Shopping Blues

by Executive Contributor February 7, 2005

written by Executive Contributor

February 1997, when Hamra was blocked with shoppers and traffic was but a distant memory. The ads on international and regional satellite TV for the Lebanon’s February shopping festival may have become less frequent in the recent years, but few could have predicted its outright cancellation, hot on the back of record tourism figures and a new wave of modern massive shopping malls opening. To make matters worse, the decision came with no official explanation. “Political instability was the cause behind the cancellation,” said a source at the ministry of tourism. “The government didn’t want to allocate any resources to prepare for it.”

Merchants, however, will go ahead with the month long extravaganza as planned. “We prefer not to make any cancellations,” said Mohammed al-Khatib, President of Beirut’s Hamra shop owners. “Anyway they [government] didn’t do much last year,” he added.

The government’s role in the shopping festival, the first of which took place in 1997, is to coordinate all marketing efforts towards promoting the month long purchasing spree – be it through advertisements or hotel and air discounts. However, since 1999, the government has appeared to lose interest and tightened its belt and there has been little or no progress in developing Lebanon into a regional retail hub like Dubai.

Last year, during the first quarter of 2004, there were 202,422 visitors that came to Lebanon – a 33% year-on-year increase. However, economists predict, that while Lebanon’s overall tourism momentum will continue, monthly arrivals over the period of the “Non-Shopping Festival” will dip. In a somewhat damning indictment of ministerial planning and continuity, tourism minister Farid Khazen in January admitted that inadequate planning was the main cause for the cancellation of the festival. “We didn’t have enough time to achieve preparations,” said Khazen meekly, no doubt referring to the cabinet reshuffle in October.

MTC all set to slash

“It was one of the smoothest transitions we ever had,” said Said Nasir, MTC Lebanon’s chief commercial officer, speaking about replacing the telecommunications network inherited from Libancell by the Intelligence Network (IN) in mid January. A few people had trouble sending SMS for two days, but apart from that, the company received no complaints.

“IN is more transparent and easier to use,” said Nasir, “as both calls and SMS are not indicated in units, but in dollars. IN also enabled us to introduce a large number of value added services, which so far were reserved for people with a fixed line. Finally, as everything is indicated in dollars, it will also be easier to implement new tariffs.”

So far, tariffs have remained exactly the same: $0.47 cents for a phone call and $0.10 cents for sending an SMS.

MTC manages one of Lebanon’s two state-owned telecommunication networks, but can only do so within a pricing strategy determined by the ministry of telecommunications (MoT). However, according to Nasir, the MoT is serious about substantially reducing tariffs, maybe as early as spring. “The MoT is sensitive to public complaints and is well aware that Lebanon has one the world’s highest tariffs. In any case,” he added, “global research has shown that reducing tariffs will not reduce revenues. On the contrary, revenues increase as people are inclined to talk more.”

As early as June 2004, when MTC took over from Libancell, the company received a government proposal with seven possible ways of reducing tariffs, which included: a direct percentage cut, the introduction of off-peak tariffs, the billing of seconds instead of minutes and reduced tariffs for a client’s five to eight most dialled numbers.

Bling Bling

For a tranche of the Lebanese population, who in the words of one economist are “committed to conspicuous consumption,” New Year’s Eve was another opportunity to spend, spend, spend! Lebanon’s finances may be squeezed, but the country is still liquid; especially, it seems, on this biggest of party nights. One restaurateur revealed that revelers at his establishment had forked out as much as $1,000 each, double the average wage.

But just how much was spent? Economist Marwan Iskander conservatively estimated that around 25,000 to 30,000 people went out on New Year’s Eve, each spending on average $100 per person. This translates into rough countrywide 2004-2005 New Year revenue of around $3 million. “That’s a good figure for Lebanon,” Iskander said.

“New Year’s Eve is a big money night for us in terms of revenue,” acknowledged InterContinental Phoenicia sales director Maha Bourachi, who revealed that around 1,300 merrymakers paid up to $600 for dinner and live performances by Arab music stars Najwa Karam, Fadi Shaker and Nancy Ajam. In total, Bourachi said business for the night, including rooms, generated over half a million dollars for the hotel, roughly 16.5% of the country’s taking for the night, if Iskandar’s figure is to be believed.

Elsewhere, 1,400 punters, many from as far away as Japan, India and the United States, paid as much as $200 per head, to be – and be seen – at the hot-ticket, “Bling, Bling” party, billed as the biggest private party in town. Held at the Forum de Beyrouth, the bash generated revenues of around $200,000.

Not to be outdone, across town at the Regency Palace Hotel in Jounieh, 3,000 to 4,000 guests paid up to $400 a head to see Haifa Wehbeh, Georges Wassouf and the Four Cats. Wehbeh’s fee for the evening was a reported $30,000 per hour. Nice work if you can find it.

Bank shuffle signals end of an era

Fouad Siniora, the former minister of finance, was appointed as the new head of Banque de la Méditerranée, one of Lebanon’s largest and best capitalized banks. Siniora replaces Moustafa Razian, who helmed the bank for more than a decade, while Siniora during the same period intermittently took charge of the country’s finances. Banque de la Méditerranée is principally owned by the former prime minister Rafik Hariri, and that both Siniora and Razian have been Hariri’s advisors and partners within the Méditerranée group for decades. Razian – whose pay off was rumored to be in the eight figures – is expected to run Allied Bank on a full time basis. Allied Bank became Banque de la Méditerranée’s wholly owned subsidiary back in 2001, and is now aiming at becoming a specialized retail bank.

There is a sense of déjà vu. Siniora’s appointment is not a first. He was chairman of the bank prior to his first appointment as finance minister during Hariri’s first term in office as prime minister between 1992and 1999. Siniora’s re-appointment in the private sector has been interpreted by many within Lebanon’s banking sector as a sign that he is not likely to stage a comeback as finance minister any time in the medium or even long-term. Indeed, as many have pointed out, a chairman of a major bank such as Méditerranée needs to commit fully to the development of the institution and cannot afford to swap hats to suit the political climate. An intriguing notion then arises: should Hariri return for a third time, he would surely appoint a “new” finance minister. Say you read it here first.

IDAL targets local investors

The Investment Development Authority of Lebanon (IDAL) has wrapped up a nationwide campaign to raise awareness among Lebanese investors of the benefits of the Investment Development Law, raising the question what has it been doing for the four years that the law has been on the statute books. “We decided to launch this campaign now as we realized that too many people were either not familiar with the investment law or just didn’t understand how it applied to local investors,” an IDAL spokesman explained.

Entitled “IDAL beside you to achieve your investments”, the 2 ½ month long campaign which ended on January 31, 2005, held conferences in several regional Chambers of Commerce, to explain Investment Development Law 360 and offer incentives to assist potential investors implement and develop their projects according to a solid marketing strategy.

“Due to their unfamiliarity with the law, some potential investors aren’t aware of the many advantages the law offers, such as fiscal incentives, discounted work permits and so on,” added the IDAL spokesman. Adopted by the Lebanese parliament on August 16, 2001, the Investment Development Law grants a series of incentives to investors so as to stimulate the country’s social and economic development, as well as enhance its competitiveness.

Targeting the productive sectors of the economy such as industry, agriculture, agro-industries, tourism, ICT and media, the campaign also sought to encourage regional investment in Lebanon. “By launching this campaign throughout the country, we are also hoping to create more of an equilibrium, investment wise, between the regions”, the spokesman added.

IDAL was established in 1994 as a public institution charged with the promotion of investments in Lebanon and assistance to investors in the development of their projects. A One-Stop-Shop facility, it is meant to bypass all public administrations and authorities in issuing permits and licenses to investors.

Born again!

Born Interactive and Orange Clicks, two Lebanese agencies, merged on January 1, 2005, creating Born Interactive-OC, one of Lebanon’s largest interactive technology companies. Based in Beirut, the company is expecting a turnover of $1 million for the year 2005, 50% of which will stem from regional clients.

“The aim of this merger is to enhance growth and expansion for both of us,” said Fadi Sabbagha, general manager of Born Interactive. “By increasing our production capacity we can meet the growing demand for big, regional projects and compete with global and regional agencies.”

“Reaching a critical size is the main issue,” added Walid Hanna, general manager of Orange Clicks. “Because we have high fixed costs, we can double or even triple our revenue by increasing profit.”

While Orange Clicks has developed an important client base in Lebanon and in the Gulf countries, Born Interactive has built a portfolio of clients ranging from Lebanon to North Africa, France and the USA. “The two companies are very complementary in terms of market penetration,” said Hanna. “Furthermore, from an IT point of view, we complement each other as well: they have know-how that we don’t and vice versa.”

Both companies maintained the entirety of their staff during the merger, reaching a total number of 25 employees – a figure that is expected to increase. “We share the same company culture and vision,” said Sabbagh. “Although we plan on recruiting and expanding, we are also ensuring that our clients do not feel the transition.”

“Business wise this was a smart move,” admitted an industry insider. “In the website and e-solution industry, they are two of the most serious players on the Lebanese market.” The new company’s shareholders, composed of Walid Hanna and members of the Sabbagha family, elected Fadi Sabbagha as CEO. Hanna will be a board member and a minority shareholder, whose share is registered under the name of the TRINEC Group.

The SABIS effect

The SABIS International School will create a third school in Lebanon after signing a contract with Intered (the managing arm of the SABIS School network) and the Beirut-based Abniah general contractor company on October 21, 2004. The move comes as part of a greater international strategy, which will see the opening of six new schools in Syria, Bahrain, the UAE and the United States.

The new school will be located on the hills of Adma and is scheduled to open its doors to students during the 2005-2006 academic year. The 75,000m2 purpose-built campus will be comprised of ten buildings, including educational facilities, a performance hall and sports facilities, such as an Olympic-size swimming pool and a soccer field. It will offer kindergarten, primary and secondary classes, with the capacity to accommodate up to 1,800 students.

An educational system which started in Choueifat, Lebanon in 1886 as an all-girls school, SABIS now counts 27 schools across four continents – the Middle East, Africa, Europe and the United States – totaling approximately 25,000 students. It is all part of the school’s strategy of catering to “mobile” families. “We have 29 different nationalities at Choueifat, including children of United Nations employees, of foreign companies. Families that move around,” said Victor Saad, VP Operations and Developments.

The tuition fees for the SABIS schools vary, even within countries. At Choueifat, fees range from LL5.4 million per year at kindergarten level to LL6.1 million per year for the upper secondary classes. Fees at the school in Khoura are less. Those for Adma have not yet been set.

“Tuition fees are set according to local culture and income levels,” Saad explained. “You can’t have an expensive school in an area where people can’t afford to pay for it, but although the tuition fees are lower, the school will provide the same services and obtain the same results.”

Dora Mall

The much-heralded $80 million, 200,000m2 City Mall in Dorah on the northern edge of Beirut finally threw open its doors, after some delay, in time for Christmas. Behind the doors, though, much was still missing. Only the 11,000m2 ground-floor hypermarket anchor Casino Geant – the first in Lebanon – has been completed. Still to come, according to Michel Abchee, CEO of City Mall creators ADMIC, are ground floor specialty shops (in February), more stores and a food court on the upper level (in March or April), an 18,000m2 BHV outlet (which will serve as a second anchor), a sporting goods store (anchor number three) and a nine-screen multiplex cinema, both by the end of 2005.

The opening of the only Casino Geant, in a first phase, was part of a calculated, staggered approach, Abchee explained. “If we had opened the whole thing at once it would have been unmanageable,” he said. On opening day, wires protruding from the walls of the empty halls leading to Casino Geant from the underground City Mall car park spoke of ongoing finishing work. Inside the hypermarket, a few of the items on display bore no prices and salespeople were unable to say what the prices were. One salesman spoke of chaos.

But Abchee was upbeat. “It was a rushed opening, but a good opening,” he declared. “We worked long hours to ensure it. But we opened because we were ready. Of course, people are still working but very little was unfinished. Prices change before, during and after any mall opening, to suit the market. There were a huge number of products. Some didn’t arrive on time. All employees were trained; some were trained better than others. Mistakes happen. But a phased opening was the right thing to do.”

Real estate observers were impressed. “It has everything time-wise, size-wise and location-wise to make it a success,” said real estate expert Raja Makarem of RAMCO. “Success doesn’t depend on the opening. It depends on quality. And quality depends on professionalism and expertise – which the Abchee brothers have. They know how to run a good mall.”

Tsunami fallout

In December 2004, tour operators Emirates Holidays paid a marketing visit to Beirut, together with the ministry of tourism of Mauritius – a small, scenic island in the Indian Ocean – and the Mauritian Tourism Promotion Board, to tap into growing Arab tourist interest in Southeast Asian destinations. The visit was robust and upbeat, Emirates Holidays vice president, John Felix, said: “Interest in the Middle East in exotic destinations is increasing. Mauritius is one of them. Travelers are becoming more sophisticated. They are looking for affordable luxury. The uniqueness of destinations is becoming more appealing. Honeymooners, for example, want exclusive destinations and we can offer that.”

Then came the wave. A death toll of 200,000 is not good news for tour operators. “There are no more bookings for Southeast Asian destinations,” lamented Lilian Daher, assistant to Nakhal Travel Manager Elie Nakhal, “even those not affected by the tsunami. We have a person who deals with Southeast Asia bookings. Now she is doing nothing. We will have to find other destinations for her.”

Before the tidal wave, in the run-up to Christmas, Nakhal had been flooded with Southeast Asia bookings. Daher said she feared there would be no revival for at least six months. “There is no traffic towards South East Asia,” said an equally somber Ghassan Hitti, manager of the Association of Travel Agents in Lebanon. Things may pick up at the start of the season in mid-April. But there won’t be as many as before. People are afraid.” Emirates Holidays in Beirut were unavailable for comment.

Reaching for the stars

French-registered Star Airlines will begin services between Paris and Beirut on February 17, initially offering round trip fares starting at $452. Star will join more than 45 airlines already flying in and out of Beirut under an ‘open skies’ policy instituted four years ago. Until the high season kicks off in June, the airline will be offering two flights to Paris a week, leaving on Mondays and Fridays at 1:00am. Starting June 14, a Wednesday flight will be added.

Star says it is tapping into demand among the Lebanese in Lebanon and those who have emigrated to France for a cheaper alternative to the hitherto only direct link between Beirut and Paris offered by national carrier MEA in conjunction with Air France. In the past, travelers seeking lower fares had to use airlines offering an indirect service to Paris via a hub in Europe. Examples are Cyprus Airways, Alitalia, KLM, Lufthansa and Czech Airways. It is from airlines like this that Star hopes to poach passengers.

“We won’t be able to take a share of the MEA/Air France clients because they have three flights a day, a frequent flier program, and bigger aircraft offering a more exclusive business class,” acknowledged Samaha.

Star will be operating a 164-seat Airbus 320 on the Beirut-Paris route. Interest in the service has indeed been strongest in Lebanon and among the many Lebanese expatriates living in France. “At a later stage we will be targeting tourists. That will require a lot of work, because it takes time to establish and develop a product. For the moment our main target is the Lebanese,” said Samaha.

An MEA employee, speaking on the condition of anonymity, said: “Star Airlines offers two flights a week. Business travelers and frequent fliers will always want the flexibility of three flights a day. Star may attract leisure travelers who don’t need to come back ‘the day after tomorrow.’”

February 7, 2005 0 comments

Editorial

Hate campaign

by Yasser Akkaoui February 7, 2005

written by Yasser Akkaoui

The shot most of us saw as George Bush gave his second inaugural speech had John Kerry in the background. The expression on his face was one of respect and understanding. The contest was over and now, even though he fought tooth and nail to remove Bush from office, he no doubt conceded that, at the end of the day, his ticket was not convincing enough for him to be standing at the lectern that day. Essentially, the battle was over who could aggregate the greatest interest in a plan that could satisfy the electoral needs, not between two individuals looking to feed their egos and those of their cronies.

In fact, ex-presidents Clinton and Carter and even senator Kerry, still, even in defeat, represent the USA and what it stands for, both at home and abroad. Dedicating one’s life to the public interest and the promotion of common values continues to occupy them to the extent that those whom they fought in elections often assign them the role of envoys.

There is mutual respect

In Lebanon, as the election build-up gathers momentum and with a new election law on trial, candidates are starting to show their colors at public appearances, accepting wedding invitations and unexpectedly attending funerals of “close friends”, in a bid to improve their chances at the ballot box. While all politicians need exposure at election time, the current crop of Lebanese candidates cannot back up the schmoozing with a coherent political vision. Swinging from left to right like a wayward pendulum, they have no idea what they stand for and find it almost impossible to present a mandate to their electorate and succeed only in insulting the intelligence of the people they seek to represent.

What is more offensive is the amount of hatred they reserve for each other. Their campaigns revolve more around how much pain they can inflict on the other during and after the elections and at times they seem no more eloquent that traditional story tellers of old, labeling any opponent an enemy of the state, a status automatically conferred upon him, if he is defeated.

However, the only enemy of the state is their ignorance.

February 7, 2005 0 comments

Comment

Me, myself and Iraq

by Michael Young February 3, 2005

written by Michael Young

A principal prop of liberal Western capitalist culture is individualism. The grand transformation of the European order came when people hitherto perceived mainly as components of larger social structures (often under the ultimate authority of a king endorsed by the Divine) slowly established secular systems where individuals played the defining role. The individual could now shape his own life narrative much as he pleased, agreed a contract with society to avoid mutual harm, but otherwise acted as an autonomous unit whose individuality was best embodied in the institution of democratic elections – “one man, one vote.”

So obvious were the merits of this scheme that it was with growing consternation that the United States struggled with it as the scheduled date for Iraqi parliamentary elections approached at the end of last month. The reason was that under the system chosen to govern the elections, individuals in Iraq might, in theory, have gained, but relations between the country’s religious communities, which are far more important in shaping social behavior, lost. Why is that? Because the electoral system chosen by the UN, and approved by the US-led Coalition Provisional Authority, virtually ensured that Iraq’s Sunni Arabs would boycott the process, fearing it would grant too much power to the Shiite community. The election law made the country a single constituency, with nationwide (and closed) slates of candidates competing for seats on the basis of proportional representation. The idea was that given a relatively high turnout by all communities, the ensuing parliament would essentially reflect Iraq’s communal and ethnic makeup. This rationale broke down, however, when Sunni Arabs said “no thank you.” For weeks politicians and analysts thought of ways to bring Sunni Arabs back into the fold to ensure the legitimacy of the new Iraqi order. Then one word began increasingly appearing in the media: “Lebanon.” For example, writing in the DAILY STAR, even someone as sympathetic to Arab nationalism as British journalist Patrick Seale could not help but observe: “The answer [in Iraq] might be to devise a system in which posts and power in a new Iraq are shared equitably between the communities, on the model of the National Pact that Lebanon adopted in 1943 to satisfy the aspirations of Muslims and Christians.”

Indeed, as the American concept of democracy–with its focus on the individual as a benchmark – faltered, consideration of more relevant regional alternatives became unavoidable. The Lebanese “consociational” system (based on a power-sharing agreement between the country’s varied communities) suddenly seemed to offer a possible way out of the Iraqi morass. Not surprisingly, at the end of December US officials began floating the idea of reserving parliamentary seats for Sunni Arabs, to ensure a balance in the legislature that will also be writing a constitution. Just as predictably, however, none of these officials wanted to go on the record with the proposal, and very soon it was Iraq’s election board that shot the idea down, with little public reaction from Washington. This was revealing, since in the American interpretation of individual-based democracy, communal set-asides are, simply, an aberration. The highest embodiment of individual rights is not, or should not be, the traditional religious, sectarian or tribal community, but the state and its representative institutions. But for a moment, the Americans did blink.

As well they should have, since Lebanon, for all its problems, has shown that a Middle Eastern country relying on a consociational system can also be relatively liberal, open, and devoted to the free market (even if the country daily witnesses appalling abuse of the notion, though almost never the free market’s being called into question). However, Lebanon’s civil war clouds the picture. For most outsiders, the consociational system led to the conflict of 1975-1990; but what they cannot understand is that the system also allowed Lebanon to survive as a single multi-communal society despite 15 years of carnage.

It would surely be too simple to transpose the Lebanese system to Iraq. However, as the US and a post-election Iraqi authority contemplate what types of political mechanisms might best apply to Iraq in the future, a first step is necessary: to reconsider the admirable, but also in the Iraqi case probably inapplicable, individual-based notion of majority democracy, and look at alternatives – most notably introduction of a consociational system that can better play off Iraq’s more traditional social structures. This effort would, at the least, enrich a global debate on democracy that far too often hits a brick wall when considering societies where sub-state groups are potentially more powerful than the state. Modern democracy is often too wedded to the idea of classical Western statehood for its proponents to readily consider that when a state is weak, the room for liberty might actually expand. Yes, a consociational system might make the Iraqi state less powerful, but it might also bring it much closer to liberal capitalist culture than any other.

February 3, 2005 0 comments

Real Estate

Former Green Line becomes real estate hotspot

by Peter Speetjens February 1, 2005

written by Peter Speetjens

Until recently, the Damascus Road was one of the last reminders of the Lebanese Civil War and its buildings, pockmarked by bullet holes, a favorite subject for camera crazy tourists. But those days are gone now. Today, tens of millions of dollars are being invested in the area, turning the former Green Line into one of Beirut’s real estate hot spots. A string of nightclubs and restaurants have opened their doors, while a number of eye catching residential projects are under construction, pushing the price of land and apartments up by 20%.

As was the case in formerly neglected areas Monot and Gemaizeh, frontrunners in refurbishing and revitalizing the Damascus Road have been club and restaurant owners. The 250 seat Italian restaurant Piazza was (along with Japanese eatery Yabani) among the first to open its doors. Thanks to its combination of location and medium priced quality food, the eatery has also been one of the area’s true success stories. The $2 million restaurant is managed by Premier Leisure, a holding company part of the Boubess Group, which runs several other restaurants and clubs, such as Piazza Downtown, Scoozi, Le Relais de l’Entrecôte and Mandarine.

“We opened Piazza in 1999, when there were hardly any restaurants yet on the Damascus Road,” said Premier Leisure’s operations manager Toufic Akl. “In our opinion, it was a prime location, as it is close to downtown. What’s more, Ashrafieh has always been the area for bars and restaurants. So, we foresaw the future and I think we’ve been proven right.”

It was, however, the opening of the popular club-restaurant Element in February 2003, that really started the current wave of clubs and restaurants opening up in the area. First located just off Monot at St. Joseph Street, Element had been one of the most successful outlets in the trendy area until a legal dispute with their Jesuit neighbors forced them to close down. “I decided to move to Damascus Road,” said Element’s main owner Sami Farhat, “because there was a plot of land available and I would not have any neighbors.” He downplayed the importance of the location’s proximity to both downtown and Monot. “If you have a good formula,” he said, “it will work anywhere. In the end, Beirut is such a small city. At night, it takes you twenty minutes to get from one end to the other.”

Facing Bernard Khoury’s tower design for Yabani, the newly built Element cost an estimated $1 million. That excludes the rent of land, which is some $110,000 or $160 m/2 a year.

Party time

A dozen clubs and restaurants have now opened up shop in the Sodeco area, including District, which is right next door to the Element, and 50 meters up the road sits L Bar, the owners of which are currently building a large new restaurant next to Piazza. On the crossing of Damascus Road and Sodeco Square sits Casino, which is building an extension to the club, while a group of young investors turned the ruined red villa on the main road towards the French Cultural Center from a war relic into a nightclub, La Villa, for an estimated $600,000.

This sudden wave of investment is even more remarkable, considering that not everything has turned gold on the former Green Line. One of the most striking failures was Lebanese restaurant L’Os, which learnt the hard way that its mountain reputation for good food was not quite enough to make things work in the heart of Beirut. Another failure was the opening of a second branch of Broumana’s popular English pub The Fox, which closed only months after it opened.

“I don’t think Damascus Road will become a future Monot,” Premier Leisure’s Toufic Akl said. “Pubs and café’s don’t work on the main road. They need a pedestrian flow, which is impossible to generate on this street.” Farhat couldn’t agree more. “Monot is more for a younger crowd who like to go bar hopping,” he said. “What we see opening up at Damascus Road are much larger, upscale places with valet parking. I have customers who come in at 8.30pm and stay till four in the morning.”

It seems that Monot is more likely to feel the heat from the burgeoning number of small cafés and bistros opening in Gemaizeh rather than from the establishments opening up on Damascus Road. Between the larger pubs and restaurants in the Sodeco area and the smaller scale operations in Gemaizeh, part of Monot will certainly have to give. Three places are already up for sale in Monot’s main street.

Retail and residential

It’s not just the food and beverage industry that has discovered Beirut’s former demarcation line and its direct surroundings. Many of the bombed out apartment blocks have been refurbished and wait for inhabitants, while in between Element and L Bar, the foundations are being laid for the Michelangelo Center, an office and retail complex (??). Just off Damascus Road, facing the St. Saveur Church, construction has started on Hugo 43, a $9 million, 20-store residential tower for luxurious apartments of 300m2 and 400 m2. The sales price per m/2 varies from $1,300 on the first to $2,600 on the last floor.

Another notorious war remnant, the yellow building adjacent to Sodeco Square, was until a few months a Lebanese army checkpoint, complete with tanks, an image which only enhanced the memory of war. Today, it has been knocked down to make way for the landmark Dakota Building. Designed by Australian architect Nicholas Turner, the Dakota Building is an 11-storey residential tower with retail space and offices on the ground and first floor respectively. Turner’s striking design is characterized by two open box-shaped penthouses on top.

“The idea behind the building,” the architect said, “is to make a positive contribution to Sodeco’s rapidly changing urban tissue and to serve as the new gateway to Ashrafieh.” According to Turner, the building’s owners, residing in Australia, prefer to remain unknown and do not want to go into details concerning the value of investment. Apartments will be sold for an estimated $1,700 to $2,500 m/2.

Fifty meters further into Ashrafieh, another tower called Le Bellevue d’Ashrafieh has nearly been completed. The some $12 million, 18-storey building offers retail space on the ground floor, offices on the first, and 17 floors of luxurious apartments. All apartments have been sold, except on the fourth and seventh floors. While the price was some $1,200 two years ago when construction began, today prices amount to $1,540 m/2 and $1,700 m/2 for the fourth and seventh floors, respectively.

Prices The Conseil Gestion Immobilier (CGI) is Saradar Bank’s department specialized in real estate consultancy and investment, which among other projects has been responsible for the development of Le Bellevue d’Ashrafieh and Hugo 43. According to CGI’s Aboudi Farkouh, the prices per m/2 of both land and luxury apartments in and around Sodeco Square have risen by up to 20% since 2001.

“Depending on location and project, the price of land generally varies between $2,000 and $2,500, and in some cases has risen to no less than $3,000 m/2. Note that prices on the opposite side of Damascus Road are significantly lower at an estimated $1,500 to $2,000 m/2. The price per m/2 for newly built apartments varies between some $1,500 and $2,500 m/2,” said Farkouh. “Prices have risen due to the increase of the euro, which makes imports more expensive, the increase in price of raw materials such as steel and gravel, and last but not least the rise in demand for Lebanese real estate, which stems mainly from Arab investors.”

It is, however, still possible to find slightly older and less luxurious apartments for some $1,000 m/2, like for example, at the highly successful multi-use Sodeco Towers. Arguably the first major post-war development of the former Green Line area, both offices and apartments at the tower have performed remarkably well since its inauguration at the end of 1996. Prices stand today at some $150 m/2 to rent office space and some $1,500 a month for a 190m2 apartment. The price to buy an apartment is $1,000 m/2 on the first floor, which increases by some $50 m/2 per floor. In other words, a top floor apartment will cost some $1,800 m/2.

The Barakat building

Finally, any analysis of real estate developments on the Damascus Road and Sodeco area would be incomplete without a final word on the Barakat Building. Facing Sodeco Square, this yellow villa with its double-pillared façade is both an architectural masterpiece and the most ghostly reminder of the civil war, during which it served as one of the city’s most notorious snipers nests.

Built in 1924, it was designed by architect Yousef Bay Aftinos, who also signed for the municipality building in downtown Beirut. The Barakat family, who owns the building, had preferred to just tear it down and sell the land. In 1996, architect Mona Hallak, however, started lobbying for the protection and preservation of the monumental building, which in 2002 resulted in the government agreeing to acquire the property. Ever since, however, any restoration has been at a standstill. Plans to turn the Barakat Building into a war museum have been stalled, partly due to lack of funds.

Though many people in the neighborhood want to see the Barakat building knocked down, especially the owners of the Sodeco Towers, its unique design and memory certainly warrant proper preservation. In fact, notwithstanding all the developments carried out on the Damacus Road and in Sodeco thus far, a solution for the Barakat building, be it preservation or destruction, is essential for a successful overall upgrade of the area.

February 1, 2005 0 comments

Society

Opening the doors to patients – and controversy

by Peter Speetjens February 1, 2005

written by Peter Speetjens

Lebanon’s largest public hospital, the very modern $150 million, 544-bed Beirut Government University Hospital in Bir Hassan, has opened its doors and hopes to be self-sufficient within three years. However, its critics have called it a waste of money in a sector that already has a surplus of hospital beds and question its viability in a system characterized by waste and abuse.

The first in-patients will be admitted in this month but only 250 out of the full quota of 1,000 nurses and other administrative employees needed to run the out-patient clinics, labs, and radio therapy clinics, radiology, rehabilitation and pathology departments, have been hired. It could be said that the BGUH has come a long way in a long time. The first stone was laid in 1995. The main buildings and interior were finished by 2000 and by 2003, all medical equipment was installed. The 90,000 m2 hospital boasts no less than 14 operating rooms, including two in the ER, one for cardiology, one for organ transplantation and one for burns. It will employ around 1,000 full time and part time doctors.

“What differentiates the BGUH from other hospitals,” explained Dr. Noureddine el Kouche, who, until January 15, was the hospital’s chairman and general manager, “is the extensive forensic, drug treatment and child psychology departments.”

Funded by the Saudi Fund for Development and the Islamic Development Bank, the hospital is the jewel in the crown of the government’s postwar national health scheme, which foresees a nationwide system of 28 new and rehabilitated public hospitals. “The BGUH is the largest and most sophisticated,” said Kouche, who studied medicine in Russia and the UK. “It will receive the most complicated cases, such as those patients needing open heart surgery or transplants, from the country’s other public hospitals.”

In general, Kouche is an enthusiastic advocate of public hospitals. “We have to accept anyone, no matter what his name or bank account,” he said. And yet, at times, he wishes the BCUH would operate outside public sector, for all the obvious reasons. “Here politics touch everything,” he sighed, reflecting on the fact that as the BGUH was the brainchild of former prime minister, Rafik Hariri, Hariri appointee Kouche had to make way for an apparently more politically palatable GM, Dr. Wasim Wazan, on January 15.

In fact, sources say that robust politicking is to blame for the fact that it took no less than 10 years to build and equip the hospital and until now, this is still no consensus on the final confessional blend of the hospital’s board of directors. Nonetheless, Kouche is determined to leave office with dignity. “I’m proud of what we have achieved and fortunately, I know Dr. Wazan very well and I will do everything in my power to make the transition as smooth as possible and to make this hospital a success story.”

But does Lebanon need such a large hospital, be it private or public? There is already a surplus of beds, a fact borne out by Roy Wakim, an external consultant working for the World Bank at the ministry of health, which shows that Lebanon’s largely private hospital sector saw an exceptional growth during the civil war, with the number of beds increasing from 1,562 in 1972 to over 8,000 beds in 1996.

After the war, the government decided to rehabilitate a handful of existing public hospitals and build two dozen new ones. The aim was to increase the number of 810 beds spread across 15 hospitals, a mere 10% of the country’s total, to some 3,000 beds over 28 hospitals. This, combined with an extra 1,000 beds commissioned by the country’s private hospital sector, will soon bring the total number of beds to 12,000.

On average, Lebanon currently counts approximately one bed for every 255 inhabitants, which is more than most countries in the region and similar to the ratio in most Western countries. Not a bad ration you might say, but these beds are actually unevenly divided. While there’s one bed for every 166 persons in Beirut, there is only one for every 762 in the North.

“The BGUH is opening in Greater Beirut and Mount Lebanon, the most densely hospitalized area of Lebanon,” Wakim explained. “Even without the extra beds, the average occupancy rate is a mere 55%, which is well below what is recommended by international standards.”

Not surprisingly, Kouche believes these statistics do not tell the whole story. He points to the fact that only 30% of Lebanon’s hospitals are up to international standards. “Sure there are enough hospitals in Lebanon,” he said, “but not enough quality hospitals.”

The World Bank report, however, shows that there are 3.3 open heart surgery centers for every one million people, a ratio that although may compare well with the USA, is in fact four times the ratio in Germany. The number of lithotripsy (advanced kidney stone removal) centers in Lebanon is five times the ratio in the USA and almost 20 times the ratio in Germany.

“Lebanon saw an exceptional growth in advanced equipment by the end of the 1990s,” said Wakim, “predominantly in medical disciplines covered by the ministry of public health. The existence of this equipment could generate an artificial demand for their utilization. Still, nationwide average use remains well below optimum. So, the average use of 60 MRI machines per week is only one third of what is internationally regarded as being efficient.”

Kouche is aware of those who label the public sector inefficient, but remains confident that the BGUH will be a success, even if the hospital’s aims are rather ambitious. After a period of three years, in which the ministry of health will finance the hospital to the tune of $15 million a year, the BGUH is supposed to be financially self-sufficient. From the 544 beds, 244 will be covered by the ministry of public health and be allocated to social security patients and armed forces personnel. The remaining 300 will be reserved for privately insured patients, including foreigners (the BGUH aims to be a regional player) and explains the presence of 50 furnished apartments.

“Yemen sends some 70,000 to 90,000 people to Jordanian hospitals every year,” Kouche explained. “We’ve already sent a mission to Sana’a to ensure that part of that flow will come to Lebanon in the near future. Likewise we have made contacts in the Gulf countries and Saudi Arabia, so Arab patients will come here instead of going to Europe or the United States.”

According to Kouche, the BGUH can compete with any hospital in the country or abroad, not only because of the high standard and services it is able to offer, but also because it is competitive. “The BGUH is a 100% paperless and filmless hospital,” he said, “which will keep operational costs down. There are about 700 PC’s in direct communication with each other through a fiber optic network, which makes this one of only a dozen fully digital hospitals in the world.”

He gave the following example: “A magnetic resolution x-ray or MRI costs on average in Lebanon about $400, while here it will cost no more than $200, as we don’t have to print a film, but directly burn the image onto a CD.” Another way of keeping the hospital’s costs down has been through university outsourcing; secondary activities, such as security, parking, cleaning, laundry, catering and landscaping are all in the hands of private companies. As a result, the hospital’s human resources needs are, in some areas, such as nursing, 33% less.

Wakim however, is still not convinced. Apart from the structural problem of over-bedding, he fears that on an administrative level, the hospital needs to be more efficient or it may risk losing the doctors it has hired, the outsourcing contracts it has signed and momentum and credibility. Secondly, he questions the ease with which the hospital will find some 700 nurses in a country where there already is a shortage. “Nurses are trained in Lebanon,” he said, ‘but then travel to Europe or the Gulf, where they are better paid,” he explained. Finally, the hospital’s Saudi design, which sees corridors on the outside, rooms on the inside for added privacy, is already outdated and doesn’t suit Lebanon’s more liberal climate. So far, not one hospital in Lebanon is self-sufficient. Since 1996, public hospitals have operated much in the same way as private ones, in the sense they are financed by a both the ministry of health, public agencies and private insurance companies. It is a system that has been characterized by waste for many years and one which is a severe drain on the public purse.

“We see that public hospitals develop much the same behavior as private ones,” Wakim said. “As inpatient treatment is reimbursed by the ministry of health and outpatient treatment is not, hospitals favor the first option, even if it is not necessary. In the Nabatieh public hospital for example, only 30% of hospital admissions actually underwent surgery. Don’t get me wrong, I truly hope the BGUH will be a success, but I fear it will be one big and costly white elephant.”

February 1, 2005 0 comments

Economics & Policy

What goes down…

by Faysal Badran February 1, 2005

written by Faysal Badran

Over the past few months, there seems to have been excessive but not unusual focus by market commentators and, to some extent, mainstream Wall Street strategists, about the dollar’s direction. In Lebanon, a highly dollarized economy, the issue has also been on the forefront as many Lebanese gauge their wealth in dollar terms. Those who have not diversified their liquid assets have seen their purchasing power halved vis-à-vis the euro, and the drop has been especially painful for importers of European goods.

This focus appears odd, since most of the large decline in the greenback started in early 2001 and has run nearly 40% against the euro (30% in Dollar Index terms). While the fundamental backdrop continues to be unkind to the dollar, there are some signs that in the immediate future, the drop may have reached a point of exhaustion of sorts. The overwhelming fiscal deterioration, the gradual erosion of federal re-flation attempts and ensuing poor maneuverability of monetary tools to the massive debt overhang, and the weak perception of US policy abroad are all well known fuel agents for the multi-decade bear market. And in some respect, a case can be made for the secular decline to continue well into the early part of the century, but for the near term, a different set of dynamics, more relevant for gauging trajectory at inflection points are telling a different story.

The short dollar trade from a technical perspective is crowded. The consensus is greatly leaning against the US currency, reaching only 4% of Bullish Sentiment according to Market Vane, and nearly all major media vehicles are writing the dollar’s epitaph. There is no real new dollar crisis, just a continuation of policies that do not favor the Treasury’s “strong dollar policy” dogma. But the acceptance of the dollar’s decline has become too widespread, and to some degree, this asymmetrical market situation will need to be corrected. With yield spreads converging on a 10 year note basis between the dollar and euro, there is room for the dollar to move up, in a countertrend fashion. Such moves can be brutal, especially since they mostly happen in a backdrop of continued “bad news.” The consensus view of how to solve the burgeoning US trade deficit gives the falling dollar a key roll. This view follows traditional economic theory, which supposes that a fall in the value of a nation’s currency, relative to the currencies of its trading partners, will eventually improve the trade balance of that nation. Alan Greenspan, the Chairman of the Federal Reserve, has made this argument. Early in 2004, he said: “The currency depreciation we have experienced of late should eventually help to contain our current account deficit as foreign producers export less to the United States.”

In the chain of reasoning behind this theory, the falling dollar presumably affects the trade balance in two different ways. First, as the value of the US dollar falls, the value of foreign currencies will rise; consequently the US dollar price of imports will also rise. Since, as a general economic principle, higher prices should reduce demand, the level of imports to the US should fall. And as demand for higher-priced imports falls, the US trade deficit will improve. Greenspan’s comment refers specifically to this effect. As a corollary of this, the higher price of imports will stimulate demand for equivalent goods that are produced domestically (so-called domestic substitution, such as buying US produced wine instead of imported wine).

Second, in the traditional theory, the lower dollar will also improve the US trade balance through the export side of the equation. Just as imports will become more expensive because of the lower value of the dollar, US exports will become less expensive in their foreign markets. And just as higher prices should curtail import demand, the lower dollar prices of US exports should stimulate demand for US made goods and services in foreign markets. In theory, through the intermediary of the lower dollar, the combination of higher prices for imports here and lower prices for US exports abroad will gradually bring down the huge trade deficit.

The US dollar has indeed fallen in value – for over two years now – but in reality how effective will this prove in improving the nation’s trade balance? Beginning in early 2002, the dollar had a value of about 117 (the US Dollar Index), measured against a group of major foreign currencies. It now stands at about 85, a decline of nearly 27%. Half of this decline has occurred since early this year, when Greenspan made the comment quoted above. A decline of this magnitude and over this length of time should certainly be sufficient to see whether the lower dollar has begun to have the desired effect of increasing US exports and decreasing imports.

To estimate the effectiveness of the lower dollar, we can compare the level of exports, imports, and the trade deficit in March 2002 with the most recent figures available when this was written. Over this time period, exports have increased 21% while imports have increased 35%. The monthly trade deficit itself has increased 70%, from $31.5 billion in March 2002 to $54 billion in August 2004. In other words, while the lower dollar may certainly have helped to increase exports, its effect on imports contradicts theoretical expectations, as they have grown even faster than exports. The result is a mushrooming trade deficit that expands even as the dollar falls. The situation not only runs counter to theoretical expectations, but to Greenspan’s expectations as well. One can only wonder what might be wrong with the theory.

When reality contradicts theory (whether in economics or another science), the source of the problem often lies in the assumptions that a theory makes about reality. In this case, traditional theory assumes that the value of our trading partners’ currencies float against the dollar. That is, the values of currencies are relative to each other: when the dollar falls in value, foreign currencies should increase in value relative to the dollar, and vice versa. But the real world is different. The value of some currencies does rise and fall against the dollar. However, the value of other currencies, notably those of some Asian countries, is either tied directly to the level of the dollar (a so-called hard peg) or tightly controlled relative to the dollar (a so-called soft peg).

For Lebanon, the collapse of the dollar has meant, along with lower rates, less pressure on the Lebanese Pound. Some pundits argue that had the dollar been too strong, some pressure on the local currency might have materialized. It is key here to remember that the low inflation/low interest rate environment in US has been a positive factor on monetary stability in Lebanon.

It is also relevant to note that in fundamental terms, the euro, Swiss et al, are not exactly safe havens when you consider the sticky unemployment and structural imbalance, not to mention immigration headaches. So while dollar bears, rightly, pound the table on poor US ingredients and misguided monetary chefs, a lot can also be said about European macroeconomic influences. Germany, the engine of Europe, is stalled in most statistical measures, and unemployment refuses to drop below 10%. The European central bank is caught in the straightjacket of inflation fighting and simply watches as the deflationary impact of a massive upward move in the euro hits home.

The blend of overdone technical factors and overly telegraphed risks make the dollar worth watching on the upside. Long term dollar based investors may want to look at decreasing their holdings in non dollar zones from a purely tactical perspective. The natural caveat to this scenario, which seems to point to a possible 15% up move in the dollar, is a sudden geopolitical event, or a negative systemic even in the US financial market, such as a large failure or a sharp dislocation in fixed income markets.

Here it is worth noting that the degree of complacency prevalent toward the euro (and most other major currencies) has an analog in the stock and junk bond market. The stock market euphoria goes unabated, still punch drunk from election fantasies, and junk bond spreads have narrowed to dangerous levels. It is possible for an asset market correction in the US to coincide with a dollar upswing, but only temporarily. If the secular bear in stocks returns with a vengeance, the dollar swoon would take on a new, more violent form.

In the meantime, a high degree of caution should be used when considering non dollar investments, as 2005 could be the year of the greenback bounce back. For the Lebanese trader, it seems some relief is on the way, and for investors, a chance to exit the dollar appears on the horizon in the year ahead.

February 1, 2005 0 comments

Society

It ain’t easy being green but industry is adapting

by Tarek Zein February 1, 2005

written by Tarek Zein

Last month saw two major local cement producers, Holcim Lebanon and Cimenterie Nationale, both acquire an ISO 14001 accreditation – the International Standard Organization’s guideline for environmental management tools – and later announce that they planned to invest more than $5 million over the next five years and $15 million in the next four years, respectively, for the amelioration of the environmental performance of their plants in Chekka, an area blighted by environmental problems.

In fact, since 1996, Lebanese industrialists have plowed more than $250 million into safeguarding the environment. The simple truth is that a sound environmental policy enhances productivity, reduces operating costs, improves sales, bolsters marketing efforts and creates a better working atmosphere. What is even more surprising is that Lebanese industrialists have taken the hint. “In our case, our $30 million investment in environmentally friendly equipment, which we have installed over the past 10 years, has allowed us to pollute less,” said Pierre Doumet, chairman and CEO of Cimenterie Nationale. “And since we are not polluting, this means that we are not tossing dust in the atmosphere, and dust is essentially production as it is either our raw material or our end product. Thus, instead of polluting our atmosphere with our end product, we are now recuperating it, recycling it and becoming more effective. It is a virtual cycle,” said Doumet, whose company exported 40% of its 1.6 million tons of cement produced in 2004.

There are currently nine companies in Lebanon that are ISO 14001 certified, with over 15 others set to get it, including Sibline, another local cement company. There are a further 12 companies working on cleaner production processes and over 40 others implementing an Environmental Management System (EMS) without being ISO certified. Nearly all of these environmentally friendly companies utilize their ISO 14001 certification and EMS.

“It is a means to enter into foreign markets and sell to consumers that opt for products that have not damaged the environment,” said Fadi Abboud, president of the Lebanese Industrial Association. However, Cimenterie Nationale is one of the few that went for the ISO 14001 certification for ethical and marketing reasons. “We decided to acquire the certification because the Lebanese tend not to believe their own people and we were continuously being accused of killing people by polluting. So we thought it would be better to have an international body to back our work for protecting the environment,” said Doumet who added that the certification was granted by the auditing department of the Association of German Cement Manufacturers. This new environmental trend within industrialists is likely to exponentially grow as it is the fruit of a decade of work orchestrated by a special environmental committee integrated within the Lebanese Industrial Association (LIA) – which is in direct partnership with the ministry of environment.

The environmental committee was created in 1994 with sole purpose to study the best environmentally friendly policy the industrial sector should adopt and then implement it. And when the committee found out in 1998 that ‘cleaner production’ was the best policy to espouse, it has since been working on helping companies throughout Lebanon understand the benefits of being environmentally friendly as well as drafting a common strategy that would make Lebanese industrialists abide by the international environmental standards and laws while making them more competitive. “We are planning to finish the final draft of this common strategy by February. It will explain what laws and standards to opt for, how to enforce the strategy through economical rewards by describing what should be the stick and the carrot for industrialists and how we will deal with industrial waste,” said Hisham Abou Jaoude, the secretary of the LIA’s environmental committee. “It will also include certain requests directed towards the Central Bank as well as the government.”

Changing the status quo

According to Abou Jaoude, one of the main problems hindering the adoption speed of EMS is caused by the lack of soft loans and the allocation of money for environmental purposes. “If I was to go to a bank and request a loan in order to implement EMS, the banker would simply stare at me astonishingly, as if I was insane,” said Abou Jaoude, “and we want to work with the Central Bank to find a way to change this mentality and help reduce interest rates on loans related to the environment.” A United Nations Environmental Protection (UNEP) study clearly illustrates the financing problem in Lebanon by stating that it is not beneficial for a firm to implement EMS or introduce cleaner production processes if loans are shadowed by an interest rate above 5%. “One of the main problems for small and medium sized (SMEs) companies is to find cash to invest in environmental policy and machinery. If you look at it coldly as an investor, maybe you don’t get an internal rate of return that warrants the investment purely on financial ground, but believe me it is still rewarding and is hugely satisfying on many other levels,” said Doumet.

Setting the bar

Being environmentally friendly has become a good benchmarking tool worldwide because if a company is reducing its waste, then it is also reducing it cost, which in turn makes the business more effective – due to the utilization of BAT (Best Available Technology) – and competitive. However, SMEs have a clear disadvantage in adopting environmentally friendly policies due to tough access to cash. SMITE, a Mediterranean information web-based node for the SMEs, will help improve competitiveness of SMEs through IT-based environmental business planning – a new tool that is expected to re-orient production processes, products and services; ensure and consolidate efficiency, quality, occupational health and safety and environmental performance; and increase productivity efficiency by reducing environmental burdening. The multi-party project will support SMEs of the food, textile and hotel sectors with up-to-date tools and access to environmental information.

Industrial Waste

“The common strategy drafted by LIA’s environmental committee plans to solve up to 70% of all national industrial waste through an intra-industry solution,” said Abou Jaoude. As an example, in 1994, the Ministry of Environment ordered Sidem, an aluminum production company, that it should treat the liquid waste that was polluting the shores of Kesrouan by purchasing a treatment plant. After investing $750,000 and being reassured by the ministry of environment that the sludge that will be produced by the treatment plant will be stored in a safe location, Sidem employees were ready to re-activate the plant. However, one problem emerged: the ministry of environment had not found a location to store the sludge and the treatment plant remained silent till 2004, when Sidem found a solution to their problem by entering into talks with Holcim Lebanon. After running several tests, Holcim discovered that the sludge that was produced by Sidem could be used as a raw material, allowing the environmentally friendly treatment plant to run. “This is the kind of intra-industry environmental partnership we want to introduce by setting a bank for industrial waste. And later on, we could also find solutions that would allow the industrial sector to solve household waste,” Abou Jaoude added. Abboud, who has been constantly pushing for the adoption of environmental policies, believes that all the steps that have been taken by his association and companies are a good start for the country’s environment. However, many problems are still widely present. “At the moment it is so very expensive to recycle in this country hence you would see whenever you are driving near the port of Beirut hundreds and hundreds of trucks filled with aluminum, steel, brass and copper because we cannot afford to recycle them if the ton of diesel is $400 and the ton of fuel is $500,” said Abboud. “All solutions with the environment start with industrialists because if we recycle what we should be recycling, then half of our problem would be solved. The government needs to understand this and lend us a firmer hand.”

What is ISO 14001 and EMS?

ISO 14001 is a standard in the ISO 14000 series that provides a specification for a complete and effective EMS. As a specification standard, it can be used as an audit tool, to evaluate whether an organization has a complete EMS in place. ISO 14001 specifies the elements and tools that must be in place for an EMS to be complete and effective.

These tools can provide significant tangible economic benefits, including reduced raw material/resource use; reduced energy consumption; improved process efficiency; reduced waste generation and disposal costs; and utilization of recoverable resources.

An EMS is a structure of connected elements that define how an organization manages its environmental impacts. These elements include policies, organizational structure, procedures, goals and objectives, and defined processes. In order to be effective, all of these various elements must work together cohesively and be a part of the overall business management system.

What EMS elements are required by ISO 14001?

ISO 14001 states that a comprehensive EMS must include the following elements or activities:

– Establishing an environmental policy

– Establishing environmental objectives and targets and implementing plans for meeting these

– Evaluating environmental aspects and impacts

– Identifying regulatory requirements and evaluating compliance with requirements – Defining roles and responsibilities

– Identifying and providing necessary training

– Communicating effectively

– Documenting processes that affect environmental impacts

– Controlling parameters that affect environmental impacts

– Evaluating which suppliers’ goods and services affect environmental impacts

– Preparing for emergency situations

– Monitoring and measuring critical environmental parameters

– Initiating corrective actions when problems occur

– Maintaining environmental records – Auditing the EMS

– Evaluating and reviewing the EMS to ensure it is effective, suitable, and adequate for your organization.

Does ISO 14001 set emissions or discharge limits?

Absolutely not. ISO 14001 helps organizations to develop and implement their own, unique environmental management system. You set your own policies, determine your own objectives and targets, and define your own procedures. Then your systems help you to meet your policy and objectives. ISO 14001 tells you what elements need to be in place; you decide exactly how to define and implement those elements.

What kind of organization can use ISO 14001?

ISO 14001 is intended for any kind of organization – business, school, hospital, non-profit, etc. – that wants to implement or improve its environmental management system. It applies equally well to both service and manufacturing organizations and to both non-profit organizations and for-profit businesses. ISO 14001 provides plenty of flexibility to do what’s right for your own unique organization.

February 1, 2005 0 comments

Business

Menajet ready for takeoff

by Anthony Mills February 1, 2005

written by Anthony Mills

Menajet, the new, low-cost Lebanese charter airline, is billing itself as the vanguard of no-frills charter business in Lebanon, a challenge that menajet’s chairman and general manager, Riad Mikaoui is confident the airline will meet, but, he admits, his line of work is not the easiest, given current regulatory restrictions. However the company has solid shareholders and is actively seeking commercial alliances with Europe and the Gulf that have eased any local pressure.

The new airline has to operate under the draconian rules imposed on the air travel sector by the government to protect Lebanon’s Middle East Airlines (MEA), which has an exclusivity clause that ensures that no Lebanon-based airline apart from MEA can be registered as anything but a non-scheduled charter airline. The bottom line is that menajet is prohibited from selling, or even advertising, directly to the public. Instead, it can only sell tickets as components of packages through travel agencies and tour operators.

Come fly with me

“We are trying to serve unserved destinations,” explained Mikaoui, who is a pilot himself and, ironically, was a former senior executive at MEA before taking the controls at menajet. “In doing so, we are trying to bolster tourism and helping the Lebanese public by creating greater interconnectivity. Beirut airport could serve six million passengers. Now we’re barely serving a million. And unless the destinations not being served are served, we will see no improvement. But we’re not being allowed to compete. Syrian Arab Airlines operates, like us, between Brussels and Beirut, and Germany and Beirut. They are competitors. But we cannot compete because we cannot sell or advertise,” said Mikaoui, adding, “Lebanon is supposed to have an ‘open skies’ policy. But in effect it is a regulated ‘open skies’ policy.”

Menajet, which cost $15 million to set up, is currently losing half a million dollars a month. This, insists Mikaoui, is a “sustainable” loss as his aircraft are all flying. Mikaoui said that menajet shareholders had been prepared for the constraints governing the sector in Lebanon, were aware of the development cost involved in creating direct links to unserved destinations, and would accept initial losses. Nonetheless, they are robustly lobbying the Lebanese government to relax the rules and allow the company to become more competitive.

“We hope that sooner or later we will at least be allowed to operate on a scheduled basis, through advertising and direct selling,” Mikaoui said, “because no airline can start up in Lebanon and succeed under the current conditions.”

Another source of uncertainty for the airline is a rule stipulating that non-scheduled Lebanese-registered charter airlines’ permission to fly be renewed by the government every two, four or six months. “If tomorrow the government says we’re not renewing it, our projections fall flat. Permission must be secured well in advance and protected if a charter airline is to develop,” Mikaoui said. He said he didn’t think the MEA exclusivity decree was politically motivated, but rather a response to the then dire financial state of publicly-owned MEA. “Now the situation has changed,” he said. “MEA is in good health. There is no reason for exclusivity anymore.” The exclusivity clause protecting MEA is valid until at least 2011 and despite the high-level lobbying there has been little indication that is going to change.

Forging alliances

“It will be difficult to survive, but not impossible,” Mikaoui asserted. “We have great hopes that the circumstances will change because there is pressure coming from Europe, especially since a European-Arab ‘open skies’ policy is set to come into effect in 2006.” In the absence, though, of any immediate progress on the lobbying front, menajet is expanding the breadth of agreements with Lebanese and foreign tour operators, especially in Germany, Belgium and France.

“The problem, though, is that sometimes airlines and tour operators don’t have the same priorities,” complained Mikaoui. “There are certain offers and packages that we would like to develop but can’t. We constantly have to make sure that the packages offered by the tour operators meet the minimum cost requirements of the flights.”

In Europe, menajet has struck a cooperation agreement with German-Lebanese tour operator Middle East Europe, which is based in Berlin but also has offices in Belgium. Other accords may be in the pipeline.

“I learned today that Thomas Cook is interested in talking to our agents in Belgium to see if they can sell menajet flights from Brussels to Beirut,” noted Mikaoui, “and I have also learned from our agents in Berlin that there may be some contacts with TUI, the biggest tour operator in Germany.”

Menajet has also sent a delegation to France and Belgium, to discuss with travel agents and tour operators ways of improving sales of packages involving the airline. In Lebanon, menajet has struck an accord with travel and tourism heavyweights Nakhal, but is also talking to Wild Discovery, Kurban Travel and Anastasia Travel about possible future collaboration. For the moment, menajet is operating flights between Beirut and Aleppo in Syria, Charleroi in Belgium, and Berlin. A one-way ticket to Aleppo costs $45, a round-trip $90, and a roundtrip with two nights in a hotel will set you back $150. The packages incorporating the flights involve a stay in Europe or Lebanon of up to three months, and are advertised in newspapers.

The bottom line

For the moment, menajet operates one aircraft – an eight-year-old Airbus 320-211, which seats 155 passengers. The aircraft has been leased from a sister company of Europe-based Airbus, at a current cost of about $250,000 a month, excluding maintenance. The airline needs to book at least 120 passengers on a round trip flight to break even on the flight. On the day Mikaoui spoke to EXECUTIVE, the menajet flight scheduled to arrive from Brussels had only 40 passengers booked.

“As an unscheduled charter company, we deal with seasonal travel. That doesn’t generate enough business for us to be expanding and introducing more and more aircraft,” said Mikaoui. “Financially, it would be possible to introduce more than one or two aircraft. But we would have to find the destinations and then be able to sell tickets and advertise the destinations.” The earliest any business growth might conceivably allow for the introduction of another aircraft is the summer of 2006, Mikaoui said.

In preparation for this summer, and in addition to the destinations in Belgium and Germany already served last year, the company has set its sights on Bahrain, Egypt, Italy combined with France (two destinations), Spain (two destinations), Greece, Turkey, Denmark and Sweden – wherever it thinks there is demand. It expects a flight schedule totaling 200 to 250 hours a month, or about seven hours a day. This schedule will, Mikaoui hopes, allow menajet to break even for 2005, and possibly even make half a million dollars. “And if tour operators are willing to sell packages to or from London’s Stansted Airport, we’d open up a flight between Beirut and there as well,” he remarked.

As a no frills charter airline, menajet has to ensure costs are kept to a minimum. It employs as few people as possible and serves tickets in only one class. “We have qualified employees operating a one-man department; we are going to try to sell as much as we can through the internet to avoid having offices; we subcontract all our services; and we deal directly with our agents,” said Mikaoui.

The road ahead

Internet purchases, too, are governed by the MEA exclusivity decree. They can only be offered through an online booking service in conjunction with a tour operator or travel agent. Mikaoui said arrangements were being made with menajet’s agents to begin internet sales of packages involving the airline within two months.

“The demand from Europe to Lebanon is there,” said Mikaoui, “particularly from the unserved destinations. I have tour operators in Hamburg and Hannover who want flights out of those cities. Agents in Hannover want 10 to 15 flights this summer. Berlin wants an additional flight. What we are trying to do now is develop travel from Lebanon to Europe.”

This effort is being hampered by visa restrictions on Lebanese, which intensified since the events of 9/11. “The restrictions are not an insurmountable obstacle, but they will take time to overcome,” proclaimed Mikaoui guardedly. He said advance planning for any packages as well as the lobbying of European embassies would help.

But there is far less menajet can do about the decline of the dollar against the Euro – something that has rendered a trip to Europe financially daunting for Lebanese tourists. Nonetheless, for the moment only 20% of menajet passengers are Europeans. In an effort to entice more Europeans to Beirut, menajet is trying to promote the Lebanese capital as an enjoyable stopover on a trip to the Gulf – especially Dubai, which already well publicized as a tourist destination for Europeans – and is also offering juicy packages and highlighting the advantages of a direct flight.

An increase in European passengers would benefit menajet in its quest to break free of seasonal confines because, in contrast to Arabs, Europeans tend to travel all year round, Mikaoui said. Menajet’s high season is June to October. In another revenue-seeking venture designed to offset the difficulties associated with Lebanon’s MEA-favoring regulation, the holding company of menajet is hoping to become a shareholder in subsidiary companies of a new $20 to $24 million airline to be created by the government of Ras al-Khaimah, the smallest emirate in the UAE.

“We already have agreements. We are working very hard to start the project. The studies are in place. We will be involved with management, development, expertise, transfer of know-how, maintenance, operation and may own shares, possibly within subsidiary companies,” said Mikaoui. Tens of millions of dollars would be spent on the subsidiary companies involved in maintenance, operation, cargo etc, he said.

“Don’t forget that menajet’s shareholders [which include the speaker of Kuwait’s National Assembly, Jassem al-Khurafi, as well as a number of finance houses and holding companies from Bahrain and Saudi Arabia] are from the Gulf Cooperation Council (GCC) countries,” Mikaoui added. “They are not just interested in Lebanon.”

February 1, 2005 0 comments

Finance

Brighter times for banking in Lebanon

by Nicolas Photiades January 1, 2005

written by Nicolas Photiades

In 2003, the Lebanese banking sector showed significant improvement in terms of deposit and asset growth, as well as in terms of profitability. The Paris II conference in late 2002 triggered a more efficient monetary policy from the part of the government and the central bank (BDL), which led to a sharp drop in deposit rates in both Lebanese pounds and US dollars, while debit rates, or rates assigned on loans to corporates and individuals, decreased albeit, at a much more reduced pace. Margins hence increased, and with them profits. Higher profits also generated more capital, as banks realized that it was a good opportunity to increase capital organically, given that external means to raise capital are rare. It is worth noting that profitability during 2003 and early 2004 could have been even higher were it not for a new regulatory reserve imposed by the BDL, which account for 10% of foreign currency deposits. This latter reserve at least had the advantage of significantly improving the banks’ liquidity as well as the BDL’s foreign currency reserves and installing a greater air of confidence in the market.

Although profit figures for 2004 are not officially out, the few half-yearly unaudited profit and loss accounts published by some of the larger banks show an improvement in profitability. Indeed, banks have been able to reduce interest rates on deposits even further during 2004, while, as usual, debit rates or rates assigned to loans and T-bill and government debt securities only moved fractionally, further enlarging margins. Although it was the larger banks, which mostly benefited from that situation, the smaller banks suffered more. Some of the smaller banks, or those with total assets well below $1 billion, suffered a decline in profitability, as they could not reduce their deposit rates enough without risking losing their saving deposits to the larger banks. Until now, the main value added of smaller banks to individual customers has been their ability to offer higher rates on both US dollar and Lebanese pound deposits. Lining up their deposit rates with those of the larger banks would clearly signal the loss of business.

The bulk of profits for the overwhelming majority of banks again came from interest income on government debt securities and loans. Banks in Lebanon are still unable to diversify revenues sufficiently, and generate non-interest income of consequent sizes. This reliance on interest income is worrisome, as any downward trend in interest rates and increases in non-performing loans would affect the revenue stream of banks substantially. Lebanese banks are yet to build a reliable and recurrent income stream, and are still highly vulnerable to external conditions (economic, political, social, etc.).

However, the biggest challenge still facing the Lebanese banking sector is the heavy exposure to a debt-laden Lebanese economy and the government, with the latter coming in the form of subscription to Treasury bills and foreign currency bonds issued directly by the State. Assets of banks, which are mainly composed of loans, liquid assets, and government debt securities, are still of a poor credit quality (for some banks it is very, very poor), and the level of non-performing loans in proportion to loans remains abysmal at around 28% (the peer group of banks with deposits between $100 million and $300 million had an average non-performing loans to loans ratio of 46.3% at the end of 2003). This is extremely high, when we can recall that the ratio of non-performing loans to loans for the Argentinean banking sector at the time of this country’s default stood at only 4%. The greatest challenge for Lebanese banks is still to stabilize asset quality and, through higher profits, to increase the level of loan loss reserves to provide better coverage of non-performing loans. Although the trend of bad loans continues, it is widely expected to slow down given the slight improvement of the economy (the highest GDP growth for some years is expected for 2004). Smaller banks will be more hit by a weak asset quality as they usually get retail and corporate debit customers, which are of lower credit quality than those of their larger peers. The smaller banks are expected to be caught in a vicious circle of rising non-performing loans and decreasing profitability, and will find it harder to improve their coverage of non-performing loans with loan loss reserves. Meanwhile, retail lending continues to rise, while corporate loans are being optimized and are stabilizing. Retail loans are more easily controlled, as most Lebanese banks (especially the larger banks) have recent credit models for retail lending, while corporate lending is still an under-developed animal for most banks. Indeed, corporate credit analysis techniques are seldom mastered within a large number of banks.

On the capitalization side, Lebanese banks have so far seen their shareholders’ equity rise to a total of $3.9 billion at the end of September 2004, compared to $3.6 billion a year ago. Such a consolidated level of equity leads to a consolidated equity to assets and equity to loans ratios of around 6.2% and 25.5% respectively. Although such ratios would appear solid in a different country with a more stable economy, in Lebanon they can only be considered adequate, bearing in mind that banks here do not often lend to the private sector (loans account for only 23% of total consolidated assets), and that risk levels are abnormally high. It is also worth noting that more than 80% of the sector’s consolidated equity is accounted for by the fourteen largest banks. The remaining thirty four banks are too small to warrant a meaningful level of equity, and a certain number of them have insufficient capital anyway. Nonetheless, capitalization is improving for the sector in general, as higher profits have allowed a healthy dose of retained earnings and some banks have resorted to capital raising with private investors and issues of preferred shares (e.g. Byblos, Audi, BLOM, Crédit Libanais).

Although regulatory capital (the required level of capital by the BDL) appears more than adequate for the entire sector, with a Cooke ratio (a ratio of equity to risk weighted assets) standing on average between 15% and 23%, economic or real capital is low because of the high risk exposure to the government. Such an economic capital should be expected to drop even further in the coming years, as the Basel II Capital Accord is to start being implemented across the world, including Lebanon. Basel II is a set of regulations that increases the risk weightings on assets if the risk profile of the same assets is high. In fact, it is even expected that regulatory capital for Lebanese banks will drop significantly as a consequence of the implementation of the Basel II regulations, as risk weightings on some assets (mainly government securities) will go from 0% up to the dizzy heights of 100%. A recent calculation by many independent research organizations, including the Union of Arab Banks, showed that the implementation of the Basel II rules should lead to a decrease in the Cooke ratio below 8% (which is the legal minimum) for some banks, and certainly below the current 20% average for most other banks. By then a lot of banks will be thinking about seriously increasing their capital, or even joining hands with other institutions with a better grip on risk management.

The banks’ liquidity appears more than satisfactory on the other hand, with liquid assets (excluding government debt securities) covering more than 56% of total deposits for the sector. Such a ratio is regarded to be higher than the norm by international standards but is appropriate in the case of Lebanon. Although the post Paris II BDL regulation, forcing banks to place 10% of their foreign currency deposits with the BDL at 0% interest, has affected the banks’ profitability a little bit, it has nevertheless forced a massive improvement in liquidity and deposit coverage with liquid assets. Banks can now face any runs on deposits with greater confidence, and have the BDL’s conservative vision to thank. However, funding remains a problem, with most banks having to live with significant maturity mismatches year after year. Indeed, customers’ deposits are only short-term in nature and are used by most banks for medium and long-term lending. Some banks have resorted to issues of medium-term bonds and other kinds of debt securities with longer maturities to fill up this maturity gap, but it is still largely insufficient, and in some cases, just a drop in the ocean. What prevents banks for issuing long-term bonds is simply the high cost of it, which is inevitably benchmarked against the high financing cost of the government.

The need for long-term borrowing by retail and corporate borrowers has never been so urgent, particularly as regards to housing loans. Some banks have been stepping up their mortgage lending and offer long maturities (ten and fifteen years), but the interest rate is still high and conditions quite onerous for borrowers. The housing and mortgage markets in Lebanon are yet to really take off and should be considered a priority by the banking sector on one side, and the regulatory and monetary authorities on the other. The enhancement of the mortgage market would create many opportunities for the Lebanese economy, not only in terms of financial products (issues of long-term bonds, securitisation of mortgage loans, etc.), but also in terms of construction activity. A developed mortgage market would also gradually meet the massive demand for housing by Lebanon’s younger population.

Qualitatively, many Lebanese banks have been addressing the issues of corporate governance (or lack of) and institutionalization. 2004 did not bring about significant changes on that front, with the exception of the Audi-Saradar merger, which created a banking group with a greater degree of institutionalization than many peers, which are still owned and managed by families. Decision making has been slightly diluted amongst the larger banks in particular, but many banks still concentrate strategic decisions in the hands of one individual. This individual is usually the founder or the heir to the founder of the bank and carries the dual title of CEO and chairman. Banks in Lebanon have not yet embraced the Western concept of having a CEO, a CFO, and COO, as the senior managers of the bank. The chairman should in principle be representing the interests of the shareholders and not mingle in the operational aspects, which should be left to the CEO-CFO-COO triumvirate.

The banking sector in Lebanon does, however, benefit from substantial support from the regulatory authorities, which motto is to maintain a solid banking system, that would gradually consolidate into a more compact and efficient group of institutions. The BDL is keen not to let banks collapse, as such events would shake a fragile economy. The larger the bank, the greater its importance to the domestic economy, and the more implicit support it can expect from the regulatory authorities.

Banks are aware of the difficult operating environment, which has lead so far to a rise in bad loans and a lack of earnings diversification, and their current high exposure to the weak credit of the government. They realize that diversification should be carried out away from Lebanon, if revenues are to strengthen and become more recurrent in time. Many banks have already started opening branches in other countries in the region, as well as strengthening their existing franchises in the countries where they are already present. Such a strategy can only be beneficial in the medium to long-term and could in time very well transform Lebanese banks into regional, and perhaps international players. For the moment, the Lebanese banking sector is still considered small in relation to the GCC banking sectors, and lacking asset and earning diversification.

January 1, 2005 0 comments

The Buzz

Service: A skill we can’t afford to ignore

by Tommy Weir January 1, 2005

written by Tommy Weir

When we asked a random sample of people their opinion on customer service in Lebanon, we routinely received the same answer: “What customer service? Ha! MAFEE customer service in Lebanon.” This is surprising considering the current economic climate and the level of competition most businesses face. One would think that Lebanese companies would be scrambling to please their customers, to offer them special deals and dazzling service. However, this is simply not the case, and it’s not just our opinion. Over the last few months, we have been surveying men and women on how they spend their money, and if customer service influences their choices. We also asked them to rank establishments according to levels of customer service (the five best and the five worst).

The InterContinental hotel chain has consistently come out on top; starting with the Phoenicia.The Mövenpick also ranked very high. Roadster restaurants (all branches) were continually mentioned as having superior customer service. Spinney’s (Dora branch) seems to be moving in the right direction, as is Roum hospital.

What makes these organizations stand out is that they provided a positive memorable experience for the majority of their customers CONSISTENTLY. People told us that they felt important when they interacted with certain companies. They were thanked, and the staff smiled and treated them well. “Once when I received something that I didn’t like at Roadster, the waiter actually let me order something else and didn’t charge me and he was very nice about it. Now, to me, that’s customer service!” said one patron of the restaurant chain. A local company that we deal with for air conditioning, Frigo Services (Haroutune Beuyukian Est.), has provided incredible service for us in the last year. They anticipate our needs, call us regularly and if they say someone will be there at 9:00am, they actually mean it!

When we asked people if they told others about their positive experiences they all replied ‘yes.’ And we also asked them if they ever spoke about bad experiences and they replied with a louder ‘yes!’ As Customer Service 101 will tell you, “A happy customer will tell three, an unhappy customer will tell ten!” In companies where staff has freedom to make decisions to please the customer, it makes a huge difference. Proactive employees are something that so many companies desire, yet few leaders are able to let go enough to allow their proactive men and women space to be truly service oriented, let alone creative, especially if it involves money. Please see that satisfying your customer in the short-term, even if it costs, will be worth it in the long-term.

Everyone is a client

It is imperative in today’s competitive market that companies (no matter what size) take notice of the level of service throughout their organization. All departments must be seen as customers of other departments. We must develop a holistic service mentality if we are eventually going to sell our skills in the global marketplace, which expects/demands a higher level of professionalism.

Think outsourcing!

What is a service mentality? A service mentality is one that understands that in order to be considered as a member of the service community (which we all aim to be regardless of business), we have be to dedicated to constant improvement and providing exceptional results. Unfortunately, many leaders fail to completely understand that each department has to be converted into behaving like a professional service firm (think Deloitte & Touche, Accenture, McKinsey). Customers have to be seen as the most important aspect of your business: how about even calling them clients. Tom Peters, a man known as the most listened to business thinker, put it into one phrase in 1997: “Life = Client Service. Period.”

Recently, a Lebanese colleague and consultant remarked that he had a difficult time convincing local companies to change some of their basic practices and procedures in order to streamline, saving valuable time, money and enhancing customer satisfaction. He found that many leaders were resistant to adopting new technology that could replace lots of signatures and unnecessary time wasting steps for “service representatives” (employees) and “clients” (customers). “It’s as if they are telling me, ‘I’ve been doing it this way for 30 years and it worked in the past, so I’m going to keep doing it!’” But as Lew Platt, the chairman and CEO of Hewlett/Packard said, “Whatever made you successful in the past WON’T in the future.” This is really unfortunate. We found that actually there are a lot of good employees out there that aspire to be “service representatives,” however, the systems that they have to work with (or around) are so illogical and cumbersome that it makes their jobs nearly impossible. In fact, in some companies, we felt that it was a miracle that people were even able to smile, let alone thank the client, considering the steps they had to go through to complete a transaction.

Think. Government telecommunications!

What steps can leaders make now that can increase the overall performance of their organization and enhance service to their clients?

1. Take time to create a mission statement and vision for your organization. Make sure that this is an original statement of intention, and not something copied from another organization. It has to fit! The importance of service must be included in some way.

2. Communicate this mission to every person who works for you and with you, and ensure that the bottom-line nuts and bolts of why your company is in business in known. 3. Raise the level of customer to client and communicate this constantly and consistently through written and spoken correspondence, business behavior and training.

4. Contact every client (customers, departments, suppliers etc). Review past work. Examine results. What kind of service did you provide? Was your work PROFESSIONAL? If not, correct it. Offer something free, no strings attached. The reward will be felt throughout your organization and the impact on the client will be lasting. Needless to say, companies that have corrected past mistakes have seen their profits soar.

5. Add Value to every employee’s performance by recognizing him or her on a consistent basis for exceptional work. Conduct weekly meetings that focus only on service performance. This includes service between departments.

6. Ensure that you are delivering high quality goods.

7. Communicate…did we already say that?

8. Go to the ends of the Earth to satisfy your clients and understand that teamwork is key. Make it clear that everyone has to do WHATEVER IT TAKES to achieve top performance and Client satisfaction.

9. Spend time and money training your people. Even if you are the only trainer. Most people want to do a good job, however many of them have no idea what they are supposed to be doing or how to do it!

10. Conduct constant evaluations of your company’s performance. There are lots of things that you need to know about your company. The most important is: how are you doing? I mean the big picture, not your profit balance. Insist on continuous evaluations (even of yourself) and use this incredibly valuable information to improve.

11. Invite people in from outside your organization for insight, advice and experience. 12. Market your product and services. 13. Invest in TRAINING…did we already say that?

Reputation is EVERYTHING

We know you are wondering which companies were listed as the worst. Well, sadly there are too many to even discuss. Furniture companies that have no idea what you ordered and paid for; department stores that force customers to search for a place to pay and offer almost no accountability should the item purchased turn out to be faulty; banks that treat their clients like nuisances; automotive repair shops that charge people for something and give them something else (like a used rusted battery). The list is endless. Ad hoc business practices, corruption and resistance to change are definitely not characteristics that will carry us into the Service Age. Tommy Weir and Christine Crumrine are from the Beirut-based CrumrineWeir, the global leadership experts.

January 1, 2005 0 comments