Events in the Middle East are not exactly turning out the way President George W. Bush would have liked, and this is particularly bad with an election year just around the corner.

The situation in Iraq is not progressing nearly as fast or as successfully as was initially hoped for. Rather, resistance to the continued US occupation is escalating. There are approximately 10 to 15 attacks carried out every day against American troops, though the military only reports them when a death occurs.

“There has been a dramatic worsening in the security situation in Baghdad, with attacks against the coalition forces remaining a daily occurrence,” stated a September 8 report from Baghdad issued by Centurion Risk Assessment Services, a firm specializing in providing protection services to many media and non-governmental organizations operating in Iraq. “Many parts of the city are out of bounds due to the increase in violence,” added the report.

So, understandably, the president is asking for help. Bush has requested from Congress an additional $87 billion (above what has already been allocated) to help support military operations in Iraq and Afghanistan and to combat ongoing threats of terrorism, which have also not abated. In fact, since September 11, 2001, rumblings of a possible new al-Qaeda attack on America are louder than ever. In a recently released message, al-Qaeda vowed to hurt the US in a way that would make them forget the attacks on Manhattan and the Pentagon.

Interestingly, the president is now seeking help from the United Nations, as well as from the Europeans, two groups his administration cold-shouldered in launching the invasion of Iraq earlier this year that got the Bush administration in the Iraqi mess in the first place. Bush is beginning to feel the pressure. Since June, his approval ratings, according to a Zogby International Polls survey, have dropped by 13 points, while his disapproval ratings have risen by 12 points.

Consider the following: in mid-June the president commanded a 58% approval rating. That number went down five points to 53% by July 1. The president then lost another point by August 19th and ultimately sank to a low of 45% by September 6.

So, just how badly does the president need a successful turn in the Middle East to win the next election? Why is he spending that astronomical amount on Iraq? If a price tag could be placed on that question, the answer would be $87 billion.

Eighty-seven billion dollars buys a lot, particularly when compared to what has been earmarked in the Fiscal Year 2004 Budget for Discretionary Programs.

As rumblings over the increased war spending begin to gather momentum, Democratic presidential hopeful Joe Lieberman called Bush “the most fiscally irresponsible president in the history of America.”

But in the reverse sense, how much does the Middle East need Bush? With American casualties in Iraq surpassing the number of killed during the actual offensive, a debate is beginning to brew in Washington whether there is a need to dispatch more troops to Iraq or not. Some say yes, while others, such as Secretary of Defense Donald Rumsfeld, say no, the current numbers can adequately do the job. Others in the administration, such as Karl Rove, the president’s senior advisor and Richard Pearl, the former chairman of the Pentagon’s Policy Advisory Board, are now advocating leaving Iraq altogether. The reality, however, lies somewhere in between.

Following the horrific blast at the Najaf Imam Ali mosque on August 29, which killed Ayatollah Syed Bakr al-Hakim and some 100 others, the bombing of the UN headquarters in Baghdad on August 19 that killed its representative, Sergio Vieira de Mello, and another 20 people, some voices argued for reinforcing “boots on the ground.”

The Najaf and UN attacks, which came on the heels of a similar attack on the Jordanian embassy and the sabotage of major water and oil conduits, as well as another car bomb outside a Baghdad police station on September 2, reinforce the belief that the current level of troops is simply not enough for the task at hand. There are currently about 130,000 US, 11,000 Brits and some 8,000 soldiers made up from the rest of the coalition.

Others argued for more international troops from Europe, India and other friendly nations, particularly Muslim countries, that would allow American soldiers to be less visible, thus less prone to attack. The counter argument opined that more troops would simply offer those targeting coalition troops greater opportunities to kill American (and other allied) soldiers. The attack on the UN, after all, was not aimed at American troops. There is, indeed, something to be said for that.

In truth, it’s not more American troops that are needed in Iraq, but rather, speeding up of the process required in order to replace coalition troops with autochthonous forces.

In terms of simple numbers, Iraq had the largest army in the Middle East before the US-led invasion abolished it last April. According to a 2003 CIA estimate, Iraq had about 3.5 million men fit for military service. Deduct from that number those who were killed and disabled in the war and those who were too closely linked to the old regime in one way or another. Filtered down, you should easily come up with at least 100,000 able men. Why not mobilize them? And if you really want to revolutionize the country, allow Iraqi women into the armed forces, too. That should easily provide an additional 5,000 to 10,000 troops.

By now, more than five months into the occupation of Iraq, coalition commanders – with assistance from their friends in the Iraqi National Council, Kurds and others – should have no trouble identifying a cadre of friendly Iraqi officers able to lead a reformed military to take over control of much of the country’s security. At least as far as high-profile assignments go, such as the guarding of government buildings, major intersections, bridges and other sensitive installations. Let the Iraqi people feel they have direct involvement in the rebuilding of their nation, instead of appearing as bystanders with little or no say. The current situation in Iraq leaves little room for doubt; something needs to be done to prevent the country from becoming a refuge for Islamist militants and other groups opposed to democratic reform. And it needs to be done quickly. Every day that goes by draws more and more anti-American (as well as anti-democracy) forces to the region. So much has been acknowledged by American intelligence agencies. Note to those who opposed the United States’ unilateral policy or who might regard US policy in the Middle East as neo-colonialist imperialism: before you begin to applaud America’s headaches in Iraq, be advised that continued unrest in Iraq will also weaken the rest of the region. An unstable Iraq will only endanger the whole Middle East. The attack on the UN has changed the face of this war.

“If the Americans pull out now, it will open the area to the forces of darkness, the nihilists, the (Osama) bin Laden supporters, and others who will regress the area into the dark ages,” said a seasoned Middle East observer. Or, as President Bush pointed out to an American Legion convention in St. Louis on August 26, “Retreat in the face of terror would only invite further and bolder attacks.”

What we are seeing in Iraq in many ways is a repeat performance of what happened in Lebanon in 1982 to 1983, when a multinational force was dispatched to restore order to the war-ravaged country. Lebanon, at the time, was torn apart along sectarian lines with Christian militias opposed to a fractured Muslim-Leftist-Palestinian alliance. Much as the Shiites, Sunnis, Assyrians, Kurds and Turkmen are in Iraq. The difference in Iraq is that the various factions are not fighting each other at the level the Lebanese were, at least not yet.

Following the bombing of the US marines and the French army barrack attacks in Beirut 20 years ago this month, the multinational force decided to cut its losses and leave, abandoning Lebanon to its own predicament. The Bush administration, however, does not have that luxury in Iraq (particularly if he is looking towards the 2004 elections). Abandonment in its current state is not an option. Which is why two things need to happen with haste.

First, more international troops should be brought in, because security is a concern. The attack on the UN building demonstrated that this was not simply an assault on US forces, but also on the international community. And second, Iraqis should be given a more direct role in the running of their country sooner rather than later. Only at that point will the US be able to withdraw without dire consequences and begin to save taxpayers’ dollars. Until then, Bush needs Iraq as much as they need him, although both would like a quick divorce.

Claude Salhani is a senior editor and a political news analyst with United Press International in Washington, DC.

This year, roughly 1,000 couples, spending between $25,000 and $35,000 each, retained the services of wedding planners, those hardy souls who organize, advise, coordinate and offer a shoulder to cry on. Essentially an American import, wedding planning has evolved from a few scattered operators into a lucrative $7 million niche sector, serviced by a dozen established names.

Planners argue that what they do is not a fad. Whether you are opting for a grand marriage or something a bit more restrained, hiring a wedding planner can often make sound financial sense. One of the main advantages of hiring a wedding planner is that they can provide their clients with discounts on everything from entertainment to flowers. “We can save our clients up to 20% in discounts on high quality items,” says Raya Zahlan, manager of Weddings 4 Life. “People are learning more and more that it is very hard to organize weddings and to remove the stress from the bride,” says Vivianne Ajini of Weddings “R” Us, “it a huge, huge thing.”

Nathalie Rahal Abou-Jaoudé, general manager and owner of Amareyn, another leading wedding planner, agrees. “Weddings for Lebanese people are very important,” she says, “they will spend money on a wedding, even if it means taking out a loan.”

Abou-Jaoudé estimates that about 40% of couples (or in 95% of the time their parents) spend more than they can actually afford. And with amounts of up to $35,000 being doled out, it’s no wonder that they have to go cap in hand to the bank. “But,” Abou-Jaoudé points out, “a small budget doesn’t mean that you can’t have a nice wedding.” Some planners see themselves as artists and Zahlan insists that planning a wedding is “not about the money” – well, not only about money. She and her business partner and cousin, Maya Zahlan, take into consideration a client’s background as well as their budget. “We prefer to plan weddings for clientele from a certain background so that our work is appreciated.”

It is an industry that attracts people from all professional backgrounds. Zahlan admits she fell into the job. “I majored in psychology and education, and my business partner studied interior design.” She points out that the paramount skill is the ability to communicate with people. But how much does good communication cost these days? Ajini explains that it is often difficult to give a clear picture of fees simply because they vary according to each wedding. “We could charge anywhere from $5,000 to $50,000, depending on the client.” However, most charge either a fixed fee or take commission based on the client’s budget (the Weddings 4 Life team charges a fixed fee, while Amareyn’s costs range from $2,000 to $15,000 for what she calls ‘big’ weddings with budgets of $400,000 plus, which represent 10% to 15% of the high-end market).

According to Abou-Jaoudé, there are four main variables that affect the cost of any wedding: the number of people, the season, decorations and entertainment (music, dancers, fireworks, special effects etc.). When deciding on the venue, Abou-Jaoudé says that most halls and major hotels charge similar fees. Cocktail receptions can cost from $15 to $30 per person, whereas seated, or buffet dinners, about $30 to $150, depending on the quality of the menu (traditional Lebanese cuisine, for example, is cheaper than an all seafood menu). Bridal gowns, invitations, flowers and invitations all combine to send the bill into the stratosphere. Not surprisingly, it’s big business and this is good news for the fledgling sector. Abou-Jaoudé says that since starting Amareyn five years ago, her clientele has doubled so that her company now plans about 80 events per year. Weddings 4 Life boasts even higher figures, with 150 weddings per year, 70 to 80 of which are in the high season (May 15 to end of September and the entire month of December). Still, to survive, wedding planners have to be up to speed with current trends and ideas if they are to sell themselves as cutting edge. “We are here to create something new and different for every wedding,” says Abou-Jaoudé. “Our job equals details.” Some of the big trends hitting Lebanon’s weddings this year were splashes of big color and the use of special effects. According Zahlan, weddings no longer stick to a specific color theme, with vibrant hues making their way onto the scene in the form of flowers, tablecloths and other decorations. Becoming increasingly common is the not-so-white wedding gown, with champagne shades making the most waves. Special effects are also no longer limited to fireworks displays – which are not exactly unique here. Now even the first dance sequence can feature a fog machine, complete with falling confetti spread with the use of a giant fan. The end result is much like the couple’s very own music video.

In order to stay on top of her game, Abou-Jaoudé employs a team of 22 – interior and graphic designers and technicians etc – during the high season and admits annual operating costs of over $200,000 a year. “Our telephone expenses alone are a catastrophe!” she moans.

Removing stress was the key factor that prompted Nada Afeiche-Shehadi to hire a wedding planner for her 2002 nuptials at Sursock. “I only had a little time [two months] to plan everything and needed someone who could have everything done at short notice,” she says. She was especially pleased with the party favors suggested by Zahlan – a little cedar tree to represent Lebanon since many of the guests were coming from the United States. Afeiche-Shehadi was also comforted by the fact that the Weddings 4 Life team would be present at her wedding to orchestrate everything at the church and the reception. “For me, it was more about having peace of mind than anything else,” she says, adding that little unexpected perks from the planners, like a guest book and special decorations on her table were a nice touch. So, was it all worth it in the end? For Afeiche-Shehadi it certainly was but she was quick to point out that hiring a wedding planner is not necessarily the best route for everyone. “At the end, it’s really the couple that makes the wedding.”

E: How would you describe Lebanon’s summer in terms of tourists?

PA: If summer means July and August, then summer was excellent for Beirut. Like last year, it was also good for the regions of Jounieh, Broummana and Bhamdoun. Our aim, however, is to extend the summer season from April to October, as in the rest of the Middle East.

E: From where did most tourists originate?

PA: Most of them came from Syria, Jordan, Egypt, Saudi Arabia and the Gulf. But don’t underestimate the number of Lebanese expatriates. About 35% of summer visitors are Lebanese coming back from Africa, the Arab world or South America. Many of them stay in hotels.

E: Does one good summer mean Lebanon has regained its pre-war status as a top tourist destination?

PA: Since September 11, we’re again the biggest and best summer resort destination for the Arab region. But we have a problem attracting European tourists, even though any kind of tourism can flourish here. Just look at the country. There’s the sea, mountains, clubs, pubs and freedom for women to dress and behave as they like. Lebanon has the best of two worlds, East and West, and so it should be able to attract people from both sides.

E: Why aren’t the Europeans coming?

PA: Lebanon has an image problem. The international media only report about Lebanon in terms of terrorism, Israel and the civil war, even though these ended years ago. We have to change the image, but that cannot be done overnight. We’re talking big politics here. If a certain world leader says a certain group in the country is terrorist, this affects Lebanon’s image, and tourism. We need to change the image to attract a big tour operator who buys 10,000 room nights, like in any other top world destination. Here we generally talk about 10 to 50 room nights, which is too little for prices to really come down.

E: What do you think to do about it?

PA: So far, the Lebanese who profit from tourism have all been working on their own in promoting Lebanon. We’ve suggested that the ministries of tourism and economy, IDAL, Solidere, MEA, Casino du Liban and others cooperate under one umbrella. That would save costs and enable us to make a bigger, better impression at the big international tourism fairs. Secondly we’ve found a niche in the market. From now on, we will focus more on countries like Poland, Ukraine and Russia, as Eastern Europeans are much less impressed by the “propaganda” of the international media. During the second Gulf War hardly anyone cancelled their flights to the Middle East, while some 80 percent of the Europeans and Americans did.

E: How would you characterize the Lebanese market?

PA: Highly competitive, especially outside the summer months. There are just too many hotels for existing demand, especially in the four- and five-star range and there are still another 1,500 rooms under construction. Average occupancy rate in Beirut is some 59 percent; it should be at least 65 percent before further investments are needed. But what happens? As soon as there’s a big conference and most Beirut hotels are full, everyone calls for more hotels, while only 20 minutes away in Jounieh and Broummana most hotels remain largely empty.

E: What are the hopes and fears for the future?

PA: One of the problems of Arab tourists coming back again and again, is that at a certain point they will rent a furnished apartment or buy one. The market for furnished apartments is already booming, which is a big threat to the hotel business. The hope for the future, as I said before, is an improved image abroad, which would enable us to attract more European guests.

E: What should the role of the government be?

PA: We live in a free economy, so we don’t want a government ban on building more hotels. The problem is that the government is badly organized. We all know that. But the least we expect is decent, reliable data on which we can make our management decisions. Apart from that, we would like to see more cooperation. One thing the government can start doing is providing everyone promoting Lebanon with one and the same logo.

Last month, Condoleezza Rice, Bush’s national security advisor, compared the present post-Iraq war situation in the Middle East to post World War II Europe. “America,” wrote Rice in her August 7 editorial published in the Washington Post, “committed itself to the long-term transformation of Europe.” She goes on to say: “…our policymakers set out to work for a Europe where another war was unthinkable.”

Her views – and quite naturally one would assume those of her boss – on the administration’s guidelines upon which to build peace and democracy in the Middle East, contain the thesis of the Bush administration’s manifesto regarding the future of the Middle East. It will most likely not work.

Rice advocates working with those in the Middle East who “seek progress toward greater democracy, tolerance, prosperity and freedom,” and advocates copying the European experiment and applying it to the Middle East.

While indeed a noble concept, Bush’s plan for spoon-feeding democracy and prosperity to the Middle East remains, nevertheless, one with great many shortfalls. The Bush administration may well find many similarities in post-WWII Europe and today’s Levant, but in truth, it’s the dissimilarities that abound.

Undeniably, the United States played an important role in guaranteeing the stability, and particularly the security, of Western Europe all throughout the long years of the Cold War. But one must not ignore the fact that a stable Europe would have never been a possibility without, first and foremost, the strong desire of the Europeans themselves to place conflict behind them. After two devastating world wars and economic disasters that ravaged the continent, the Europeans finally realized it was time to look ahead.

“In an inherently unstable world, only the primacy of law and stable institutions can guarantee co-operation among nations and hence peace,” declared Jacques Delors, a former European Commissioner and finance minister in Francois Mitterrand’s first government in 1981, during a speech delivered in 1997 on the history of building a unified Europe.

Finding leaders who sought progress, democracy and freedom in Europe in 1945 was not difficult. Alas, that is hardly the case in most of the Middle East today. Granted, there are many people of goodwill across the region with a strong desire for peace and who wish to see true democracy implemented. But how many of those in a position of leadership in the Arab world would willingly allow free elections without fear of losing their grip on power?

“Muslim leaders are failing, first, to provide justice (adl) and, second, to create the conditions for the existence of compassion and balance (ihsan) or knowledge (ilm) in their societies,” wrote Akbar S. Ahmed, the Ibn Khaldun Chair of Islamic Studies at the American University in Washington, DC, in his book, Islam Under Siege. The US had hoped that the fall of Saddam would accentuate the drive for democracy. Instead, it appears to have crystallized anti-American feelings across the region. Jihadi Islamist fundamentalists are reported heading to Iraq for a chance to fight American soldiers. Two recent attacks against the Jordanian diplomatic mission and the UN headquarters in Baghdad, which killed representative Sergio Vieira de Mello and at least 20 others, reinforce the belief that the US is far from controlling the situation on the ground.

Following the capitulation of Nazi Germany in 1945, the old continent was ripe for a new start. Realization set in across Europe that war was not about to advance them, but rather regress socio-economic reforms. Western Europe came together in the face of a new threat – communism. “The memory of the failures of the inter-war years was still in the minds of everyone,” said Delors.

In Iraq, however, the enemy – extremist violence – comes from within. Additionally, the reconstruction of Germany was carried out mostly by local contractors, whereas in Iraq, the lucrative business deals are mostly being granted to US corporations.

Leaders such as Winston Churchill, who as early as September 1946 proposed establishing a United States of Europe, and West Germany’s Chancellor Konrad Adenauer emerged to rebuild the continent. But, perhaps, more importantly, visionaries such as Jean Monet and Robert Schuman – the instigators of a united Europe and the fathers of the modern-day European Community – were able to look into the future and envision a united Europe. “That is why the initiators of the community model, which gradually came into being with the treaties of Paris (1950) and Rome (1957) made a point of thinking creatively,” said Delors. “There was a new element at work this time around in that the idea was championed by statesmen. In other words, the ideal of transforming Europe had emerged out of the intellectual arena, as a political necessity of the utmost urgency,” said Delors.

That, regrettably, is far from being the case in the present-day Middle East, a region that until now has only spawned more iron-fisted despots or violent revolutions, than Adenauers or Schumans. Additionally, post-WWII Europe had managed to place aside its past differences, building together in unity. The ongoing Arab-Israeli dispute – seen by many as the nucleus of all continued unsettlement in the area – does not allow for a peaceful building process, yet. Neither does the education system in place in some Arab states, such as the Wahhabi-funded madrassas that fail to establish an educated elite needed to construct a brighter future for the region.

The first logical step, therefore, would be to address the leitmotif of Arab discontent and excuse for continued war footing that persists in some Arab states. It is important to point out that once the Arab-Israeli dispute is peacefully resolved, and the reason for maintaining a war stance dissipated, it will only be a matter of time before the urge for greater democratic reforms begins to be heard.

Which is what Bush hopes the “road map” will achieve by 2005. By then, the plan calls for a Palestinian and Jewish state living side-by-side in peace. It is also what they hoped jump-starting Iraqi democracy would accomplish. But don’t hold your breath. Road bumps such as the massive bus bomb that killed no less than 20 people in Jerusalem in mid-August and wounded another 100 are not about to make things easier for the peace process.

Rice talks about America’s long-term commitment to transform the region, but the Arabs are still far from convinced of two things that remain paramount before they can accept America as a full-fledged partner in the peace-building process. America and Western Europe – despite their differences – saw eye-to-eye on most major issues relating to the defense of the continent in the face of Soviet expansionism. Such is not the case in the Middle East, where the Arabs and the US greatly diverge on the Palestine/Israel issue.

Additionally, America must clearly demonstrate that it is indeed committed and here to stay (at least politically), as was the case in Europe. When the end of hostilities was announced on May 8th, 1945, aggression against US troops ceased. In contrast, in Iraq, over 140 US soldiers have lost their lives since Bush declared the end of major combat operations on May 1st. While no exact figures are available, some estimates place the number of Iraqis killed during the same period in the thousands. Many will argue that the situation for the average Iraqi today is much worse than it was before the war.

US troops were greeted throughout Europe as liberators. That is far from being the case in Iraq today, where anti-American sentiment appears to be on the increase and the security situation getting worse.Iraq, sitting on the world’s second-largest oil reserves, is only producing 750,000 barrels of oil per day, down from a pre-war mark that hovered around a million bpd. And that figure is down from 900,000 in June due to continued power cuts and acts of sabotage. As a result, Iraq is forced to import fuel for domestic consumption. Iraqis consume about 15 million liters (3.9 million gallons) of gasoline a day. The country can barely meet that need with domestic production. They use about 17 million liters of diesel, mostly for trucks. Currently, Iraqi refineries are producing only half that amount, according to U.S. military estimates. Ironically, oil is being imported from Kuwait and other countries to help cover the gap. Meanwhile, Iraqis blame the Americans for their ills. The hearts and minds of the Arab world the US had set out to conquer are being lost.

Yes, quite possibly, Bush, in his heart of hearts, is devoted to pursuing the “road map” to peace. Quite possibly, he believes that he can keep pushing the reluctant participants, prodding some here, coaxing others there, or even threatening some when needed. But, and here is the breaker, how committed would his successor be? Let’s assume the following scenario, just for the sake of argument. The situation in Iraq continues as it is for the next few years with a low-grade war of attrition being waged against US troops, who are forced to remain there. One American killed today, two more wounded tomorrow, another one or two killed the following day. Over two or three years, the casualties begin to add up and the electorate back home starts to get nervous. Not to mention the economic impact the continued occupation weighs on the American economy. (See Executive, August 2003)

Bush père found himself in a quite similar situation at the close of the first Gulf War in 1991. He had won a quick victory over Saddam Hussein, liberated Kuwait, freed the oil wells, defeated the Iraqi military and, for a short while, appeared to be a hero. But the domestic economic situation was suffering and that is what lost him the election to Bill Clinton. Bush junior could well find himself facing a similar conundrum.

Bush, meanwhile, remains committed. But if he looses the election in 2004 and his successor, possibly under electorate pressure, decides to bring the boys home and pull out of Iraq. Then what? American foreign policy has been known to suffer from severe attention deficit disorder in the past. Look at Lebanon; look at Somalia.

Secondly, the United States’ lack of objectivity in the Arab-Israeli conflict is another mark against it in trying to evenly mediate with both sides. There was no thorny issue comparable to the Palestinian-Israel one in post WWII Europe, and this made it easier for the US to be accepted as an equal partner in shaping the continent. Neither was there an issue of religion, which exists in the present context. Most of the Arab world continues to view the US war in Iraq as one of occupation and not as a war of liberation. Not to mention those who see it as a clash of civilization, as pointed out by Samuel Huntington.

This is where Europe (and the United Nations) can play a greater role in the peace building process. Europe is seen by Arabs as being friendlier to their cause, and naturally, they tend to trust Europeans more than they do the US. Rice, in her exposé, stresses the importance of including Europe and all free nations, “working in full partnership with those in the region who share our belief in the power of human freedom.”

But will the US accept to take a back seat now in the rebuilding of Iraq and allow Europe – including France and Germany, who opposed the war and were labeled “old Europe” by Donald Rumsfeld – to become engaged in Iraq? The answer to Bush’s manifesto for peace in the Middle East may lie in the answer to that question. Much as the US may dislike the idea, international participation may be the key to success.

Information and Communications Technology (ICT) stands undisputed as the sector with the greatest importance for any country seeking to position itself at the forefront of the “knowledge” economy. Banking and education are key, but manufacturing automation, health care, hospitality, logistics, media and all other advanced services industries depend on ICT. Modern government and public sector administration are increasingly being defined by ICT. The sector’s eminence in national economies has been thrust into the limelight through fabled cases such as Ireland’s 1990s record rise from European economic backwater to high-growth technology and services hub.

To Lebanon, Ireland’s rise was an oft-quoted example in discussions on the economic and social potential of ICT because the population and labor market in both countries were similar. Subsequent convergent phases of global new economy optimism and Lebanon’s own developmental hopes in the mid to late 90s, led the country and its business elite to revel in the anticipation of becoming a regional ICT hub. Today, while still aspiring to become a center of technology for the Middle East, Lebanon is in some respects even further away from realizing its dream. In other respects, the country has been defending its potential for leadership in Middle Eastern ICT but has yet to claim the ground of real growth.

Luckily, the ICT industry has an immense number of nuances and niches and thus being a center for ICT can mean many things. “Every country wants to be an ICT hub,” said Charbel Fakhoury, Eastern Mediterranean manager for international software manufacturer Microsoft. “Lebanon went through some steps and didn’t take others. I think a hub is an evolution. It doesn’t happen over night.”

From hardware to software to services, telecommunications, mobile data networks, computer training, web design, content provision, e-commerce and online banking, the ICT sector indeed has far too many facets to see a single country take the region’s leadership role in every respect, or even to allow for a wholesale review of the industry in one country.

To quote a case in point, several companies over the past two years have had to exit Lebanon’s computer assembly and retail business or severely reduce the number of outlets, while other local assemblers and their main chip supplier, Intel, confirmed an increase in assembly and sales of PCs. “The Lebanese assembly market has been growing steadily over the past few years,” said Maan Ahmadie, regional channel manager for Intel, the world’s leading chip manufacturer. “We have recorded around 20% to 30% growth in the past three years, and we expect to see this trend continue.”

However, data on the exact size of the local hardware market tends to be inconclusive. As an expert from the International Telecommunication Union (ITU) observed at a Beirut conference earlier this year, no Arab country has yet carried out a detailed ICT survey. “It is difficult to put a dollar value as such on the Lebanese assembly market,” Ahmadie conceded, “but, in terms of channel members, we have around 300 resellers, working in different market sectors, from PC assembly for homes and small offices to servers and mobile computers.”

Estimates on hardware penetration vary. One local company, Computer Echo, claims it assembles some 40,000 PCs annually, supplying about one third of the market. “Business has been growing very fast over the past four years,” said Computer Echo marketing manager Tony Abboud, reporting an annual sales growth of about 20%. Other local assemblers and resellers estimated the figure of personal computers entering the market each year to be slightly lower, at around 60,000. A matter of general agreement is that locally assembled computers hold an 80% share of the market, with units going mostly to home users and small businesses. Larger companies and institutions are said to rely more strongly on imported, brand name equipment that account for the remaining 20%.

Assembly of computers from foreign-made components is a viable business. However, neither profit margins nor local value-added are particularly high, and exports are not necessarily an outstanding perspective. Computer Echo distributes its assembled PCs through large and small local resellers, with only sporadic exports, mostly to West Africa. Regional exports are not on Abboud’s mind, because satisfying local demand is consuming all his time. And although Computer Echo benefits from Intel rebate and promotion programs, assemblers in Jordan and Egypt receive the same advantages, he said. “I don’t see what kind of a market I would have in Jordan.”

For Lebanese software companies, however, exports are a question of sustainable existence. “We will be a really strong industry only if we are exporting,” said Fares Kobeissy, president of the Association of the Lebanese Software Industry. “Our overall strategic objective is to open markets and create a highly exportable software industry,” agreed Ali Shamseddine, vice president of the organization. Like Kobeissy, he is founder and CEO of a Lebanese software company. According to figures from a joint 2003 research paper by Lebanon’s Office of the Minister of State for Administrative Reform (OMSAR) and the UNDP Lebanon office, Lebanon’s ICT industry consists of about 500 computer-related companies, of which “about 200 small and medium sized software companies employ more than 3,000 people, and can play a major role in the development of an information-based national economy.”

The size of the software industry also is a figure of some dispute, though. To Kobeissy and Shamseddine, the realm of viable software development companies extends to dozens rather than hundreds, with hundreds rather than thousands of employees. When their new-founded association approached potential members, they contacted somewhere over 50 companies and succeeded in convincing 15 to join their ranks. The software section of Lebanon’s largest ICT industry association, the Professional Computer Association (PCA), groups less than 10 companies out of roughly 70 PCA member firms. Notable as the size problem is in assessing ICT capabilities here, it is not to say that this industry doesn’t hold some extremely interesting potential. Firms based here have sold their software solutions to major banking and large retail enterprises in Europe, whereas other Lebanese development houses have a stable clientele among small and medium sized enterprises in the Middle East. “While Jordan and Egypt seem to have a higher percentage of projects where they write code under outsourcing contracts for clients abroad, Lebanon seems to have a higher share of own development,” Tony Prince, Intel’s regional business development manager, told Executive.

According to Prince, Intel has become increasingly interested in Lebanon. In July, the firm hired a developer relations manager to closer interact with software companies; Intel also this year participated in numerous public and private sector projects, ranging from installing a high-powered server at a software company to setting up or testing of wireless data technology (WiFi) in hotels, stores and the BCD. Later this year, the company hopes to finalize an agreement over establishing a developer facility at a Lebanese university. “We are in advanced stages of negotiations with AUB for setting up a banking competence center,” Prince said.

Lebanon is no exception to the global ICT evolution whereby services and solutions provision is gaining in economic importance over hardware manufacturing and equipment sales. ICT multinationals thus have come to attach great importance to finding, especially in promising locations, as many partners as possible who work with their technologies. The chipmaker apparently hopes that the banking competence center, with its emphasis on the area where Lebanese software is of highest regional repute, will attract developers to work with Intel tools. While investing into local capacity building and providing technology transfer, the multinational would profit by bringing Lebanese developers into its flock. “Our reward is that the applications are optimized for the Intel platform,” Prince said.

It is within the same logic that other multinational firms confirm their commitment to the Lebanese ICT industry, although the market here is rarely even worth a footnote in their annual reports. Networking equipment manufacturer Cisco Systems thus maintains an active office in Beirut, although business hasn’t been strong. “From a Cisco perspective, the market here has been flat since last year, and we expect another flat year,” said Hussam Kayyal, Cisco general manager Levant.

Waiting out the time until the public and private sector are ready for deploying new data infrastructure makes it all the more important to maintain a good rapport with the market. “We are optimistic,” Kayyal said. “We are looking at the coming couple of years as development years for Cisco in Lebanon, to spend time with partners and educate them, especially government agencies, to use IT in cost cutting.”

The company actively supports the training of ICT students and computer professionals as Cisco certified experts. Kayyal’s team works with agencies and professional associations such as IDAL and PCA but also with non-governmental organizations and educational institutions. The manager said Cisco intends to participate in three community projects before the end of the year. Working together with active NGOs, the multinational would invest $600,000 into these ICT community projects.

However, it is also worth mentioning that Lebanon’s ICT development initiatives not only originate from foreign firms. A project for a new tech zone, called the Beirut Emerging Technology Zone (BETZ), is high up on the list of initiatives managed by the Investment and Development Authority of Lebanon, IDAL. After several years of pondering over terms of reference and proper procedures, a feasibility study for the project was conducted last year (by an American company; the grant financing the study came from USAID). Many in the industry say that a tech zone would be of great importance to improve Lebanon’s chances in the march towards ICT leadership, and yet there seems to be some uncertainty over the BETZ concept. “Any tech park should drive the country to be a producer, moving companies to an environment where production is cheaper. But what is the target of BETZ?” asked Shamseddine and Kobeissy, in comments resonating those of several other industry members. “Our claim is that nobody knows. We have a vision but we know that none of the actors know.” Executive requested an interview with IDAL chairman, Dr. Samih Barbir, to find out about the zone’s concept and the agency’s latest activities in context of Investment Law 360, which rates ICT projects as particularly support-worthy. Unfortunately, Barbir is not currently available for interviews on this topic, the agency responded. Meanwhile, the Lebanese information technology community has been readying itself for the annual Termium exhibition, with statements of growth expectations and fine business tidings. “We are changing Termium to become more of an IT-experience trade show where companies can show products by stating IT success stories,” PCA president Jalal Fawaz told Executive. After two editions of partnership with the Dubai-based Gitex IT expo brand, Termium this September is back to its own devices for attracting exhibitors and visitors. “It will be the same companies and the same people as every year,” said the CEO of a Lebanese software-manufacturing firm between parmesan-laden salad and main dish at the press lunch announcing the conference. “But some companies cannot afford to stay away,” he moaned. Of course, nowhere in the recent past have ICT shows been able to emulate quite the same mix of geeky pleasures and relentless business optimism they were hallmarked for before 2001.

If Nasdaq trends and international industry surveys can be believed, ICT is not only returning to a growth cycle more moderate than the last spurt that ended in 2000/2001, but is also more sustainable. As happened with the ICT industry worldwide, Lebanon’s information economy also felt struck by the bursting of the e-bubble and was shaken by the weakness of business confidence that flooded planet earth over the past 24 months. On top of that, there were the socio and politico-economic troubles of the region to contend with. However, living through these experiences did not fundamentally alter the many concerns and issues the local industry has to confront.

Take violations of intellectual property rights (IPR). “Basically, the level of piracy on all fronts is more or less the same,” said Walid Nasser, a lawyer who locally represents international organizations concerned with IPR protection. IPR is a crucial concern to anyone in the knowledge economy, from software engineers to content providers. Initiated at a global level, software piracy and theft of intellectual property have been exposed. According to the international industry pressure group, Business Software Alliance (BSA), an eight-year high-powered campaign has helped reduce software piracy as a worldwide phenomenon from 49% in 1994 to 39% in 2002. In the Middle East, the BSA reports, the margin of piracy reduction over this period was the highest of all world regions, from 80% to 49%. However, while piracy was reduced in Lebanon, the rate of suppression was much less impressive than in the UAE or Israel. With 74% percent of piracy (down from 83% a few years ago), Lebanon still ranks among the world’s least IPR-enforced countries. The government’s ICT experts at the OMSAR technology unit could vigorously refute recent unfounded claims in a report by the US trade delegate that Lebanese ministries operate on pirated software, but the fact remains that this country is listed among the 25 nations – 13th to be precise – with the highest software piracy rates. To make software piracy non-palatable to corporate offenders – in reality, no one goes after the individual – legal recourse is essential. And here, enforcement is key. “We want court decisions with amounts that really deter,” Nasser said. “The laws are really good, they just lack muscle. We are still dragging our feet and treating this as a minor offense.”

Enforcement is better now than it was immediately after passage of the 1999 IPR law, but not decisively so. Taking a software pirate to court in Lebanon consumes much time and cash, and can take between two to four years and cost between $5,000 and $10,000 in legal expenses, according to Nasser. “At the end of the day, you will get a court decision in your favor if the file is handled properly,” he said. “But if the fine is no deterrent, you’re wasting your money.”

So far, legal battles for IPR protection in Lebanon have been fought and financed by multinational corporations with regional interests. Although they often decried the unfairness of businesses working from unlicensed copies of their products, local software developers have neither joined the BSA (and one couldn’t blame them; the BSA is a costly club for the major players) nor pushed for prosecution of violators. However, an improved economy and greater demand for Lebanese software will see an increase in piracy. “The more the sector will grow, the more piracy will become a problem,” admitted Ali Shamseddine, vice president of the Association of the Lebanese Software Industry (ALSI).

The Lebanese telecommunications infrastructure is as sore a point as it was before the spring 2001 crash of the internet bubble. Bandwidth for connecting to the global data backbone remains limited and expensive, and the country is in danger of losing its edge of having a more advanced mobile network than other countries in the region. In the view of Jalal Fawaz, president of the Professional Computer Association (PCA), next to the general business concerns that relate to the country’s economic environment, the completion of the telecommunications infrastructure through establishment of a public data network tops the list of industry-specific concerns for local ICT companies. The same concern is high on the mind of Intel Corporation’s regional business development manager, Tony Prince. “I would like to see an improved infrastructure,” he said, “better broadband would be a necessary condition for the evolution of the business. People such as ourselves could do business better.” According to Kamal Shehadeh, an economist specialized in regulatory frameworks and telecommunications affairs, the non-development of telecommunications infrastructure in the past few years has had a negative impact on the entire ICT industry by creating technical availability bottlenecks as well as access barriers through high prices. “Access to broadband is a very expensive proposition at current tariffs,” he said. “Prices for regular phone connectivity to the internet have come down, but are still very high, even prohibitive.”

A contributing factor to the problem is that the state-run communications infrastructure network would presently not be able to handle a flood of demand for high-speed internet access, giving the monopoly provider absolutely no incentive to encourage demand for broadband access. This market structure issue reflects how the monopolistic nature of Lebanese telecommunications has negated the chance of establishing a legally licensed private sector data structure, Shehadeh reasoned. The only way to change the situation is to license alternative providers, such as the private sector data network operators. “Is it a realistic and reasonable request? Yes. Can it be done? Yes,” he said. “It has been done in other economies less developed than this one.” But at the end of the day, this is a political decision, he added. Retaining talent is the next headache that Lebanese ICT companies face today just as they did three and four years ago. “A second main concern is the human resources issue,” Fawaz said, “how to create growth to keep people inside the country.”

In a best case scenario, a talented young software engineer or computer science graduate will leave Lebanon in search of the advanced training and experience, which she or he can acquire in the technologically most developed countries. This person will stay abroad for a limited time and at some stage return to Lebanon with the will to put the acquired expertise to work in the local economy.

In practical reality, Lebanese ICT companies, face the daily threat of losing human resources, often because a company cannot offer their best minds the advancement they seek, even if that company wants to keep them. “We have had ten years of ICT brain drain,” Shamseddine said, “and the only way to bring them back is to have proper jobs, properly paid.” In the experience of ALSI president Fares Kobeissy, Lebanon’s narrow ICT career market is a clear impediment. “Our industry has upward mobility as a requirement,” he said. “People need to grow into better positions and better jobs.” What acerbates the problem for the companies in the local ICT industry is that their high share of labor cost translates into extra-heavy additional burdens of National Social Security Funds contributions. Exempting ICT companies from income tax would alleviate the burden, suggested Kobeissy and Shamseddine. “We want labor laws different from the ones existing today,” said Michel Nseir, head of the PCA software committee. He admonished that the inflexibility of regulations (designed to protect professionals in labor contracts) disallows for effective subcontracting and temporary project-based work agreements. Additionally, Nseir asked for adjustments to visa regulations, which would make it easier to bring in tech experts from countries such as India.

Intel’s Prince would wish for people purchasing ICT equipment to receive a break from Value-Added Tax to reduce the cost of ownership. With such a catalogue of needs and concerns, it becomes quite clear that the Lebanese ICT companies must see more than an improvement of conditions in the worldwide climate of their industry. Doubting existing mechanisms for investment promotion, companies are crying out for comprehensive public sector support of this industry, which its members consider as one of the top prospects for Lebanese economic leadership in the region and eventually beyond. For the moment, however, the mood is strained. “The way things are going, the policy of the government is destroying what little we have in IT today,” Nseir said. “New investors in tech are not encouraged, and instead of growing, we are sleeping. IT is suffering terribly. The only firms that were able to make it were those that could keep up in the local market and expand in export markets.”

“It is very hard these days to do business in Lebanon related to information technology,” concurred an investor involved in the sector. A big weeding out is taking its course, and only the strongest companies have any prospects.

E: Senator Dogmoch, your group has recently stepped up its local investments. How do you evaluate the investment climate in Lebanon?

YD: I believe every investor has to see the glass as half full. The Dogmoch Group of companies has a presence in all Arab countries, with activities in different sectors, be it industry, trade, Internet, transportation, shipping and forwarding, airplanes etc. As a mid-sized enterprise with a presence in several countries, we decided to establish the base of our undertakings in Lebanon.

E: Why motivated you to this decision?

YD: Lebanon offers many advantages in terms of taxation, through the flexibility of the banking system, the climate, or the high quality of human resources. You find more human capacities and resources in Lebanon than in other Arab countries. Investment in the Arab countries hinges on the security of capital. This security is provided in Lebanon to no lesser a degree than in other parts of the world. Certainly, Lebanon will be the first country to profit if there is progress in resolving the Middle East problem. These are some reasons why we have opted for Lebanon.

E: You recently acquired a major share in Bartercard Lebanon. Was that your first major investment here?

YD: No. Bartercard is one of over 30 companies in which we have invested in Lebanon. Where do you see the best current investment prospects in Lebanon, and what projects did you find rewarding?

YD: In tourism. This year is the best in a while, and the country still needs many projects in the industry. We are in the hotel business and also have recently established a company called Cruise Med, for the rental of boats. We established it three months ago and now have 11 yachts, measuring between six and 24 meters. This business was a success from the start. Some days all boats are rented.

E: When you started investing here, did you encounter difficulties?

YD: For any project you start in Lebanon, in tourism or industry, you receive support from the authorities. There are no stones thrown in your way. In tourism projects, one can request loans at a very low interest, subsidized by the central bank, and this will be approved.

E: Did you work with IDAL?

YD: We are involved in a project with IDAL in Tripoli involving the construction of a car park and reorganization of the Gamal Abdel Nasser Square in central Tripoli.

E: Overall, then, you would say that as investor you do not find it difficult here?

YD:Lebanon has ideal circumstances for the investor, better than in any European or Arab country. If you want something from the authorities here, it is processed quickly. Even as a German in Germany I have not experienced that. To acquire a construction permit, for instance, it takes a month here, and one year in Germany.

E: What is the size of the Dogmoch Group’s investment portfolio in Lebanon?

YD: I believe that it is a sizeable amount for this country. In comparison to the activities of our group, 50 percent of our investments are in Lebanon, and that is a lot.

E: Is there anything that you would wish for to be different for investors?

YD: If some German or European investors knew the conditions and environment here, they would not hesitate to invest in Arab countries, Lebanon among them. The perspectives here are better than anywhere else.

E: Do you have further plans for major projects in Lebanon?

YD: We want to launch passenger-only sea transportation between Tyre, Sidon, Byblos and Tripoli. It will combine regular transportation and sightseeing. Based on experiences with the boat rental project, I have discussed this program for coastal transport with the transport minister, Najib Mikati. This could take some pressure off the road network. I hope that we will implement it within the next two years.

E: Then it will be related to tourism?

YD: If we use hovercraft it would be a tourism project, but operate year round. There’s a small problem that can be overcome. The sea in these parts is not very calm. But with the latest hovercraft, transport can be quick and reduce disturbances. On a calm sea, it will be a very interesting affair.