Business

Revamp!

by Anthony Mills
written by Anthony Mills

Khalil Daoud, the new chairman and managing director of LibanPost, has set aside a small patch of land outside the company’s headquarters, next to Beirut Airport. “It’s for the employees, so they can grow cucumbers and tomatoes.” he explained. “But they don’t care.” The failed horticultural experiment illustrates how difficult it is to spawn a sense of esprit de corps among LibanPost’s 600 employees, as well as the notion that they have a stake in its success or failure. Only a year and a half ago, after the original LibanPost had folded, many thought they were going to be laid off.

In a bid to bolster consumer confidence, Daoud has started giving the country’s post offices a “rejuvenated look,” by redecorating the offices. LibanPost is now allocating $300,000 to $350,000 a year – about 2% of its roughly $16 million annual budget – to this endeavor, and has spent $300,000 on a new post office off Riad al-Solh Square, in the Beirut Central District.

In addition, the company pays Canada Post $500,000 a year for consultancy services, which include training, and has spent over $1 million this year upgrading its technical capacities. Since he took over LibanPost in February 2002, Daoud has been implementing his vision of an overhauled Lebanese postal system. No easy task, since the country’s postal service was obliterated by the civil war and it was only thanks to local and international courier companies that any post flowed at all during that time.

Daoud said he has had to coax a people grown unaccustomed to using postal services back into the fold. “The core objective was to revamp the mail culture, which was non-existent over here. You had a whole generation without any idea about what a postal administration can offer.”

To this end, LibanPost is attempting to establish itself as a conduit for government services such as passport/residency permit renewals and military service exemptions/postponements. The effort, argued Daoud, bolsters President Emile Lahoud’s anti-corruption drive because it cuts out face-to-face transactions between citizens and government employees, thus reducing the potential for “under-the-table” deals. LibanPost exacts no fees for the renewal services, which it began offering about two years ago. So far, Daoud said, between 75,000 and 80,000 people have renewed their documents through LibanPost. The decision to offer assistance with military service formalities was born, Daoud noted, of his frustration with the time wasted sorting out an exemption for his university-bound son at one of the country’s five military service centers in the Bekaa region. “We had to wake up very early in the morning and when we arrived, there were some 2,000 to 3,000 students in line. We had to wait for several hours.” Initiated at the beginning of the year, the service costs LL6,000, or $4. Every week, the number of related transactions grows by 20% to 25%. LibanPost has processed a total of about 3,000 military service-related requests. In 2004, the company expects an increase to about 25,000 to 30,000 requests.

LibanPost is trying, as well, to foster a retail environment in its post offices by offering stationary products such as greeting cards, postcards, envelopes, packages, newspapers, magazines, Lebanon-themed screensavers, floppy diskettes, books about stamps, prepaid internet cards, credit cards and fuel coupons, bus tickets etc. Post offices also offer fax and photocopy services. “We’re gradually expanding the retail services so that it becomes a one-stop shop for people who are in any case visiting the post office,” said Daoud. On a less enthusiastic note, Daoud bemoaned the paucity of banking-related transactions registered by LibanPost. “So far, we haven’t been very successful with the financial institutions. The bulk of mail from banks consists basically of statements of accounts. Most banks today are not distributing statements of accounts, although [bank clients] pay a quarterly fee for them.”

Before the civil war in 1975, Lebanon’s postal services were under the direct control of the ministry of telecommunications. LibanPost, formed in 1998, is a private company under contract to the Lebanese government to operate the country’s postal services. The ministry of telecommunications and the general-directorate of the post regulate the service, but Daoud said the two institutions do not meddle in LibanPost’s affairs or impose strategy. Revenues are shared, but Daoud said that under the terms of the 15-year agreement he could not disclose the breakdown. Daoud refused to reveal the company’s revenues, but acknowledged that the company is still losing money, and probably will continue to do so until the end of 2003. “Next year, however, we hope to start generating profits. I am 100% convinced that there are ways of making a profit without simply waiting for the government to give us business. In all postal organizations around the world, the government is a major contributor to the well-being of the postal administration – this is not the case in Lebanon,” said Daoud.

LibanPost’s shareholders changed in 2001, and an amendment to the original contract spawned the agreement under which LibanPost in its current form operates. Daoud claimed he was not sure why the previous LibanPost agreement disintegrated, but likened its failure to a “wedding that breaks up – the chemistry didn’t work.” In the belly of the company’s headquarters, video cameras and supervisors monitor employees as they handle the roughly 14 million annual transactions. Mistakes are not tolerated. “We are ruthless with errors,” acknowledged Daoud, from behind the broad desk of his white, spartanly furnished office. “Our clients are like people who go to the same restaurant every day. If one day they find a hair on their plate, that’s it, finished. If we hear of any moral irregularities proved to have been committed by one of our employees, then they are fired on the same day,” said Daoud, explaining that he LibanPost operates a “clean floor” policy. Shortcomings are exposed and discussed during daily, early-morning “debriefing” sessions. “Over the last 18 to 20 months, the quality of the service has been continuously improving,” asserted Daoud.

Nonetheless, in the mail sorting room, boxes full of undelivered letters abound, the envelopes marked in some instances with unintelligible scrawl, or an unidentifiable address – after all, Lebanon has no post code system. Thus, delivering letters in the oft labyrinthine streets of Beirut and its southern suburbs, can be a frustrating, sometimes impossible, task – especially if the envelopes sport addresses such as: “Current resident, 14, Blue Cliff Drive, Lebanon,” or “Ms. ‘X’, Lebanon.” Not surprisingly, the ‘Return to Sender’ stamp is in constant use. According to Daoud, Lebanon’s chaotic or non-existent address system is one of LibanPost’s biggest challenges. “Most of the addresses are either wrong or approximate, like ‘opposite that place,’ ‘next to the mosque,’ or ‘over the petrol station.,’” he lamented. In an effort to push for a postal code, LibanPost has already spent $2 million, but the investment has yet to bear fruit because municipalities will not allow plaques bearing postal codes to be affixed to buildings. “We have sent several reminders on the subject, and nothing has been done,” noted Daoud. An alternative, he said, would be to ensure that every street in Lebanon has a name and every building a number. But because the “ownership” of this initiative lies with the municipalities – of which there are 752 – the process is potentially lengthy. The stack of official approvals that must accompany each act of renaming merely serves to complicate the process. LibanPost’s obstacles, however, do not all arise from bureaucratic red tape. Daoud acknowledged that occasionally mail does go astray, but asserted that only in rare instances is it the fault of LibanPost. Inhospitable janitors or doormen sometimes refuse postmen access to a building, saying they will deliver the letters but do not. “The absence of letterboxes can also contribute to the loss of mail. When letters are left lying in front of doors, perched on walls, or propped up against electricity meters, they are easy prey for dishonest neighbors.”
 

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Finance

Balancing act

by Tony Hchaime
written by Tony Hchaime

At the press conference in which he outlined the 2004 budget, minister of finance, Fouad Siniora, began by justifying why the 2003 budget was missed by such a sizeable margin. According to figures for the first nine months of 2003, the deficit stood at around 38%, compared to almost 40% for the same period last year, thus registering a modest improvement. While revenues seem to be on target for the year, and may reach the budgeted LL6.475 billion by year-end, expenditures remain high. Current expenditures (excluding debt servicing) grew almost 8% between January and September 2003, compared to the same period last year, reaching LL3.4 billion against a full year budget of LL4.2 billion. On the other hand, debt servicing, which was expected to be capped at LL4 billion for the year, has already exceeded LL3.4 billion by September, and remains the main factor behind the government’s failure to trim the deficit further. In an effort to justify this performance, Siniora stressed that failure to implement structural reforms in the public sector was to blame for the government’s inability to trim current expenditures and meet its targets, while debt servicing targets set for 2003 were primarily dependent on the proceeds from privatization of state assets, a move yet to be implemented.

In doing so, Siniora absolved his ministry from failing to meet the budget for 2003, placing the blame primarily on the political bickering that has hampered the implementation of structural reforms and the progress of privatization. That done, Siniora moved on to sketch the main highlights of the government’s draft budget for the coming year, repeating the importance of structural reforms in the public sector, and their critical role in achieving any target set for 2004.

He said that the new budget would take into consideration the current and expected burdens on the ministry and the treasury. No new taxes would be levied, nor would there be any modifications to existing taxes, including the famed Value Added Tax, expected to remain at 10%.

On the revenue side, total proceeds were expected to remain stable at around LL6.4 billion, yielding an initial surplus in the budget of LL1.45 billion – until debt servicing comes into play.

Setting the debt-servicing burden aside, total expenditure by the government is expected to stretch by almost 8% to reach LL4.95 billion. Around 69%, or LL3.4 billion of such expenditures are allocated to salaries and wages for the workers of the public sector. With the national debt holding steady at current levels, total interest on the debt for the year 2004 is expected to reach at least LL4.3 billion, constituting 46% of total expenses, 67% of total revenues, and yielding a net deficit for the budget of LL2.85 billion, or 30.8% of spending.

As such, wages and salaries, in addition to debt servicing costs, amount to a staggering LL7.7 billion, or 84% of total expenditures. The remaining 16% of expenditures, or LL 1.9 billion, are allocated among various ministries as normal operating expenses for government entities. While such “discretionary” costs may be trimmed, it would conceivably be difficult to significantly improve efficiencies on that front with no radical structural reforms.

On the other hand, if privatization plans do materialize early in 2004, and if proceeds from such efforts are up to expectations, total debt servicing for the year may drop to LL3.9 billion. Such a drastic improvement would reduce the deficit to LL2.45 billion, or 27.7% of spending. The ability of the government to meet even the high end of the deficit for 2004 remains to be assessed, however, as it still marks a significant improvement over the numbers seen in the second half of 2003, where the deficit reached 38% of spending. In fact, as it has been clearly outlined by Siniora, prospects for additional cost-cutting outside debt servicing are bleak, while revenues are expected to remain flat. On the revenue side, options appear to be very limited, or so the government would want us to believe. Income taxes are already being levied on companies and individuals alike. Consumer taxes are being levied through a 10% Value Added Tax system being applied to almost every type of good or service. Custom duties are still applied to almost all import, including unfortunately raw materials and semi-finished goods for industrial use. From this perspective, it does seem that there is virtually no room for improvements. Any additional or higher taxes and the already high cost of living in Lebanon would squeeze consumption, investments, and subsequently economic growth.

Nevertheless, the case may not be as hopeless on that front as the government is painting it out to be. The government should be able to significantly improve its income not from increasing taxes and duties, but by simply improving tax collection. While no official records are kept on who pays what taxes, or at least no records are disclosed, the possibility of digging in that direction should be seriously considered because the current situation leaves no room for slacking off, especially with the World Bank and IMF breathing down the government’s neck. Improvements can be achieved through better tax collection on currently levied taxes, in addition to levying taxes on some job sectors to this day indemnified from paying taxes (medicine, law, etc…).

On the expenditure side, and apart from debt servicing, it was made clear by the government that the overwhelming majority of expenses (or 86%) is non-discretionary and cannot be significantly reduced. Furthermore, almost two thirds of all expenses are allocated to wages and salaries of public sector “servants”. The majority of members in the government and the parliament seem to believe that no cuts can be implemented on that front. Basic finance stipulates that reducing the debt servicing cost can be achieved by either trimming the amount of debt on the books, or negotiating lower interest rates on the existing loans. It appears that perhaps the easier solution is negotiating lower rates on existing loans, or replacing existing obligations with more suitable ones. However efforts in that direction are limited, with the benefits of Paris II beginning to dissipate as the country still fails to meet the requirement set during the summit last year. The government has failed to prove to potential lender/donor countries it ability to implement needed reforms and complete privatization.

As the current situation stands, on the other hand, reducing the overall debt level without privatization seems practically impossible. Severe drainage at the power company, a sizeable budget deficit, and increasing spending on social welfare are likely to force the government to continue borrowing over the near term. As such, the total public debt level is expected to breach the $33 billion level in the foreseeable future.

Therefore, we again realize that the fate of the country hinges on a matter debated so many times over the past five years: privatization of state assets. Three matters should be addressed with that regard:

– The importance of privatization and its impact on government finances

– The urgency of completing privatization plans

– The likelihood that privatization takes place in 2004.

The critical importance of privatization of state assets and its proceeds has been underlined so many times by various parties, including the World Bank, the IMF, international banks such as Citigroup, Merrill Lynch, and rating agencies such as Standards and Poor’s and Moody’s. The country’s economy is severely burdened by the level of debt, high debt servicing costs and the resulting deficits forcing the government to borrow more. Such factors have prompted a number of rating agencies to downgrade Lebanon’s sovereign rating yet again, stating the pace of reforms and privatization as the main factors behind such a move. Furthermore, the presidential elections to be held towards the end of 2004 are likely to stall any major moves on the part of the government.

Standard and Poor’s proceeded to revise Lebanon’s outlook from Positive to Stable due to fiscal consolidation delays. “The outlook revision reflects our view that the draft budget for 2004 implies a postponement in fiscal consolidation and hence delays the envisaged reduction in the government’s debt burden,” said S&P’s credit analyst Ala’a Al-Yousuf.

The only conceivable solution to reduce the level of debt is through the privatization of some state assets. The two profitable cellular operations should CONCEPTUALLY be easily sold. The power company, on the other hand, is a losing business, with accumulating debts and losses. Nevertheless, serious efforts should be undertaken to sell-off EDL, which by itself is burdening the treasury and forcing on more debts. Proceeds from privatization can range from $2 to $4 billion, and can substantially reduce the overall debt servicing cost by more than 10% in 2004 alone.

Moreover, the benefits of privatization are not limited to the use of proceeds to reduce debts, but such a move would considerably boost the government’s image on the international scene, prompting cheaper lending, more donations, and improve the overall foreign investment climate in the country.

However, as the political bickering has delayed privatization for almost 4 years, the value of the assets, to the contrary of the level of national debt, are certainly not rising. The longer the privatization is delayed, the less the proceeds of such a move will be, and the more damage the government’s already frail credibility will suffer.

The year 2004 is the presidential election year. President Emile Lahoud is eager to improve his public image, while Prime Minister Rafik Hariri is equally keen on meeting his economic targets. It remains to be seen, however, if their plans to improve their public image include a certain compromise on such critical issues as privatization, and how soon, if ever, such precarious steps are to be taken.
 

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Economics & Policy

Happy days?

by Faysal Badran
written by Faysal Badran

The stock market’s upward move this year has humbled many analysts and perplexed even the most optimistic financial experts. Take the all-tech/all-emotions Nasdaq as an example: it’s up a mind-boggling 73% from its October 2002 lows, a tempting sign to many that it’s safe to invest again. But are Wall Street’s happy days here to stay, or is the stock market’s upswing operating on borrowed time?

It is crucial when looking at the market to keep an eye on the big picture, which in this case is that stocks cracked in 2000 and have embarked on a massive bear market. Any moves up within this bear market have to be analyzed in the context of the larger force in action: the bear. In fact, for the SP500 index, the bear market is in the earlier stages of its decline. The Nasdaq, although on the rise – some Nasdaq dream makers are up two, three, even five-fold – it is still down 60% from its March 2002 numbers. This latest rally has brought little real solace for the buy and hold crowd, as they are still down. The short-term punters that have played the move up, however, have cleaned up nicely. But in the meantime, the individual investor must ask the following question: “Is it for real and do I keep my money in?” The answer to both is a resounding “no”.

The move up, from a technical perspective is not so irrational – there have been three other moves up since the crash started, and all had been mistaken for a real revival. This latest surge came with a whole media blitz on how “the US economy is recovering” and in three months, the word “recovery” replaced the word “recession”. The current mainstream view is that the recovery in the US will lead to ever-higher asset prices, but there are two important cautionary factors that should be considered. The first is that the sentiment is extremely positive. This may seem counter-intuitive, but with market participants feeling so buoyant, there is ample room for disappointment. Ever forgetful of the past, the public and the media are being lured into a false sense of security. The market never bottomed at multiples beyond seven or eight and we are currently at 28 times earnings on the SP500. The second factor is that with consumption being the catalyst of any recovery, it is hard to imagine it staying robust without improvements in job creation. Job growth, especially weak in Europe, has faded significantly in the US, with the unemployment rate increasing from 4% at the height of the mania, to near 6%. Chances are, unemployment will continue to rise given the massive overcapacity in most sectors.

The technical factors abound, but the most relevant for the individual investor, is that the bear market is not over. People should be looking at their portfolios and cutting stock exposure to a bare minimum, and while the media and large financial institutions will have you believe that “cash is trash”, this advice will likely turn out ruinous. The notion that people must invest in the stock market is outdated. From 1982 to 2001, the markets were hugging a near perfect up trend (see chart). Since then, it has gone back and forth, sometimes with inebriating speeds, but the market remains below the trend line broken three years ago. What does that entail? It simply reinforces, visually, that despite the recent large move up in stocks, and the hope driven discourse about elections, recoveries, and the “new world”, the markets are still in dangerous territory. Even the sexiest alternative investment will not dodge the coming deflation in prices across the global markets, especially in US stocks and corporate bonds. It is much simpler to adopt the optimistic scenario, as it flows strongly in the ambient media. But one must be more cautious than ever before of the dream of long-term prosperity in stocks. Having been devastated by hope on multiple occasions in the past, it is an elixir that should be passed up. Stay in cash, invest where you live, and preserve hard-earned money. Cash, far from being trash, is the ammunition for investing when no one, including CNBC, will be positive on stocks. For now, stay liquid for the stormy winter.

 

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Society

Biting the bullet

by Sarah Smiles
written by Sarah Smiles

“No serious newspaper will survive in Iraq today unless the security situation improves. Advertisers aren’t interested. Locals can’t afford to spend much on a newspaper. As a newspaper owner, you’re in trouble,” said Mark Gordon-James, 25, the former finance director of the BAGHDAD BULLETIN, the English language newspaper that has gone belly-up. Established by a team of mainly young, adventurous British expatriates straight after the war, the paper showed early promise. Little did the team predict the persistent operational hazards – power outages to street crime – that would thwart growth from the beginning. All eventually kept advertisers at bay.

“Our mistake was to assume that Iraq would be better off three to five months after the war,” said Gordon-James who estimated losses at $20,000 and who argued that if there had been a genuine effort by the coalition to inject money into Iraq and get reconstruction underway, Iraq would have seen a massive influx of foreign investment.

“Instead, just nothing has happened,” he said bleakly back in London after spending over four months in Iraq. “The place has simply stagnated and started to decompose with the social rot that sets in when you take basic services away from a people – in other words, the collapse of the state.” Ralph Hassall, 24, a young British entrepreneur and graduate from Oxford University, recruited Gordon-James to handle the business side of the paper in May. “Within a week of hearing the idea and meeting Ralph, I was on a plane to Amman,” said Gordon-James, who at 25 was the Bulletin’s oldest staff member. “I thought it an entirely appropriate and essential project for Iraq … plus I found the idea of being an entrepreneur pretty attractive. Didn’t Richard Branson start like this?”

For his part, Hassall was inspired by his mother to start the paper whilst on a trip to the UK from Beirut, where he had been studying Arabic at the American University of Beirut (AUB).

“I spoke to my Mum and she said: ‘You know what they’re going to need in Iraq after the war? They’re going to need an English language newspaper,’” he said. Searching for investors, Hassall solicited start-up funds of $14,000 from what he described as “a wealthy banking friend.”

“A rich friend from Oxford gave me the start up cash. It’s a high risk venture that he did more as a favor for me,” said Hassall, who has an MA in chemistry from Oxford.

With funds in the bag, Hassall and Gordon-James braved the dangerous desert highway from Amman to Baghdad and published the first edition of the paper on June 9. Half of the initial $14,000 was spent on flights, a car, equipment and setting up the office in Baghdad. “Later, when things were looking positive, we got $10,000 more in seed capital from the same investor,” said Gordon-James, who added that the paper also received various donations of around $1,500 per month.

While inefficient printers and the difficulty of importing paper set the printing costs in Baghdad at $2,000 to $2,500 for a print run of 10,000, operational costs in Baghdad were generally cheap, said Gordon-James. “We were the cheapest newsmagazine in the world,” he said, estimating the entire costs of running the paper at $8,000 a month. “That is ridiculous for what it was.” At the height of operations, the paper employed 20 people, paying local staff members $50 per week – a huge salary for Iraqis who were used to being paid a pittance under sanctions-ravaged Iraq.

Nonetheless, without proper funding, the BAGHDAD BULLETIN was destined for failure. While the paper had ad agencies in Saudi Arabia (Saatchi & Saatchi) UAE and Jordan (Promoseven) and Kuwait (Impact/BBDO) lined up to sell advertising, only one ad was ever sold, despite the paper’s rate of 70 cents/cm2.

“We depended on growing ad sales relatively speedily in order to cover our operational costs, but they didn’t materialize because there was and is no vibrant business in Iraq,” said Gordon-James flatly. “No international companies are really interested in advertising in a pure Iraq-circulated paper while the country remains so volatile; they have to see a return for their investment, which is impossible from a country in crisis.”

Gordon-James said that if the paper had backing beyond its shoe-string budget, it could have grown through an international circulation in Jordan, Kuwait, the UAE and Saudi Arabia, building sustainable ad sales revenues on the back of this. “But as it was, we couldn’t afford to even send our director to Kuwait just to sign the distribution agreement,” he said. By the seventh issue, just when regional interest in the magazine was apparently taking off, the money ran out.

After flying close to bankruptcy for many weeks, the paper’s staff members were forced to evacuate Baghdad in mid-September. “We still exist as a company by the way and we could re-start tomorrow if we found financial support,” said Gordon-James, who would gladly travel back to Baghdad if decent funding were secured. “In the meantime we plan to run the BAGHDAD BULLETIN website as an information forum.”

Aside from enduring financial difficulties, the chaotic situation on the ground made it extremely difficult to get the paper off to print. Without a generator, the staff’s working hours were dictated by power outages that saw electricity flow between 2am and 4am. Security was also a serious concern. In July, Richard Wild, a young British journalist who had come to work in part for the BAGHDAD BULLETIN, was shot dead hailing a taxi on a Baghdad street at point blank range. “We were supposed to meet with him the evening he was killed,” said American David Enders, the paper’s 22-year-old former editor. “The staff, which was mostly young Brits, freaked out for the most part – as it seemed to drive home how dangerous the situation was in Iraq.”

At that point, Enders hired an armed security guard. “We didn’t have a gun in the house until that point, and we agreed to getting a guard after some [staff members] started saying they wanted their own weapons,” he said. “From then on, we always kept an AK-47 on the sofa by the front door.”

Back now in his relatively serene home city of Grand Rapids, Michigan, an exhausted Enders has time to reflect on his surreal experience in Baghdad. “At one point it almost felt like we were playing some sort of bizarre prank, printing a newsmagazine in a war zone,” said Enders, who was invited to edit the paper by Hassall after they met while he was a visiting student at AUB. He recalls a fitful night before the first edition went to print where the staff had a “solid freak-out” about how the paper would be received by Iraqis.

“We had a very eclectic group of guest contributors, from Daniel Pipes to a human shield, and we weren’t sure how they would be taken by the population at large. I was especially concerned about being viewed as cultural imperialists, and also didn’t know what would be totally taboo,” he said.

The paper originally relied on overseas contributors for content, yet later employed local and foreign journalists. The foreign journalists, mainly young British university graduates were not paid, rather offered board and a chance to further their journalism careers. “They got a lot out of it, because it’s experience that counts for foreign journalists. They have to make a name for themselves, and we gave them the perfect excuse and safety net to come to a flash point and cover it,” said Gordon-James. Two of the Bulletin’s former journalists are now working in Mosul and Basra, respectively, as stringers for Reuters, another in Baghdad for the BBC and the Associated Press.

While Enders and Gordon-James convey a sense of exhaustion about their time in Baghdad, they impart a sense of thrill about their extreme, almost action-movie like experience.

“We were caught in a number of close-quarter fire-fights, were on the scene of the UN bombing before the Americans, went to all-night raves with gun-firing party goers and hired Uday’s chief engineer and drinking partner as a distribution man,” said Gordon-James. “I almost crashed my car trying to swerve a dead body in the street … the bottle store next door to our house was shot-up in a drive-by shooting; a carjacker was nailed on our street by the neighbors; we were given one of Moktada Sadr’s only ever foreign interview, and we were called by an MP in London saying she’d just given Tony Blair an issue.”

While Gordon-James said he would have never risked the venture had he known the outlook for post-war Iraq, or the improbability of financial success given the start-up funding, he still views the founding of the paper as an achievement.

“Without hindsight, what we did within a month of the end of official hostilities was create an informative, balanced, insightful, publication driven by pure ideology and it was totally unexpected to everyone, especially Iraqis.”

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The Buzz

Spinal tap

by Anissa Rafeh
written by Anissa Rafeh

Hassan, a 38-year-old marketing manager, is talking about his first bout with lower back pain. “It was so bad, I could hardly step off the sidewalk,” he said. “I tried everything. I did stretching and when that didn’t work I rested. I used Deep Heat on the afflicted area. I even thought I had cancer when I diagnosed my self on the internet,” he laughed. “In the end, I went to the pharmacy and the woman gave me muscle relaxants. They worked, but they played havoc with my stomach."

Hassan has since pinpointed the reason for his pain. “It was stress related. I would feel it coming back if I started to feel tense or anxious. It was like a wave lapping me on the beach, getting closer and closer. I would have to lie down and really relax for the sensation to go away.” More than 80% of the world’s population will experience some sort of lower back pain at least one time in their life. It is the second most frequent disability after the common cold, afflicting people between the ages of 18 and 30, and the most prevalent ailment to affect adults under the age of 45. Of the $27 billion spent on musculoskeletal trauma worldwide, $16 billion is spent on the treatment of lower back pain, over half of which is spent on surgery. “There are a lot of economic ramifications resulting from lower back pain, like absence from work and financial compensation for those immobilized from the affliction,” said Dr. A.F. Masri, attending physician of arthritis and rheumatology at the AUH and the former president of the Lebanese Rheumatology Society. There are no statistics in Lebanon for just how many days are lost from back related illnesses but it is estimated that in the United States last year, the total cost of back pain from back disorders in the workplace, was between $50 billion to $100 billion. This figure includes the cost of medical care, absence from work, social costs, personal loss and disability payments. So, what exactly is lower back pain?

“Lower back pain can best be described as a feeling of discomfort in the lower part of the spinal column – which is basically the area from the waist to the buttocks,” said Masri. Masri explained that there are three forms of back pain: acute, chronic and sub-acute. Acute pain generally comes on suddenly, lasting – as in the case of Hassan – up to four to six weeks, and the degree of pain ranges from mild to severe. A high percentage of acute pain sufferers take days off work to recover.

Chronic back pain lasts beyond three months but the level of pain experienced is not necessarily high. Chronic pain has higher economic repercussions, however, because this is where financial compensation due to immobility comes in the picture – i.e. the sufferer is laid off because he/she is no longer able to continue working. Sub-acute pain is in between acute and chronic and lasts about six to 12 weeks. According to Masri, treatment for lower back pain depends on the type of injury, of which there are four main categories. The first, mechanical injuries, usually consist of sprained muscles as a result of lifting heavy objects. “Such injuries heal with time, and can be eased with massage therapy, medication or physical therapy,” said Masri. Osteoarthritis is another type of mechanical back injury and it is the most common cause of lower back pain in the elderly, as it comes with age. Treatment is usually medication, physical therapy and massage. Falling under the same category are fracture injuries – which are usually caused by falls and treatment is bed rest – and herniated discs – which usually heal with time and proper care, including rest, physical therapy, muscle relaxants and avoiding any heavy lifting. The second form of back injury is inflammatory, which is usually a result of chronic arthritis that affects the joints of the back. “This usually affects young people between the ages of 18 and 30-years-old,” explained Masri. Treatment for such ailments is usually anti-inflammatory analgesia drugs, like Panadol, Advil and Volteran. 

Next come infections, which affect the spine and cause extreme pain in the back region. “The most common spinal infection in Lebanon is BRUCELLOSIS, and to a lesser extent, TUBERCULOSIS,” said Masri. “Signs of infection are fever, chills and weight loss, and treatment is antibiotics.”


However, Masri was quick to point out that perhaps the most severe form of back ailments is cancer, which results in a high degree of pain if affecting the spinal area. Treatment is chemotherapy or radiotherapy. “No matter what form of back pain a patient is suffering from,” said Masri, “surgery is usually a last resort,” adding that although not generally a necessary treatment, back surgery is common. For the most part, lower back pain eases with time, however, Masri advises that if the pain continues longer that one to two weeks, a consultation with a physician is necessary. “About 90% of the time, a diagnosis can be made based on the history of a patient combined with a physical exam,” said Masri, adding that x-rays are usually not needed. “Most of the time, x-rays are unnecessary and just a waste of money.”

To avoid the most common lower back pains, Masri advises to always maintain proper posture – keeping shoulders back, and when sitting, making sure both feet are on the floor and knees form a right angle – exercise regularly, avoid putting stress on your back with heavy lifting, and lose weight if you are more than 10% overweight. “It’s important to remember that lower back pain affects all people, all races, all ages, is very common, and, a diagnosis is relatively simple to determine.”

Anti-inflammatory drugs

Those, like Hassan, who were plagued by discomfort such as nausea and stomach pain, when they took anti-inflammatory drugs, can look forward to milder treatments. Enter rofecoxib, a newly developed painkiller and anti-inflammatory drug, which, in recent tests, has proved to be as efficient as traditional treatment techniques and much safer. It has also been formally endorsed by the US Food and Drug Administration (FDA).

“[There is] a growing international concern about the safety of traditional pain treatment techniques, which are based on prescribing Non-Steroid Anti-Inflammatory Drugs (NSAID),” said Dr. Tore Kvien, speaking at the 6th Pan-Arab Congress of Rheumatism and Rehabilitation, held in Beirut in September. “Those traditional medications have proven to be dangerous to the human gastrointestinal (GI) system, and the international medical community has been looking for new alternatives for over a decade.”

The symposium discussed the results of two most recent studies, which showed that rofecoxib provided fast and powerful relief from the pain of osteoarthritis (OA), rheumatoid arthritis (RA), and chronic low-back pain (CLBP). The studies, which were conducted on 1,925 patients, also proved that the new medication was more effective than traditional anti-inflammatory drugs.

Other studies revealed that rofecoxib provided superior pain relief in dental and regular surgery. Those studies showed that pre-operative use of rofecoxib is not associated with increased risk of procedure-related bleeding. Finally, treatment with rofecoxib was safe in treating both upper and lower gastro-intestinal disorders. “The emergence of certain drugs, such as rofecoxib, gave prolonged and safe duration of pain relief and analgesic effect from a single dose. The importance of these qualities in acute pain relief has only recently been appreciated and quantified,” Kvien noted.

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Society

Money back guarantee

by Michael Karam
written by Michael Karam

In the first six months of 2003, over $1 million in VAT-refunds have been reimbursed to tourists and non-resident Lebanese. It is estimated that 15,000 tourists, roughly 1.5% of all foreign arrivals, took the time to put their purchases through the Global Refund tax-free shopping system, collecting an average of $66 from new tax-free shopping desks at Lebanon’s main border crossings.

Since 2001, Lebanon has touted itself as a shopping destination to eventually challenge Dubai. This claim has been strengthened by the evolution of the BCD, the arrival of modern, well-specified shopping centers and the long-overdue appearance of high-profile international consumer brands have proved a popular complement to Lebanon’s established tourist attractions. When it is eventually built, the long awaited Souks project will be the jewel in Lebanon’s retail crown and the center of tourist shopping.

Retailers can now point to defined shopping periods: summer, Eid el Adha and Eid el Fitr. ”Our boom periods are dictated by the Islamic calendar and, to a lesser degree, Christmas,” explains Khalil Achkar, Global Refund’s general manger in Lebanon. The company works in collaboration with the ministry of finance to refund VAT in return for a 1.85% handling fee. Global Refund operates VAT refund services in 35 countries in four continents. “We service over 210,000 outlets and deliver 10 million refunds globally,” boasts Achkar.

The profile of tourists’ spending habits is still far from comprehensive, but a survey of those who chose to collect on their VAT shows that 74% of purchases took place in Beirut – mainly in the BCD and Verdun – with 18% of shopping activity taking place in the Metn – mainly from the ABC, GS and Sports et Loisirs branches in Dbayeh.

Saudi Arabians make up the bulk of Lebanon’s tax free shoppers (a shopper qualifies for tax rebates if he or she is a foreign national or Lebanese who spends less than three months a year in the country) with Kuwaitis and Egyptians coming second and third respectively, ahead of those nationals from the UAE, Jordan, the US and the “rest of the Arab world.” Clothes (62%) and jewelry and watches (12%) are the most popular purchases, according to global refund statistics. “When it comes to clothes, Lebanon is surprisingly competitive compared to Dubai, but the emirate still has the edge on us in terms of electronic goods,” says Achkar According to Achkar, Arabs are very discreet shoppers. “They show off at home but they shop abroad,” he explains. “Ever since September 11, many have chosen to do their major shopping in Lebanon. There isn’t the stigma towards Arabs that has developed in the West, there are cultural similarities and now many international brands are available here. It is the ideal destination.” Nonetheless, Lebanon’s is still very much a fledgling culture when it comes to international retail. To attract the big rollers, Beirut would have to market itself to the big three international spenders: the Japanese, the Russians and the Americans (not Lebanese Americans). China’s dormant spending power is stirring. The world’s most populated country, which is becoming richer through a modern industrial revolution, recently overtook Hong Kong on its way to becoming the fourth in the top spending nationalities table. Saudi nationals are the world’s eighth biggest spenders.

Global Refund began operating in Lebanon in June 2002, five months after the controversial introduction of VAT. Over 1,000 stores have signed up to offer the service. Achkar says that the more sophisticated retailers are enthusiastic. “They have been quick to understand that offering rebates is an asset to the overall shopping experience,” he says. “Others are fairly ambivalent or just assume that it’s a service that solely benefits the shopper.”

Shops that wish to offer tax-free shopping pay an annual fee of LL75,900, which gives them an unlimited supply of refund checks, technical support, training and, most importantly, monthly data on what is being bought by whom.

Data is a dirty word in Lebanon. Those who do give out statistics often inflate their figures, convinced that the other guy is doing the same. Global Refund’s reports are allaying this national paranoia and setting a new benchmark in transparency.

Although the company can only chart the shopping habits of those customers who choose to use the tax-free shopping process, Achkar believes it paints a valuable picture of what tourists are spending. “The feedback tells the retailers who their customers are and where they come from,” say’s Achkar. “Based on these reports, a retailer might then want to recruit sales staff who speak a certain language (shops in Europe have sent their staff on a basic Japanese course) or who may be more sensitive to the needs of gulf Arabs. Retailers can also plan ahead better if they can identify the trends.” However, Achkar believes there is still more that can be done to get a better profile of the tourist shopper. “Most of those shoppers who are listed as American are in fact Lebanese and many of those who come in on Kuwaiti and other GCC passports are also originally Lebanese. If we could know who are Kuwaiti and who are Lebanese-Kuwaiti we would be able to get a better idea of shopping trends. Lebanese and Gulf Arabs have different shopping habits.” Achkar says that although training seminars (the cost of which is included in the annual fee) are held regularly, retailers have been slow to take advantage of the service. “We do our best to make it attractive by holding the sessions at hotels, but the invitations require a lot of follow up,” he said. “You can just send an invitation the week before and expect them to come. You have to remind them and even pick them up from work and take them to the venue.” The need to train staff may put a strain on main of the smaller retailers but the big players – Aïshti, BHV and GS stable of outlets – have embraced the new system and say they are reaping the benefits of offering the service.

Aïshti was unavailable for comment, but Achkar hinted that the up-market clothing store, which sells Gucci, Burberry and other designer labels and which has three outlets in the BCD, was among the most popular outlets for tax-free shopping. Fadi Rayess of Hamra shopping, which owns the GS brand and sells Timberland, Springfield, Hugo Boss and Ralph Lauren Polo, among others, believes that the system is putting Beirut on the retail map. “Our foreign customers are satisfied with the VAT refund process,” he says. “This is a good step towards placing Beirut among the [region’s] top shopping destinations.” Gerard L’Hotel handles the tax-free shopping at BHV, the appliance-driven department store in Jnah. “We had a very good summer especially with those customers from Saudi Arabia,” he says. “We trained our staff in June in anticipation of the rush. It was a good move as we were dealing with purchases made in all departments of the store.” Achkar says it is too early to give accurate measurements of year-on-year growth for tax-free tourist shopping. “Last year we were not at cruising speed,” he says, “so it is difficult to say how we compared year-on-year. Next year’s results will give a clearer picture. This year, there has been greater awareness and this can only increase.”

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Finance

Tough sell

by Tony Hchaime
written by Tony Hchaime

Recent data suggests that commercial banks and financial institutions in Lebanon are increasingly shying away from corporate lending. In fact, most major banks remain wary of the Lebanese corporate environment, as they still attempt to mend their existing portfolios of corporate debt, to the extent of actually reducing the size of their portfolio of commercial loans. BLOM Bank, Banque Audi, and Banque Saradar saw their portfolios of commercial loans shrink anywhere between 1% and 8% over the past year. Typically, and perhaps oddly, the bulk of non-performing loans held by most banks fall into the corporate lending category, as opposed to retail lending to consumers. Corporate banking – including corporate loans and financial assistance – thrived in the mid 1990s as the economy was perceived to accelerate its post-war recovery with a GDP growth of 8.8% per year. Banks were typically more eager to help finance business ventures in Lebanon, coupled with equity capital being contributed by domestic and regional investors alike. New companies were being established, consumption was high, real estate prices were soaring, and the overall outlook for the economy was rosy, to say the least.

In 1996, as banks continuously enlarged their portfolios of corporate debt – typically of a long-term nature – things rapidly took a turn for the worse. Economic growth slipped into reverse, consumer confidence, and consequently consumption, toppled. As businesses saw their margins squeezed by high interest rates on their financing and lower revenues, bankruptcies thrived, creating a substantial burden to anyone and everyone with any kind of exposure to the Lebanese corporate environment. Despite the promising signs of an economic recovery observed over the past few months, and the increased consumer and investor confidence pursuant to Paris II, Lebanese banks are not likely to expose themselves to additional corporate debt until they improve the status of their existing portfolio to a point where they can take on additional exposure, a task typically of a high risk nature considering the unpredictability of the Lebanese economic and business environments.

While no bank has categorically ruled out any form of lending, credit assessment is stringent at most institutions, and conditions for acceptance are as such because only large, well-established businesses are eligible to apply. Many Alpha group banks are extending corporate loans, albeit on a very conservative basis, requiring substantial due diligence and a number of guarantees.

Smaller banks, on the other hand, seem perhaps more eager to venture into corporate lending. Typically, smaller banks have less balance sheet exposure to corporate loans from their past activities. This, coupled with an increasingly competitive environment in retail lending, has prompted a number of medium sized banks to draft strategies that would focus on business loans. As such, conditions are less stringent, interest rates are more flexible, and leniency is more commonplace.

However, the major factors behind the reluctance of banks to finance businesses in Lebanon are being exacerbated by their own policies on the matter. Small and medium sized enterprises have always been the backbone of the Lebanese economy. In fact, SMEs represent around 95% of total industrial enterprises, and employ up to 65% of the total industry labor force. Moreover, SMEs contribute over 40% of the country’s industrial output. Unfortunately however, most SMEs are foregoing profitable business opportunities and are operating below full potential. Production is being limited by the overall reluctance of major banks to provide fairly priced financing facilities to expand production.

While the Lebanese government is attempting to nurture this appetite for small enterprises through subsidies, it does not do so for all sectors, as many promising entrepreneurs are facing difficulty in obtaining debt financing for their projects.

A significant level of risk is typically inherent of small businesses, whose operations are of a typically high volatility. Such a factor is deterring banks from extending to them the much-needed facilities, to the benefit of large and well-established institutions. Such an attitude is somewhat detrimental to the overall growth of businesses in Lebanon, since large institutions typically make use of credit facilities to maintain their operations; whereas small businesses make use of funds made available to them to open up to new markets, increase their product lines, and focus on promotion and advertising.

It should be noted, however, that banks are not the only ones shying away from corporate lending. While Lebanese banks are typically reluctant to offer financing services to local companies, such companies themselves often find it detrimental to make use of such services if and when they are provided. In fact, the cost of debt on corporate loans is so high that it significantly eats into profit margins and forces companies to forego promising investment opportunities. According to Central Bank statistics, interest rates typically charged by Lebanese banks do not fall below 10% p.a. on average, a drastically excessive figure given the typical returns on investments in the country.

A high cost of equity resulting from the geo-political and economic risks associated with the country, coupled with a high cost of debt, are severely undermining appetite for investments in Lebanon. Sought after investments should currently achieve returns in excess of 15% in order to marginally exceed their cost of capital. The issue has been raised numerous times recently, namely in the industrial sector. A number of Lebanese industrialists are reducing output, moving production to other countries, or outright shutting down their operations due to – among other reasons – the high cost of financing their working capital.

It appears then that would-be entrepreneurs should shift their focus towards a perhaps more expensive source of financing: equity capital. Equity capital for new innovative businesses often comes in the form of venture capital, especially in the West. A solid equity base would provide a newly established company with a solid base to launch and expand its operations. Moreover, the ability of a company to attract regional strategic partners would assist in expanding across borders, a critical factor given the limited size of the domestic market in Lebanon.

In addition, a well-capitalized company offers an added incentive to banks to provide debt financing, as the perceived risk to the banking institutions is reduced by the availability of a solid capital base.

It appears then as though the Lebanese business environment suffers from a basic flaw, which severely reduces its ability to promote investments and attract foreign investment capital. Bank’s preferences towards government bonds instead of loans severely limits the sector’s ability to play its basic role of channeling funds from depositors into investments. Several steps should be undertaken, and promptly so, to remedy the situation. It surely does not suffice to attract Arab funds into Lebanese banks if their primary use is lending to the government, and consequently crowding out the private sector. In fact, the government itself should promote corporate lending by reducing interest rates to spur investments, offering subsidies, and encouraging banks to open up their vaults.

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Society

It’s all in the name

by Toby Stevens
written by Toby Stevens

Did it ever occur to you that your email address could be presenting you in a bad light?

Last year, 31 million emails were sent each day. According to the International Data Corporation, by 2006, this number is expected to reach 60 billion, while the number of worldwide email addresses is expected to increase from 505 million in 2000 to 1.2 billion in 2005. Subscribers to email providers such as Yahoo! and AOL are also increasing, with Hotmail the market leader with over three million members. With all the spam (electronic junk mail) received daily in most in-boxes, many email users are growing tired of using the popular, and free, hotmail, yahoo, or AOL services. In fact, in the corporate arena, employees assess how important a company, or individual, is from their email address. More attention is likely to be given to emails using a company’s domain name ([email protected]) rather than an email using an ISP’s domain name ([email protected]). Even riskier is using free email services ([email protected]). “I consider an email message more credible when it has a corporate domain name, rather than a hotmail domain, which I usually discard,” said Rami Majzoub, account director for Levant and Egypt at Reuters Middle East. “ Unfortunately, some Lebanese companies, even well known banks, still use their ISP’s domain name, which shows a lack of seriousness and awareness on their part,” he added. According to Michel Kilzi, general manager at Internet Facilities Group, the reason most corporate employees in the Arab world still use their personal emails for work related issues is because of the lack of awareness and widespread internet penetration. “Whether it is a small, medium sized or huge corporation, all the emails I receive from Europe and the US use the domain address of the corporation,” said Kilzi. “Since most companies have a certain amount of control and restrictions on their corporate emails, every employee separates between their business and personal email accounts. But this is not the case when it comes to the Arab countries. Sometimes I receive an email from Saudi Arabia, Syria or Kuwait from a CEO using his hotmail or yahoo account and I don’t take them as seriously – it’s as if they don’t have a company profile or business card,” added Kilzi.

One thing is for sure, the lack of corporate domain usage is not due to financial or economic constraints. Most companies can register a domain name on the net for as low as $25 per year, and with hosting fees, the cost could reach a maximum of $100. “In Lebanon, 60% of companies have their own domain name, 5% still use hotmail and yahoo, and the rest use their ISP’s domain,” said Rita Hayek, sales and marketing manager at Terravision. “Lebanese companies understand the importance of having their own domain name. It is usually students or small companies that usually use hotmail and yahoo, and they are probably unaware of the importance of a domain name.” Lebanese companies can also register a .lb domain for about LL900,000, or $600. However, some find the procedure too complicated, as they need to register their company trademark with the government before receiving their domain registration. “We have seen many Lebanese companies register .com because they don’t want to go through the lengthy process of registering for the .lb,” said Rim El Kady, IT unit manager at AUB. Companies should especially take care about the email addresses of its employees because, according to analysts, a domain name speaks volumes. For example, it can determine how a corporation treats its employees. If a company uses the full name of the employee in the email address (like, [email protected]), it shows that the organization views its employees as independent entities that provide added value to the company, and as such, respects their individuality. If only the position is used (as in [email protected]), the company is considered more impersonal and viewed as valuing company divisions and apparatuses over personnel. “Sometimes, it is easier for the IT department to create an impersonal address so that when an employee leaves they don’t have to go through the hassle of changing names, adding new ones and deleting old ones,” one IT administer explained. A third method adopted by companies is incorporating the initials of an employee followed by numbers (e.g., [email protected]). In such a case, analysts say the company views its personnel objectively and in a hierarchical manner, while recognizing that they are in charge of services and activities.

But for those of you not wanting to be pigeon holed by a company domain name, or wanting to stand out from the hoards of millions using hotmail and yahoo accounts, do not fear – there is a domain out there for everyone. If you want to show you have a funny bone, you could try [email protected]. Not really in a social mood? Well then [email protected] is just right for you. Whoever said ‘what’s in name’ obviously never had email.

(Box) Revealing messages: Is your position affecting the way you write your emails?

According to an article in The Guardian, your position in a company could influence the way you write your emails. For example, did you know that the higher up you are, the more likely your emails are full of informalities. Since, big honchos have already made it, so to speak, they don’t feel the need to impress through meticulous email writing. In fact, senior executives rarely use corporate jargon and are more likely to talk to a person face to face. Furthermore, the powers that be are less like to use the cc option.

For the middlemen, the story is a bit different because they have a lot to lose or gain. If you’re only half way up the corporate ladder, you probably write lengthy emails to try and impress the higher ups. Middle management also like to sign off with signatures, which include name, position and sometimes a quote even. At the entry level? Well, in that case, according to the Guardian, you like to crowd messages with emoticons, like smiley (?), sad (?), or anxious faces (:S) that MSN or Yahoo messenger have made so popular. Being at the lower end of the corporate food chain also means that you have time to send conversational emails to colleagues, mainly not work related of course. Low status employees are, not surprisingly, more likely to send all those annoying jokes and forwards.

Who knew an email could say so much?

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Business

So just how much trouble is Bush in?

by Claude Salhani
written by Claude Salhani

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.

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Business

The wedding planners

by Anissa Rafeh
written by Anissa Rafeh

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.”

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