Comment

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.

 

0 comments
0 FacebookTwitterPinterestEmail
Comment

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.

 

0 comments
0 FacebookTwitterPinterestEmail
Comment

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.”

 

0 comments
0 FacebookTwitterPinterestEmail
Comment

Uncle Tehran wins again

by Gareth Smith
written by Gareth Smith

With the dust settling on March’s Iranian parliament election, the poll suggests President Mahmoud Ahmadinejad is likely to win a second term next year. Belying those who had again written him off as a lame duck, Ahmadinejad can take comfort in conservatives winning around 75% of the vote in an election where turn-out of 60% — up from 51% in 2004 — was hardly discouraged by the widespread disqualification of reformist candidates.

The president’s own supporters formed part of the United Fundamentalist Front, the largest conservative list, which was comfortably ahead of the rival Fundamentalist Front. Ahmadinejad, inexperienced when he came to office, learned from mistakes in local elections in December 2006, when supporters did poorly as a separate list, with little time to prepare for 207 constituencies.

What’s more, potential rivals to Ahmadinejad in 2009 have done little to raise their profile with the election. The exception is Ali Larijani, the former top security official and central figure in the Fundamentalist Front, who stormed to victory in the holy city of Qom. But the erudite voters of Qom hardly typify the wider Iranian electorate where Larijani’s lack of charisma counted more in his poor 2005 presidential showing — 4 million votes behind Ahmadinejad — than his lineage as the son and son-in-law of leading ayatollahs.

Neither did the reformists make much impact in parliamentary poll, although they increased their number of seats to around 50 or 60 (once the second round, on April 25, is included) from 39 in the outgoing parliament. Banned from around two-thirds of the seats, the two reformist parties — Mosharekat (Participation Front) and Etemad-e Melli (National Trust) — spent much of the campaign arguing amongst themselves.

Even in Tehran the reformists fared badly, despite reports of high turn-outs in upper-class areas that usually support them. Gholam-Ali Haddad Adel, the parliamentary speaker and a leading fundamentalist, topped the poll in the capital, and the leading 15 candidates in the city were all from the main fundamentalist list.

Gholam Hossein Karbashi, leader of the Kargozaran (Executives of Construction Party), a centrist party established by former president Akbar Hashemi Rafsanjani, blamed divisions for the reformists’ poor showing. “Despite all our efforts we were not able to motivate more than 30% of the electorate… the behavior of the reformists is partly to blame for the results — instead of uniting, they dispersed the vote [by failing to agree on a common list of candidates].”

Failure to run a common candidate in 2009 would probably doom the reformists to a result similar to 2005, when Mehdi Karrubi, Etemad-e Melli’s head and well-known as a former parliamentary leader, fell 600,000 votes short of the second-ballot run off in which Ahmadinejad defeated Rafsanjani.

Across the country, the election was fought mainly on economic and regional or local issues, not on foreign policy, where the government is seen as successful in showing the world that Iran is serious about the nuclear issue.

This is territory on which Ahmadinejad has appeared vulnerable, given that the official inflation rate is as high as 20%. But it is far from clear whether voters across the country hold the president responsible, as many areas have benefited from development schemes funded by the government from record oil receipts. Current spending for the new Iranian fiscal year will be up around 20% on last, from $253 billion to $304 billion.

Ahmadinejad’s message for the Iranian New Year outlined the themes that will dominate his re-election campaign. While acknowledging that his administration has not resolved all the economic problems of the country and conceding inflation was causing problems for “fellow Iranians,” the president promised the government had “an extensive economic development plan” to continue “massive industrial, scientific, research, economic, job-creating and cultural projects.”

He also issued a rallying cry for national resistance in the face of Western-led pressures over the nuclear programmed, emphasizing Iran was “in the middle of an all-out war,” and faced world recession as well as “the bad temper of some of our enemies” and inside the country “the mal-intent of some people.”

US conservatives — rallying around John McCain as presidential candidate — and their European allies have long seized on such rhetoric, especially over Israel, as justification for punishing Iran through UN and other sanctions. Hence, the prospect of Ahmadinejad’s re-election — and possible undermining of the argument that Iran should be engaged — is for them hardly unpalatable.

Continuing the international stand-off also seems to suit Ayatollah Ali Khamenei, Iran’s supreme leader, who praised the turn-out in the parliamentary election as “legendary,” since voters had “prevailed over the wily enemy,” a reference to western accusations that the poll was unfair, the result being to help but keep the initiative with Ahmadinejad.

Gareth Smyth was the Financial Times Tehran correspondent and is now based in London.
 

 

0 comments
0 FacebookTwitterPinterestEmail
Comment

Heeling the Arab media

by Peter Speetjens
written by Peter Speetjens

“The revolution will not be televised,” Gil Scott Heron sang in his razor-sharp 1974 criticism of mainstream US media. His words have since traveled well beyond American borders and, if it is up to the regional powers that be, the revolution will indeed never be televised, nor will television ever be revolutionized.

In a remarkable show of solidarity, on February 12 of this year 22 Arab Ministers of Information signed the charter “Suggested Guidelines and Principles for Organizing Satellite TV in the Arab World.” The text stipulates, among other things, that satellite broadcasters are not to offend Arab leaders, national and religious symbols, nor to damage social harmony, national unity or public order. They should show respect for the Arab family structure and refrain from broadcasting anything which calls into question God and religion, while protecting Arab identity from the harmful effects of globalization.

The charter governs all existing and future agreements with TV stations. If broadcasters do not comply, the states party to the agreement can take punitive steps, varying from issuing a warning to confiscating material and equipment and, ultimately, canceling the station’s permit.

The text was immediately condemned by media observers as an attempt to enhance censorship. Reporters Without Borders defined it as “not only repressive but also retrograde… the Arab League information ministers have banded together to put pressure on news media that have been annoying them and escaping their control.”

Of the 22 countries represented at the meeting, only Qatar abstained from voting, which should not come as a surprise, as the charter is widely believed to particularly target two channels that have been a thorn in the side of many rulers: Lebanon-based Al-Manar and, especially, Qatar-based Al Jazeera.

Al Jazeera has been (temporarily) banned from many Arab countries, including Egypt, Iraq and Saudi Arabia, while Washington accuses the channel of fanning anti-

Americanism. In 2004, two British MPs leaked a secret memo in which George Bush suggested to Tony Blair to bomb the Al Jazeera premises. Israel joined the choir in March accusing Al Jazeera reporters of being pro-Hamas, banning them from interviewing government officials and entering Gaza.

The Arab information ministers stressed that the charter is of a non-binding nature and needs to be ratified by national authorities, which has so far only been done by the text’s mastermind, Egypt. The embattled Mubarak regime is determined to suppress anything that does not fit the pretty picture.

Thus, one newspaper editor was sentenced to six months in jail for questioning the Big Leader’s health, hundreds of activists and political opponents were imprisoned and the Britain-based al-Hiwar station on April 1 became the third channel to be banned from Nilesat.

Al-Hiwar founder Dr. Azzem Tamimi told media-watchdog Menassat that he was neither notified nor given an explanation. He believes, however, that the reason for pulling the plug were two programs that had been critical of human rights violations and media independence in the land of the Nile.

Of late, workers in Egypt’s all-important textile industry have gone on strike and, despite the overwhelming presence of Egyptian security forces, thousands of protesters regularly hit the streets, calling for the regime to step down. Yet if the state-run TV were to be believed, none of this ever took place.

Jordan has not yet ratified the charter, yet ended its first experiment with a private broadcaster before it had even started. After two years of preparations and numerous public announcements, ATV was finally to be launched on July 1, 2007. One day before D-Day, however, it received a letter from the semi-independent Audiovisual Commission (AVC), stating the launch was off, as the channel lacked a permit.

Now, call me suspicious, but that is weird. A private broadcaster starting a $30 million operation in a tightly controlled media landscape is not aware it lacked a permit? Even stranger is that none of Jordan’s state-owned newspapers or privately-run magazines covered the story. The only interviews with ATV Managing Director Mohannad Khatib I found were conducted with a portal called 7iber.com and… Al Jazeera.

Khatib claimed ATV had all necessary permits, yet admitted the channel had a financial dispute with the state-owned Jordan TV (JTV). Although mainly broadcasting via satellite, ATV had also leased one of JTV’s terrestrial channels for a staggering $3 million a year. JTV demanded payment for 2007, although ATV had not used the channel. In fact, it was JTV that had continued broadcasting. Interesting detail: the head of the AVC also heads JTV.

According to Khatib, the real reason for pulling the plug was that the Jordan authorities were becoming nervous about losing control over the message sent to the masses. While the rumor machine is in full swing, the truth will arguably never come out, as authorities and media continue to ignore the story as if it never happened. And thus the status quo prevails — ATV lacks a permit, JTV broadcasts despite deplorable ratings, and most Jordanians watch Al Jazeera, like the rest of the region.

Peter Speetjens is a Beirut-based journalist.

 

0 comments
0 FacebookTwitterPinterestEmail
Comment

Progress, driven to insanity

by Norbert Schiller
written by Norbert Schiller

The UAE, and particularly Dubai, are on a mission to prove to the world that anything they set their minds to can be achieved. Under the leadership of Sheikh Mohammed bin Rashid Al Maktoum, the transformations happening in Dubai are so significant that some can even be seen from space.

Take for example Dubai’s coastline, which a few years ago was only 70 kilometers in length. Now, with the development of hundreds of artificial islands shaped like the world or a palm tree, Dubai will have hundreds of kilometers of sandy coastline at its disposal. And that is just the beginning. There are plans to create another palm island the size of the city of Paris, and if all goes well Dubai will transplant the universe to its shores. On another front, Dubai’s building boom is proceeding at such a break neck speed that 17% of the world’s cranes are at work in the emirate. A milestone was recently achieved when the Burj Dubai became the tallest skyscraper in the world, surpassing Chicago’s Sears Tower while still a ways to go before completion. Besides redefining the natural contours of the desert, Dubai has created snow where once only sand existed. If you want to put on winter clothes and ski in the middle of summer, where temperatures top 50 degrees Celsius, then the indoor Ski Dubai is the place to go.

Not to be outdone, the richest of the seven emirates, Abu Dhabi, also has its own agenda. Though not as grandiose as Dubai, Abu Dhabi wants to be seen more as a cultural hub. In 2012 it will have its own Louvre Museum, a state of the art complex that will showcase many of the original works currently housed in Paris. Beside the Louvre, Abu Dhabi will also have its own branch of New York’s prestigious Guggenheim Museum.

With all the successes there are bound to be a number of setbacks. On a global scale, according to the World Wildlife Fund, the UAE leaves the largest ecological per capita footprint in the world. This means that each of its residents uses up more resources than any other person in the world. On a more local level, there is another world record that the Emirates should not proud of. Per capita, the UAE has the highest number of road fatalities

When I was a junior high school student in America, a friend of mine, whose father was a policeman, used to pass around a magazine called California Highway Patrolman (CHP). It was the equivalent of a monthly trade magazine for law enforcers that showed detailed photographs of car accidents across California. Even though all the photographs were black and white, the pictures were nonetheless quite graphic. Most of the photos were taken by the police for their own records. The sight of all those horrific wrecks had a profound effect on me and most probably made me a little more careful when I was finally old enough to drive.

Today, the local press in the Emirates is beginning to look more like the highway patrolman magazine of my youth than a daily newspaper. Headlines like “UAE Road Accidents Claim 21 in 72 hours” or “Driver Burnt to Death after Truck Collision in Dubai” are just a sample of what the reader is hit up with every morning. And it’s not only limited to newsprint. Turn on the radio at any time of the day or night and you will hear between songs a stream of traffic updates, some sent in by motorists, telling you which roads to avoid because of accidents. “Avoid Arabian Ranches Roundabout because a bus has overturned” or “Traffic coming into Dubai on Sheikh Zayed Road is backed up all the way to Jebal Ali because of a multi car pile-up.”

The reason for the high death toll is simple: there are just too many vehicles on the roads and increasing at a phenomenal rate. In spite of the dozens of new four-lane bridges and freeways, traffic problems are still horrendous. It seems that no matter what the authorities do to ease the flow, they cannot keep ahead of the mounting vehicles on the road. Add to this the fact that many drivers do not obey the rules. They drive too fast, pass on the right hand side, use their cell phones, travel too closely behind the car in front and do not take precautions when the roads are flooded or visibility is impaired by fog. The numbers tell the rest of the story. In 2007, a total of 1,056 people were killed in traffic accidents, while 878 died in 2006 and 829 in 2005.

Recently, the Emirates broke one of its own records. On a foggy morning in March, 250 automobiles were involved in a massive accident which killed three and injured more than 300 on the Dubai-Abu Dhabi highway. Of the 250 cars, 60 caught fire and the scene looked more like a massive car bomb explosion somewhere in Iraq than a simple traffic accident. Beside the cars, there were 12 buses involved in the accident as well.

No matter how much the Emirates try to impress the rest of the world with their achievements, the bottom line is that life for those who have to battle on the roads every day is becoming intolerable. With billions of dollars in development projects expected in the coming years, and the millions who are bound to flood here in search of work, the Emirates should think of banning automobiles all together and using their resources to come up with an alternative way of transport that has yet to be discovered. This way they will truly dazzle the rest of the world with an innovation that will prove useful to humanity.

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

 

0 comments
0 FacebookTwitterPinterestEmail
Banking & Finance

Secrecy Laws – Hush money

by Executive Staff
written by Executive Staff
 
Since the country’s early inception in the 1920s banking has played a pivotal role in shaping Lebanon ’s economy. Today, it remains a resilient sector, especially when compared to other industry sectors, which have been plagued with low growth levels. For example, in February 2008, Bank Byblos reported that the country’s bank assets showed a 14.10% year-to-year growth.

During the fifteen years of the 1975 civil war and up until this date, banking secrecy has undoubtedly contributed to the sector’s resilience, said Dr. Paul Morcos, legal consultant at the Bank of Beirut and the Arab Countries (BBAC) and author of the study “The challenges of the Banking Secrecy in Lebanon: A Comparison with Banking and Professional Secrecy in France, Switzerland, Luxembourg and the Middle East”. According to him, during the 1975-90 period the volume of bank deposits increased by 392 times. Morcos also highlighted the importance of banking secrecy in attracting and retaining deposits of foreign, mostly Arab, investors.

“Banking secrecy in Lebanon is defined by the 1956 law, which was amended in 2001,” Morcos explained. Abbas Halabi, former magistrate and vice chairman at BBAC underscored the very limited scope of the earlier law. “Bank secrecy could only be lifted in a few cases with the approval of the depositor or in the case of bankruptcy or illicit enrichment.”

The amendment included (and defined) the concept of money laundering and added other types of illicit enrichment such as drug dealing, terrorist acts, embezzlement of public or private funds or their appropriation by fraudulent means, and counterfeiting activities.

A recent report published by the Special investigation Committee (SIC) of the Lebanese central bank (Banque du Liban – BDL) defines money laundering as “any act committed with the purpose of concealing the real source of illicit funds or giving by any means, a false justification about the said source.”

Other acts also include the transfer or substitution of funds known to be illegal for the purpose of concealing or disguising their source, or helping a person involved in the offence to dodge responsibility, acquiring or holding illicit funds, using or investing such funds in purchasing movable or immovable assets, or in carrying out financial operations, while being aware of the illicit nature of these funds.

Morcos cites numerous cases in which bank secrecy has been abused by unscrupulous individuals, among them the infamous case of the Al-Madina Bank.

According to Halabi, financial institutions subjected to the bank secrecy law are required to monitor their clients’ operations, for example by screening for unusual activity. “They are also subject to regular visits by the SIC whose mandate is to investigate money laundering operations, and to monitor compliance with rules and procedures,” he said.

In Lebanon , the central bank has oversight on debtor accounts and can access creditor accounts as long as the identity of depositor remains hidden. “When accounts opened at banks or financial institutions are suspected to have been used for money laundering purposes, the SIC will investigate the case, the account will be frozen and when foul play is proven banking secrecy will be lifted,” Halabi explained.

Throughout 2007, the BDL investigated 191 cases involving alleged money laundering and the financing of terrorism operations and passed 54 of them on to the prosecuting authorities. The report mentions a few cases as examples, one of which involved the account of a car dealer.

The SIC had received a request of assistance from a foreign financial intelligence unit (FIU) regarding a suspect belonging to a known international organization under investigation for supporting a terrorist group. The foreign criminal investigation had revealed several wire transfers from the suspect’s foreign bank account to a local bank account in Lebanon held by his brother, also suspected of being a member in the organization.

Other cases include fraud schemes involving three Lebanese with dual nationality who forged import invoices and sent them for collection to a local bank, assisted by an accomplice employed at one of the local banks, which tallied up with the transfer of more than $1.3 million to Lebanon .

The report outlines that out of the 54 cases in which bank secrecy was lifted 7 cases were considered to be local while the other 47 cases had foreign origin. In the report, Lebanese customs were the largest source of all cases representing 33.76% of cases received, while commercial banks accounted for 28.63% and the UN for 1.28%.

Most cases received involved cash courier fraud, which constituted 33.76% of the total, while counterfeiting accounted for 14.53%, terrorism for 5.56%, embezzlement of private funds for 3.42% and drugs for 3.42%. Ironically, in a country known for its rampant corruption, embezzlement of public funds constituted only 2.14% of all cases.

How to cleanse the system

Morcos suggested a series of amendments to avoid the exploitation of the banking secrecy framework by criminals. “It is first essential to define the notion of ’client’, which is quite extensive in Lebanon and includes transitory clients.”

He also envisions the creation of a special commission, which would guarantee transparency and accountability and of both senior functionaries and politicians. Other issues he deemed in need of clarification are the opposability of banking secrecy to the penal law, allowing for the misuse of the system by embezzlers vis-à-vis penal courts or defaulting borrowers versus their lenders, bankrupt merchants opposed to creditors in order to traffic their money to other clients benefiting from banking secrecy as well as corrupted politicians opposed to inspection and investigation authorities. “Issuers of checks should also be able to trace their funds when it is endorsed by other benefactors.”

Morcos concluded that the banking secrecy system in Lebanon is still one of most extensive in the world. Its scope exceeds by far the ones practiced in countries such as Switzerland and Luxembourg . Therefore, he said, “a redefinition of the system necessary in order to limit abuses and break a long-maintained taboo.”

 

0 comments
0 FacebookTwitterPinterestEmail
Banking & Finance

IPO Watch – Gulf still soaring

by Executive Staff
written by Executive Staff

The GCC’s plans to re-engineer family businesses and a serious push towards privatization have started what could be soon known as the “hottest IPO market in the world,” analysts say. The IPO market had raised well over $4 billion in the first quarter of 2008, compared to just $1 billion in the first quarter of 2007. Also in the first quarter, regional companies announced over $14 billion in IPOs; these figures come at a time when IPO markets in the more developed economies are experiencing a downturn. The number of IPOs in the U.S. dropped by 73% in Q1 2008 compared to Q1 2007. Only 12 firms floated shares in the same period on one of the top U.S. stock exchanges compared to 44 in Q1 2007.

If the month of April is at all a telltale sign, the trend is expected to continue unabated and foreign interest in regional markets will continue to rise as well. April witnessed a flurry of IPO announcements and closings, starting with the hottest and the largest IPO in the region this year — that of Saudi-based Inmaa Bank, a shariah-compliant financial institution which raised SAR 18.3 billion (US$4.89 billion) in its initial public offering on April 17. That’s 74% over subscription with 9 million Saudi investors quickly snapping up around some 1.05 billion shares.

Still in Saudi Arabia, Basic Chemical Industries, a manufacture of construction chemicals, announced that it will offer 30% of its shares to the public starting on May 24. The company will offer 6.6 million shares but it did not disclose the amount it wants to raise. Consumer goods manufacture, Al Othaim Markets Company, said in early April that it plans to raise 22.5 million by offering 6.75 million shares or 30% of the company’s capital. The launch of the IPO is expected to start on June 21 and end on June 30. Also playing in the same ballpark of figures, Halwani Brothers, an agriculture firm, will offer 30% of its capital to the public, or 8.57 million shares on June 21. Although Halawani did not disclose the amount it is seeking to raise, the proceeds are expected to go towards the company’s strategic local and regional expansion.

Moving north to Kuwait, Al Ahlia Real Estate Projects, a subsidiary of Al Ahlia Holding, announced in late April that it will launch an IPO for 49% of the company in the second quarter of 2008. Company officials did not provide any more additional details but discussed a possible listing on another regional market in addition to Kuwait.

For the UAE, the region’s hottest economy, April was a slow month where only one serious announcement was made. M’Sharie, the private equity arm of the Dubai Investments, said it will offer around 40% of its shares to around “10 investors” in a private placement on May 8. According to media reports, the private placement is a prelude to an IPO in 2010. M’Sharie’s portfolio consists of 19 companies with principle activities in the construction industry.

In Oman, Nawras, the country’s second telecom operator, has appointed two international banks to advise them on their planned IPO, scheduled for late 2008. Also, following suit, Barr al Jissah Resort Company said that plans for an IPO are now under consideration and a “definite” announcement will be forthcoming in the second half of 2008.

In North Africa, two interesting announcements came out in early April. Sudan Telecommunications (Sudatel), said that it needs to raise an additional $1.75 billion to fund its expansion plans. Sudatel is listed on Khartoum Stock Exchanges, Abu Dhabi Stock Market and Bahrain Stock Exchange. The company plans to raise the money through rights issues on all three exchanges, but it did not say when. Meanwhile, in Morocco, Label’Vie, a consumer goods firm and Chaabi Lil Iskane, a real estate company, announced plans to go public in the second quarter of 2008, but both did not provide any details about the offer.

So it appears that local investors will have a large, if delicate, menu to choose from in the second half of 2008. The IPO fever in the region is only expected to reach higher temperatures and investors’ appetite remains wet as a new wave of listings is expected to take local markets to new heights. But observers warn that despite the record IPO announcements local markets still have much to do in terms of providing better transparency, shareholders protection and opening up the markets to foreign ownership. Observers point out that even though Saudi Arabia has taken some steps to liberalize its economy, much more is needed to enable proper marker functioning. For example, the IPO Al Inamaa was exclusively available to Saudi citizens, with non-Saudis banned from participating in the offer.

The stock markets of the GCC are now a serious financial force to reckon with, but governments and local investors must continue to advocate additional policies to promote better trading principles, further innovation and most importantly, more transparency in effort to protect both, the local and foreign investor participating in these growing markets.

 

0 comments
0 FacebookTwitterPinterestEmail
Banking & Finance

Lebanon Defaulting on staff

by Executive Staff
written by Executive Staff
 
For the last few years, a brain drain has been depleting Lebanon of its human talent. One of the many sectors to be hard hit by emigration, losing its brightest and most qualified employees to foreign shores, is the banking sector, Lebanon’s largest employer. To curtail the trend, banks have been looking into their competitors’ backyards, luring in top individuals to beef up their staff.

“A severe competition for qualified personnel is undoubtedly pitting Lebanese banks against their regional counterparts,” said Rabih Yaghi, head of human resources at Bank of Beirut. Foreign banks appeal to Lebanese employees with higher salaries and a larger structure — thus better advancement opportunities. Most bank employees who resign from their positions in Lebanon move to the Gulf countries.

“In the Gulf, bonus schemes and career advancement opportunities are tremendous,” reckons Adel Hechme, HR manager at Banque de la Mediterranée. “Bank employees are increasingly prone to accept a 15% to 20% markup on their packages, anticipating a doubling-up of their income potential on the longer run.”

In his opinion, it is not the actual pay that shapes the decision making of employees leaving for the Gulf, as they are often offered similar packages in Lebanon when cost of living and inflation are added to the equation, but instead “local institutions cannot really compare in terms of medium and long term opportunities provided.”

Getting and keeping a qualified workforce

Attracting qualified personnel at the junior level is a concern for most institutions facing the challenge of going after candidates from top universities.

“Our policy is to go after the actual candidate. We do not discriminate against anyone as long as they have the right academic background, personality abilities and skills,” Hechme explained. Regional institutions tend to target employees with three to four years experience, or with a seven year seniority. A background in corporate banking or finance is often greatly desired. Elie Abi Chahine, HR manager at Byblos Bank, believes that credit officers and employees from capital markets and banking technology are sought after by most local and international institutions.

Other sectors witnessing high attrition levels include private banking, as bankers flock to Gulf where financial markets are fueled by skyrocketing oil prices. On the local level, banks also try to draw in qualified employees to their credit department, and because of limited local resources are forced to look into their competitors’ employee pool. “Junior dealers are another type of employees who are also in great demand,” according to Hechme. Lebanon financial markets are also dwarfed by the mere size of the regional financial scene.

Can the grim situation be partly attributed to lower salary schemes applied in Lebanon? In most local banks, entry level salaries vary from $650-900. At the higher managerial level, a distinction is made between support and revenue generating positions and salary brackets also depend on scarcity of employees and their individual abilities. “We are currently witnessing a depletion of top universities’ MBA holders, who are leaving Lebanon for the Gulf,” Abi Chahine admitted. At the entry level, MBA holders will earn some $100-200 more than BS or BA holders. “Another thorny issue is that candidates have become more demanding and expect to rapidly climb the managerial ladder, often despite their lack of proper qualification,” he complained. The manager reckons that in recent years, banks have been able to retain employees at the corporate level, while attrition levels are higher at the branch level.

Yaghi attributes 70% of total number of resignations to employees departing for the Gulf and the West, while the remaining 30% is recruited by other local banks, also including resignations of senior managers who leave their employer to accelerate their career by seeking a higher position in a smaller institution. At the local level, rivalry for the best employee usually takes place between banks of relatively similar size.

“Employees who abandon their position in local banks are also often motivated by security concerns, the political instability affecting to a great extent their decision making process. Evidently, appealing career plans featured by foreign companies also account ultimately for their choice,” Abi Chahine said. The manager estimates attrition levels at about 6%, but this figure might be misleading as it also includes housewives who follow their spouse, or employees retiring at the end of their service. Hechme believes that “attrition levels reach about 6.8% for the whole Lebanese banking sector, of which 3% equal to real attrition, a figure roughly equal to international standards.”

Taming Attrition

To reign in the trend and retain their staff, human resource departments aim to develop a clear career path for their employees and positive bonus and salary schemes. Regardless of the measures taken, they are also required to develop contingency plans, allowing for replacement to rapidly step into a vacant position. Yaghi believes that training is another essential tool at the hand of HR managers, however, one that has been affected by the dwindling number of professional companies who, like Lebanese employees, are looking to further to the east.

“Attrition is an international problem that plagues all institutions around the world. CitiBank is a perfect example; it is after all considered by the global workforce as the biggest school in the banking world. I don’t think we can describe the prevailing situation as an actual war but the by-product of an economic reality where supply is scarce and demand quite important,” Hechme emphasized. He believes that high retention levels at Banque de la Mediterranée are due to a fair incentive and bonus system, good career paths supported by clearly defined job competencies and professional training backed by a reward based performance management culture.

“We operate in an open market environment and recruiting employees from other institutions is allowed as longs as it is done ethically, and avoids targeting one institution in particular,” explained Abi Chahine. Nonetheless, on the local level, reality is quite different with banks to this day engaged in an undeclared tug-of-war for the best candidates, underlined by ancient, and often personal, rivalries among the top management.

 

0 comments
0 FacebookTwitterPinterestEmail
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

0 comments
0 FacebookTwitterPinterestEmail