billion on its border security over the next decade, while the Israeli “security fence” costs $2 million per kilometer, with the total cost slated at $2.1 billion. That’s a boatload of money that could be sunk into alleviating the fundamental causes behind the supposed need for such barriers. But maybe that’s just overly utopian thinking, although if you’d said to a French engineer working on the Maginot Line over 70 years ago that decades later there would not even be a visible border between France and Germany, he would probably have thought you were a sandwich short of a picnic. Or a few bricks short of a wall.
 

PAUL COCHRANE is a freelance journalist based in Beirut.

 

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Give peace a Jimmy Carter

by Claude Salhani
written by Claude Salhani

How quickly one forgets. As the State of Israel prepares to celebrate its 60th anniversary this May, the country seems to be suffering a case of collective — and selective — amnesia, forgetting who their true friends are.

During those 60 years, Israel has had to fight for its survival on average one major war every 10 years: the War of independence (1948); the Suez War (1956); the Six Day War (1967): the October (Yom Kippur) War (1973); the invasion of Lebanon (1982); the first intifada (1987-93); the second Lebanon War (2006).

Throughout this tumultuous, and often violent, history, one man has brought lasting peace — at least on one front — to the troubled region; that man is Jimmy Carter. As president of the United States, Carter devoted unprecedented amounts of energy and deployed the full force and prestige of the U.S. diplomacy machine to cement a peace agreement between Egypt and Israel. Working against tremendous odds President Carter succeeded where others have failed. The peace agreement he designed gave Israel its first exchange of diplomatic relations with an Arab country, and Egypt is not just any Arab country — it is the most populous Arab country, and until Saddam Hussein decided to invade his neighbors one after another, Egypt had the largest Arab army.

For that alone Israel should be grateful. But people have short memories. Since announcing his intention to meet with Hamas leader Khalid Mash’al in Syria during a tour of the Middle East, Carter has come under very heavy criticism from Israel and its supporters.

Carter, the indefatigable peacemaker, has found himself snubbed by a good number of Israelis, including Prime Minister Ehud Olmert, who was unable to find a few minutes to allow for a courtesy call. In an editorial titled ‘Our debt to Jimmy Carter,’ Israel’s Haaretz newspaper writes: “Ehud Olmert, who has not managed to achieve a peace agreement during his public life, and who even tried to undermine negotiations in the past” could not find the time “to meet the American president who is a signatory to the peace agreement with Egypt.”

Now, 60 years into the Arab-Israeli dispute, and a half-dozen wars later, most people would come to realize that there can be no military solution to the crisis. Only a negotiated settlement will put an end to the decades of fighting and bloodshed. The former U.S. president understood that problem. He realized the importance of talking to all sides in a conflict.

Unfortunately, many Israelis failed to see the real courage in Carter. They were quick on the draw, ready to shoot down a man who displayed innovative courageous thinking in a highly complex situation. He went where others have not dared venture. He explored peace.

For the sake of those who have forgotten their history, or perhaps chosen to forget it, it’s always worth reminding them that it was Carter, who as president of the United States, laid the cornerstone to peace in the Middle East when he brought together Egypt’s President Anwar Sadat and Israel’s Prime Minister Menahem Begin at the presidential retreat at Camp David, extracting a peace treaty from Egypt and Israel. Imperfect as it might be, this peace treaty has put an end to the state of belligerency between the two countries, and it is still in effect today. And had Egypt not paved the way and entered into a peace treaty with Israel, Jordan would have never been able to follow suit, becoming the second Arab country to recognize Israel and exchange diplomatic relations with the Jewish state.

In fact, had it not been for Jimmy Carter’s initiative to push for peace between the Arabs and Israelis, the visit by Israel’s Foreign Minister Tzipi Livni to the Gulf state of Qatar last April would have never been possible. Just as the exchange of diplomatic relations with Mauritania, the third Arab country to officially recognize Israel, would have never been possible.

Many Israelis have disliked Carter since he published his book Palestine: Peace not Apartheid. As Haaretz says in an editorial: “Israel is not ready for such comparisons, even though the situation begs it” given that the Jewish state is “a country which has a network of segregated roads on which Arabs may not travel.” The Israeli daily also points out that, along with the lack of freedom of movement, Israel’s control over Palestinian lands and their confiscation — especially the continued settlement activity — contravenes all promises Israel has made and the treaties it has signed.

Throughout the six decades of continued conflict, violence has only bred more violence. Violence never offered a solution. A quick glance through the history books will prove the point. The June 1967 Six-Day war gave birth to the Palestinian resistance movement. The 1982 Israeli invasion of Lebanon propelled the creation of Hizbullah. And the continuing unrest in the West Bank and Gaza gave rise to Hamas.

The longer the crisis is allowed to continue, the more complicated it will become. Hard as it may be to comprehend or accept Jimmy Carter’s initiative, engaging Hamas in talks should be encouraged, if not welcomed. Let’s give peace — and Jimmy Carter — a chance.

Claude Salhani is editor of the Middle East Times and a political analyst in Washington.

 

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Libya’s tyro-tourist oasis

by Alex Warren
written by Alex Warren

One of the first sights that greet new arrivals at Tripoli International Airport is an imposing portrait of Colonel Muammar Gaddafi wearing his trademark military sunglasses and a lustrous robe. Only a few years ago, it would have been difficult to imagine that some of those deboarding in the Libyan capital would be American tourists coming to see what this enigmatic country has to offer.

Let’s face it: the prevailing image of Libya held by most outsiders is hardly one of an inviting tourist destination. The country only emerged from international sanctions in 2003, after it settled the infamous Lockerbie bombing case, and is still considered to be something of an amusing pariah on the global diplomatic stage.

But for someone like myself, who struggles in vain to understand why more than six million people every year choose to spend their holidays in Dubai, Libya seems to hold plenty of tricks up its sleeve if it wants to take on its regional competitors and attract European visitors.

In many ways, it’s perfectly placed to become the next big thing in Mediterranean tourism. Next-door neighbors Tunisia and Egypt have already shown that it is possible to develop massive tourist industries which play a crucial role in the local economy and create thousands of jobs. Morocco has done the same. Algeria has bags of potential, but for now is simply too unpredictable to attract all but the most adventurous of travelers.

But Libya has arguably more to offer than all of these places. For a start, it’s safe, stable and within a stone’s throw of Europe. It also boasts a staggering variety of world-class attractions. The old Roman city at Leptis Magna is a UN World Heritage Site and even in Italy would be classed as a prime tourist attraction. On the eastern coastline is the Jebel Akhdar, a verdant mountainous peninsula which tumbles down spectacularly into pristine beaches and clean waters close to the ancient Greek site of Cyrene.

Covering most of the country is the Sahara, which is the top lure for many visitors. The vast expanses of awesome sand dunes in southern and western Libya, dotted with idyllic oases and ancient rock art, are virtually incomparable — with perhaps the exception of neighboring Algeria.

And then, of course, you’ve got the Gaddafi factor, which I would personally rank amongst Libya’s most valuable tourist assets. Not only is his face omnipresent in Tripoli, appearing in some form or other on most of the city’s billboard, but you can also buy a whole gamut of celebratory merchandise including t-shirts, baseball caps, posters and even watches. Maybe I’m reading too much into it, but there’s something pleasingly self-knowing about that: you get the impression that if the Great Leader really took himself so seriously, the police would have shut down the kitsch-sellers long ago.

Despite the wealth of things to see, the government seems to be taking a somewhat contradictory approach to encouraging visitors. On the one hand, the tourism ministry has identified more than 60 sites along the coast which it wants to develop with foreign partners, and is targeting three million tourists by 2010. That’s almost triple the meager number who visited in 2007.

Other things, though, make you wonder whether the Libyans are really that serious about the tourist sector at all. Last year, the immigration authorities suddenly altered the entry visa regulations and demanded that all non-Arab passport holders carry a certified Arabic translation of their passport. Something of a communication breakdown ensued, to the extent that tourists were simply turned away from Tripoli’s port and airport. A group of French tourists were apparently stranded in the country, while European cruise ships were even turned back from the port, subsequently prompting the operators to remove Tripoli from their itineraries and deprive the country of thousands of high-spending visitors.

Another issue is alcohol. Clearly, with its blanket ban on booze, Libya isn’t going to attract the Mediterranean party set, and those rules aren’t necessarily going to be eased any time soon. But then Libya doesn’t want to be Tunisia, with its low-grade package tourism aimed at the kind of tourists who don’t leave their hotel during a week’s holiday.

There’s a long way to go then, but drive around Tripoli and you see evidence that people have faith. Dozens of small hotels are sprouting up, attracted by tax incentives and the rising number of tour groups passing through the capital before heading south to the desert. There are Sheraton and Intercontinental hotels on the way, with more international brands expected to compete in what is presently a very lucrative market.

So if Libya gets its act together and provides its attractions with the promotion they deserve — including the Gaddafi-themed souvenirs — then it could well give the more established Middle East tourist destinations a run for their money.

Alex Warren is a Dubai-based freelance

consultant and writer.

 

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Europe making neighbors

by Riad Al-Khouri
written by Riad Al-Khouri

While the vast oil reserves of the Arab world are more than ever the focus of Western attention, over the last few years the eastern neighborhood of the trans-Atlantic community has also gained in importance. European Union enlargement has redrawn the map of Europe, and as a result the EU is struggling to determine policies and instruments for stability and security in its east, a concern it shares with the United States. Although broader priorities face the US, among which Eastern Europe is just one, the EU focus is narrower and deeper, concerning internal functioning and development of the Union.

Careful of Russian interests, policies and instruments employed by the trans-Atlantic partners have remained modest, but more recently, consensus seems to be emerging that Eastern Europe deserves stronger Western engagement. On the European Union side, there is broadening acknowledgement that older policies have been insufficient, and adjustment of EU strategies has begun. Thus, the EU is rethinking its European Neighborhood Policy (ENP), with several member states pressing for a stronger focus on Eastern Europe. Could this be at the expense of Arab countries?

Building on mutual commitment to democracy and human rights, rule of law, good governance, market economy principles and sustainable development, ENP goes beyond existing partnership models to offer a deeper political relationship and economic integration. The European Union developed ENP to avoid emergence of new dividing lines between the enlarged EU and its neighbors, in the Middle East and North Africa (MENA) and in Eastern Europe alike. The Strategy Paper on the ENP published in 2004 sets out how the EU would work more closely with Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia, Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the Palestinian Authority, Syria, Tunisia, and Ukraine.

The central elements of the ENP are the bilateral Action Plans agreed between the EU and each partner, which set out agendas of political and economic reform with short and medium-term priorities. Implementation of these plans — agreed to in 2005 with Israel, Jordan, Moldova, Morocco, the Palestinian Authority, Tunisia and Ukraine; in 2006 with Armenia, Azerbaijan and Georgia; and in 2007 with Egypt and Lebanon — is underway. Algeria, having only recently ratified its Association Agreement with the EU, has chosen not to negotiate an Action Plan yet. Since the ENP builds upon existing agreements between the EU and individual partners (Partnership and Cooperation accords, or Euro-Mediterranean Association Agreements), the ENP is not activated for Belarus, Libya, or Syria, with whom Association Agreements are not yet in force.

An interesting aspect of the ENP is that the majority of its members are actually Arab countries, and not Eastern European. However, there is an asymmetry in the Neighborhood Policy between the Arab world and Eastern Europe. In the latter, ENP can gradually advance reform and strengthen the case of neighboring countries to pursue eventual EU membership; for Arab countries, however, membership is at the very best a far distant prospect, and may actually not be an option at all. Thus, within the trans-Atlantic partnership, while the EU will have primary responsibility in shaping relationships with and developments in the eastern neighborhood, the US still seems to be paramount in the Arab world.

The EU and its eastern neighborhood are works in progress, but such is the drastic pace of global change that the boundaries of Europe may yet include peoples in MENA who are not currently “potential Europeans.” For the time being however, the EU’s focus on its eastern rim means that by default America may remain the dominant Western power in the Arab world, against the logic of geography and economics.

For the time being, ENP has yet to prove that it has a significant positive short-term effect on relations with the Arab world, and several EU member states are now pressing for a stronger focus of this policy on Eastern Europe. Regional frameworks, such as in the Black Sea area, may mark new relationships of the EU with its eastern neighborhood — by contrast, new EU policies involving Arab countries, such as the recently announced Union of the Mediterranean, look wobbly.

That concept, which began last year as the Mediterranean Union, an international forum grouping only states with a Mediterranean coastline and involving nine new agencies and a bank, now consists merely of a regular summit of EU and Mediterranean countries, a small secretariat, and a joint presidency. In practice, the Union for the Mediterranean may be little more than an upgrade of the Barcelona process and a political umbrella for the existing Euro-Med partnership, itself largely ineffective.

Riad al Khouri is a visiting scholar at the Carnegie Middle East Center, and Senior Fellow of the William Davidson Institute, University of Michigan.

 

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So Pacific-ally Lebanese

by Nicholas Blanford
written by Nicholas Blanford

For those Lebanese grimly preparing for a prolonged political stalemate, you may be reassured to learn that Lebanon is far from alone in experiencing a parliamentary paralysis.

A similar — although less violent — situation has arisen on the tiny island of Nauru in the Pacific Ocean. With a land area of only 21 square kilometers and a population of 13,770, Nauru is credited with being the smallest republic in the world, the smallest island state, the least populous member of the United Nations and the only republic without a capital. The island generated considerable wealth — achieving at one time the highest per capita income in the world — through exporting its enormous phosphate reserves. But the phosphates began to run out in the 1990s and Nauru sought other, less orthodox, means of generating income, such as money laundering. Today it receives cash handouts from Australia in exchange for housing a detention facility for would-be emigrants to Australia.

Nauru’s current political woes began in December with the election as president of Marcus Stephens, a former weightlifting champion and a medalist in the British Commonwealth Games who is revered as a national idol. In Nauru, the president is also head of the government.

In March, the opposition in Nauru’s 18-seat parliament attempted to topple Stephens by demanding a vote of no confidence. The opposition is seeking to re-elect a former Nauruan president, Rene Harris, whose chief claim to fame appears to have been to turn Nauru from one of the world’s richest nations into one of the poorest.

But the opposition move was finessed by the resignation of the parliamentary speaker Riddell Akua, an ally of the president, thus deadlocking parliament. David Adeang, an opposition MP, was appointed the new speaker, allowing him to table a vote of no confidence. But his appointment reduced the opposition’s share of the parliament to just eight seats, giving the loyalist camp the majority. That meant that although the opposition could now call for a no-confidence vote, it could not win as the loyalists held the majority. Adeang, the new speaker and clearly a crafty fellow, then called for a parliamentary session on Easter Saturday — without informing the loyalist bloc. The opposition MPs met alone and quickly voted in new legislation forbidding Nauruans with dual citizenship from sitting in parliament. The result of that new law was that two members of the loyalist camp, who were dual Nauruan and Australian citizens, could no longer sit in parliament, thus handing the majority back to the opposition.

The loyalists cried foul, insisting the parliamentary session on Easter Saturday was unconstitutional and lacked quorum, thus the new law was invalid. Adeang retorted that as speaker he could decide what was or was not quorum.

Stop me when any of this sounds familiar.

The loyalist camp then took their complaint to the Supreme Court and asked for a ruling on whether the Easter session was legitimate. The Supreme Court pondered awhile, then ruled that the session was indeed unconstitutional and the law banning dual nationals from parliament must be rescinded.

But Adeang, the redoubtable speaker, ignored the Supreme Court decision and refused to open parliament. Budget supply bills have been blocked as well as a number of investment projects for Nauru, threatening the island’s economy.

“They have made a mockery of parliamentary process and our constitution,” President Stephens said in a statement. “We can’t stand by any longer while the opposition pursues its self-serving agenda of economic destruction, which is now starting to hurt every Nauruan. I believe the voters of Nauru will voice their disgust at the opposition’s attempts to hold our democratic institutions to ransom.”

Substitute “Nauru” for “Lebanon” and “Nauruans” for “Lebanese” and that could have been Ahmad Fatfat fulminating against Nabih Berri.

The latest move in this South Pacific saga is the decision by President Stephens to dissolve parliament, declare a state of emergency and call for elections at the end of April.

Still, the good folks of Nauru will not be seeing bored-

looking soldiers standing on street corners or manning heavy machine guns atop armored personnel carriers at busy street junctions as Nauru does not have an army. (In fact, does Nauru have busy street junctions?). Happily, neither have they been plagued with assassinations, wars or bomb attacks; although a central police station burned down in March in a suspected case of arson linked to a commercial dispute.

Still, the political crisis in Nauru has earned the island that badge of international recognition for unstable states — the travel advisory from a Western Government.

“The political situation in Nauru is uncertain,” says the British Foreign Office stiffly. It advises potential tourists to “avoid large gatherings and keep away from major infrastructure sites.”

That should not be too hard in the world’s smallest island state.
 

Nicholas Blanford is a Beirut-based journalist and author of “Killing Mr. Lebanon — The Assassination of Rafik Hariri and its Impact on the Middle East.”

 

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