Executive Magazine

The so-called ‘peace process’

by Lee Smith May 1, 2007

written by Lee Smith

Here in Washington, the winners of the 2006 mid-termelections had just started to enjoy their spoils when the2008 presidential campaign already started to heat up. Nosooner had Nancy Pelosi finished her tour of the Hamadeyasouq than the Clinton campaign decided to make Syria part ofthe campaign platform.

See, former President Bill Clinton used to say that themajor impediment he faced in solving the Israeli-Arabdispute was Yasser Arafat. But now with Hilary on thecampaign trail, that’s all in the past. Peace in the MiddleEast is easy, as long as you have the right person in theWhite House—and a proper knowledge of history. Clinton saysthe peace process was derailed for one reason alone—thebullet that killed Yitzhak Rabin.

“The assassination of Rabin killed the whole process,”Clinton told the London-based pan-Arab daily, Ash-SharqAl-Awsat. “This one bullet not only killed Yitzhak Rabin butthe whole process that we were working on.”

That’s right—it was a Jewish extremist who ruined Oslo.Never mind the second intifada and Hamas’s genocidalcampaign against Jews. And Chairman Arafat had nothing to dowith sabotaging the peace process. If it weren’t for thatone Jewish bullet we even would have had peace betweenIsrael and Syria. And we still can—“It will take 35 minutesto resolve the problem between Israel and Syria,” saysClinton. 35 minutes! Wow—I wonder which Americanpresidential candidate could pull that stunt off?

Ah, peace. It is true that the “P word” is certain to strikea Pavlovian chord among the Americans, who are particularlyprone to Middle Eastern fantasies, but it’s not just WhiteHouse hopefuls putting a tired Middle Eastern nag throughher pointless paces. Consider the curious case of Ibrahim“Abe” Suleiman, a Syrian-born naturalized American citizenfor close to half a century now. In April, Suleiman traveledto the Knesset to explain how an Israeli-Syrian peace dealwas possible within six months. Ok, that time frame isconsiderably longer than a half hour and change, but giventhat the Israelis and Syrians both think Suleiman’s talkingout of his hat, six months is nothing short of miraculous.

The US press has followed the case with interest, albeitconfusedly so. For instance, there’s the New York Times,which for well over half a year now has waged a relentlesscampaign demanding the Bush administration “engage”Damascus. The space they’ve devoted to l’affair Suleiman hasbeen for all practical purposes to explain that Syria’sspecial envoy seems to represent no official position inDamascus and has found no confidence in Jerusalem. In otherwords, it is a story about a non-story.

On the other hand, the anti-Syrian Kuwaiti daily al-Siyassahhas reported that Suleiman is the brother of former regimeaffiliate Bajhat Suleiman, once believed to be involved inthe assassination of Rafiq al-Hariri—a fact that wouldsuggest that “Abe” is indeed well connected in Damascus.

However, much more troubling than any genuine relationshipSuleiman may have to the Asad regime is the prospect thathis role as mediator will generate its own momentum andcause chaos throughout the region.

We have already discussed why Washington is apt to embraceeven the most dubious prophet of peace and concord, butother regional interests have their own reasons as well.

Israeli officials are no doubt looking a little more than ayear into the future and wondering whether a possibleDemocrat in the White House will demand concessions fromJerusalem that the Bush administration did not. In thatcase, it would be wise for Israel to keep an apparentlysincere fool like Suleiman close at hand rather than sufferthe vicious Arabist inanities of, say, Walid Moallem orFarouq al-Shara. And even if the new White House is asfriendly to Israel as the present one, the Jewish state hasits own internal politics to worry about. However improbablepeace may seem, Olmert or Netanyahu or whoever winds up inthe running for Prime Minister is going to need some sort ofroad map or peace process to keep voters interested. Whoknows but that the Syria track may seem more appealing thana deal with the Hamas-controlled PA.

Damascus of course would like nothing more than to be tiedup in a peace process—while it also threatens war againstIsrael to liberate the Golan, a prospect even more fantasticthan Clinton’s 35 minutes to peace. The Asad regime isterrified of the international tribunal charged with handingdown indictments in the Hariri murder. So far, Damascus hasallegedly assassinated Lebanese citizens and backed a waragainst Israel in its attempts to forestall the tribunal,but the train is steadily and surely approaching thestation. With so much riding on a “peace process,” no matterhow phony, who would dare punish Damascus for the blood ithas shed not just in Lebanon, but throughout the region? Andafter all, isn’t that how the regime has been selling itscase to the international community for some time now? See,we don’t really want to kill people. We want to be part ofthe rest of the world, we want to come in from the cold, wewant a deal. And isn’t it a shame that until we get what wewant we will have to keep killing people—and just so wedon’t have to keep killing people?

Lee Smith is a Hudson Institute visiting fellow and reporter on Middle East affairs.

May 1, 2007 0 comments

Comment

Inter Arab Trade” no longer a joke

by Riad Al-Khouri May 1, 2007

written by Riad Al-Khouri

Arab political unity, from being a mantra in the 1950s,has turned into a joke, and today the Arab world’s 22″sister” countries regularly bicker in an endless politicaltragic-comedy. Politically, fragmentation of the Arab worldis clear, but what about economics? The same lack ofintegration had been true in the late 20th century of Arabeconomies as it was of states themselves, but couldintra-Arab business now be reversing that? It used to be thecase that Arab states traded little with each other, butthat is starting to change, thanks in part to the Arab FreeTrade Area (AFTA). AFTA was launched in 1997, and seventeencountries are now part of it (with Mauritania, Djibouti,Somalia, the Comoros, and Algeria still outside) accountingfor 96% of the total intra-Arab trade. The agreement aims toabolish tariffs and other barriers to intra-Arab commerce,and the goal of duty-free merchandise trade among members isnow close.

Partly thanks to AFTA, trade among Arab states has risen:in 2001, 7.2% of Arab merchandise exports went to other Arabstates; by 2005, the figure was 8.1%; with the comparablenumbers for imports moving from 10.2% to 12.4% over the sameperiod. This is not a spectacular jump, and is still farfrom the percentages for intra- EU or North Americancommerce; but the trend is clear, with partial figures for2006 indicating a further rise and the outlook for 2007 evenbetter. The same is true for non-merchandise trade, asbusiness in sectors such as banking, transport, and tourismbooms among Arab countries.

Going beyond AFTA, Egypt, Morocco, Tunisia, and Jordanentered in 2004 into the Agadir Agreement, which seeks toestablish an Arab-Mediterranean free trade zone by 2010.(Lebanon and Syria have also expressed interest in joiningAgadir, and other serious potential adherents are Algeria,Libya, Mauritania, and Palestine.) Encouraged by the highlysuccessful Israeli-Jordanian-American Qualifying IndustrialZone (QIZ) model, which has seen Jordan selling billions ofdollars worth of goods to America in the past decade, Agadirseeks to boost exports to Europe through accumulation ofvalue added among Arab and European producers. To do thisfirst requires unifying “rules of origin” (i.e. the way thatcountries determine where and how goods are transformed intofinished products) to allow member exports to benefit from duty-free entry into the EU market. The principle is simple: forthe manufactures of one country to enter another at a low orno tariff charge under a free trade agreement, a certainamount of local value added has to occur. Agadir aims to dosomething similar to QIZ, but vis-à-vis Europe, adding valuefrom there and from Arab signatories to export to theEuropeans duty-free.

While not a panacea for economic fragmentation, AFTA andthe more ambitious Agadir accord are quietly drawing Arabcountries closer. As the rest of the world integrateseconomically, the Arabs will have little choice but to dothe same. To help thing along, the likes of the Arab TradeFinancing Program (ATFP) is bankrolling intra-Arab tradedeals. One of several schemes of this type, the ATFP, aspecialized Arab financial institution with a mission tocontribute to development of regional trade, was started in1989 by Arab shareholders including regional funds, centralbanks, and a number of private financial institutions. Oneof its latest deals came this year when four Lebanese bankssigned agreement for USD82 m in lines of credit from theprogram. The money is part of a pledge made by the ATFP atthe January Paris III donor conference to give Lebanesebanks USD90 m in soft loans, and the program has nowprovided more than USD930 m to Lebanon since the ATFPstarted operations.

Finally, and related to this trend, intra-Arab investment isalso rising strongly, partly as a result of capitalrepatriation from the West after 911. Jordan is a case inpoint: investments recorded during the first quarter of thisyear by the state Jordan Investment Board (JIB) totaledUSD1.357 b, 212% higher than the USD435 m made during thefirst three months of 2006, with most of the non-Jordanianinflow from the Gulf region. (Actual investments are evenhigher, but these numbers are for projects benefiting fromJIB exemptions.) To spur this process, JIB investmentpromotion offices will open in Kuwait, Qatar and Abu Dhabithis year. You have only to remember the early 90s, whensuch a move would have been unthinkable, to realize how farArab economies have moved together in the past decade and ahalf. Driven increasingly by the private sector, this trendshould continue no.

Riad al Khouri is Director of MEBA wll, Amman andSenior Associate of BNI Inc, New York

May 1, 2007 0 comments

Comment

Lessons of a hostage crisis

by Gareth Smith May 1, 2007

written by Gareth Smith

The United States’ cold war with Iran has taken aseries of sinister turns in recent weeks. Hopes of regionalco-operation over Iraq’s future are just one victim ofWashington’s drive to apply the thumbscrews.

The good news was Tehran’s release of 15 British sailors andmarines, and the freeing in Baghdad of Jalal Sharafi, secondsecretary in Iran’s embassy, after his kidnap two months agoapparently by Iraqi special forces.

But the bad news was weightier. Washington has now allegedTehran has supplied lethal weaponry not just to insurgentsin Iraq but to the resurgent Taliban in Afghanistan.

In turn, there is increasing anger in Tehran over thedetention since January of five Iranians seized by US forcesfrom a consulate building in Arbil, northern Iraq. The case,which began shortly after George Bush announced a ‘new Iraqstrategy’ that basically consisted of countering Iran, isfor Tehran a disturbing sign of hostile US intentions.

Rumors of tit-for-tat seizures were encouraged by thedisappearance of a former FBI agent, Robert Levinson, inIran’s Kish island in early March, with mystery surroundinghis motives for the trip and what happened to him after hemet a black American who fled to Iran in 1980 afterassassinating a former diplomat under the Shah.

Meanwhile, Ali-Reza Asgari, the former deputy Iraniandefense minister, is still missing after disappearing inTurkey either in December or February. Political opinion inTehran divides between thinking he defected and thinking hewas kidnapped by the US or Israelis.

While Iranian officials continue to emphasize their opennessto “serious” talks over their nuclear program, Tehran haspressed ahead with uranium enrichment at its Natanz plant,despite two UN security council resolutions demanding itsuspend all atomic activities barring the preparation of theRussian-built reactor at Bushehr.

The most tangible pressure on Iran is Washington’s militarybuild-up in the region’s waters, especially with the arrivalin early May of a additional aircraft carrier, the Nimitzalong with its strike fleet.

Given the wider picture, the case of the 15 Britons wasalmost light relief. The world watched a theatrical 13 daysof televised “confessions,” tub-thumping from British primeminister Tony Blair, and president Mahmoud Ahmadinejadannouncing their release as a gesture of Islamicmagnanimity.

Iran, Britain and the US all deny any links between the fateof the 15 and the ‘Arbil five’ or Sharafi. But many saw morethan coincidence in the timing of Sharafi’s release.

Nonetheless, the freeing of the 15 Britons did follow quietcontact between Blair’s office and Ali Larijani, Iran’s topsecurity official, who apparently co-ordinated Iran’shandling of the crisis. It is unclear what Britain promised,if anything, although Ahmadinejad said a letter [fromforeign secretary Margaret Beckett] has said there would be“no repetition” of the incident. Iran gave no indicationBritain has accepted its demand for an apology andAhmadinejad noted that “the British government was not evenbrave enough to tell their people the truth.”

The release also came only after London toned down itsrhetoric. Tehran-based diplomats, led by ambassador GeoffreyAdams, had argued from the beginning that a “softly, softly”approach was more likely to lead to an early release.

And despite all the speculation outside Iran about conflictswithin the political elite over the crisis, there was aremarkable level of agreement. Indeed, the crisis over theBritish sailors and marines encouraged a closing of ranksafter heated arguments in recent months over the economicmanagement of Mr Ahmadinejad and aspects of nuclear policy.

Both conservative and reformist newspapers, which act partlyas mouthpieces of political currents in the absence ofeffective parties, were united in their support for Iran’sposition in the stand-off over the detained Britons.

Etemad-e Melli, a reformist paper critical of Ahmadinejad,accused Britain of pushing a “crisis scenario” to preparewider confrontation with Iran and relieve the pressure on MrBlair over the situation in Iraq. Officials close to AkbarHashemi Rafsanjani, former president and still influentialconservative pragmatist, said they feared the crisis was apretext for a US and UK military attack.

However confusing the details, the direction is clear. TheUS administration believes that increasing pressure withthrough sanctions and a military build-up will lead to splitin Iran’s political elite and force the leadership toreverse nuclear policy and abandon Iran’s relationship withIraqi Shia groups, Hizbollah and Palestinian groups.

It is a dangerous strategy based on assumptions thatunderestimate Iranian nationalism and the commitment of itspolitical class. Iranian military commanders who as youngmen fought in the trenches of the 1980-88 war with Saddam’sIraq will not have been cowered by British forces makingtelevised confessions after a few days’ captivity and laterselling their spiced-up stories to the highest bidder.

But, at bottom, the Bush administration believes the 1979Revolution as boil that can still be lanced. And if onlyIran can be changed, then the wider region will belatedlyenter the new American century.

Gareth Smyth is The Financial Times Tehran correspondent

May 1, 2007 0 comments

Comment

Dubai and Halliburton hardly an ideal match, business is business

by Thomas Schellen May 1, 2007

written by Thomas Schellen

When US oil services behemoth Halliburton said this springit was moving its corporate headquarters to Dubai, exudationof praises ensued at full throttle. Maestro developerMohammed Alabbar of Emaar grandeur for example recentlycited the move as proof that a global city is underconstruction in Dubai with no real estate bubble about toburst.

Local and regional commentators from academia and media usedthe occasion to hail Dubai’s new international appeal andits welcoming attitude to foreign businesses, especiallywhen compared with the, at best, lukewarm US reception ofUAE-based companies to American shores. Even the soberFinancial Times called it the emirate’s biggest marketingcoup yet, even if it did allude to Halliburton’s reputationfor untoward corporate behavior.

As a romantic fling, the affair between the US corporateanimal and the overachieving emirate would be worth chasingby gossip columnists and paparazzi—were it not for onemissing element: emotion. It is more a marriage ofconvenience and a dubious one at that. It is a questionableunion and one that will not advance the corporate culturefor which Dubai wants to be known.

Halliburton knows Dubai because it has maintained an officethere since 1991. Having a single executive holding thepositions of chairman, president, and CEO, Halliburton alsohas at least one corporate culture aspect in common with agood number of companies in the GCC. But when thetri-functional David Lesar in March announced his migrationfrom steamy, hot Houston to steamier, hotter Dubai, he spokeentirely the lingo of more business growth, better customerrelations in the “Eastern Hemisphere”, and bringinginnovative “rotary steerable tools” to the company’scustomers in the oil and gas business.

There was not a single hint from Mr. Lesar of any emotionalattachment to the city of Dubai of the sort that top MiddleEastern corporate heads often freely profess, and definitelyno signal that Halliburton wants to be a model for goodgovernance, aspiring to widen the ranks of multinational andlocal companies questing to make Dubai a regional center ofsocially responsible corporations.

In fact if the truth be told, American perception actuallypointed in the opposite direction. Upon hearing the news, USpoliticians and watchdog organizations flooded the publicforums with allegations that Halliburton might try to cutits tax burden through the relocation, shift jobs abroad,avoid scrutiny of its supposedly Un-American activities inIran, or even escape from scathing inquiries into its pastsins of corruption and allegations that is was ripping offthe US army in Iraq via its subsidiary, KBR.

The company immediately acted to deny those accusations,emphasizing that it would remain registered in Delaware, payits taxes, and hire more employees in the US. It alsocompleted its separation from KBR last month and announcedthat it will end its involvement in Iran, which Halliburtonhad managed through a subsidiary registered in the CaymanIslands and working from, yes, Dubai.

But distrust of Halliburton looms large in the US, whereself-appointed watchdog groups included the firm in lists ofthe ten worst corporate criminals of the 1990s and as one ofthe ten worst companies in 2004 and 2005. ConfirmedHalliburton haters also pointed out that Dubai has noextradition treaty with the US.

Part of the over-enthusiasm in cheering Halliburton’s officemove may be rooted in the fact that Dubai is a regionalbigwig but by no means a global contender yet. This showsfrom its position on many of the global, from the WorldBank’s Doing Business ratings (77th) to the World EconomicForum’s Competitiveness Index, where it ranked 29th amongthe 40 most developed economies. Even though it was theindex’s top Arab country, it was still near the top of thebottom third for competitiveness in the high-income peergroup. It also doesn’t help Dubai’s cause to be rated—fairlyor unfairly—as 74th and only just “moderately free”in theHeritage Foundation’s ranking of 153 countries for theireconomic freedom.

Dubai has taken many good steps and it is at a point whereit needs to implement some corrections rather than gettingexcited about another corporate addition to its overcrowdedspace. There are already more than enough companies whoopened shop in Dubai and its various free zones with motivesthat have little to do with a vision of building acosmopolitan center for business and leisure and more to dowith being somewhere that a foreign company can avoidquestions or chase money. Dubai should refocus on the bestpractices and honest aims it set out to pursue not so long ago.

Thomas Schellen is business editor for Zawya Dow Jones in Beirut

May 1, 2007 0 comments

Comment

Chapter 7 and the tribunal

by Nicholas Blanford May 1, 2007

written by Nicholas Blanford

Despite the hesitation of the United Nations secretariat andthe warnings of the Lebanese opposition, the adoption of theInternational Tribunal under a Chapter 7 mandate appearsalmost certain.

The government and its supporters have stepped up efforts tohave the tribunal adopted under Chapter 7, believing thatonce it becomes a fait accompli it will break the politicaldeadlock with the opposition.

There is much uncertainty over the powers and legalparameters of the tribunal which has only helped exacerbatethe tensions surrounding its formation. Hizbullah says it isworried that the US—the main external driving force behindthe tribunal—will use it as a political weapon to settle oldscores, such as reopening “files” dating back to the suicidebombings and kidnappings of the 1980s. Those fears are notwholly without foundation. One senior Christian politiciantold me that was exactly what he hoped would happen once thetribunal is formed so as to undermine Hizbullah’s oppositionrole. Former Prime Minister Omar Karami has suggested thatthe tribunal’s powers be expanded to include the murder ofhis brother, Rashid. If Rashid Karami’s death is included,then there is no end to the number of assassinations,massacres and killings that could end up before thetribunal.

UN officials, however, have said that the tribunal willlimit its work to the series of murders, attempted murdersand bombings that began in October 2004.

International tribunals are a relatively recent phenomenonin international law, a result of greater cooperation amongglobal powers after the polarization of the Cold War came toan end. The first since the Nuremburg and Tokyo tribunals in1945 and 1946 was the tribunal for the former Yugoslavia in1993. Since then numerous ad hoc tribunals have been formedto deal with international war crimes such as those forSierra Leone, Cambodia and Rwanda among others. Critics ofthese tribunals claim they are politically motivated and aform of victor’s justice. Certainly, there can be littledoubt that Lebanon’s tribunal owes its imminent existence tothe exigencies of United States policy toward Syria ratherthan an impartial attempt to discover and prosecute thekillers of Rafik Hariri and his companions.

Much of the ambiguity surrounding the Lebanese version isthat it is a hybrid of several other international tribunalsrather than a direct copy and will be treading new legalground. For example, the tribunals for the former Yugoslaviaand Rwanda were adopted under Chapter 7 from the beginning.There were no local judges sitting on the tribunal andinternational law was adopted for both. The tribunal forSierra Leone included a token local presence and was heldin-country although international law was adopted again. Themixed Lebanese International Tribunal will have equalparticipation of local and foreign judges and will sit underLebanese law (with the exception of the death penalty).Unlike its Sierra Leonean counterpart, however, the Lebanesetribunal will not sit in Lebanon.

Furthermore, the original intention was to establish thetribunal under a bilateral treaty between Beirut and theUnited Nations. The recourse to Chapter 7 only arose whenthe passage of the treaty through parliament became blocked.

Nicolas Michel, the UN’s top legal adviser, has suggestedthat even if the Security Council approves the tribunalunder Chapter 7, it will not be put together until the UNcommission concludes its investigation. That statement wasintended to reassure critics of a Chapter 7 tribunal, buttheoretically the tribunal can begin operating as soon as itis approved by the Security Council, a location chosen andthe judges selected. For example, the tribunal could begintrials of the four generals presently languishing withoutcharge in Roumieh prison. They were detained nearly twoyears ago on the advice of Detlev Mehlis, the then head ofthe UN investigation commission. While, their detention waslegally permissible, their indefinite incarceration withoutcharge nor arraignment in a court of law is not.

In normal circumstances, there should be no need for thetribunal to have recourse to the raft of coercive measuresat the disposal of the UN Security Council under Chapter 7.Indictments issued by the tribunal are legally binding underinternational law irrespective of Chapter 7.

However, Chapter 7 could be applied if any party refused tohand over individuals indicted by the tribunal. AlthoughArticle 42 of Chapter 7 permits the use of military force toimplement Security Council decisions, the UN could opt forthe softer measures contained in Article 41 such as economicsanctions and the severance of diplomatic relations. Even ifthe Security Council was unable to forge a consensus onusing military force, the indicted persons would be unableto travel internationally and could face a freeze of theirinternational assets. However, the down side is that thewhole legal process could grind to a halt, the prosecutionspending, until those indicted are turned over or handthemselves in.

Such is the case with Ratko Mladic and Radovan Karadzic whohave been under indictment by the tribunal for the formerYugoslavia since 1995. The Serbian authorities agreed toturn them over, but both men remain at large, apparently inSerbia, and their prosecution consequently pending.

Nicholas Blanford is a Beirut-based reporter and author of Killing Mr Lebanon: The Assassination of Rafik Hariri andits Impact on the Middle East.

May 1, 2007 0 comments

Lebanon

Retailors join forces

by Executive Staff April 12, 2007

written by Executive Staff

Major Lebanese businesses, such as Aïshti, Bank Audi, ABC, Patchi, MEA, BankMed, InterContinental Phoenicia, Virgin Megastore, Global Refund and CityMall have joined forces in a new campaign dubbed “Bhebak Bil Rabih,” (I Love You in Spring.) Promoting Lebanon as a tourist and shopping destination in a conference held on March 1, business owners highlighted the activities planned, including fashion shows, festivals, prizes, car giveaways and more. Participants took, however, a stern stance against both the Lebanese government and politicians, who were taxed with irresponsibility for their failure to solve the ongoing political deadlock paralyzing the BCD (Beirut central district) since the beginning of December.

“In this year alone, we have witnessed a 70% drop in activity. We’re currently trying to compile loss estimates, while our lawyers study different options, including a possible lawsuit,” said Tony Salameh, chairman of the Aïshti department stores. “A committee mainly responsible for looking into rental, electricity and tax expenses with a possible waiver of companies’ payments will be also formed.”

Michel Ferneyni, owner of La Posta, said Lebanon’s political situation presented an unfathomable paradox that started first with the “ongoing dialogue” resulting in the closure of the BCD, followed by “pacific demonstrations,” which crippled the country’s economy. According to participants, to date, over 80 companies have closed down, most of them permanently. Rumors also circulated about the Habtoor Hotel being put up for sale.

Paul Ariss, president of the Syndicate of Restaurant Owners, who met recently with leaders from all political factions, announced that the prime minister’s office had formed a committee, including representatives from the economy, tourism and finance ministries as well as leaders of industry associations to look into possible solutions. In addition, he asked the government to subsidize no interest, medium and long-term loans for existing businesses.

“The greatest damage done is not merely to Lebanon’s economy, but to its image as well, as the people are increasingly losing faith in their country,” concluded Ferneyni. “Many employees, even those with a secure job in Lebanon, are opting for a career abroad, and will never be coming back.”

April 12, 2007 0 comments

Lebanon

Radio Orient goes global

by Executive Staff April 12, 2007

written by Executive Staff

Radio Orient, aka Izaat Al Shark, has become the first Arabic language radio station broadcasting worldwide. In its January issue, Forbes included the station, which is owned by Future TV, as number 17 on its list of the top 40 brands in Middle East. This month, in order to take advantage of its new global reach and maximize its coverage, the station is revamping its grid of programs, bolstered by three major shows as well as a prime entertainment program called “With a Stars.”

Available all over the MENA region through its internet and satellite networks, the radio station is using local channels to retransmit its programs. “In some countries they’re even retransmitted in full,” said Elie Rahme, manager of Radio Orient in Lebanon. The program grid has been modified to take advantage of its new global coverage, including the morning show (airing during peak drive time in Australia), the afternoon show (broadcast in the morning in the US), and the night show. The program “With a Star” features a different Arab star every week, with giveaway prizes that have participants calling in from the all over the world.

Although Rahme did not reveal international market penetration figures, he stated that the international audience participation to the station’s various programs is substantial. “The fact that people call from the United States, Iraq, Australia or Africa provides us with a clear idea of the station’s global reach,” he explained.

Radio Orient is supported by a staff of 17 employees based in Lebanon, with the sound operators and editors shared with Future TV. The joint features of the TV and radio stations explain the unified overall marketing approach, however, it should be pointed out that they do not share advertisement booking deals. “People advertising with Future TV will not necessarily use our radio network, because each medium achieves a different type of exposure,” explained Fayez Bizri, Future TV’s financial manager.

According to Bizri, Radio Orient complements Future TV’s network by reaching beyond the traditional televised medium. “Whether they’re at work or driving in their cars, most people have access to a radio. This exposure will likely increase in countries where driving distances are longer,” says Bizri.

When asked about the cost of the worldwide reach of Radio Orient, Bizri did not disclose any figures, saying, “It is difficult to tabulate leasing, licensing and marketing expenses involved in the process.” He did state, however, that the most advanced technology had been used to place the radio station on the satellite system.

Further bolstering Radio Orient’s appeal is the growth of Future TV’s network. “The TV station expansion plan includes the addition of a 24-hour news channel – scheduled to air in April or June – which will definitely benefit Radio Orient by providing up-to-the-minute reporting,” said Rahme.

During April, Future TV will witness another major overhaul besides its new expansion plan and program grid, when current Chairman Nadim Munla will be replaced by BankMed executive, Samir Hammoud.

April 12, 2007 0 comments

Financial Indicators

Global economic data

by Executive Staff April 12, 2007

written by Executive Staff

Obesity

Percentage of population aged 15 and above with a MBI greater than 30, 2003 or latest available year

More than 50% of adults are now defined as either being overweight or obese in no less than 10 OECD countries: the United States, Mexico, the United Kingdom, Australia, the Slovak Republic, Greece, New Zealand, Hungary, Luxembourg and the Czech Republic. By comparison, overweight and obesity rates are much lower in the OECD’s two Asian countries (Japan and Korea) and in some European countries (France and Switzerland), although overweight and obesity rates are also increasing in these countries. Focusing only on obesity, the prevalence of obesity among adults varies from a low of 3% in Japan and Korea to a high of 31% in the United States.

Based on consistent measures of obesity over time, the rate of obesity has more than doubled over the past twenty years in the United States, while it has almost tripled in Australia and more than tripled in the United Kingdom. The obesity rate in many Western European countries has also increased substantially over the past decade.

Gender differences are striking. Over all countries, more men are overweight than women, but in just over half of OECD countries, more women are obese than men. Taking overweight and obesity together, the rate for women exceeds that for men in only two countries—Mexico and Turkey.

Forest

Forest and other wooded land

As a percentage of land area, latest available year

The percentage of land covered by forest and other wooded land varies widely from country to country: from shares of over 60% in Finland, Sweden, Japan and Korea to 10% or less in the United Kingdom, the Netherlands, Ireland and Iceland.

Long time series are required to capture changes in forest areas. Increases are generally due to active government policies of land afforestation while decreases may be caused by fires, clear-felling of forests without replanting, and conversion of forest land to residential, agricultural and other uses.

The area of forests and wooded land has remained stable or has slightly increased at national level in most OECD countries and has remained stable in the OECD as a whole. However, forest areas have been decreasing at the world level due in part to continued deforestation in tropical countries.

Tsunami aid

DAC member country responses to the tsunami disaster

Millions of US dollars

The unprecedented humanitarian response to the Indian Ocean tsunami prompted governments, international organizations, private individuals, charities and companies to pledge $13.6 billion to the affected countries. Of that, $5.3 billion was from OECD member governments, and a further amount from private citizens in OECD countries.

Donor governments and the European Commission have committed $1.7 billion to emergency aid and $1.9 billion to longer-term reconstruction projects, to be spent by 2009. More than 90% of the emergency aid—nearly $1.6 billion—was spent in the nine months immediately following the disaster. For reconstruction, $473 million has been spent, leaving $1.4 billion committed and in the pipeline for spending over the coming years.

Together, Indonesia and Sri Lanka have received more than 60% of the funds committed so far.

Government debt

General government gross financial liabilities

As a percentage of GDP

From 1990 to 1996, government gross financial liabilities were rising in most countries. Since then, government debt has been decreasing as a percentage of GDP in many of the 27 countries in the table. There are, however, exceptions: government debt ratios continued to increase particularly fast in Japan and Korea and significantly in France, Germany and Greece. Korea’s government debt ratio rose by over 7% per year from 1990 to 2003, but this is measured from a very low initial rate and by 2003, Korea’s government debt ratio was still among the lowest in the OECD.

In 2004, government debt ratios exceeded 100% in Greece, Italy and Japan and was close to 100% in Belgium. Most countries were in a band between 40% and 70%, with three countries reporting debt ratios of under 20%—Luxembourg, Korea and Australia.

April 12, 2007 0 comments

Financial Indicators

Regional equity markets

by Executive Staff April 12, 2007

written by Executive Staff

Beirut SE: Blom (1 month)

Current Year High: 1,625.45 Current Year Low: 1,168.36

Between Feb. 28 and March 16, the BSE saw a spike in hope, as much as spikes go in a coma. The index moved from a year low of 1,168.36 points in late February to 1,248 points on March 16, basically driven up by talks between the opposing sides in the Lebanese political quagmire. As the voices announcing impending solutions faded, so did the traders’ enthusiasm and the third week pushed the BSI lower, to 1,224.19 points on March 26. Research, which Dubai-based investment bank Shuaa conducted on Audi Saradar banking group and concluded with a Neutral recommendation, led Audi to shoot back and claim that the fair value of its stock is significantly better than the $61.09 calculated by Shuaa. Audi shares closed at $63 on Mar 26.

Amman SE (1 month)

Current Year High: 7,407.15 Current Year Low: 5,267.27

The Amman Stock Exchange moved sideways in a range above 6,200 points to close at 6,219.51 points on Mar 26. Arab Bank made headlines, beginning with having to deny a story in a US newspaper that warmed up allegations from a lawsuit that the bank had been used to finance “terrorism.” Later in March, the bank said it halted negotiations on a share sale to a strategic investor thought to be Emaar Properties, and the Jordanian government was said to be increasing its shareholding in Arab Bank in order to keep the Hariri family shareholders from buying up a controlling stake. The stock saw some lively trading in March, with a downward drift. Real estate firm Taameer Jordan was one of the main volume movers toward the end of March. Its share price regained in the second half of the month what it had given in the first half.

Abu Dhabi SM (1 month)

Current Year High: 4,648.80 Current Year Low: 2,899.43

The Abu Dhabi Securities Market could not sustain the gains it had made in late February when it clawed its way above 3,000 points. The index dropped by 4% between March 1 and its close of 2,939 on March 25. At the end of the month, property and energy stocks were on the sunny side of the ADSM while banking values were selling. National Bank of Abu Dhabi, which issued 40% cash dividend and 30% bonus shares on March 22, traded down by 11% in the week between March 19-26. Banking news from neighboring Dubai with its impending merger between Emirates Bank and National Bank of Dubai mean the NBAD will, upon completion of the merger, lose its claim to being the biggest bank in the UAE.

Dubai FM (1 month)

Current Year High: 6,987.91 Current Year Low: 3,675.93

The DFM had a bad month in March, as its index weakened by almost 13% to a new year low of 3,675.93 points on March 25, from 4,207.51 points on Feb. 25. The DFM’s own shares started trading. Emaar, which pleased some analysts with a lower than expected dividend of 20% but disappointed stock owners with the move, traded down and was pushed even to a 12-month low of AED 10.60 on March 25 after Dubai Holding said it will acquire 28% in Emaar through a land-for-shares deal. Shuaa Capital bought back 3 million shares and the stock jumped 10.8% on a single day with high trading volume before sliding again.

Kuwait SE (1 month)

Current Year High: 10,812.30 Current Year Low: 9,164.30

The Kuwait Stock Exchange had a period of growth as its index strengthened by almost 6% to 10,341.3 points on March 26 from 9,769.2 points on Feb. 27. Telecommunications events supplied major influences on the KSE. In the beginning of the month, the share price of Kipco got a boost from the company’s extraordinary profit from selling shares in Kuwaiti mobile operator Wataniya to Qatar’s Qtel. Shares of MTC, the leading telco in Kuwait, advanced 15% to KWD 3.20 on Mar 26, from KWD 2.79 on Feb. 28. At the end of March, MTC emerged as highest bidder in the contest for Saudi Arabia’s third mobile phone license.

Saudi Arabia SE (1 month)

Current Year High: 17,730.96 Current Year Low: 6,916.85

The Saudi Stock Exchange ended a month of modest gains and sideways movements with a splash of cold water. The TASI lost 522 points, or just over 6%, on March 26 in its worst one-day drop since falling 6.3% on July 19 of last year. Sell-offs on March 26 included blue chip companies and leading banks such as Sabic, Al Rajhi Bank, SEC, and the two telcos. For the month, the market moved from 8,356.48 points on Feb. 27 to 8,098.36 points on the evening of March 26. Insurance industry IPOs came in a bundle of five simultaneous subscription offerings worth combined SAR 266 million. The Saudi government created a new $320 million company to operate the SSE, with a long-term view of taking the bourse public.

Muscat SM (1 month)

Current Year High: 5,956.46 Current Year Low: 4,657.16

After a slide in February to 5,781.1 points on Feb 26, the Muscat Securities Market went down by 216.73 points, or 3.7%, between Feb. 26 and March 14 before regaining some ground to close at 5616.24 on March 26. The sultanate’s primary market raised new expectations as four companies announced IPO plans. Besides engineering firm Galfar’s OMR 60 million flotation, Oman Merchant Bank and government-owned investment firm Takamul (in May) and Oman Oil Marketing Company are the IPO candidates for 2007. Additionally, Al Omaniya Financial Services will float a two-year OMR 8 million convertible bond.

Bahrain SE (1 month)

Current Year High: 2,251.15 Current Year Low: 1,996.68

The Bahrain Stock Exchange closed at 2,130.71 points on March 26, down by 0.6% when compared with its level on Feb. 27. The index had dipped lower in the middle of the month but things appeared uneventful and volumes were once again low. Esterad Investment Company moved up 12% in the second half of March and Nass Corp saw some volume toward the end of the month. Mobile phone operator Batelco announced the purchase of 20% in Yemeni network SabaFon for $144 million.

Doha SM: Qatar (1 month)

Current Year High: 9,878.10 Current Year Low: 5,825.80

The downward movement of the Doha Securities Market slowed but did not cease and the DSM index slipped 3.5% to 6,060.16 points on March 26 from 6,277.1 points on Feb. 27. This performance put the DSM again as the GCC’s largest underperformer for the year-to-date with a drop of 15% since Jan. 1. After dividend events, banking stocks such as Ahli and Commercialbank paced the market’s downward trend in the later part of the month. Qtel, which initiated the purchase of 51% in Kuwait’s Wataniya telecom, stabilized toward the end of the month. Nakilat continued its rise that started in February and gained 18% in March. DSM market authorities suspended a brokerage for one month for violating regulations.

Tunis SE (1 month)

Current Year High: 2,712.33 Current Year Low: 1,861.15

The Tunisian Stock Exchange in March traded sideways on a high plateau and the Tunindex closed at 2,610.14 points on March 26, about 100 points below its year high from Feb. 9. Tunis International Bank participated as lenders in a 55 million euros project finance facility for a new residential project in Libya, the first such finance arrangement in Libya’s real estate sector.

Casablanca SE All Shares (1 month)

Current Year High: 11,552.97 Current Year Low: 6,563.27

The Moroccan exchange broke through the 11,000 points line in early March and scaled further index gains to close at 11,478.87 points on March 26 in continuation of its rise which brought its gain for the year to date to a tidy 21%. Morocco’s central bank said it expects commercial banks in the country to be compliant with Basel II rules by this summer. With ongoing reforms, the central bank also hinted that a loosening of restrictions on investing in foreign bourses might be on the books, which might take steam out of the Casablanca Exchange and its extended rally.

Cairo SE: Hermes (1 month)

Current Year High: 65,135.08 Current Year Low: 41,965.37

The Cairo and Alexandria Stock Exchanges entered the month with a week of downward motion to the 61,000 points level but the index moved back up and closed at 63,859.80 points on March 26. While Telecom Egypt shares made some gains in late March on news of higher 2006 results and a very faint outlook of a secondary 20% flotation in a few years’ time, Orascom Telecom Holding received three regulatory decisions against its MobiNil affiliate and got disqualified from bidding for the third Saudi mobile license, with rumors going wild on the reasons. Al-Watany Bank found several suitors interested in buying a strategic stake. Emaar Properties subsidiary Emaar Misr said it would file a complaint over a CASE decision refusing to list its shares.

April 12, 2007 0 comments

Insurance Special Report

Islamic Insurance: The concept

by Jihad Feitrouni April 12, 2007

written by Jihad Feitrouni

People have used insurance in the past to protect against impact of damages and risks.

In the absence of the social insurance, which Islamic countries shoulder to counter the effect and impact of damage to a nation and its assets, and as the majority of countries relinquished their responsibilities in reinforcing cooperation between their people, there grew the need to look for an alternative that guarantees to protect against damage and loss. This alternative is insurance companies operating in Islamic countries, similar to those commercial insurance companies operating in western countries.

Since the nature of transactions practiced within non-Islamic commercial insurance companies do not comply with provisions of Islamic shariah (and often insure establishments and companies that practice types of business not in compliance with shariah provisions), it became essential to look for an Islamic alternative, one that adopted cooperative insurance principles in its business transactions. Islamic insurance is known as “a collective insurance contract” by virtue of the fact that every contributor pays a specific amount of money as a donation for the purpose of indemnifying other contributions on the basis of solidarity and takaful.

Insurance operations are managed by a specialized company on basis of proxy wakala against a pre-determined charge. The subject of the contract is the commitment by all those insured to bear the risk sustained by another contributor. Thus, it is a contractual relationship based on solidarity and takaful to spread risk.

The role of insurance companies in the Islamic insurance system is to manage insurance operations by way of underwriting and execution since this is beyond the policy holder’s capabilities due to the large number of contributors. The company enters into agreement with the contributors by which it collects insurance premiums and pays incurred indemnity to those who have sustained damages in accordance with the regulations, principles and criteria dedicated for the purpose, in addition to all other operations which are required within the insurance industry. All these duties are performed in its capacity as a proxy wakeel against a predetermined charge. The company promises, in the name, and interest of the contributors, to either indemnify against a great portion of damages and losses sustained or indemnify it totally.

As for insurance premiums which are collected from contributors, it is usually enough to cover operational costs, pay incurred indemnity amounts or allot to all types of technical reserve amounts.

For the purpose of determining the amount of insurance premiums, formal statistical principles are applied for each type of cover. Should the premiums not be enough to meet the liabilities, the deficit will be covered by the shareholders on the basis of al qardh al hasan or “Good Loan,” and if the company has a reserve balance as a result of insurance premiums profit surplus, the deficit then will be met by that surplus.

Jihad Feitrouni is the general manager of Dubai Islamic Insurance & Reinsurance

April 12, 2007 0 comments