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Capitalist Culture

The Information debate

by Michael Young August 1, 2007
written by Michael Young

In July, a controversy erupted when two Israel journalists traveling under foreign passports came to Lebanon to report on the country a year after the summer 2006 war. The pair, Lisa Goldman and Rinat Malkes, was taken to task by Nour Samaha of the Daily Star, who wrote that the journalists “not only broke Lebanese law, but also violated codes of ethics in journalism and endangered the lives of those they interviewed.”

Goldman defended herself against several of Samaha’s statements. But one phrase in particular stood out in her response: “Ramez Maluf, professor of journalism at the Lebanese American University, is quoted in the article as saying that Israelis interested in news about Lebanon should rely on the wire services. That sounds a lot like ‘let them eat cake.’ Me, I prefer a more substantive meal. Given the tsunami of congratulatory emails I have received from both Lebanese and Israelis, it seems pretty clear that there is a great hunger for human-interest reporting that goes beyond conflict and war — and that the average Lebanese and the average Israeli share a preference for a real meal over cake, too.”

This merits a closer look. Maluf’s point that Israelis should satisfy themselves with wire reports is more a political statement than a professional one. Journalists, at least the better ones, will rarely subscribe to constraints placed on them by governments. Indeed, should they? That doesn’t mean it’s the duty of a journalist to break the law, but one has to be realistic: to ask of individuals whose job it is to gather information that they satisfy themselves with stockpiling wire reports is a bit much.

The matter of Goldman’s ethics or whether she endangered the Lebanese she talked to can be debated. There certainly are dangers to interviewees if an Israeli journalist doesn’t work carefully. However, it is inconsistent to hold against Israelis that they remain ignorant about their neighbors in the Arab World, only to turn around and blame them for trying to remedy that failing. Most Arab television stations have correspondents in Israel, and all broadcasted live last year during the Lebanon war. Goldman’s impulse to be selective with the truth about herself in Beirut came from the lack of a similar opportunity afforded to Israeli journalists.

One of the questions raised by the discussion of Goldman’s and Malkes’ stay was whether it was time to grant Israeli journalists an opportunity to report from Lebanon, in the spirit of open communications. There are pros and cons involved, and the political implications are significant.

First, it’s time to dispel a myth. Israelis or correspondents for Israeli media have long been reporting from Lebanon. Goldman and Malkes did not invent the wheel. The journalists have done so by entering Lebanon on foreign passports, as Goldman and Malkes did, while showing credentials from newspapers of countries with which Lebanon has no problems. So, for example, a journalist might write for an American newspaper, but also file for an Israeli publication. The journalists’ chances of returning to Lebanon may be blown once the Lebanese find out, but that doesn’t change that the loophole is often exploited.

Second, for diplomatic and security reasons it would be absurd to expect either the Lebanese government or Hizbullah to sign off on opening Lebanon up fully to Israeli correspondents. It’s not going to happen, nor can we forget that the Israelis do censor news reports at their end. A free flow of information is unlikely, so we have to think of an alternative.

Is allowing tightly controlled access to Israeli journalists better than the current ambiguity? The answer will provoke hackles from those who believe the Israelis must make scarce. But what if Israeli journalists had been taken on a tour of the destroyed quarters of Bint Jubayl and Beirut’s southern suburbs last year? What if they were shown the bridges and factories needlessly destroyed because Israel didn’t quite know what it wanted to do in Lebanon once the war began? What if they were taken on a tour of Lebanon’s morgues at the height of the bombings?

Oddly enough, Hizbullah would have a much better sense of the latent advantages here than those who insist on remaining politically correct. In fact, once the political implications of allowing Israelis to enter Lebanon under some form of political control are grasped by Israeli officials, it is the officials themselves who might begin protesting the Lebanese sojourns. However, the Israeli media would insist the trips continue, because, as Goldman put it, journalists prefer a full meal to eating cake.

That is assuming of course that the hypocritical equilibrium existing now is not the best solution for all. We call the Israelis scoundrels for entering Lebanon under false pretenses; they call us intolerant for failing to allow them into the country except under false pretenses; and everyone remains happy. Yet the point is being missed: information will cross borders whether we like it or not. Who will best get his information across?

August 1, 2007 0 comments
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Putin’s gambit

by Claude Salhani August 1, 2007
written by Claude Salhani

The Cuban missile crisis began in 1961 when the US started to deploy 15 Jupiter IRBM — intermediate-range ballistic missiles — in Turkey, close to the Soviet border. With a range of 1,500 miles and a flight time of about 16 minutes, the missiles threatened several cities — including Moscow.

On October 14, 1962, photographs shot by US reconnaissance planes and shown to President John F. Kennedy revealed similar installations being erected in Cuba, as a response to the American threat. Days later, on October 28, after a dramatic confrontation threatened world peace, Kennedy and Soviet premier Nikita Khrushchev, with the intercession of the Secretary General of the United Nations, agreed both sides would dismantle their installations.

Now 46 years later US President George W. Bush wants to install a missile defense system in the Czech Republic and a radar tracking station in Poland. News of US missiles being positioned so close to Russia triggered a “mini-Cuban missile crisis.”

Russia’s initial reaction was not surprising. As soon as President Vladimir Putin managed to overcome his anger, he said he would direct Russian missiles at European cities in retaliation to the US plans to deploy in Central Europe.

But then the Russian president surprised Bush when the two men met a few weeks later, in June, at the G-8 Summit in Germany. Changing tactics once more and sidestepping his earlier threats to target European cities, Putin suggested that Russia joins the US initiative. Instead of the Czech Republic and Poland being used as bases for the defense system he recommended the use of a former-Soviet base in Azerbaijan. The Russian president had even gone to his Azeri counterpart and already obtained an agreement.

“Interesting,” was how Bush replied to Putin’s offer. That’s the diplomatic way of saying “thanks, but no.” Bush and his advisors probably never gave the Russian offer very serious thought. In any case it did not take very long for the United States to deem the Russian offer invalid on grounds that the Azeri station would not be acceptable from a technical point of view. The Americans said it was outdated.

But the Russian president, whose years in the KGB must have taught him how to remain cool under duress, was not so easily dissuaded.

In early July he flew to the United States and spent a weekend at the Bush family estate in Maine, in a relaxed atmosphere for what was, without a doubt, very stressful talks that even a fishing trip off the Atlantic coast on the Bush Sr.’s speedboat did little to smooth over.

And once again the Russian president came up with a new plan. This time Putin proposed to join the project as a partner and base the tracking station in Russia.

Meanwhile, Bush Jr. kept trying to convince the Russian president that his country has nothing to fear from those missiles. The US president stressed that the defensive missile system is needed to counter eventual threats emerging from Iran, if and when it reaches the point where it can produce its own nuclear weapons.

Why then is Putin so persistent in trying to get Bush to back away from the Czech/Polish project? So adamant is the Russian president to prevent this from becoming a reality that he keeps coming back with a new offer at every meeting. The answer to Putin’s opposition to the Czech/Polish defense plan can be found in two factors; one is of a strategic nature while the other is more emotional, combined with a brisk of nostalgia for the Soviet past.

Strategically, the Russians share the same fears the US has of a nuclear-armed Iran. In fact, Russia has probably far more reason to worry of an Iran with nukes than the US. First, Russia is geographically much closer, needing only short or intermediary range missiles, which Iran already has, should it ever wish to strike at Russia. On the other hand, Iran would need to deploy intercontinental missiles, which it does not yet have, should it wish to strike at the US.

Second, Russia, a federal state, also has its share of problems with Islamist extremists operating from its southern Muslim republics, like Chechnya, who are seeking to break away from the motherland. In that respect Moscow and Washington have equal trepidation that a nuclear weapon would fall into the hands of Islamist terrorists, the consequences of which would be catastrophic for both.

On the emotional level, call it even a level of national pride, Moscow is highly reluctant to see two former Warsaw Pact countries enter into a defense agreement which may be viewed by many Russians as ganging up on Russia. Moscow still has a hard time digesting the fact that its former satellites states are now members of the European Union and, to add insult to injury, also members of NATO.

Still, despite Putin’s ongoing objections Bush said after meeting his Russian counterpart, “I think the Czech Republic and Poland need to be an integral part of the system.”

If for the Russian president the week got off to a bad start with his failure to convince the American president to change his mind and back away from the Czech Republic and Poland, at least it ended on a positive note as he managed to convince the International Olympic Committee to designate the Russian city of Sochi as the site for the 2014 Winter Olympics. This is the first time in the history of the Winter Games that Russia is chosen as a host and the second time, after the 1980 Moscow Summer Olympics, that Russia will host the Games.
 

Claude Salhani is International Editor and a political analyst with United Press International in Washington, DC. He can be reached at [email protected].

August 1, 2007 0 comments
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Roads to nowhere

by Alex Warren August 1, 2007
written by Alex Warren

DUBAI: “First Salik violator spotted,” read a prominent headline on one Gulf daily last month. It led into a description of how a renegade Nissan Altima driver had been caught on CCTV crossing one of Dubai’s new toll gates without the requisite badge, just minutes after the system came online at midnight on July 1.

Salik has been gripping the nation for some time — and not just due to the lack of more interesting local news. The new road toll system, which is the first in the Gulf and one of a handful in the Arab world, has found itself at the center of much controversy and criticism.

In short, it works by scanning vehicles at two toll gates on the city’s main drag, Sheikh Zayed Road, charging a little over $1 a time. If drivers want to use the tolled roads, they buy credit for a special badge which is fixed to the windscreen. If you don’t have a badge, you pay a $27 fine every time you go under a toll. You are a Salik violator.

The scheme is expected to generate annual revenues of about $160 million for its creators, the Road and Transportation Authority (RTA), although it is unclear what proportion of that will come from legitimate use and what proportion from fines.

But whatever its business model, the new system’s purported aim is an ambitious one: to tackle some world-class traffic problems in one of the most rapidly-growing cities on earth.

A recent survey found that the average commuter spends one hour and 45 minutes in traffic everyday, a statistic which made Dubai the most congested city in the Arab world. Cairo took second prize. Another study claims that $1.2 billion is lost from the Emirate’s economy every year due to traffic inefficiencies, and that the resulting stress is having a negative impact on the productivity of employees.

Something, then, needed to be done. But Salik has come under heavy fire from many quarters. Many say it has actually made congestion worse, cramming up smaller streets with queues of motorists unwilling to pay for the convenience of the main roads. Cynics say it is another stealth tax imposed by the authorities. Car rental agencies moan that they are losing business and suffering from a constant headache of administrative paperwork.

Others complain that Salik, like many other things in Dubai which sound very sophisticated, just doesn’t function properly. Irate drivers say that customer helplines are constantly busy, that they receive erroneous text messages about the amount of credit in their Salik accounts, and that some have been charged without ever using the tolls. The Salik website has apparently been receiving over a million hits a day, which could make it a fortune in advertising if its owners signed up to Google.

A lot of these issues are probably teething troubles which might iron themselves out over time. And, for now, the newly-tolled roads are less crowded than they used to be at the peak times of day. Yet it’s difficult to see how Salik, or indeed anything, can hope to permanently solve Dubai’s traffic problem.

This is a place where cars are cheap, petrol virtually costs less than water and having an expensive set of wheels is essential. Everyone is too busy making money to care about the environment, and the threat of global warming becomes slightly meaningless to those used to the climate in the Arabian Gulf.

But the real problem, and the reason why introducing Salik at this time makes so little sense, is that there is no practical alternative to driving. Taxis don’t solve anything. You can’t walk anywhere. And the few bus services that exist are unreliable, unpunctual and extremely hot. How can you hope to persuade the western expat to give up his Audi, the Lebanese housewife her Porsche Cayenne or the Emirati his Land Cruiser in favor of a sweaty communal cabin?

The Dubai Metro is currently under construction, and, once it comes into service in 2009, will surely be used widely. It would have been more sensible to postpone Salik until then, offering a practical alternative to driving, but even the metro’s appeal will be limited. It is difficult to imagine a suited executive walking to a metro station to commute to the office, as he would in London, for instance. Weather, the layout of the city, and inflated egos all preclude that in Dubai.

So if there is no way of reducing the number of cars on the roads, then maybe the answer is to build more roads. The RTA says that it is spending about $12 billion on trying to solve traffic problems, that a total of 100 lanes will run across Dubai’s creek by 2020 and that more bus routes will be launched.

Even so, all this will take time, and the never-ending population growth means that Dubai’s traffic woes aren’t going anywhere. As for Salik, it just seems to be one more thing for the city’s residents to moan about.

ALEX WARREN is a freelance journalist based in Dubai

August 1, 2007 0 comments
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Oslo’s secrets

by Riad Al-Khouri August 1, 2007
written by Riad Al-Khouri

Despite its title, The Secret Israel-Palestinian Negotiations in Oslo (Routledge, Oxford: 2007) is no potboiler, being a recent publication in the scholarly Durham Modern Middle East and Islamic World Series. Rather it looks at the topic against the background of negotiation concepts and strategies, focusing particularly on the timely issue of non-recognition. That was certainly a significant topic in the early 1990s when the book’s events are mainly set; but is an absolutely vital one today given the emergence of Hamas as a key political force and the soap opera currently playing in Palestine and world capitals, starring various forces and governments refusing to recognize each other.

The author Sven Behrendt studied politics and management before receiving a Ph.D. in International Relations. After the completion of his studies he joined the Bertelsmann Foundation and directed a project addressing Middle East issues. He has since 2000 been working for the World Economic Forum where he set up and directed numerous projects focusing on geopolitics and business strategy, including several in the Arab World.

Behrendt’s credentials are thus sound, on both theory and the real life issues of the region, and his description and analysis do not disappoint. The book starts by showing how Israel and the Palestine Liberation Organization were facing challenges in the late 1980s and early 1990s that drove them to start talking to each other. Though Arab-Israeli diplomacy was always there, what made the Oslo negotiations different were direct, face-to-face talks between Israel and the PLO.

Oslo called for withdrawal of Israel from Gaza and parts of the West Bank, affirming a Palestinian right of self-government within those areas. After an interim period, the two sides would negotiate a permanent agreement on deliberately excluded “final status” issues such as Jerusalem, refugees, and Israeli settlements. However, with these core topics off the table, what did Oslo actually accomplish? Most importantly, the two sides had engaged in formal mutual recognition. The Israelis officially accepted the PLO as the legitimate representative of the Palestinian people while the Palestinians recognized the right of the state of Israel to exist, and renounced terrorism and violence.

Though the accord aroused hope for an end to conflict, skepticism abounded. Subsequent negotiations were many, in Europe, the US and the Middle East, ending in the fiasco of the Camp David 2000 Summit, which failed to resolve final status issues. The al-Aqsa Intifada followed that, and the rest, as they say, is history.

In the final analysis, Oslo was an icebreaker. Not that ice breaking is not an honorable activity, or indeed a necessary one. The last chapter in the book is tellingly entitled “The Success of the Oslo Talks — and Why the Process Failed.” Behrendt correctly concludes that the lack of longer-term vision on both sides doomed Oslo, but which was in its own way a successful breaking of the ice.

Where are we today, 14 years later? James Wolfensohn summed it up by ending a recent interview on a note of exasperation: “Israelis and Palestinians really should get over thinking that they’re a show on Broadway. They are a show in the Village, off-off-off-off Broadway. I hope I don’t get into too much trouble for saying this, but what the hell, that’s what I believe, and I’m 73.” For those who may not get the thespian metaphor, “the Village” refers to downtown Manhattan’s Greenwich Village, where small audiences see obscure plays, as opposed to Broadway where big names star in grand shows.

Wolfie is a 21st century Old Testament Patriarch who will certainly not get into hot water over his outspokenness. I on the other hand, neither septuagenarian nor Jewish, hope I can stay out of trouble for repeating something I said, on the record, in late 1995 about Arab-Israeli rapprochement: “The ice has been broken but the temperature is still below zero. It could easily freeze over again.”

With Ehud Barak politically resurrected and Peres occupying the bully pulpit of the Israeli presidency, could we now be in for another, perhaps final, chapter of the Palestinian-Israeli show? Barak, the man who scuttled Camp David in 2000, is now presumably wiser; and Shimon Peres co-orchestrated the breaking of the ice at Oslo, so maybe… With the American position unraveling in the Middle East, and the majority of its inhabitants (including those of Israel/Palestine) fed up with the consequences of Zionism and its antitheses, it may be time for Israel to wind down its failed neo-colonialism. This would first involve real recognition of the Palestinians and their rights, instead of an Oslo-like public relations exercise. In any event, it will be interesting to see what the next phase of Arab-Israeli diplomacy looks like; and I for one would look forward to Behrendt’s sequel.

RIAD AL KHOURI is an economist who relaxes by reading books and sometimes reviewing them  

August 1, 2007 0 comments
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Petrol rationing in Iran

by Gareth Smith August 1, 2007
written by Gareth Smith

With Iranians’ view of unlimited cheap petrol as a birthright, rationing was never going to be easy. But the need for change grew as years of a pump price frozen at 9 cents a liter took the import bill to $5 billion with Iran’s refineries way behind increasing consumption.

Finally, the government of Mahmoud Ahmadinejad bit the bullet, first with a price hike to 12 cents a liter and then with the introduction on June 27 of a ration of 100 liters a month per motorist.

The torching of some petrol stations in protest made great television but has obscured, at least internationally, the palpable fact that the policy is beginning to work.

Anecdotal evidence is clear. Tehran’s streets are less congested and the air quality improved. Hoteliers on the Caspian Sea coast complain of a lack of summer guests. “We’re struggling to get petrol for our tour buses,” said one tourist guide, “and motorists are saving their petrol allocation in case they need it later.”

And with all the usual caveats over government figures, the numbers are starting to add up. The Environment Ministry reported after two weeks of rationing there was a daily reduction of 8.7 million liters in consumption previously running at around 75 million a day. This would shave $1.7 billion from an import bill projected to reach $7 billion this year.

More recent figures suggest the reduction in consumption could be higher. Mostafa Pour-Mohammadi, the interior minister, told parliament in mid-July that between 11 and 16 million liters a day were being saved. And Ali Akbar Mehrabian of the government’s fuel committee put the saving at around 18 million liters, which he said would cut $4 billion from the import bill.

In the face of growing international pressure over its nuclear program, the Iranian government has long seen importing around 40% of petrol consumption as a dangerous vulnerability. Israeli prime minister Ehud Olmert was among those arguing the volatile public reaction to rationing showed that existing sanctions against Iran were working and should be extended.

Hence Mr. Ahmadinejad wants the government to go further in reducing imports — shifting vehicles away from petrol to natural gas, improving public transport and increasing the output of Iran’s refineries.

Like many countries that failed to invest sufficiently in refineries in the 1980s, Iran’s capacity has struggled with rising demand. But Mohammad Reza Nematzadeh, managing director of the National Iranian Oil Refining and Distribution company, has said existing plans for improved refining would take production of petrol from today’s 1.6 million barrels a day to 3 million by 2012.

The government is also pushing for conversion of more vehicles to gas, already used by Tehran’s yellow taxis. Kazem Vazeri-Hameneh, the oil minister, said last month the number of gas fueling stations would reach 1000, from the current 250, by the end of the Iranian year, and the number of converted vehicles would rise from 115,000 to 500,000. The government would target Nissan vans, he said, of which there are 500,000 across the country and whose conversion could save 10 million liters of petrol a year.

Rather than collapsing from internal dissent as a result of growing international pressure, the government of Mr. Ahmadinejad is developing a greater sense of purpose. Many of its members, including the president, spent their formative years in the trenches of the 1980-88 Iran-Iraq war and seem to feel at home in a crisis demanding national unity.

Hence, contrary to expectation, the government decided not to allow motorists to purchase petrol above their allocation at a higher price. However unpopular among Toyota Prado drivers of north Tehran and those running unofficial taxis, the decision was not just counter-inflationary but in line with the government’s commitment to “social justice” and its skepticism about market economics.

Rationing is also a major challenge to the vested interests involved in smuggling petrol out of the country to Iraq, Pakistan, Afghanistan and the UAE. Some put the figure as high as 8 million liters a day and while some smugglers use mules others are well-connected enough to drive tankers.

It remains an open question whether Mr. Ahmadinejad will benefit politically from petrol rationing. It has certainly been a major jolt in popular feeling, even though some Iranians say the system is at least “fair.”

The government has asked parliament to allow three months before judging the success or otherwise of the move. Either way, the decision — which the supreme leader, Ayatollah Ali Khamenei called “historic” — is surely one whose consequences, for good or bad, will play out for years to come.

GARETH SMYTH is the Financial Times Tehran correspondent

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The Russians are coming

by Peter Speetjens August 1, 2007
written by Peter Speetjens

Founded by the controversial Russian-born billionaire Arkadi Gaydamak, the Social Welfare Party (SWP) is but the latest gladiator to enter Israel’s increasingly fragmented political arena. For decades the Knesset was dominated by eternal foes Labor and Likud, yet today it is home to a dozen small and medium-size parties, while tens of others failed to meet the minimum amount of votes required to enter parliament.

Within this widely varied political landscape, the distinct “Russian vote” is of growing importance. Since the collapse of the Soviet Union in 1989, some 1.2 million immigrants of Jewish descent were welcomed in Israel. Note, however, that although a Jew is generally defined as someone born to a Jewish mother, the Israeli Law of Return grants anyone with a Jewish grandparent the right to live the Zionist dream. It is estimated that some 300,000 Russian immigrants are not Jews.

Note as well that not all immigrants are Russians. They are mainly referred to as such because of the language they speak, which today is a common feature of Israeli society. Representing at least 20 of the Knesset’s total of 120 seats, the Russians are also known as the “kingmakers” of Israeli politics, as they are able to make or break a coalition. Little wonder then that during the 2006 elections Israel’s leading political parties all ran Russian-language campaigns.

Like other Russian parties, the SWP appears to the right of the Israeli political spectrum. It aims to topple the Olmert government, because of its failures in the 2006 Lebanon war, and promises full integration and social justice for Russian immigrants, most of whom are secular, belong to lower and middle class income groups, and share a sentiment of being second-class citizens.

During past elections, Israel’s Russians have predominantly voted right-wing, and showed a preference for a strong charismatic leader most likely to deliver on the issues of security and stability. The self-made man Gaydamak seems to meet that demand.

Born in Russia in 1952, Gaydamak left for France at the age of 20. Having started as a day laborer, he worked his way up the business ladder by means of a translation and import-export firm working between France and Russia. Part of his fortune, worth an estimated $4 billion, may not have been earned legitimately, as French authorities are keen to interrogate Gaydamak about his role in “Angolagate,” in which hundreds of millions worth of arms were smuggled to the African nation.

Gaydamak expects the SWP to win no less than 40 seats, even though he himself will not run. He has also set his eyes on becoming the mayor of Jerusalem, banking on the fact he owns the Holy City’s leading football and basketball teams.

It remains to be seen if the SWP can indeed win up to 40 seats. Thus, Benyamin Netanyahu’s Russian-media strategist, Michael Falkov, told the Jerusalem Post that Gaydamak lost a lot of popularity trying to acquire the Russian pork-selling supermarket chain Tiv Ta’am and make it kosher. As the Russian vote is fiercely secular, that particular move was not appreciated.

What’s more, Gaydamak is not the first Russian to enter Israeli politics playing the immigrant card. In the mid-1990s, Natan Sharansky, a former Soviet dissident who spent years in the Gulag, founded Israel B’Aliya (Israel on the Rise), which promoted the rapid absorption of Soviet Jews and in 1996 won 7 seats. However, he failed to deliver and after a brief spell as minister under Ariel Sharon only managed to re-enter the Knesset as a Likud candidate.

Sharansky’s position as Israel’s leading Russian politician has now been taken by Avigdor Lieberman. Having previously worked as the Likud Party’s Director General, he participated in the 2006 elections with his Yisrael Baytenu (Israel – Our Home), which gained 11 seats. With the arrival of Lieberman, Israeli hard-line politics became a whole different ballgame.

Lieberman propagates positions considered radical even among the right wing. He was once quoted as saying that Palestinian prisoners should be drowned in the Dead Sea and that he himself would provide the buses. More recently, he called for a loyalty test for Arab-Israelis and for the execution of Israeli MPs who met with Hamas representatives. Despite these and other controversial remarks, Olmert appointed him as Minister of Strategic Affairs, a new cabinet position that solely deals with Iran.

At this point, it is unlikely that Gaydamak will be able to overtake the popular Lieberman as Israel’s leading Russian politician. Yet, whatever the face of the Russian vote may be, it is a vote that is here to stay and one that favors a hard line “safety first” approach in negotiations with the Palestinians and other Arab nations. What makes the Russians different from other right-wing voters is their as fervent disliking of the religious right.

And the latter is arguably the good news, as it is likely to prevent an ultra-right cocktail between Likud, the Russians and the Orthodox Jews to come into existence, for one need not be a genius to predict what that could mean for the future of the Middle East.

August 1, 2007 0 comments
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Buying a home in Beirut

by Rana Hanna August 1, 2007
written by Rana Hanna

Birds do it, bees do it, even educated fleas do it, let’s do it, let’s … buy a home!” So you’ve decided to do the grown-up thing and buy a house. Now what? Buying a newly built — or half built or even unbuilt — property is indeed a daunting task, not only because of the big sums of money involved (Can I afford it?) but also because of the commitment necessary (Will I still love it in the morning?) and the risk associated with it (Will the market go up or down? Will the building collapse on my head in 20 years?).

The obvious first step is to find the right property. Real estate agents in Lebanon may help, but if you are looking to buy new property, you can easily eschew agents’ fees (2.5% of the final price) as all new projects are advertised clearly, allowing you to contact the developer directly.

The earlier you commit in the project’s development, the bigger the discount you get. That is because developers are usually looking to recoup their investment costs as quickly as possible and are therefore more willing to negotiate prices. Once developers do recoup their costs, they look to maximize their profits. Although buying ‘on spec’ may reap its rewards financially, the risk is greater. You’re expected to pay 30% of the total price up-front upon signature of the contract, although sometimes legal and/or financial problems may hinder the developer from obtaining the necessary licenses and planning permissions, and in some cases you may end up without an ownership deed.

Another risk of buying on spec are the specs themselves. Always ask for a list and sign on it: some developers eager to sell may agree with you on many points such as number of parking spaces available to you or the size of the storage room although some may renege on these agreements. An easy way out of this is to make sure the developer is reputable (in a country this size, that is the easy part) and to check out some of their other projects. Don’t be shy to ask some of the residents how happy they are with their property. Also, visit the site with an architect or an engineer who may point out issues you may not have thought of: they tend to see the minutest details.

When it comes to negotiating the price, that’s when you need someone like my sister. Don’t be afraid to argue, most developers will negotiate between 10% and even 20% of the asking price. But think of the hidden or extra costs that can amount up to $50,000 depending on the property. Firstly, you need to factor in charges that you pay upon signature of the contract (0.3% the value of the property) and 5% of the total cost upon registration of the property (plus another 0.6% in fees and miscellaneous costs) — an extra $31,500 on a half- million dollar property. Extra costs may also be incurred through the building process as some developers will charge for any extras you will want to install (one extra plug in a room can cost $50, electric shutters $500) and can easily amount to around $15,000 in total.

Financing is a different thing altogether. Usually, in Lebanon you are expected to have paid up to 90% of the house price by the time you move in. So unless you can pay up cash, you’d need to get a housing loan. In Lebanon this puts you into a Catch-22 situation as you need a document proving ownership of the property which is usually only given to you by developers after you’ve already paid about 60% of the house price already. Also, there’s a limit to just how much the bank will give you. For example, a salaried employee earning around $4,000 a month can borrow up to a maximum of $115,000 over 15 years which is repaid at a current interest rate of between 8-9%. With current house prices in central Beirut averaging around $2,000 per square meter, you would either need to settle for a 100 m2 home in the city or for a bigger house in suburbia.

So, if you find the idea of buying a new house unnerving, perhaps it is best to do as the birds and the bees do and find a good tree somewhere else!

RANA HANNA has spent the better part of the last two years searching for property to purchase. She is sill looking

August 1, 2007 0 comments
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Who is Barak Obama?

by Lee Smith August 1, 2007
written by Lee Smith

The 47 year-old junior senator from Illinois emerged as a powerful figure after he delivered the keynote address at the 2004 Democratic Convention while he was still a state legislator. A charismatic speaker whose half-African half-American heritage seem to represent the reality of multi-racial America and the future of the Democratic Party, Obama’s current ascendancy appears to reside in the fact that not only did he not approve the Iraq War but he wasn’t even a member of the Senate when the 2003 vote was called. He was elected to the Senate in 2004.

Obama is where the fantasies of the left wing and the center of the Democratic Party seem to converge. The left never wanted the war to begin with and the center wishes it had never happened this way. Obama, the untainted one, is the candidate who allows them to imagine Iraq back into never-never-land. He is not the anti-war choice as much as he is the non-Iraq candidate.

Nonetheless, the Democratic front-runner is still New York Senator Hillary Clinton, whose most obvious liability is that she voted for the war, a mark on her record that Obama has been eager to exploit. Finally, after the latest debate between the Democratic candidates, Clinton struck back, targeting the principles of her opponent’s foreign policy. In the debate, Obama welcomed the opportunity to meet with world leaders hostile to the US, and Clinton later said that this strategy “was irresponsible and frankly naïve.”

Obama, whose inexperience at the national level means he has no foreign policy credentials to speak of, justified his position by favorably comparing his willingness to engage enemies with the ethos of the current White House. “The notion that somehow not talking to countries is punishment to them — and this is the guiding diplomatic principle of this administration — is ridiculous.”

Here Obama is not irresponsible and naïve, but ignorant. The Bush White House does not withhold diplomacy as a form of punishment, but rather contends that engagement with radical states legitimizes and rewards outlaw behavior. The actions, for example, of Syria and Iran offer sufficient evidence to justify the White House’s rationale.

Obama may be the non-Iraq candidate, but he also seems to have been in a deep sleep the last five plus years, snoring through not only 9/11, but everything else the region has revealed about itself since then. In addition to the timeless clichés of Washington foreign policy circles — like the signal importance of the Arab-Israeli crisis and trying to separate Syria from Iran — Obama also subscribes to the innocent realism of the Baker-Hamilton Iraq Study Group report. The junior senator calls for a “comprehensive regional and international diplomatic initiative to help broker an end to the civil war in Iraq.”

The international actors who might make a difference in Iraq — like France, Germany and Russia — have been transparently clear over the last several years they have no interest in tying themselves down in Iraq to suit US strategic goals. As for the significant regional players who could help, they have either distanced themselves from the project or have done everything in their power to subvert it. Saudi Arabia is uncomfortable being the meat squeezed between the ascendant Shia sandwich of Iran and Iraq and has no Iraq policy. And Iran and Syria obviously have no stake in a stable Iraq, or else they would not have nurtured chaos in the land of the two rivers so assiduously over the last four years. Tehran and Damascus want the US out of the Middle East and will understand any invitations to a US-led conference as a ceremony to accept Washington’s terms of surrender.

Elsewhere, Obama’s Iraq policy is being criticized not for its naiveté but rather its cynicism. In an interview with the Associated Press, Obama argued that, “preventing a potential genocide in Iraq isn’t a good enough reason to keep U.S. forces there. If genocide,” said Obama, is “the criteria by which we are making decisions on the deployment of U.S. forces, then by that argument you would have 300,000 troops in the Congo right now … We would be deploying unilaterally and occupying the Sudan, which we haven’t done. Those of us who care about Darfur don’t think it would be a good idea.”

Obama’s all-or-nothing interventionism as an excuse to ignore a potential full-blown civil war may seem amoral to some, but it illustrates an important development in US thinking. In a long essay outlining his foreign policy positions for the July/August Foreign Affairs, “Renewing American Leadership,” Obama writes, “After thousands of lives lost and billions of dollars spent, many Americans may be tempted to turn inward and cede our leadership in world affairs. But this is a mistake we must not make.”

Even if most of the candidates who have virtually talked themselves out of contention the 2008 elections will depend very much on what the electorate thinks about Iraq. And yet as Obama’s AP interview obliquely suggests, the real consequences of Iraq will not be understood for years to come. Obama’s Foreign Affairs essay essentially argues that liberal interventionism is the right idea, even if the Bush team got it wrong. The big question looming in America’s strategic future is: What if liberal interventionism is not the right idea, no matter who’s running the show?

LEE SMITH is a Hudson Institute visiting fellow and reporter on Middle East affairs 

August 1, 2007 0 comments
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Consumer Society

Hooters, Tooters It’s a bad idea

by Executive Staff August 1, 2007
written by Executive Staff

The food franchising industry is doing well in the Middle East. Buying a tried-and-proven formula for a hospitality venture has allowed both small entrepreneurs and powerful investors to roll out restaurants in their markets while cutting down some of their development headaches and harvesting customer recognition from the strength of international brands. Examples range from lowbrow individual franchisees of sandwich and pizza delivery outlets to the full-scale regional multi-US-brand operations of Kuwait Food Corporation (TGIF, KFC, et al).

Although franchisees in the region had their problems with copycatting or brand disputes, the franchise concept has on the whole worked smoother than the nation’s consumer goods wrestling battles between exclusive agencies and overpriced import monopolies in one corner and product fakers and unethical traders in the other.

International food franchising formulas have been repeated by local conceptioneers who brought, for example, Lebanese restaurants like Caspar & Gambini or Crepaway to the Gulf. The process is also working in the opposite direction of bringing concepts from the GCC to the Levant.

But do people of the region want restaurants that openly offend conservatives? Would they accept franchise outlets that express an alien culture in highly intrusive manner? The issue arose newly this summer over marketing announcements by a Kuwaiti businessman who wanted to land a Hooters restaurant — trademark: only busty waitresses willing to wear tight orange shorts and dress totally down on top need apply — not in Kuwait but in Dubai.

The man’s announcement immediately drew disbelief and some consternation from readers and commentators. A Kuwaiti columnist suggested that Hooters should “keep their breasts in the West.” Officials in Dubai said there was no record of an application to register the venture there and that they would follow “very closely” any moves to establish the restaurant in the emirate.

Not always welcome

Bringing those international brands into your hometown is not everyone’s cup of tea. In pre-enlightened Syria, state representatives once forced eaters to abandon the Colonel’s coleslaw apparently because of a (later reversed) official aversion to Kentuckian chicken commercialism.

However, most failed franchise operations in developed countries as well as the Middle East arguably did not go down because of protests by gender activists or anxious culture guardians. They faltered because their concepts didn’t vie with customers — in Beirut alone, the list is quite long and includes donut makers, ice cream and frozen yogurt, and regional and international fried chicken vendors.

The apparently wishful-more-than-wistful Hooters impresario, a man by the name Jamal Shaheen, gave interviews in June, during which he said that he was looking for a location where he could open a first outlet in Dubai by the end of 2007 and add further outlets in the following year, also in the emirate. He did not elaborate on his investment into becoming a franchisee or if he had a motive other than money for wanting to set up the restaurant.

After his news sparked contrarian opinions, he was no longer available to answer interview requests on the economics of the projects. According to the information on the company’s website in the US, the firm charges a franchise fee of $75,000 per location; typical costs furthermore include an initial investment of between $800,000 and $1.5 million per restaurant.

Given Dubai’s spiraling rent and other costs, an outlet there is unlikely to require an initial investment at the low end of range cited by Hooters. And by the way, the plan to set up in Dubai was already Shaheen’s secondary roll-out plan. He wanted first to launch in Beirut but dropped the idea because of the difficult development outlook.

The reality test of trying if this particular skimpy waitress scheme will be allowed in Lebanon thus fell flat, although it might have caused less of a controversy here. Teasing attires and self-commercialization of women and men in Lebanon are nothing new.

Whereas regional online discussions on the restaurant project revealed many similarities to accusations and justifications that make the pros and cons in debates on sexist business ventures in the US, the wire to trip the attempt of letting Hooters loose in an Arab market may well be that the regional cultural paradigm enforces a public set of norms also when those norms come with a past of having been breached for centuries or millennia in the off.

Announcing raucous plans for a restaurant in open digression of the norms held up publicly in the region may have greatly impaired any chances that such a venture ever might have had in Dubai and any city of the region. Tooting about Hooters appears to have been a bad idea.

August 1, 2007 0 comments
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Feature

MENA: Tourism tracker

by Executive Staff July 31, 2007
written by Executive Staff

More Leisure! is the universal battle cry of the region’s governmental economic planners. Irrespective of presence or absence of oil revenues or the varying states of their knowledge economies, most countries in Asia Minor and North Africa have plans for making tourism produce more income and more jobs in the coming 10 to 15 years. The ambitions run so high that many countries want to increase the influx of foreign visitors two, four, or even six and tenfold by the century’s third decade.

Countries like Tunisia and Turkey have already succeeded in staking good claims as easy venues for quick-grill-in-the-sun (and a bit of culture garnish) visits by European herd travelers. Backed by ample supplies of shorelines, new and mostly self-contained resort projects, and natural hospitality of their people, at least half the region’s countries appear eager to “emulate” the sunshine tourism model or create niche tourism destinations.

As home of three major religions and numerous confessional subdivisions, the Middle East is also the global hub for religious tourism, not to forget its once again growing functionality as trade and meeting center for three continents and stopover location in long-haul trips. On the downside risks, tourism is fickle and nothing deters wanted peaceful visitors more (but sadly, seems to attract the other kind all the more) than if a country is enmeshed in senseless power struggles and danger of terror attacks. 

Last month, Executive devoted extensive coverage to Dubai, without doubt the region’s jewel in the crown. This month, we assess the rest from our pick of the hotspots and HOTSPOTS.

Egypt

With 9.1 million visitors in 2006 and more than a tenth of its workforce relying on tourism, Egypt was and is the top spot in Middle Eastern destinations. How can you beat pyramids for recognition value, the real thing that made even a Napoleon gasp? Tourism developments in Egypt remain vulnerable to terrorism, with murderous attacks in a Sinai resort town in April 2006 and the 2005 bombings in Sharm El Sheikh demonstrating the high level of recurring risk. Sunshine and safety thus have been picked as two themes for Egypt’s most recent tourism promotion campaign, which is a testimony to the fact that even a country with a complete line-up of archeological wonders, cruise-worthy river, dive-enticing coral reefs, picture book beaches, and plenty of resorts has to invest in its tourism marketing. Holidaymaking in Egypt is a growing potential for Arab visitors, partly because of expansive Gulf investments in tourism complexes and summer homes. Egyptian tourism promoters have also toured the Gulf recently. However, the country’s main target markets remain elsewhere and Egypt is the Middle East’s sole country which has an official tourism promotion website for industry members and media that operates in more than a dozen languages from Swedish and Russian to English and German – although not yet in Arabic.

Oman

Oman has treasures of nature supporting its aspiration to expand its tourism industry, which is said to have welcomed around 1.2 million visitors in 2006. Adventure tours and family packages are on the agenda of the sultanate which also counts the myth of Sinbad, model of the adventurous traveler, among its assets.

Flying to Oman with the national carrier means traveling in the shadow of an upsized symbolic dagger on the cabin wall but – given the airline’s chosen seat configuration on its 737s – that air trip to Muscat is actually more a menace for the long-legged than a challenge to the faint-hearted.

Tourism projects include The Wave, a 2.5 million square meter development near Muscat on the pristine shores of the sultanate. Construction at the site started last month. Once completed, the tourism paradise will be able to permanently house 4,000 of the world’s wealthy and harbor 300 of their yachts. Golf will be played on a course designed by Greg Norman and one of the four luxury hotels will be managed by Kempinski. A longer-term plan is to build Blue City, an urban and leisure dream, over the next two decades. Cost of the multi-hotel, multi-golf course entailing project is optimistically projected at $15 billion and the first $925 million note for its finance has been sold.

Iran

For a country whose intriguing historic appeal and marvels such as Isfahan, Shiraz, and Persepolis attracted 1.5 million visitors in 2005, Iran has been given a bleak tourism positioning by its current leadership whose motto appears to be ‘we don’t care who likes us’. Having a disputed civilian nuclear program may not be the worst of tourism PR disasters and denial of historic evils is not unique to Iranian ideologues, even though it did turn off well-heeled segments of US and European visitors who had taken a bit of a liking to Iran during the reign of reformist president Mohammed Khatemi. But forcing Ahmadinejadian hospitality on British sailors and sending off every single of the “guests” in attire fashioned to the taste of the current president has caused not only British interest to dwindle to a hefty nil when it comes to any form of Iran tourism. Topping the instructional news off are reports on the state’s latest fashion of coercing women to comply with restrictive interpretations of proper head scarves (show no hair!). With so much effort at state self-presentation, doubling tourist numbers by 2010 is unimaginable. The commercial tourism sector in Iran looks at years of minimal interest, save for those trip itinerary discussions for going to Tehran in some American uniformed and wannabe warrior circles that no-one can wish to see implemented. 

Kuwait

Kuwait’s tourism thrives on paper. The country has a 20-year master plan for tourism development, which was completed at end of 2005 with assistance from the UNDP and UNWTO and spans from vision to action plan. Kuwaiti tourism officials are professionally optimistic about growth of the industry, spurred on by factors such as having less salty beaches than in other locations on the Gulf coast. So far, however, most of Kuwait’s inbound tourism is business travel (estimated at 90%) and the country’s single iconic image is that of Kuwait City and its pointy towers.

During peak time Iraq occupation presence of US troops in the larger area, Kuwait was neighborhood R&R (rest and recuperation) stop for weary liberators but the numbers of American military tourists have gone down. On the other hand, Kuwaitis are world-class in traveling abroad. According to their own tally, 79% journey outside each year and spend upward of 3% of the national GDP on tourist pleasures. Guests from Kuwait spent 52,000 nights in Switzerland last year while it is not known how many Swiss revelers ventured to Kuwait’s emerging attraction, Failaka Island. Budget travelers and backpackers have not figured thus far in the country’s tourism profile but the establishment of low-cost airline Jazeera has helped making air travel to Kuwait more affordable.

Jordan

Claiming 6.5 million tourist arrivals in 2006, Jordan is one of the region’s more experienced countries in the international tourism scene. The country has diversified its visitor base and last year’s arrivals included almost two million Arab tourists. Jordan’s goal is to see 12 million tourists visit in 2010, presumably in an environment of peace and stability in Iraq and elsewhere in the Near East. Terror attacks have challenged the country but the bigger risks for Jordan are concentrated in the regional political situation, as proven in the recent past by tourism downturns in 2003 triggered through the Iraq war and last year through Israel’s summer war on Lebanon. The impact of the Lebanon conflict was a mixed bag for the Hashemite kingdom, which on one hand has seen Gulf tourists redirect their vacations to Jordan because of their fears of potential insecurity in Lebanon but on the other hand led last year to double-digit drops in European tourist visits to Petra and other sites favored by Western tourists. The Aqaba resort developments have recently been complemented by announcements of new projects on the Dead Sea and a project with environmental flavor in the north of the country. The country has made significant gains in attracting lucrative conference and events tourism and has become the Levant’s center for this corporate play on leisure travel. Currently, Jordan is concentrating new tourism promotion activities on Arab countries.

Iraq

Although some highly optimistic reporters recently meant to have detected “swanky hotels” under development in Kurdistan, Iraq remains no tourist’s land. Statements by the World Tourism Organization (UNWTO) in praise of the world’s tourism growth to 842 million arrivals in 2006 for obvious reasons do not even mention Iraq under the rubric of regretting unfulfilled expectations. Lebanon was mentioned in sparse, but sympathetic words. The disaster of the present not withstanding, long-term plans for placing Mesopotamia back on the tourism agenda would be well advised, in the spirit of those noble aims of fostering compassion among nations and support for economic development of a country that is suffering unbearably. For the moment, only the worst cynics will have the nerve to play on the kind of visitors who are drawn to Iraq from terrorist hide holes wherever hatred has become a profession. The one valid travel advisory in place is for international officials: drop in unannounced, speak, use photo-op, and withdraw at speed.

Qatar

Big on projects that seek to carve out a market for stop-over visitors whom Qatar wants to woo in ever-increasing numbers through its hard striving and marketing wise ubiquitous national carrier. Investments in hotels and tourism infrastructure are done according to the big-ticket principle. The country implemented a paradigm for its tourism ambitions in 2006 when it hosted the Asian Games as – by the host’s own reckoning – the best and biggest ever. In further self-promotion, Qatar has taken to the staging of conferences that discuss not only business but also matters that can perhaps not be solved on the conference table but are of definite global concern. Propaganda aside, 2006 was a massive and successful year in Qatar’s tourism strategy by drawing in almost double the number of visitors that had come in 2004. Challenges for the country include the high costs of living and the tight supply of hotel rooms, which currently cater mostly to visitors who come on short business trips.

By 2010, Qatar expects to add a big pearl to its crown of tourism attractions when the Lusail, or Pearl, Qatar mega-project will allow well-to-do residents and visitors to dwell on this artificial island and spend their days cruising in more than two million square feet of luxury retail and recreation space. The Lusail project is already dazzling as a stage of elite events, such as the region’s first masked ball in honor of innovators in responsible energy solutions, held fittingly in the Lusail project’s sales and marketing center, a place named The Oyster. Many more events are planned for the site.  

Saudi Arabia

The kingdom is the world’s leading destination for religious tourism, with over four million pilgrims coming each year and demand that far exceeds what currently can be accommodated in terms of both the usual tourist facilities and the rituals of faith that are the requirement of the Hajj.

Tourism development beyond the religious realm have for quite some time been discussed by Saudi officials who have in recent years come to appreciate the sector’s economic potential and its importance as source of potential employment for the growing Saudi population. UNWTO forecasts that were issued a few years ago put Saudi Arabia in the top spot of all Middle Eastern tourist arrivals by 2016, with an estimate of 22.5 million, ahead of Turkey and Egypt. Target figures cited in an April 30, 2007, study by UK consulting firm Global Futures and Foresight raise the expectations even further, to 45.3 million visitors by 2020.

The growth of pilgrim arrivals is a foregone conclusion and backed by infrastructure projects at the holy sites and in access improvements that range from airport development to an entire new pilgrimage port in the King Abdullah Economic City development. Other inbound tourism, especially from out-of-region, is a less certain proposition. A Saudi tourism commission, established in 2000 with a veritable prince in charge, has been making preparations for the sector’s growth through new seaside and mountain resorts.  

Lebanon

After a May of insurgents and bombs targeting exactly the country’s vacation areas most loved by Gulf tourists, Lebanon’s tourism outlook for 2007 is tending toward nil. Where jubilatory forecasts of 1.6 million visitors and fast growth appeared reasonable in 2006, the picture at the onset of the 2007 summer season is grim enough to keep industry members and government officials from daring a forecast. First-quarter arrivals were 25 to 30% lower than arrivals in the same period of 2006 and an expectation of even one million visitors – allowing for a positive balance in the summer months in reversal of the total tourism crash during the summer war – would be contingent on miraculous improvements in the security situation and the way in which the country appears in international perception.

But that is the problem. Where talkers and worriers focused heavily on their concerns of internal violence, the Lebanese reality was one of coping under avoidance of the – by observers overstated – worst-case scenario of civil war. This means that the risks remain substantial and one cannot assume or exclude anything – but most places in Lebanon are as pleasant to visit and at least as rewarding as they have been in the summers of 2003 and 2004. A fringe benefit for budget travelers: the Beirut downtown has its current shortfalls in atmosphere but there are readily available tent accommodations without any occupants – although the overnighter option is advisable only for people unfazed by olfactory impressions. 

Syria

The road to Damascus is slated for widening. Touting itself as every planetarian’s second homeland, Syria not only wants to more than double the number of inbound visitors from 3.5 million last year to 7.5 million by 2010 – the nation’s far-sighted authorities also are pushing a broad development agenda of new private sector investments in all segments of the hospitality industry and public-private partnerships for the fanciest resort projects.

There is a lot to do for developers, beginning with building hotels in Damascus and continuing with expanding tourism infrastructure into the provinces.

The vast need for shaping the industry is reflected in the number of projects offered in the country’s main tourism investment forum; it increased from 37 in 2005 and 40 in 2006 to 101 in 2007. Government officials said that approved investments in the tourism sector last year were in the $2 billion range, although it remained unclear how much of that was under actual implementation. For the coming years, the ministry of tourism put even larger projects on the table, focusing on the Mediterranean coast, the region around Damascus, and the archeological site of Palmyra. 

Syria’s rulers have staked a lot on tourism in seeking future revenues. The risks in tourism planning include the country’s lack of services infrastructure, the slow bureaucracy, and regional security issues. If Iraq stays down and if Lebanon becomes a target for more aggressions by hell-bent militants, Syria automatically loses a huge part of its attractiveness to foreign and regional tourists.

July 31, 2007 0 comments
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Since its first edition emerged on the newsstands in 1999, Executive Magazine has been dedicated to providing its readers with the most up-to-date local and regional business news. Executive is a monthly business magazine that offers readers in-depth analyses on the Lebanese world of commerce, covering all the major sectors – from banking, finance, and insurance to technology, tourism, hospitality, media, and retail.

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