Editorial

Statement of intent

by Yasser Akkaoui
written by Yasser Akkaoui

When it was announced that we were expanding Executive’s content to cover the MENA region “from Morocco to Iraq,” many people asked if we were “evacuating” to Dubai. It must be made clear that this was never our intention. Executive is a Lebanese magazine that will develop around journalism, not advertising – and Lebanon has always been a hub for serious journalism.

Yes, we will be building a solid network of business and economic analysts, experts and reporters throughout the region to produce what we hope will be the most authoritative and compelling business writing in the Arab world, but by rooting Executive in Lebanon, we demonstrate our commitment to our trade and to our country, in whose survival we have always believed.

Our expansion is much like that of other Lebanese industries, such as advertising, contracting, banking and finance, which outgrew Lebanon’s geographic limits and now serve broader economic centers while remaining essentially Lebanese. Our readers, in and outside Lebanon, can now access serious business journalism as we respond to the demands of the regional entrepreneur.

So it is out with the micro view of Lebanon and in with the macro take on the region. We will look at all the nations of the Arab world and chart the pace and level of change therein – be it fiscal, commercial or economic – and monitor how these nations adapt to internal and external pressures to implement key social reforms to improve quality of life and spur economic growth.

The Middle East is at the forefront of global economic and political activity, buttressed by the twin giants of the Europe and Asia. Yes, it has been marred by conflict and too often defined by religious dynamics, but it has much to contribute. This, for us, has become the story.

As we chart the successes and failures, the innovation and stagnation, the booms and the slumps, we will inspire many but no doubt aggravate a few. Some will find our style of journalism abrasive, but we wouldn’t be true to the Executive brand if we were not committed to objectivity, transparency and honesty.

This much we owe our readers.

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Lebanon

Running on Empty -Beirut‘s car market kaput

by Executive Staff
written by Executive Staff

The Lebanese car market had its worse summer in decades thanks to the war and a two-month sea blockade, with the number of new registered cars dropping 81% in August compared to the same month last year. The sector is only slowly clawing its way back, with sales down 41% for September. With the economy running on half empty, tough times lie ahead.

“The car market is in complete chaos right now, millions of dollars have been lost,” said Samir Homsi, President of the Association of Car Importers in Lebanon (ACIL) and CEO of Impex Trading, the local representative for Chevrolet and Hummer.

Car dealers had high expectations for the summer, with 1.6 million tourists expected to visit the country and the economy picking up after a sluggish 2005 that was marred by a spate of bombings following the assassination of former Prime Minister Rafik Hariri in February.

“We were expecting the best summer ever in Lebanon,” said Charbel Abi Ghanem, marketing manager for Rasamny Younis Motor Co. (Rymco), the dealer for Nissan, Inifiniti and GMC. “Our hopes in the sector were high, believing that over 20,000 units would be sold this year.”

Until mid-July, sales had increased by a solid 4% with 11,624 new vehicles registered, of which 10,898 were passenger cars and 726 commercial vehicles, according to ACIL.

But with the outbreak of war, the economy at a standstill and up to one million people displaced, many dealers were forced to close or operate with a skeleton staff. Sales consequently plunged, with the number of new cars registered in August decreasing to 302 compared to 1,550 in August 2005.

Nagy Heneine, manager for BMW at Bassoul-Heneine, said July 2005 sales had been $7.6 million and until the war started, $3.5 million for July this year. “Business was stunning,” he said.

Expectations dashed

Business worsened in August however, with only $390,000 in sales compared to $5.8 million for August last year.

“We expected to sell 150 BMWs in the last two months, but September sales were close to August’s,” Heneine said.

Other dealers had a similar story. Negib Debs, sales manager at T. Gargour and Fils, the sole agent for Mercedes and DaimlerChrysler, said the company expected to have sold at least 70 cars this summer—over $5 million in sales. The company sold 90 vehicles between January and August this year.

But when Israel imposed a 56-day air and sea blockade on Lebanon, ships containing cargos of new cars had to dock elsewhere, adding extra costs to dealers.

“There were 117 BMWs coming to Beirut, and had to be returned to Genoa and then to Germany. We had to pay for all the port expenses,” said Heneine.

Due to the unpredictability of the situation, Debs said Gargour cancelled orders for 100 vehicles.

Rental woes

Rental car companies, which account for between 30 to 35% of overall car sales, were also badly affected. Tony Gebran, marketing manager at City Car, said July and August usually account for 75% of annual rentals, but instead resulted in tens of millions of dollars in losses for the sector.

Until the war, City Car had experienced 30% growth in the first quarter and 40% growth in the second quarter. “If rentals had stayed like this we would have had nearly 50% growth this year,” said Gebran. He added that the company had to cancel orders for new vehicles and is now working at 50% capacity, slashing fees to buoy rentals.

Cancelled orders by rental companies also put a strain on dealers’ marketing strategies, particularly as new models were slated for launch in the fall.

“We were expecting to launch four new models this year,” said Nadine Azar Ghostine, marketing manager at Gargour. “We will introduce nothing before the New Year as we have to sell the older models.”

A biannual Beirut motor show that had been organized for November has also been cancelled.

“Lots of people wait for the motor show to buy cars. It would have been a peak sales period for us,” said Abi Ghanem.

Scrambling to recover

Dealerships are consequently scrambling to make up for lost ground. Promotional campaigns are also underway to get rid of the 2006 stock by reducing prices, lowering interest rates, offering extras, and entering into loan agreements with banks.

The price of a GMC Envoy, for instance, has been slashed from $33,500 to $29,500. “So we practically have no margins,” said Abi Ghanem. “We will forget about the brand and go for the hard sell.”

Such a strategy appears to be working, with sales picking up slightly in September. According to ACIL, the number of registered vehicles decreased by 41% compared to September last year, from 1,187 registered vehicles to 691.

But with dealers only getting 6-8% net margin on each vehicle sold, Heneine said dealers are not able to drop prices significantly. He believes the onus now lies with the government to help jumpstart the sector.

“The government should take immediate action as they are also affected by reduced revenues from customs, taxes and registration. They should remove registration fees—currently 7% of a vehicle’s cost—as it would help hesitant buyers,” Heneine said.

Although after-sales have returned to normal, in the medium- to long-term, dealers will struggle in the face of sluggish economic growth and rental companies unable to pay back loans.

“The worst thing is that even though the war has finished, people have lost confidence in the country,” said Heneine. “People with purchasing power have left—the ones that usually buy luxury brands—and are not coming back. It’s a long-term disaster.”

Bassoul-Heneine has resultantly scaled back annual sales predictions of BMWs from 740 units to between 250 and 400.

Some optimism remains

Higher oil prices, which spiked due to the sea blockade, have also affected sales of larger vehicles. Debs said that Mercedes with V8 engines had previously accounted for 60% of sales but has dropped to 25% after the war, with higher demand for V6 engines.

Despite the gloomy outlook, however, some dealers remain optimistic.

“The situation here is unstable, and people would rather put their money elsewhere than buy a car. But with Ramadan and tourists from the Gulf coming, the economy could pick up,” said Layal Karam, PR coordinator at Rymco.

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Society

Putting money where the mouth is – Lebanon’s boutique foods

by Executive Staff
written by Executive Staff

Lebanon, with its limited, varied terrain and lack of cheap labor, will never be an ideal environment for mass-production. However, Lebanon is ideally positioned to “go boutique.” There are already boutique hotels and Lebanon is considered a boutique wine producer, so why not other boutique products? Why not, indeed. Local entrepreneurs are catching on, and are capitalizing on Lebanon’s strengths—its climate, its educated workforce, and its historic ties with Europe—and producing high-quality fine foods.

In the case of Le Ferme St. Jacques, a duck farm nestled alongside a monastery in the mountain village of Bechtoudar and the Arab world’s only producer of foie gras and gourmet duck products, the farm was developed in 2001 as a pilot project to help in the revival of the northern economy.

The entire operation at St. Jacques could be called a French import. The staff was trained in France, all of their equipment was purchased there, and every three weeks, Air France flies 2,000 1-day-old ducklings into Rafik Hariri International Airport for delivery to the farm.

“The ducks need to be kept at an altitude of 1000m,” explains Jihane Richa, sales and marketing manager at St. Jacques. “Lebanon is the only country in the Arab world with a suitable climate.” As the sole regional producer of fine duck products, demand is high from across the Arab world, with Dubai and other Gulf states making up the primary export market.

Expansion plans

The farm, limited by its small size, has not yet fully exploited its commercial potential, but there are plans to expand and open similar farms in other villages in the north. In the meantime, St. Jacques has successfully achieved impressive secondary objectives—a solid reputation for high quality, brand awareness, ever-increasing exports across the region, and demand far higher than what they can supply.

This last point will be especially true over December of this year. The war prevented St. Jacques from bringing in the extra ducks it had ordered to meet the holiday rush.

“Last year, we didn’t expect so much demand over Christmas, so this year, we were really prepared. But the ducks came late—they won’t be old enough in time,” notes Richa wistfully. “We’ll be able to deliver for Christmas, of course—but not the way we wanted to.” The offset in timing means St. Jacques will have a large production in January and February instead, but Richa is confident that demand will be high enough to absorb the surplus.

Despite the delayed arrival of new ducklings, overall, the farm’s remote location and niche market meant it suffered less than many other businesses during the war. “We only stopped production for four days when the war broke out. I left for Morocco, and all of a sudden I was getting phone calls from restaurants in Faraya wanting to place orders,” recalls Richa. “We closed again after the attacks on Jounieh, but only briefly, to be sure it wasn’t escalating. Throughout the war, we were delivering to customers.”

“We’re going ahead confidently,” Richa affirms. “At St. Jacques, we’ve already faced a major disaster this year with the avian flu scare—in the end, everything went great. Any company that knows where it’s going can get through these times.”

Locally smoked salmon a hit

The inspiration behind Salmontini, whose owners produce the only domestically-smoked salmon in Lebanon, came in a far more casual manner—co-owners Hussni Ajlani and Joe Bassili met at a dinner party, and over the course of the evening, Bassili came to tell Ajlani how he was smoking fish in the mountains using the traditional Scottish methods. Ajlani was intrigued, and asked, only half-joking, “So, when shall we start a House of Salmon together?”

From there, the idea took off. Salmontini—the House of Salmon—opened its doors downtown in November 2001 and became a multi-million-dollar business. However, after the tumultuous events of 2005, the changing character of downtown towards a younger, most tourist-heavy crowd and the dominance of Lebanese restaurants in the area, Salmontini moved to its current location in Ashrafieh. “We are a classical restaurant,” explains Ajlani. “We need a location where we are less affected by change. Downtown moves too fast. We need a place where the restaurant can stay and stay. We hope Salmontini will still be here in 40 years.”

According to Ajlani, the overwhelming majority of new customers are unaware that all of the salmon on their plates is prepared at Bassili’s smokehouse in Hayata—and they are proud when they learn this. Approximately three tons of salmon are imported fresh each week from Scotland (it is a point of pride for Salmontini that none of its seafood—and especially none of its salmon—is ever frozen), brought up to the mountains for smoking, then sent out to both the original Salmontini in Beirut and its second outlet in Dubai, which opened in the summer of 2006. In addition, products can be purchased directly from the Salmontini boutique, and several caterers and gourmet supermarkets stock their fish as well (though not under the Salmontini brand).

The Dubai opening was particularly fortuitous considering this summer’s events, providing income while the Beirut restaurant sat empty. Throughout the war and after, Salmontini was unable to import its fish to Lebanon, and forced to close its doors in the middle of what ought to have been its high season. Temporary arrangements were made to bring fish from Scotland to Dubai directly for the duration of the blockade.

“As soon as the airport opened, we started up again. But between the loss of income, salaries, and rent, the war cost us about $25,000,” says Bassili.

Future plans on track

However, Bassili insists that none of their future plans have changed. Salmontini has already hired realtors to scout for a location in London, the site of their next expansion tentatively scheduled for next year.

“We’re here to stay, and we’re ready to lose money if we have to. But things are picking up again. We already have parties booked for Christmas. Salmontini is a unique concept in the world, and people here appreciate that,” Bassili notes.

While the foods produced at St. Jacques and Salmontini are unquestionably gourmet, both outfits are keen to stress that their products are affordable, and not limited to super-wealthy consumers. The ‘elite’ status of these products is derived not so much from their price tags, as from the rigorous training and production standards maintained in their creation.

The potential success of such enterprises has already been proven in Lebanon, through its fine wines, sweets, and other high-end products exported across the globe. Although Lebanon’s varied climate makes mass-production challenging at best, conversely, it means that almost any specialized product can be cultivated in some part of the country—a unique claim in the Arab world.

When asked if he is optimistic about the future of Salmontini—and other similar ventures in Lebanon—Bassili responds with a resounding, “Yes!”

“I’m waiting for the stock of INERGA to run out—they’re too easy to fire.” Bassili laughs. “We have a very different sense of humor in this country, no? Honestly, I’m very optimistic. We have to shake off the dust. If you want to live in this country, you have to be able to deal with these situations and move forward.”

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Society

Controversial billboards on airport road – Hizbullah’s ad campaign

by Executive Staff
written by Executive Staff

In the aftermath of its 34-day war with Israel, Hizbullah decided to launch its first-ever full-scale PR campaign: the “Divine Victory” blitz. The slogan was emblazoned on hundreds of billboards, primarily in the South, the Bekaa and the southern suburbs of Beirut, in a blissful union of militancy and marketing.

The contract was won by a team from Idea Creation, headed by Mohammad Kawtharani, the 30-year-old artistic director who coined the “Divine Victory” slogan. The campaign would have cost around $400,000, but the agency and the billboard companies offered their services for free. “So many companies refused money for their billboards. They said, ‘This is for Sayyed Hassan, this is for the muqawama—have it,’” explained an exuberant Kawtharani. Today, the slogan can be seen set against images of martyrdom and Israeli humiliation on 100 15x5m unipoles and 2,000 smaller billboards—a total of 12,000 m2 of printed area.

“We realized in the beginning that on the military and political levels, we were about to achieve victory,” Kawtharani says from the agency’s new offices in Haret Hreik, just a stone’s throw from the rubble heap that remains of its former location.

“We also saw the party unifying under the leadership of Sayyed Hassan Nasrallah. So we started linking his charisma to the victory. You know, ‘Nasrallah’ in Arabic means ‘divine victory,’” he adds.

Not just for Shia anymore

They emphasized red in the billboards to “signify the huge amount of blood” spilled during the war and highlight its civilian casualties, which Kawtharani calls the “real cost of the war.” The thin line of white line running across every image is meant to link the harsh realities on the ground with the ethereal forces of the divine. The green symbolizes the victory of resistance, which succeeded in “transforming death into life.”

Although Hizbullah was marketing the resistance long before this summer—Al-Manar TV station, local print media, and three billboards in the South and Dahieh owned by Hizbullah’s Martyr’s Institution were the crux of its public relations strategy—this is the group’s first attempt to market outside of its core constituency.

“It’s not only important that we won the war, now we have to maintain the vitality of this victory … and prove that the resistance is for all Lebanese,” Kawtharani says of the main objectives behind the campaign.

To communicate the national—as opposed to exclusively Shia—character of the “Divine Victory,” Idea Creation chose the images for each billboard according to its location and the demographics of its target audience.

“We chose different photos for billboards in the North than for the ones on the airport road,” Kawtharani says, “Like for one in Jounieh, we put a Lebanese Army soldier next to a resistance fighter, meaning the resistance is not just Muslim.”

Multi-media campaign

In addition to outdoor advertising, Idea Creation employed three other marketing tools in its campaign: printed pamphlets, banners, and personal items like flags, caps and pins. These elements of the campaign were also oriented towards specific target audiences.

The English-language banners proclaiming “Made in the USA” and “Extremely Accurate Targets” jutting from the rubble in Dahieh, for example, were designed for Western consumption.

“We tried to use the language of American media ironically there,” Kawtharani says, “So Western [news consumers] absorb a double-meaning.”

While the campaign certainly succeeded in getting attention both at home and abroad, it remains to be seen whether it will prove effective in attracting new supporters to the Hizbullah camp or in shoring up the support of disillusioned Shia. Now that domestic political tensions have once again replaced an external enemy as the biggest threat to Lebanon’s stability, the more important question may be whether the campaign was designed to help unify the Lebanese people, or as an opportunistic attempt to stir the sectarian pot.

“No one is disputing the costs of the war, but we are trying to recover now and we have billboards reminding us all along airport road,” says an executive from a mid-size advertising agency in Lebanon who preferred to remain anonymous. “If we want tourism and investor confidence to recover, we cannot show these kind of images.”

Kawtharani dismisses criticism on this count as beside the point: “Our priority is not to attract tourists back to the country—we are not trying to promote commodities, but to show the reality on the ground.”

The same executive said that the marketing campaign has also failed to consolidate increasingly fragmented public opinion within the Shia community.

“A lot of moderates in Hizbullah are thinking, ‘Why do we need to rebuild our homes every four years?’ The campaign pushed them away, and for the rest of the Shia, Nasrallah could have made a TV appearance and had the same effect because they believe everything he says anyway.”

Battle in the media, not the streets

Another executive speaking on condition of anonymity, from the Lebanese branch of a multi-national advertising franchise, agrees that the campaign did not sway public opinion. Although he is optimistic about what the strategy means for the future of the Lebanese political environment, his optimism is based on a kind of tenuous logic that has proven dangerous in the past.

“Effectively, if this is fine,” he argues, “Then Hizbullah will have to accept another political party mounting a similar campaign that they might not like, and they can’t get upset about it.”

However, he also observes that a slick Hizbullah marketing campaign, though controversial, may mark a positive change in the domestic sectarian discourse:

“It is offending a lot of people, but I’d rather the debate happens this way than for it to happen on the streets with riots and demonstrations.”

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Mohammed al-Rumaithy – Help from the UAE

by Executive Staff
written by Executive Staff

Last month, the UAE Program to Support and Rebuild Lebanon handed over the keys of 168 repaired schools to the Lebanese government. Executive talked to the program’s director, Mohammed al-Rumaithy, about the logistical aspects and political overtones of reconstruction in Lebanon.

E When exactly did the program begin and what are the main projects you have been working on in Lebanon?

It started right at the beginning of the war, but at that time it was only focusing on humanitarian aspects like food and medicine. This continued until the end of the war, when the UAE decided to participate in rebuilding—and in particular, rebuilding schools—because they believed that this was a very important project. The other major aspect of our work is de-mining and bomb removal. The UAE finished its first de-mining project here two years ago, so it was natural for us to resume this kind of work—although this time the problem of bombs is greater than mines, which is a new situation for Lebanon.

E What stage are you at in terms of achieving your objectives?

On October 18 we handed over the keys for 168 schools to the Lebanese government. Another 37 will be ready by November 18 and a further 11 by December 11. These were all schools which weren’t actually hit by rockets, but which were used for other purposes during the war and needed repairs and other work. There are two schools which were destroyed by missiles, and we estimate that we will have rebuilt these completely by December 2007. We’re satisfied with the result, the government is satisfied and so are the people in the south.

E How closely are you working with the Lebanese government on these projects, and how did you organize to rebuild the schools in the first instance?

We first went specifically to the Ministry of Education, met the minister and were given all the information on the situation. But from then on it was all on us to decide how we would work and deal with contractors, and so on. The government had nothing to do with the project field-wise, although they were helping us with statistics and logistics whenever we needed them. They asked us to go away, do the project and then give them the keys to the schools.

E How is the project funded?

It is all funded by the UAE government, except for humanitarian aid which is funded by donations from the people of the UAE.

E Is there a budget?

No, there is no specific budget, but the government is always prepared to support us if we require extra funds. At the start it was extremely difficult to budget because we didn’t know how many schools had been hit, and in the chaos immediately after the war there were no reliable statistics for us to budget from. The same was true for the de-mining and bomb removal: it was difficult to know how many cluster bombs or mines needed to be dealt with.

E How much has been spent on the program so far, whether from the UAE government or from fund-raising?

It’s a significant amount.

E What are the major logistical problems you’ve encountered when working in South Lebanon?

There have been no significant problems, although of course access was difficult at the start because of the destroyed bridges. We were also very squeezed for time as we knew that the government had told parents that the kids would be going back to school on October 16, so we only had 30 days. When we heard what the Lebanese government had promised, we had to run around even more and cover as much ground as possible every day. I think what we did so far has been appreciated by the minister and the government.

E Do you use private Lebanese contractors to rebuild the schools or do you ship in any staff from the UAE?

Only the engineers are from the UAE, the rest are Lebanese. We went directly to local contractors in the South, which is easier for logistical purposes and they know the area well already.

E Did you initially want to do more reconstruction projects in Lebanon, but were limited only to the schools?

The government of the UAE is ready to help in any way, but, of course, we don’t want to take over other people’s work. When we first came, many countries and NGOs were on the ground, and to do the job properly you have to focus on one thing. You cannot come and say “I want to do everything.” So when we made it clear that the UAE would rebuild the schools, everyone knew that. I think what we’ve done so far, and are still doing, has touched the Lebanese people. If it’s rebuilding schools, then it affects kids; if it’s removing mines and bombs, then it affects farmers. In the south, these bombs are preventing everyone from moving around—farmers, children, everyone. Even moving from house to house becomes impossible. So our projects really touch the daily life of the people. There may be more on the way, as now we get requests from the ministry about other work to do. We are tackling each request at a time, and we may increase the number of projects, but it will not be by much.

E How does de-mining actually work on the ground in the South? With so many NGOs and other organizations down there, are you given a specific section to clear up?

The main two players are the UN and the Lebanese Army. They are coordinating all the de-mining and bomb removal efforts and trying to solve this problem as quickly as possible. You tell them what your capacity and budget is and they will nominate a specific piece of land for you. The same goes for other countries that come to help. There are a lot of countries participating.

E How much work is there left to do in terms of de-mining and bomb removal?

Lots. We will not be finished until September 2007. I think there are more than 2,000 mines in Area Six, which is north of the Litani. And regarding the bombs, we’re talking about millions. But it’s a good opportunity to train our officers and [non-commissioned officers], as these conditions produce the best results from training.

E Since the end of the war, the issue of reconstruction has naturally taken on some political overtones. Many people think the various groups are trying to win the support of local people through rebuilding projects. Do you feel as if you are involved in this political aspect of things?

Not at all. We’re not politicians and my country has never in its history mixed politics with help. We have been working in many countries—in South America, in Africa, everywhere—and when we come to help our brothers in Lebanon it’s for help and nothing else. The program works along specific principles and applies to the whole of Lebanon. It does not leave anybody to one side because of their religion, ethnicity or beliefs. Because the people here know that, they welcome us and try to help us. The UAE has nothing to do with politics and this project is solely for the Lebanese people.

E What has been the feedback from people in the south towards the program? Has there been any antagonism?

It’s been positive. We get support and positive comments, and we know that we are giving from the heart and they are receiving from the heart. We’ve given to everybody and without having to particularly plan it, especially in the first few weeks when we went everywhere to help. We never encountered any negative reactions or rejections.

E How do you ensure that this reconstruction aid money is going to the right place in the South, and not being channeled off along the way?

Well, if I understood you correctly, I’m not a security agency to check up on the contractors I employ. I send in my engineers, they do the estimate of how much something will cost, and I go around the contractors and nominate the one who offers the best price. I don’t check up on contractors and if I did we would never ever finish this project.

E Apart from the schools and the mines, what other projects do you still have to complete?

The program is building a brand-new hospital close to Shebaa, which a consultant is working on now in cooperation with the Lebanese Ministry of Health. A tender will be open soon. We’re also repairing two existing hospitals in Marjeyoun and Bint Jbeil. The latter needs a lot of equipment but luckily it wasn’t touched during the war, so we will simply furnish it. The hospital in Marjeyoun is working but needs a few improvements.

E And what about Beirut?

As I said, the program applies to the whole of Lebanon, and in Beirut in particular we’ve been helping at Ouzai harbor, which was damaged by bombs during the war. About a month ago [in September] we distributed checks to 91 fishermen and 315 boat owners in the harbor, to help them get back on their feet. A few buildings in the harbor were destroyed too, and we’re coordinating with the local people to rebuild them. There are only four or five buildings, but they’re important for the people who work in the area. This should take no longer than two months to finish.

E Will the program keep a permanent presence here?

I think we’ll be finished by December 2007. The people working on the program won’t remain in Lebanon that long, so once we make sure that the remaining schools are contracted it will be a matter of follow-ups and payments that can be done through the embassy.

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The forgotten war

by Executive Staff
written by Executive Staff

When Americans talk of “the war” these days, they mean the one being fought in Iraq, a war that has been percolating for three and a half years. But Americans – and a broad multinational coalition — have been fighting another war, in Afghanistan, even longer than in Iraq. As of last month, NATO assumed the control of operations in Afghanistan.

For most of the American public, the Afghan conflict was almost forgotten for a while as the violence unfolding in Iraq grabbed most of the headlines, and, to be sure, the priority of the Pentagon.

But more recently, the Taliban has been making a not-so-discreet comeback (along with the resurgence of opium), waging attacks against Afghan government troops and coalition forces. The almost-forgotten conflict is once again making headlines.

The Bush administration decided to wage war in Afghanistan shortly after the September 11 attacks on New York and the Pentagon, in order to oust the Taliban who ruled the country and offered unlimited support to Osama bin Laden and his al-Qaeda terrorist organization. So what happened? What went wrong? Why did the United States get it so wrong in Afghanistan? Why was there such a misjudgment in the war planning? The answers to all the above questions may be found in looking at who the primary architects of the war were. Indeed, they are the very same ones who planned the Iraq campaign: Secretary of State Donald Rumsfeld, his deputy Paul Wolfowitz, Vice President Dick Cheney and a handful of carefully selected close and trusted subordinates. The president himself was not interested in the small details. Bush was more of a “show me the big picture” type of leader. As was the case in Iraq. Do we not find a similar modus operandi in the two conflicts? Go in light, go in quick, cause the maximum damage to the enemy in a Rumsfeldian blitzkrieg, but then completely fail in post combat planning. Although different in its execution, in many ways the Iraqi campaign was a mirror of the Afghani one. Granted, the terrain is very different; Afghanistan is made up of sharp mountain ridges, littered with deep caves where al-Qaeda and the Taliban could hide from heavy US aerial bombing and artillery. On the other hand Iraq is mostly flat and American tanks were able to race from the Kuwaiti border to Baghdad in record time. In studying both conflicts in Iraq and Afghanistan – as undoubtedly military historians will do in the years to come, hoping to extract lessons of what went right and what went wrong — what is already emerging is that Rumsfeld wanted quick victories to be obtained through the use of special forces, light, rapid moving units, skip the details. Full speed ahead and damn the torpedoes. In years to come, historians will scrutinize every document, every minutes of war preparation meetings, every inter-departmental memo and pre-war document as they become declassified. What they will most likely conclude is that while the initial planning for the war-– the actual battle plans for the invasion of both Afghanistan and Iraq were brilliantly executed — the post-war administration of both countries –- now under US tutelage and therefore the legal and moral responsibility of the United States, was utterly disastrous.

And the reasons? Lack of attention to what happens the first day after combat operations are over. James Fallows, a noted Atlantic Monthly national affairs correspondent, notes in his book Blind into Baghdad that the Bush administration messed up in Iraq by failing to give attention to details: “It will be years before we fully understand how intelligent people convinced themselves of this. My guess is that three factors will be important parts of the explanation.

“One is the panache of Donald Rumsfeld. He was near the zenith of his influence as the war was planned. His emphasis on the vagaries of life was all the more appealing within his circle because of his jauntiness and verve. Fallows goes on to say: “The third factor is the nature of the president himself. Leadership is always a balance making the large choices and being aware of details. George W. Bush has an obvious preference for large choices. This gave him his chance for greatness after the September 11, attacks. But his lack of all curiosity about significant details may be his fatal weakness. When the decisions made during this time are assessed and judged, the administration will be found wanting for its carelessness. Because of warnings it chose to ignore, it squandered American prestige, fortune, and lives.”

While it is important to point out that Fallows was writing about Iraq, the same can be said of Afghanistan. In both instances, the US did not go in with enough manpower to guarantee that life in Kabul as in Baghdad could return to normal once the actual fighting phase ended. In his research, Fallows found that, “According to the standard military model, warfare unfolds through four phases: ‘deterrence and engagement,’ ‘seize the initiative,’ ‘decisive operations,’ and ‘post conflict.’ War College directives clearly state that planning for Phase IV (post combat) ‘had to start as soon as possible,’ well before Phase III (‘decisive operations’).”

This means that planning for the post-combat phase should begin far ahead of the start of the war. This did not happen in Afghanistan and it did not happen in Iraq. In both cases, the signature on the architect’s blueprints are the same.
 

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State department

With friends like these

by Executive Contributor
written by Executive Contributor

Israel’s 34-day war on Lebanon crystallized Washington’s position in the Middle East conflict. The Bush administration’s unequivocal support of Israel’s actions has further alienated US from the Arab world and even succeeding in distancing traditional allies such as Saudi Arabia.
The Saudis – like the Jordanians and the Egyptians – secretly wished for a quick war that would cut Hizbullah down to size, but as the conflict dragged, these leaders had no option but to call for a ceasefire. It was to no avail: the US only succeeded in losing more hearts and minds in the region, giving birth to a new generation of anti-US resentment.

Burning issues
Given the circumstances, Washington can hardly pretend to be an objective broker to a peaceful settlement to the Arab-Israeli dispute. That is, if the issue of peace talks ever were to surface again in the little time – less than two years now – that George W. Bush has left as the resident of 1600 Pennsylvania Avenue. The president’s remaining months in the White House will be taken up by the following burning issues:

  1. The November elections: With the Democrats attempting to retake the House and Senate from the Republican Party in preparation for the 2008 presidential elections, Bush has already begun campaigning for the Republicans. Much of his time between now and November will be spent flying around the country trying to garner support for the Republican Party.
  2. The ongoing war in Iraq: That conflict alone must be responsible for more than a few of the president’s grey hairs. Despite the White House spin, Bush’s hopes of a quick victory in Iraq sputtered and died, amid growing sectarian violence with hundreds of Iraqis dying on a daily basis. In fact, Bush will be lucky if the all-out civil war that threatens to rip Iraq apart does not break out on his watch – if it already hasn’t, that is. It would be a terrible legacy for any president to leave behind. Then there is the ever-increasing casualty rate – the body count – among both US military personnel and the civilian Iraqi population. And finally, with no visible face-saving exit strategy in sight for the administration, that US forces are expected to remain in Iraq well beyond the end of the Bush presidency.
  3. The war in Afghanistan: the resurgence of the Taliban in recent months is a clear indication that the war in Afghanistan is far from over. Armed opposition to the pro-American government of Hamid Karzai – which was limited until recently to the southern part of the country – is slowly creeping into the capital, Kabul. Car bombings, suicide bombings and targeted shootings of government officials are becoming more and more common.
  4. The war on terrorism: this is a war being fought in the shadows, and it is giving the president a tough time, even with members of his own Republican party over such issues as the rights of suspects to be tried and convicted based on evidence kept secret even from the accused.
  5. The Iranian nuclear dossier: of all the urgent dossiers piling up on the president’s desk, the Iran nuclear file must be one of the most burning issues. The Bush administration is faced with one of its toughest decisions yet: what to do with Iran’s nuclear ambitions?

Beltway gossip
This this is where Lebanon – and Hizbullah – and Syria enter the scene. There is much talk inside the Washington Beltway of a possible strike on Iran, should the Islamic Republic refuse to abide by the international community’s request that it stop its nuclear program. Iran claims its nuclear program is intended for purely civilian use, but the United States and its Western allies are not convinced. If the US and/or Israel were to attack Iran’s nuclear facilities, what are the counter-measures Iran is likely to take? A good probability is that it would have Hizbullah unleash its rockets on Israel, as it did during the 34-day conflict with the Jewish state.
Such action would push Israel to retaliate against Hizbullah – and in turn against Lebanon, as it did during the July/August war. So is it all gloom and doom for the Lebanese, barely out of one crisis, before an even greater catastrophe befalls the country?
Not necessarily so. Here is an optimist’s view from Washington, DC.
The arrival of several thousand blue-helmeted peacekeepers from Italy, Spain and France, along with several thousand Arab and Muslim soldiers can be seen as a sign that the international community very much supports a stable and independent Lebanon. But what the Western powers want is a “demilitarized” zone in south Lebanon where the 15,000 Lebanese Army troops dispatched to the area can, with the support of the 15,000 foreign soldiers backing up the Lebanese Army, act as a deterrent and keep armed militias at bay.

The western powers want a demilitarized zone where armed militias can be kept at bay

Facilitating integration
For that to happen – for South Lebanon to become demilitarized – there would be a need for Hizbullah to transform itself from what it currently is – a political party with a lot of muscle – into purely a political grouping. That in turn would facilitate its integration into Lebanese political life. It has been done before in many parts of the world. Unfortunately, those are rarely the ways of the Middle East; for one, it is far too logical. And despite two United Nations resolutions (1559 and 1701) calling for the disarmament of all militias and groups in Lebanon with the exception of the Lebanese Army, don’t expect Hizbullah to start handing in its weaponry any time soon.


The most likely scenario is the one practiced many times over the years in Lebanon whenever a particular militia found it had to give up its guns. Most of the weaponry disappears underground while a token number of old machine guns along with some faulty rocket launchers are ceremoniously handed over in front of the world’s media. All sides look good, everyone goes away happy until the next time.
But what of Syria’s role in all this? So far it has remained unmentioned. Syria is edging to get back into mainstream Lebanese politics and is betting on its supporters in Lebanon (today, Hizbullah and Gen. Michel Aoun’s Free Patriotic Movement) to open the door for them.

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Feature

An army:

by Nicholas Blanford
written by Nicholas Blanford

But is it enough?

International interest in reforming the Lebanese army was triggered by the Syrian disengagement from Lebanon last year, but the month-long war this summer between Hizbullah and Israel has given the process a renewed sense of urgency.
Within days of the ceasefire coming into effect on August 14, some 15,000 soldiers were dispatched to the area south of the Litani river to take up new positions in territory vacated by withdrawing Israeli troops – the first time Lebanese troops have been posted on the border with Israel in more than three decades.
“There is no place prohibited for it and when the army sees any weapon even in the hands of the resistance, it will confiscate it,” Prime Minister Fuad Seniora said in an interview with Orbit television in mid-September.
The Lebanese troops in the South will be coordinating closely with UNIFIL II, the name given to the newly-reinforced UN Interim Force in Lebanon which is slated to increase in size from 2,000 to 15,000 by the end of November.
Hizbullah, whose fighters have abandoned the border positions established over the past six years, has raised no objections to the deployment of Lebanese troops in the South, satisfied that the army will not attempt to disarm the group.

Border protection role
The government and international military donors believe that the future principle role of the Lebanese army is to maintain border security, tightening Lebanon’s notoriously porous frontier with Syria and preventing outbreaks of violence along the sensitive border with Israel, including repelling overflights in Lebanese airspace by Israeli aircraft.
With that in mind, foreign military specialists are recommending a more streamlined, mobile and better-coordinated military force that can respond quickly to trouble.
Following the Syrian disengagement from Lebanon last year, the government commissioned assessment studies from the UK and the US on what was required to reform and improve the capabilities of the Lebanese army. After the August 14 ceasefire came into effect, a British military team updated its assessment on the Lebanese army and recommended 16,000 troops in South Lebanon, 8,000 to patrol the border with Syria and another 1,000 to protect the maritime border.
That the Lebanese army requires a thorough overhaul is beyond question. Although the army has a comparatively large amount of equipment for a force of around 45,000 soldiers (the present strength is some 60,000 after 15,000 reservists were mobilized during the recent war with Israel), much of it is obsolete or non-functioning, and a mix of US, French and Soviet hardware. The army’s 310 tanks date from the 1950s and are only effective in an internal security context. US-made trucks and jeeps also date from the 1950s. The air force consists of 23 Vietnam era UH-1 Huey helicopters. The navy’s seven British coastal patrol craft have limited firepower and radar capabilities and are too slow for anti-infiltration and anti-smuggling operations. Of the 27 US-made small inshore patrol vessels given to the navy in 1994, only 10 to 12 are operational.
Spare parts for much of the equipment are no longer available, forcing the army to cannibalize from existing gear and come up with ingenious alternatives to keep vehicles on the road.


“Since the Syrian army was here, there’s been very little procurement for the Lebanese army, but they have done a magnificent job with what they have,” said one Western defense attaché.
The Lebanese army also made an assessment of equipment needs, a “wish list” of state-of-the-art weapons systems which never stood a realistic chance of being fulfilled. The list, which was seen by Executive, included five dozen heavy tanks, several combat helicopters, such as Apache or Cobra attack helicopters, nearly 30 patrol boats and a number of self-propelled 155mm artillery guns, in all amounting to nearly $1 billion.
“Their list was a non-starter,” said a Western diplomat. “Even if they were to receive what they wanted, the Lebanese army is too small and lacks the logistical back-up to utilize such equipment.”
The figure has been slashed to under $100 million and most of the offensive weaponry such as heavy artillery and aircraft has been replaced on the list by more mundane, but vital, logistical items such as transport vehicles, and communications and surveillance equipment.
Minister of Defense Elias Murr also envisages a lighter-armed, more mobile military. He apparently disavowed the army’s “wish list” and is placing emphasis on twin-propellered troop transport helicopters capable of ferrying soldiers rapidly to remote areas of the border as well as anti-tank missiles and anti-aircraft weapons as a means of thwarting potential Israeli air and ground incursions. The utility of advanced anti-tank missiles was proven during the Hizbullah-Israel war where they accounted for some 50 of the Israeli army’s 119 fatalities and destroyed, disabled or damaged 46 tanks and 14 other armored vehicles.

Mixed signals
While the needs of the army are well understood, organizing the transfer of equipment has been slow, hampered by a lack of coordination chiefly among potential foreign donors, according to diplomats in Beirut.
Britain has offered to be the lead country in coordinating which donor nation allocates what equipment or service to prevent overlap.
“You don’t need four countries all offering dog training,” said one Western diplomat.
The US, which has supplied the army with much of its equipment under the “excess defense articles” program, and France, with its traditional links to Lebanon, were seen as politically unacceptable to lead the coordination effort to revamp the Lebanese army.
While foreign donors recognize the need for coordination, “international sensitivities” over who takes the lead is delaying the process, according to one European diplomat.
“We are no further forward than when the Syrians left, although the needs have been known from the start,” the diplomat said.
What equipment has already arrived for the army is often transferred on an ad hoc basis without attention paid to the military’s needs. For example, Qatar recently sent Lebanon 100 military trucks. The trucks, however, were delivered equipped with desert tires, without windscreen wipers and without any spare parts. Around 20% of the trucks had to be cannibalized to keep the rest of the fleet on the road.
“The trucks were fitted for desert conditions. No one had thought about the needs of the Lebanese army. In the end it cost a lot of money to put those trucks on the road,” said a foreign military advisor.
Instead of one-off gifts of arms and equipment, the trend among military suppliers is “cradle-to-grave procurement,” in which a fleet of vehicles is sold along with a package that includes spare parts and workshops to ensure that the vehicles are properly maintained.
Furthermore, the army is looking to standardize equipment, ensuring, for example, that the army and the Internal Security Forces use the same communications system.

Greater allocation
The US Congress has significantly stepped up its financial allocations for the Lebanese military, reflecting Washington’s belief that a strong united army will help safeguard Lebanese stability. Some $10.6 million was allocated for fiscal year 2006 to be spent on repairs and spare parts for existing equipment. Further funds are expected before the end of the current fiscal year. Another $2 million was earmarked mainly for training troops and improving counter-terrorism techniques, some of it under the International Military Education Training (IMET) program, which has resumed after a hiatus during the years of Syrian domination of Lebanon. Some 120 student officers and NCOs have attended Ranger school in the US in the past year under the IMET program. American military teams are also training NCOs in Lebanon under four- to six-week programs.
Lurking in the shadows of the international interest in reforming the Lebanese army is the dreaded “H- word.” The unspoken inference is that a re-equipped, better-trained, more mobile national army will undercut the rationale behind Hizbullah’s argument that the Islamic Resistance is a vital component of Lebanon’s strategic defense.


“We want to be careful how the debate is framed,” said one Western diplomat. “If it’s suspected that this is a US-Zionist subterfuge then Hizbullah will use its veto to turn it off.”
But there is little doubt that undermining Hizbullah remains a powerful factor in the mainly Western interest in improving the Lebanese army’s capabilities.
In September, Steven Hadley, the US National Security Advisor, held a meeting in Washington with two senior advisors to Israeli Prime Minister Ehud Olmert to brief them on Washington’s plans for the Lebanese army.


According to an account of the meeting reported by Israel’s Yedioth Ahronoth newspaper, Hadley explained to the Israelis that a strengthened Lebanese army would bolster the Lebanese government against Hizbullah and other pro-Syrian elements in Lebanon, namely armed Palestinian groups. The Israelis reportedly agreed in principle with the US plan but voiced concern that some of the military hardware to be transferred to the Lebanese army could end up in Hizbullah’s hands.

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For your information

Tourists trickle back

by Executive Contributor
written by Executive Contributor

Post-war wine
challenges for Israel

Lebanon’s wine producers can breathe a sigh of relief. There was no force majeur and there may even be an increase in production as the Israeli blockade has denied Egyptian winemakers their annual shipment of around 400 tons of Lebanese grapes, creating a surplus on the local market. “Opportunist wine makers who want to exploit the situation will overproduce this year,” ventured one local producer, adding, “Negociants will be selling Cabernet Sauvignon and Cinsault for peanuts at the end of the harvest.”
Next door, Israel’s $145 million industry did not face the same restrictions of movement, nor did it suffer the same scale of destruction. That said, the Upper Galilee, home to Israel’s best vineyards, was caught in the fighting. For nearly a month, the vineyards went unattended. Last-minute preparations could not be made and the harvest was delayed by about a week to ten days.
But Israeli winemakers face a more challenging threat: the issue of the sovereignty of the Golan Heights. Any Middle East peace deal that returns the Golan to Syria would see some of Israel’s best terroir absorbed by its neighbor. According to local experts, for the leading wineries on the Golan it is not a question of if the Golan will return to Syria, but when. “Even though they have been there for two generations, they are ready to leave if that will bring peace,” said one analyst.
While many have predicted that the Golan Heights winery – one of Israel’s largest – will probably relocate, possibly to the site of the Galil Mountain Winery, it would be the smaller wineries on the Golan that would bear the brunt of the upheaval. “My guess is that Chateau Golan will find a modus vivendi on the other side of the border, but that nearly all of the small wineries will fold up their tents and vanish into the night,” said the analyst.

Tourists trickle back
Since the Rafik Hariri International Airport once again started receiving international flights, planes have been arriving filled to capacity. The arrivals, however, are mainly Lebanese returning home after being evacuated during the conflict. Unsurprisingly, tourists have been slow to return to Lebanon after seeing the depressing news footage of thousands of foreigners being evacuated and the destruction caused by Israeli bombardment – not exactly an ideal destination for your dream vacation. (Ironically, readers of the July issue of Travel and Leisure would have been heartened to read that Beirut was voted number nine on its annual list of the world’s top 10 cities this year). The predictions of 1.6 million visitors to Lebanon in 2006 rings hollow now in the aftermath of the conflict, but Lebanese tour operators remain optimistic. Incredible as it may seem, there are a few tour groups willing to honor their booking to Lebanon. “The first tour group in Lebanon since the ceasefire will arrive in Lebanon on the 7th of October,” says Danny Abi Nader, owner of TLB Destinations. The trip is being marketed under the theme: “Back to Lebanon…be the first.” Abi Nader expects this arrival to attract international media attention putting the country back in in the positive spotlight, giving other groups the confidence to visit. Promoting Lebanon still remains an upward struggle, however, as governments continue to advise against all but essential travel. (Amended, however, from “against all travel,” now that a ceasefire is in place.) And caution is still advised when travelling to the Bekaa and all travel south of the Litani River is discouraged.
Outward-bound journeys from Lebanon were also put to a stop, as Lebanese holidaymakers had to cancel their trips, forced by the shut down of all air traffic. Business in this sector is slowly returning to normal. Airlines are flying to and from Beirut once again, and overdue holidays abroad are being booked. In order to give business a boost, local travel company Nakhal & Co launched an online booking system and gave a 10% reduction on all hotel bookings made during September when customers purchased an air ticket. Abi Nader remains optimistic about the long-term future of the industry and has set up CIFA (Centre pour l’Insertion par la Formation et l’Activite), a non–profit organization which trains young people in the skills of tour-leading.
He is expecting other tourists to follow this first wave and come to Lebanon as they want to see the country they have heard so much about in the news. Gulf tourists will be slower to return, but they will be back eventually once they are confident of a lasting peace. According to Elie Nakhal, general manager of Nakhal & Co, a stream of Gulf citizens is already trickling back into Lebanon to check up on their homes and businesses.

Marathon effort
Only a couple of months ago, it seemed highly unlikely that the Beirut International Marathon (BMA) would even take place this year. During the recent conflict, BMA organizers were actively arranging sporting programs for children and displaced families, instead of focusing on marathon registrations. With a ceasefire in place and the blockade lifted, organization of the event is now going ahead as planned, but under a new theme. It has been relaunched by May El Khalil, BMA race founder and president, as Kermalak Ya Loubnan – For your sake, Lebanon. The main sponsor of the event is Blom Bank, who is joined by other high- profile sponsors like Nike and Tropicana. Given the strong national sentiment, all are expecting a higher attendance than last year. According to Mark Dickinson, BMA managing director, the main cost of putting on the event is just over $900,000; this includes all of the preparation, logistics, cost per runner and the administrative costs. “Registrations through our website are exceeding all expectations, which is a great incentive for us to redouble our efforts to make this year’s race an event to remember,” says Dickinson. Foreign participants have committed themselves to running the event and instead of being put off by the recent conflict, seem even more determined than ever to attend. To drum up support, the Beirut Marathon Association plans to send a delegation to the United Arab Emirates to promote this year’s event. The aim is to encourage the people of the Emirates to participate in this year’s marathon; also to receive sponsorship support from Dubai’s booming private sector. All competitors are encouraged to run for a cause, and the marathon’s charitable cause this year will be for the victims of the cluster-bombs scattered around the country, still claiming lives.
The Beirut International Marathon will take place on Sunday, November 26, 2006. The event will feature the international marathon, 10-K Fun Run, and Mini-Marathon for kids under 18. Registration for the races can be done at one of the many registration outlets around Lebanon. For online registration go to [email protected]. The deadline for registration is October 26, 2006.

Syrian car market
sees stellar growth
DAMASCUS: Following a sizeable reduction in import duties last year, Syria’s fledgling car market has grown by up to 60% in under a year.
A decade ago, Syria’s roads were full of ageing 1960s American cars; in 1995, the government allowed imports for the first time, but customs taxes were so prohibitive that only economical South Korean and Chinese cars were affordable for even affluent Syrians.
But last September, the government reduced import duties from 255% to 60% for cars above 1.6 liters, and from 145% to 40% for smaller cars. The reduction has been a serious boon for car dealers that opened shop in Syria.
“It’s been a huge percentage increase, three times more than before 2005,” said Hilmith Al Knawati, sales manager for Fiat, Lancia and Alfa Romeo.
Although there are no official statistics on the market, dealers put growth at anywhere between 40% to 60%, with every dealer interviewed claiming an increase of up to 50%. The market saw a slight blip during the war on Lebanon, but has since bounced back.
Last year, there were a reported 900,000 cars on the roads, a small number considering Syria’s 16 million people.
“Since last year maybe 200,000 to 300,000 cars were sold,” said Al Knawati.
Chevrolet dealer Jared Gerges said there has been a 45% increase in sales, but primarily for smaller vehicles. Gerges said he hopes the US sanctions that prohibit American companies dealing with Syria will be lifted as the dealership, which has a 20% market share with Chevrolet, has the license to sell Cadillacs and Hummers.
The appetite for new cars is so high across the board that demand is exceeding supply.


“If we ordered a thousand cars now, they would sell quickly,” said Mazda’s representative Aksaan Khwandh.
But despite such growth, dealers want a further reduction in customs taxes. Customers still have to pay customs fees and a car tax that can add up to 30% on a car’s end cost.
As a result, demand is higher for smaller models, which have lower taxes.
“We will see another huge increase in demand when the registration fee is reduced,” said Al Knawati.
Due to the reduction, Renault said its market share increased from 8% to 14%, a 57% increase on 2005. Peugeot and Nissan also reported a 50% increase, but European and Japanese car dealerships will have to market hard to compete with the Chinese and South Koreans who control around 35% of the market.
Kia will open a car plant next year, as will Iran’s Saipa to manufacture one of its vehicle lines. Syria is Saipa’s top overseas market, accounting for around 90% of exports.

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Lebanon

Mayday, mayday Media hit bigMayday, mayday

by Executive Editors
written by Executive Editors

Lebanon’s media industry is struggling to recover from $38.7 million losses it suffered this summer as a result of Israel’s devastating 34-day war on Lebanon.
Media experts said that it will take time and resources for media outlets to regain their footing after sustaining direct and indirect damages.
Direct losses included material damages caused to the stations, while indirect losses pertain to advertisement contracts, most of which were terminated during the war as TV coverage focused on war developments.
Direct damages affected mostly audiovisual media, as Israeli air raids struck transmission stations of Lebanese television and radio stations and flattened the head office of Hizbullah-affiliated Al Manar TV in Beirut’s southern suburbs.
Indirect losses affected all media and were caused by a 40% drop in advertising income during the war, according to Walid Azzi, publisher of Beirut-based advertising industry magazine ArabAd.
The advertising losses hurt a media industry that is already struggling in a market that cannot sustain the large number of existing print and audiovisual outlets. At the same time, media are important for Lebanon’s economic freedom and democratic society.

Al Manar and LBC hardest hit
“The cost of operation of a single TV station is around $1.5 million per month, which is equal to $18 million per year,” Azzi said. He added that only one of Lebanon’s more than half-dozen commercial TV stations could exist on advertising income and stations had turned to other revenue sources, such as selling programs, seeking sponsorships and merchandising services and items linked to reality TV shows.
On the side of direct damages, Israeli attacks hit stations targeted for their political position in the Hizbullah camp and stations in other parts of the political spectrum.
Leading the sector in damages, Al Manar’s direct and indirect damages topped $16 million, reports an official for the station.
“When Al Manar was hit, broadcasting only stopped for two minutes. After that the station was up and running and continued its broadcast as usual,” he said.
The media outlet with the second-highest damages was the Lebanese Broadcasting Corporation International (LBCI), which operates terrestrial and satellite channels from a head office in Lebanon’s Christian heartland.
The station’s losses during the war amounted to $5.35 million, an LBCI official said on condition of anonymity.
“This is not exaggerated; it is 100% accurate,” he said, adding that three broadcast transmission stations were destroyed without affecting the national transmission of LBCI programming.
Future TV came third with $3.3 million of direct and indirect losses, according to Abdel Karim Sabbagh, chief radio frequency engineer at Future TV.

Advertising revenue lost
In addition to two broadcast towers hit by Israeli missiles, Sabbagh said the station’s indirect damages manifested in the cancellation of advertising contracts.
According to a list published by Lebanese newspaper an-Nahar, five other television stations suffered losses ranging from $350,000 to $2.65 million and seven radio stations were affected with damages amounting to a combined $6.2 million.
Despite these financial losses, Lebanon’s media sector maintained or even stepped up programming during the war, demonstrating its resilience in a time of crisis. Since the end of the war, stations have increased their efforts to stay up and running.
To ensure the survival of Lebanon’s radio and TV stations, the Union of Arab Broadcasters suggested Tuesday loan forgiveness for the stations, which carry an estimated cumulative debt burden of $760 million.
Azzi on his part called for stronger support of advertisers in the time of hardship. Companies wishing to promote their brands should not back off during wartime, but rather exploit such circumstances and uphold campaigns to ensure the continuity of their brand.
“You have to advertise during crisis in order to keep your brand alive,” Azzi said.

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