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The Union Vinicole du Liban (UVL) and the Association of Lebanese Industrialists (ALI) are exploring the possibility of setting up what is tentatively being referred to as a marketing board to promote Lebanon
Despite the usual upbeat suggestions that tourism is on the up and up in Lebanon, the Arab World Trade and Tourism Exchange (AWTTE), held at the BIEL exhibition center from 16 to 19 September, was, in the words of one hotel marketing director who participated,
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Tripoli
Microsoft chat rooms in Lebanon have been shut down. The move comes after the world
There is anger and disappointment in south Lebanon that a $62 million World Bank cultural heritage and urban development loan will not cover Beaufort Castle. The castle, a 12th century monument built during the Crusades, was used both by the PLO and Israel and its Lebanese allies as a strategic outpost during the war years and up to May 2000.
Mustafa Badreddine, a former president of the municipality of Nabatieh, under whose jurisdiction Beaufort Castle falls, said he was at a loss to explain why the
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The ministry of telecommunications and its network-operating subsidiary, Ogero, have installed the first wave of public payphones in Lebanon, with apparent success. The rollout began in late 2003 with payphones at Beirut airport and in the capital. According to ministry figures, installation shall continue until 4,000 public phones are available nationwide. The total project cost is $8 million.
The new network offers consumers an affordable alternative to mobile telephone communication. It employs the same smart card technology that has been successful around the world, but the new payphones do not accept coins. The prepaid card required to operate the phone offers the buyer of a LL10,000 card 100 minutes of domestic landline talk time. Rates for calling a mobile phone are priced at three times that, at LL300 per minute. The public phones also allow international calls, reportedly at rates below those from a regular landline phone. For the time being, customers have to visit an Ogero telephone exchange to purchase a card. Representatives at Ogero
In July and August, a new resolutely apolitical lifestyle magazine called Hi hit the Lebanese newsstands. Available only in Arabic, the magazine featured stories on singers, student life, online matchmaking and other matters that the publishers hoped would appeal to youth in the Middle East.
What made this product noteworthy was not so much its content, or its publisher, Magazine Group, a corporation specialized in niche magazines, but the fact that Hi is funded by the US State Department to the tune of $4 million annually. This makes Hi yet another example of the US government
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After having shown his face all over town to promote his first CD, fashion designer turned singer Elie Karam now has exposure he never dreamt of, putting him beyond the reach of less obscure local artists. For around three months, people all over the world have been able to listen to Karam
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.
“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.”