Executive Magazine

Signed in pencil

by Jeremy Arbid April 27, 2018

written by Jeremy Arbid

Officials went to Paris in early April to pitch an infrastructure investment plan for Lebanon to the international community at the CEDRE conference. The pitch was generally well received by donor countries and multilateral institutions, who pledged $11.3 billion in low-interest loans for infrastructure projects on the condition that Lebanon check reform boxes on the loan application.

The Capital Investment Plan (CIP) is a multiyear investment strategy aimed at rehabilitating Lebanon’s dilapidated infrastructure. The CIP is valued at $17 billion over the next seven years and includes some 250 projects—in water, wastewater, solid waste, transport, electricity, telecommunications, and infrastructure for tourism and industry.

A statement from the International Monetary Fund at CEDRE said CIP would raise $1.6 billion annually over the next decade, mostly from the loans provided by the international community. More money—about $5 billion according to the CIP—could come in the form of private financing via public-private partnerships. The CIP also says the Lebanese state would contribute about $2.3 billion over the next seven years, despite a reduction of 12.6 percent in capital expenditures in the 2018 budget (see budget story and infographic).

A joint concluding statement by Lebanon and France at the conference said that donors and multilaterals had promised $10.2 billion in loans and $860 million in grants. The prime minister’s office did not respond to a request for a list of the pledges made at CEDRE, and a spokesperson told Executive in mid-April that the office had not received the official terms and conditions attached to the pledges. At a news conference on April 11, Prime Minister Saad Hariri said: “Most of these loans are very soft loans with interest of 1.5 percent maximum, with a grace period of seven to 10 years, and a maturity period that exceeds 25 years.”

Total pledge figures compiled by Executive from media reports and available donor statements were a little different from what the government stated. The CIP projections were drawn from reading a version of the plan published on the website of the Presidency of the Council of Ministers.

International commitments

The loan money pledged—the $11.3 billion—could be unlocked if the Lebanese state follows through on reforms including a reduction of the deficit by five percentage points of GDP over five years, primarily by improving tax collection and reducing government subsidies to the failing public utility, Electricité du Liban. Another $384 million was promised by donor countries as grants.

Multilateral agencies together pledged Lebanon loans that could be worth up to $8.3 billion, while donor countries promised another $3 billion.

The World Bank Group offered the largest loan at $4 billion over five years, according to a statement made at the conference. The International Bank for Reconstruction and Development said it would provide $500 million per year over the same period, with a similar amount for the same duration coming jointly from the International Finance Corporation and Multilateral Investment Guarantee Agency. The statement promised to raise another $200 million per year in loans to support Lebanon’s host communities and refugees.

The European Bank for Reconstruction and Development (EBRD) promised the next largest loan valued at almost $1.4 billion, while the European Investment Bank (EIB) pledged around $1 billion. EBRD gave no statement describing the contents of its loan while EIB’s statement did not detail conditions or disbursement.

The Islamic Development Bank promised $750 million in loans; the Kuwait Fund for Arab Economic Development, up to $500 million; and the Arab Fund for Economic and Social Development, also up to $500 million, though Al Akhbar newspaper reported that this loan could increase to $1 billion. None of the funds published statements.

As for donor countries, Saudi Arabia said it would reinstate a $1 billion credit line that Reuters reported in 2014 was intended to support the Lebanese Armed Forces. At CEDRE, several countries promised loans, including Qatar ($500 million), France ($492 million), the Netherlands ($369 million), Turkey ($200 million), as well as the European Union ($185 million). In addition to the loans pledged, France said it would give Lebanon $185 million. The United States and the United Kingdom offered no loans but promised $115 million and $85 million in grants, respectively.

April 27, 2018 0 comments

Behind the talk

by Executive Editors April 27, 2018

written by Executive Editors

April was a milestone month, not one of celebration but of remembrance. Forty-three years ago last month is considered the start of the country’s civil war that drove many Lebanese to emigrate, displaced others, and killed many more, in addition to the 17,000 who cannot be accounted for. Beside the human toll, the civil war destroyed the country and ruined the economy. From our point of view, and it is not an uncommon one, Lebanon has still not recovered nearly three decades after militia leaders agreed to end the fighting and share the spoils of peace among themselves.

Lebanon’s situation is dire as the economy is nearing a breaking point. The prospects for the next few years, which have recently been put by the World Bank at 2 percent real annual growth, cannot alleviate the fears of the Lebanese people. As the World Bank’s MENA Economic Monitor indicates, our country’s prospects for real GDP growth, and the fiscal and current account balances in 2019 and 2020 are the worst in the entire Middle East and North Africa region, resulting in an assessment that puts Lebanon in an “unsustainable” situation.

The Lebanese people do not need to be told by international experts that their country is in trouble. Over the past six or seven years, they have had dismal experiences on all economic fronts. The people know that the Syrian refugee crisis has brought with it worsening of living conditions for both refugees and host communities. It would thus be surprising if anyone in Beirut—economist, business leader, civil society activist, or private citizen—were to disagree with what Prime Minister Saad Hariri had to say at the Brussels II refugee donor conference on April 25. He lamented that if one asks if host communities, displaced Syrian people, and Lebanon overall are better off today when compared with one year ago, the “answer is simply no.”

The gathering storm

These two Lebanese experiences, of a gathering economic storm and a continuous inability to solve the refugee crisis, put into context what happened in April in Rome, Paris, and Brussels, as far as financial pledges and official rhetoric. Brussels, the last event in this lineup, was—when read or seen from Beirut—an indigestible banquet of speeches and communiques flavored with false pathos and self-congratulatory noise. At this conference—critical not only for determining the humanitarian assistance for the estimated 12 million displaced Syrian people, but also for assuring the minimal existential security of millions in host countries—underwhelming financial commitments in the evening of April 25 juxtaposed the morning’s odiously upbeat messages by hosts of the event.

It is too early to gauge the precise implications of the pledged $4.4 billion (€3.5 billion) for 2018, as well as multi-year pledges of $3.4 billion (€2.7 billion) for 2019-2020, as stated in the co-chairs’ closing declaration in Brussels. But when compared with the amounts in the $9 billion range that had been circulated as targets for the event—more than twice of what came in pledges—the message unequivocally is one of insufficiency. Refugees and host communities in Lebanon are well advised to tighten their belts, if they even have any such fashion accessories left in their wardrobes.

Also when viewed against the painful discrepancies between the pledges made in recent years and the humanitarian and development aid actually delivered—Human Rights Watch claimed that of appeals for humanitarian aid for Syrian refugees in Lebanon for 2017, only 54 percent had been funded by December of last year—the Syria crisis of the last seven years shows the helplessness and limitations of the international community. The world’s strongest institutions and nations have so far failed in their professed best attempts to protect human dignity or control and reverse human evil in the 21st century.

Helplessness in the face of political and imperial evils is no passing occurence in this region. Let us not forget that the spring month of April sees not only the anniversary of the outbreak of the Lebanese Civil War, but of the Armenian Genocide as well. A whole epoch of instability and conflict was ignited when the UN over 70 years ago adopted its Resolution 181 for the partition of Palestine, the human cost of which is once again playing out in front of the world.

In this litany of political forcefulness and human agony, all that happened in the Middle East since the Arab Spring—and most painfully, the war in Syria—is just more proof of human existence in constant precariousness. Add to this highly combustible situation the economic misery and delayed moral bankruptcy of the Lebanese state, which has been creeping through this country’s political entities for the better part of the last 25 years, and disappointment and cynicism are indeed the most easily comprehensible responses to our living reality.

Many of our political leaders today are the same people that tore this country apart. They are the same leaders that failed to address obvious economic perils and managed to bungle every previous lifeline offered by the international community. They are the same leaders who got an F in reforms and governance but A+ in filling their pockets. Yet now, with elections at the beginning of May, it seems likely that the Lebanese voters will send many of them back to Parliament. Go figure.

Our future in our hands

But cynicism is not going to solve the problem. That is why it is time to remember essential lessons of being human, as symbolized in the May cover of Executive. The future is as fragile as any baby at birth, and Mariam—which we call the female icon of Lebanon—is struggling to break free from her chains. Those who had killed our past futures with impunity, those who are eager to thwart every future attempt at existing in political dignity and a sustainable economy—may be those who do the bidding of their sponsors.

Wherever and whoever it might be, the Lebanese people know that no overlord has anything but their self-interest in mind, and every clear mind also knows that the old political allegiances cannot but again kill the future, however much these stooges of foreign interests may call for the Lebanese people to trust them in elections. Lebanon’s future must be the people’s baby and the human experience is that people, in particular parents, will go to any length to nurture their future. For the 2018 elections, sustaining this baby means to vote against all odds, and vote conscientiously.

Equal to its commitment to nurture, successful parenting needs communication. In context of what will come after the May 2018 elections, this means for civil society and the business community to pursue persistent debate with political stakeholders. In this permanent monitoring mechanism, whether it is about reforms, infrastructure investments, economic vision, or accountability of Lebanese institutions, local beats foreign. Let’s not entrust the monitoring of restoring Lebanese sustainability to international financial or political nannies.

And, as conventional wisdom has it, there is no fiercer lioness than one who defends her cubs. Lebanon must not deteriorate into the mindset where everyone just waits for a chance to escape and migrate somewhere else. The cubs of Lebanon’s future are accountability, good governance, and civic responsibility, just to name some in the litter of the upcoming elections. They deserve to be protected and defended against all predators and prowlers, however strong they may appear.

This, if anything, is Mariam’s mission. As things look today, there will be new faces from some of the established political parties, a chance for some candidates from civil movements to break through, and hopefully there will be more than four women represented in the legislator. So even as the light at the end of the tunnel is yet growing neither larger nor nearer, Executive calls on the Lebanese to hold high their hope.

April 27, 2018 0 comments

Editorial Opinion

Break the chains

by Yasser Akkaoui April 27, 2018

written by Yasser Akkaoui

Watching the fifth masquerade of national elections since my return to Lebanon, I cannot help but recall Amin Maalouf’s masterpiece, “The Rock of Tanios.” In Maalouf’s tale there is an Ottoman sheikh of a mountain village who collects taxes and recruits the able to fight the empire’s wars. In return for his allegiance to the empire, he has his privileges. While the young men of the village go off to die in battle, the sheikh stays behind, keeping part of the tax wealth for himself and feeling entitled to pursue the parish’s women. He robs what few possessions a man owns: wealth, life, honor, and dignity. The most astonishing plot twist is when Roukos, the self-exiled, virtuous, and decent man, returns to his native village to dethrone the sheikh, return the stolen wealth, and protect the villagers’ dignity, only to find the villagers upset over their sheikh’s humiliation and crying out for his return.

Nothing illustrates our reality as much as this scene. Similar to feudal life, our politicians continue to insult our dignity, steal our wealth, send us to fight foreign wars, or push us to into self-exile through emigration. Faced with such indignities, some choose clientelism and become dependent on the offered crumbs, while others choose to work indefatigably to safekeep their integrity. Yet come what may, every election we cry out for the return of our feudal lords.

What is bewildering is the predictability of fate, and how easily history repeats itself. Today, we still live on handouts from foreign nations who sponsor a failed state that has never managed to grasp the idea of sovereignty or understand the concept of sustainability.

As much as we want to believe that the required reforms are the condition to deploying CEDRE funds, at the end of the day it does not take half a brain to realize that these agendas are not aligned. The creditors’ release of the funds—which is bound to happen—is tied to when it serves their interests and not our government’s commitment to reform. The $4.4 billion pledged at the Brussels II refugee donor conference uncovers the rationale behind the $11 billion in Paris. By pegging the CEDRE loans to the Syrian crisis Lebanon is left solely responsible for the over 1 million Syrian refugees in the country, something the international community is happy to allow. There is nothing humanitarian about it.

Elections are a week from when this magazine goes to print. We remain ever hopeful that the Lebanese will break free from their hereditary bad habits and realize what they are trading: their wealth, life, honor, and dignity. Only then can we break free of our chains and change the fate of coming generations.

April 27, 2018 0 comments

Last word Opinion

Taxes 101

by Karim Daher April 16, 2018

written by Karim Daher

As evidenced by recent surveys and public polls, Lebanese are disenchanted with their overall tax system and consider their obligation to pay taxes a burden. But they are decrying the many defects of their tax system without even understanding it. According to a national survey conducted in 2012 by the Institut des Finances Basil Fuleihan in cooperation with the World Bank, 70 percent of Lebanese people believed that taxes are used directly by politicians to fund their political agendas. This deficiency in the tax consciousness and the knowledge of Lebanese shows the need for a better financial literacy through a suitable educational and public approach.

To some extent, citizens try not to pay taxes—or avoid or deliberately fail to report income—because they do not understand tax law. Moreover, those who cannot understand tax rules may question the fairness of the tax system and feel that others are reaping more benefits. This, in turn, may make them more likely to evade taxes.

Informing the public

Clarifying and simplifying tax rules can help people better understand the tax law; however, simplification alone would not make it easier to enforce the law or to strengthen tax consciousness and fiscal citizenship. Public authorities must disseminate information about the tax system to the public, simplify tax regulations and procedures, promote transparency and accountability in the national budget and accounts, and change popular perceptions regarding the fairness of taxation.

One way to do this would be to adopt a charter for the taxpayer that summarizes in a clear manner their rights and obligations toward public authorities with a set of principles that strike a fair and equal balance between public service and the role of the tax administration on the one hand and the expectations of the legitimate taxpayers on the other.

The charter would include a very simplistic listing of tax principles and the most prominent rights and obligations of the state and of the taxpayer. It would be relied on and used as a reference by both the legislator and the administrative courts, without discrimination or favoritism, while enacting laws or rendering judgments.

Follow the money

There is no better way to encourage citizens to develop an understanding of the social contract around taxation than to make them an obvious part of the tax-paying system. In the book “Learning to Love Form 1040,” Lawrence Zelenak, a tax policy expert at the Duke University School of Law, writes that by making the filing of tax returns and connected payment of taxes painful for individuals, the return-filing process compels taxpayers to confront the extent of their total financial contributions to the government. This ought to make taxpayers more cognizant of how public officials are raising revenue and spending tax dollars. In short, the pain of paying taxes should propel taxpayers to be more politically and civically engaged and make them better citizens, as well as make politicians much more accountable to the public for their acts and decisions.

With this purpose in mind, the Lebanese Association for Taxpayer’s Rights (ALDIC) have drafted this charter and submitted it to the president with the hope that it will be discussed and adopted by the new Parliament. Our charter aims to encompass all tax principles and guidelines and act as the base from which taxpayers and tax collectors interact. With this, it is the hope of ALDIC that the image of taxes and the objectives of taxation will be improved and valued as a prerequisite to restoring confidence in institutions, expanding the taxpayer base, and meeting the objectives of a productive economy and sustainable development.

April 16, 2018 0 comments

Comment Entrepreneurship

Beyond start-ups

by Bettina Bastian April 16, 2018

written by Bettina Bastian

Lebanon has followed other countries in the region and abroad in promoting entrepreneurship to achieve economic growth and to generate future job opportunities. Entrepreneurship is considered a valid tool to help lead the country into a knowledge economy, where the role of information and technological change are the main drivers.

In this context, education can help to foster entrepreneurial behavior, but there is a recurrent debate in blog posts, at panels, and during conferences about the utility of teaching entrepreneurship. Critics say that entrepreneurship education is ineffective because it lacks action orientation, and it cannot teach the essential lessons that entrepreneurs learn simply by failing in the real world. Some even claim that entrepreneurship classes are dispensable, pointing to the likes of Steve Jobs and Jeff Bezos, who never took any formal entrepreneurship education before starting their businesses. Peter Thiel, a PayPal co-founder and Facebook investor, even offers $100,000 grants to students ages 20 and below who are willing to completely drop out of school to pursue their entrepreneurial ambitions through learning by doing.

Beyond the practical

Such comments relate mainly to the technê part of entrepreneurship. According to the Greek philosopher Aristotle, technê denotes technical know-how—in this case, the knowledge of how to manage a business. Most people associate entrepreneurship with the creation of venture-backed high growth firms, like the companies that make up Silicon Valley. Entrepreneurship classes are therefore focused on acquiring business skills. Syllabi include such topics as business plan writing, how to prepare financial projections, entrepreneurial communication (how to deliver compelling pitches to investors), risk mitigation strategies for startups, entrepreneurial marketing, and other practical skills. A common way to measure educational effectiveness is through the number of new startups and entrepreneurs a program generates. This may be an imperfect measure, however, as it has led to universities, business schools, and incubator and accelerator programs resembling each other more and more, as they focus on pushing students toward starting new ventures and entering entrepreneurship competitions—often prematurely. Currently, the strongest emphasis in entrepreneurship education is placed on technê, or on learning how to manage a company. Yet, entrepreneurship (and innovation) are not about managing what is there already; entrepreneurship is a problem-solving process that is based on a different mindset than management.

Entrepreneurial thinking

This mindset proactively seeks out new opportunities and solutions and questions conventional assumptions on how to do things. Entrepreneurally-minded people seize opportunities and act upon them. They are willing to take risks, and focus on adaptive execution, which involves collaboration with others—often even competitors. The entrepreneurial mindset revolves around identifying problems and solving them.

In Lebanon, entrepreneurial learning has implications that go beyond churning out business startups. Samir Kassir once coined the term “Arab malaise” to describe “the very widespread and deeply seated feeling that Arabs have no future, no way of improving their condition.” In the Middle East and North Africa, Kassir argued, there was a prevailing feeling of powerlessness: the powerlessness of being a lowly pawn on the geopolitical chessboard, the powerlessness of underdevelopment, the powerlessness of living under authoritarian politics. Widespread corruption, weak state institutions, and, in many countries, excessive state control have long dominated societies and drained their people’s energy and initiatives.

In his book “Startup Rising,” Christopher Schroeder studies the entrepreneurial possibilities and challenges of the Middle East and North Africa and he comes to the conclusion that entrepreneurship represents a bottom-up movement that allows people to get involved and engaged in societal problem-solving—a grassroots approach that counteracts the prevailing and ineffective top-down government strategy. Entrepreneurship education that teaches a problem-solving mindset could play an important role in developing civic engagement since it introduces young people to a different way of thinking than the prevailing Arab malaise, encouraging a mindset that is relevant far beyond simply starting a business.

Teaching an entrepreneurial mindset, then, is a form of citizen empowerment. For this to be a viable possibility, however, we have to treat entrepreneurship teaching more holistically than we do now, with objectives larger than the creation of new firms. We also have to engage all levels of society in the development of an entrepreneurial mindset, but especially the youngest generation. Teaching entrepreneurship should encourage questioning the status quo and thinking large and wide beyond societal constraints. From entrepreneurship, students can learn to develop and defend their opinions, and they can receive the tools to engage with and change the world.

A good example of this is the initiative run by the Asher Center for Innovation and Entrepreneurship at the Holy Spirit University of Kaslik, where student-entrepreneurs connect with and coach high school students from College Central Jounieh. The students help their younger peers identify community problems, for which they then develop viable solutions for change. School students are exposed to entrepreneurial thinking, cultivate leadership skills, and learn to take ownership of community problems—a prerequisite for engaged and proactive citizens.

Entrepreneurial thinking is as important for business development as it is important for an engaged civil society. Not every student aspires to have their own business. But the lessons we can learn from entrepreneurship help develop people who are self-directed and proactive, and who have the mindset to engage in purposeful projects that matter for society.

April 16, 2018 0 comments

Comment Economics & Policy

Offshore petroleum investments made riskier

by Hassan Khalife April 16, 2018

written by Hassan Khalife

In light of the recent Lebanon Investment in Infrastructure Conference as well as the highly anticipated CEDRE conference (also known as Paris IV), it is undeniable that attracting private investment is Lebanon’s top priority. This comes shortly after the country signed petroleum contracts with international oil companies (IOCs) for the exploration and production of offshore petroleum resources in Block 4 and Block 9. This major step for the Lebanese petroleum sector is anticipated to bring investments not only for the offshore upstream petroleum sector (exploration and production), but eventually to other sectors contributing to the overall petroleum value chain.

To draw in private investment, Lebanon faces the challenge of providing an attractive investment environment. The BMI Report (compiled by BMI Research, a research firm that provides macroeconomic, industry, and financial market analysis) for the first quarter of 2018 stated Lebanon was a relatively high-risk location for foreign direct investment. According to the report, Lebanon scores 54.1 out of 100 in the overall BMI Trade and Investment Risk Index, with 100 being the lowest risk country. Lebanon ranked in eighth place out of 18 MENA countries (between Morocco and Tunisia). A “relatively high-risk” environment for investment could deter petroleum investors.

These investors, especially in the upstream petroleum sector, generally engage in investments that are described as long-term, capital-intensive, and risky. Although they may take on risky investments, investors are cautious when venturing into such projects. They require that the risks associated with their venture are manageable. Managing such risks is a key determinant to invest or not. In upstream petroleum investments, these risks can be categorized into (i) risks inherent to the petroleum sector, and (ii) risks related to the country hosting the petroleum investment.

Managing risk

The petroleum industry bears substantial risks that stem from the uncertainty surrounding the sector. In the upstream sector, for example, this uncertainty derives mainly from the presence or absence of petroleum resources in a defined well, and the amount of such resources once a discovery is made. Further, there is uncertainty resulting from unexpected or unknown technical problems, as well as potential accidents affecting the environment, which could be detrimental to the investment.

The country hosting the investment may subject the investor to an array of risks that can reduce the investment return rate. These risks include, inter alia, macroeconomic instability, exchange rate risk, capital transfer risk, legal and regulatory risk, and political risk. Among the cited, political risk represents one of the highest-ranked factors constituting a main constraint on investment. In the World Bank Group’s 2014 MIGA-EIU political risk survey, approximately 20 percent of executives considered political risk as one of the greatest disincentives to investing in emerging markets.

The Lebanese context

Political risk generally can be defined as the potential damage to a business operation arising from political behavior. Robert McKellar, in his book entitled “A Short Guide to Political Risk,” broadly enumerates the sources of political risk as being: political instability, feeble governance, and conflict.

Political instability is the persistent serious challenge to the longevity and legitimacy of a government. Feeble governance often materializes as inefficient leadership and management throughout a wide range of governing institutions. Conflict generally refers to friction between different interests and is often preceded by a build up in tension over time. At an international level, risk of conflict is represented by political sensitivity or hostility between rival countries.

A simple extrapolation of the above sources of political risk to the Lebanese context leads to the conclusion that Lebanon has a relatively high political risk. This is due mainly to the political uncertainty heightened by the relatively short life of governments, the prolonged time to form a government, delayed parliamentary elections, regional tensions, the ongoing war in Syria, endemic corruption, and the long history of hostility with neighboring Israel.

Heightened political risk in Lebanon decreases its ability to attract investment in general, and foreign direct investment in particular. This negative relationship between political risk and investment could explain why only three IOCs (Eni, Total, and Novatek), forming a single consortium, participated in Lebanon’s first offshore licensing round.

Maritime boundaries

An additional contributor to Lebanon’s political risk is the maritime boundaries dispute with Israel over an area of approximately 873,722 square kilometers (see Executive’s timeline online for details). The recent award of exclusive rights to petroleum exploration and production in Block 9, falling partially within the disputed maritime area, reignited tension in political public statements.

The non-recognition of Israel by Lebanon and the longstanding state of war between them defeat any prospects for cooperation to resolve the dispute. Dispute resolution mechanisms available under international law, namely the UN Convention on the Law of the Sea (UNCLOS), are also undermined as Israel is not a signatory of UNCLOS. Ongoing indirect negotiation lead by a third-party, which seems the only current avenue to resolve the dispute, has also failed to reach any solution thus far.

It could be argued that the disputed maritime area is too small to have a substantial effect on the petroleum industry. However, this increasing hostility caused by the ongoing dispute and the near start of petroleum activities in offshore Block 9 may escalate into violent actions. Any violent action in response to the build up of tension would be detrimental to the overall Lebanese investment climate. Also, the dispute may undermine the attractiveness of future offshore licensing rounds in Lebanon. Therefore, addressing political risk, including the risk generated by the maritime boundaries dispute, is an imperative for fostering an investment-friendly climate.

Mitigate the risks

The ideal scenario for reducing political risk arising from the maritime boundaries dispute would be to resolve it. However, private investors can still play an integral role in mitigating its risks.

Generally, there are available strategies, organizations, and legal instruments for private investors to mitigate political risk in the petroleum industry including the risk of boundary disputes. The strategies include project financing, joint ventures, corporate financing, energy diplomacy, and alliances. Organizations include private and public insurance providers for financial capital and political risk insurance, governmental and non-governmental regulatory agencies, and international energy forums. Legal instruments that can manage political risk include bilateral and multilateral investment treaties, as well as petroleum contracts such as exploration and production agreements (EPAs).

Standard petroleum contracts do not usually deal with the disputed maritime boundaries’ effect on the parties’ rights and obligations. However, the mitigation of risks arising from disputed maritime boundaries can be achieved through well-negotiated contractual clauses inserted in an EPA such as force majeure and indemnification clauses. Such clauses address the rights and obligations of the parties in case of any incident that arises from non-delimited or disputed boundaries.

The Lebanese model EPA, issued by Decree No. 43 (2017), does not address the risk of maritime boundaries disputes per se. Force majeure provisions under the EPA could be interpreted to include adverse events caused by the existing dispute and affecting the performance of the investors’ obligations. The EPA deems transboundary hostilities as an event of force majeure, among others. Despite their relatively broad terms, however, the EPA force majeure provisions may not cover all the scenarios that may arise from the ongoing maritime boundaries dispute. Should the dispute continue to future licensing rounds, a comprehensive and well negotiated contractual clause would largely contribute to mitigating its risks.

Finally, it is crucial that public and private stakeholders jointly undertake a comprehensive effort to mitigate political risk and its sources by taking a holistic view of the potential levers, to attract more investments and to ultimately improve the wellbeing of the Lebanese citizens.

April 16, 2018 0 comments

Goat dairy Industry & Agriculture

Say (goat) cheese

by Nabila Rahhal April 16, 2018

written by Nabila Rahhal

Goat dairy production has a long history in our part of the world. Archaeological evidence suggests that goats were the first dairy animals to be domesticated, sometime between 9,000 and 8,000 BC in what is today Iraq and Iran. Goat milk was also mentioned in the Bible, with the prophet Abraham owning herds of goats, and the Book of Proverbs speaking of the animal’s ability to produce milk.

The dairy market later shifted to cows, and is today globally and locally dominated by the larger mammal. The relatively recent trend toward healthy, clean foods and the rise of food allergies, however, has brought goat milk back under the spotlight. The global market for goat cheese products is growing slowly but steadily, and Lebanon’s dairy producers have been quick to take part.

A brief history

Nomadic goats are traditionally bred in Lebanon’s mountainous areas. Villagers use their milk to produce cheese and kishek (a dry cheese) for the national market and occasionally, international distribution.

Mazen Khoury, the production manager at Dairy Khoury, one of the leading dairy producers in Lebanon, says his family business has been producing goat yogurt, labneh (strained yogurt), and baladi (local) cheese (a type of white, round cheese also referred to as green cheese) since the 1970s. However, according to Khoury, nomadic goats—the only goat variety found in Lebanon at the time—produce milk only seasonally, so Dairy Khoury’s production was limited to the period starting in February and ending in August at the latest.

As such, a steady and consistent business revolving around goat dairy products was not feasible in Lebanon until 2005, when Jihad Daher, the technical manager of and partner in Goût Blanc, used personal funds and a loan from Kafalat to import 60 dairy goats from France with the purpose of providing a consistent supply of high-quality goat milk to the country’s dairy producers.

A goat by any other name

The goats imported by Daher were Saanen, a Swiss breed, and Alpine, a breed that originated in the French Alps. Saanen goats are stronger and less vulnerable to disease than Alpine goats, according to Walid Bou Habib, a partner at Goût Blanc, but both breeds have a significantly higher yield than the local goat variety. “The local breed is strong and can resist diseases, but their yield is low, at 0.5 kiloliters per day per goat, whereas with the Saanen you get an average of 3 kiloliters per day. This is related to the goats’ inherent genetic potential, and there is nothing you can do to increase a goat’s maximum yield. Because of this small yield, no Lebanese dairy [farm] would invest in a local breed to get goat milk,” explains Bou Habib.

Khoury speaks of the advantages of Saanen goats over the local variety, saying that their yield is more consistent, therefore allowing for a year-round production of dairy products. Khoury also explains that Saanen goats are bred to be farm goats and can milked using automated milking systems, whereas local goats are typically milked by hand in the fields. He says automated milking is more hygienic, and it produces milk that can be immediately processed and refrigerated.

Following the trend

Bou Habib says goat cheese is fast becoming a global trend: “Internationally, people are shifting from cow dairy products to goat dairy because of the idea that goat milk is healthier and does not contain lactose, which makes it easier to digest.”

Khoury explains that because the food industry in Lebanon has evolved a lot over the past decade and a half in terms of food safety, quality of products, and consumers’ taste and awareness of global food trends, Dairy Khoury has had to keep up with these developments to grow further.

As such, Dairy Khoury introduced a dedicated line of goat cheese products, Chevrette De Khoury, in 2016. “We chose to start this dedicated line because goat dairy is now the global trend, since it is perceived as healthier than cow milk, as it has fewer allergens and is lower in cholesterol,” says Khoury, explaining that their line includes goat yogurt, soft labneh, hard labneh, as well as baladi, halloumi, and double cream cheeses.

Dairy Khoury set up their 75,000 square meter goat farm in Meshmesh, in the mountains north of Jbeil, which is an hour and a half’s drive away from their production center in Ain el-Sendyene, Metn. Khoury explains that the company chose this location because of its extreme remoteness (thereby ensuring a pollutant free and cleaner environment) and abundance of agricultural land, as goats are extremely sensitive to their surroundings.

The pioneer of a branded and dedicated goat dairy production in Lebanon was Goût Blanc, who began its venture in 2013. While previously Daher had sold his imported goats’ milk to local dairies, he had not considered starting his own dairy production company until he met Bou Habib through Alfa Laval—a Swedish company that markets itself as the global leader in heat transfer, separation, and fluid handling—where Bou Habib used to work and from whom Daher had bought his automatic milking line.

The duo introduced new partners to the company—Camille Atallah, a lawyer, and holding company Sarkis Group—and imported more goats from France, bringing the total of imported goats to 300, which then went on to breed others. To house them, they built a second farm adjacent to the first one Daher had already built in Anaya, north of Jbeil, an area Daher also chose because of its remoteness and pristine environment. They built the production facility and the nursery for newborn goats in the same area as well. All this investment was aimed at having a large-scale goat production business, and Bou Habib says that a total of $1 million has been invested in Goût Blanc to date. A further $1.5 million will be invested to expand the farm, as well as for distribution and transportation—Bou Habib says this amount will come from personal funds and a subsidized loan from the central bank. Until now, Goût Blanc is only breaking even with its goat dairy products.

Supply and demand

Lebanese have indeed warmed up to goat dairy products, as even a casual observer cannot help but notice the abundance of restaurant menu items listing goat cheese as an ingredient or the supermarket shelves that are increasingly stacked with goat dairy products.

In fact, demand for locally produced goat cheeses and yogurts has generally been increasing faster than the available supply. Goût Blanc has a total of 1,400 goats and is in the process of constructing a third farm with a capacity of 1,800 goats which will be ready in mid-2018 and will bring their total number of goats to 3,200). Currently, the company processes a maximum of two tons of milk per day, but Bou Habib says this is not enough to meet demand. “The market demand is ahead of us—we should have started construction of the third farm two years ago to meet the growing demand that we are facing now. People think our distribution is bad because they don’t find us consistently in our points of sale. But what is happening is that our products disappear fast from the shelf because we have a limited supply,” he explains, adding that by early 2019 they expect to have enough supply to meet local demand.

Khoury also believes that the market demand for goat dairy is higher than the supply, and that there is therefore room for more players to enter the market without leading to saturation. Dairy Khoury has more than 3,500 goats that produce 3 tons of milk per day and has created a division in its factory solely for processing its milk—as such, Khoury says the company is able to keep up with the demand for its goat dairy products.

Old dog, new tricks

Although goat dairy products are hot items in Lebanon, not all of them are created equal, and it seems traditional tastes are hard to change.

Goût Blanc’s original idea, says Bou Habib, was to produce only French goat cheese. However, he and Daher quickly realized that the Lebanese market for that type of cheese alone was too small and would not justify the big investment they had in mind for their project. “A small segment of the market in Lebanon consumes French goat cheese, and they do so mainly in winter time around holiday gatherings, while they eat halloumi, labneh, and laban on a daily basis. So we decided to introduce these products as well to sustain and grow our business,” explains Bou Habib.

Goût Blanc has 10 products which include soft and hard labneh, labneh with oil, yogurt, two types of French goat cheese, halloumi, and double cream cheese. Of these products, labneh alone constitutes 46 percent of the company’s turnover, while 15 percent is from yogurt, and only 10 percent is from the French goat cheese. “As a general taste in Lebanon, we prefer the sourness of the labneh and laban to the creaminess of French cheeses,” muses Bou Habib. Similarly, Khoury says Dairy Khoury’s most sold goat dairy products are labneh and yogurt “which are part of our traditional cuisine.”

Greener pastures

Given the global goat cheese trend, both Goût Blanc and Dairy Khoury see a rosy future for their dairy products. Although Dairy Khoury says cow milk products will always be their best sellers—it currently constitutes 90 percent of their business—they plan to expand their goat line further by introducing French goat cheese in 2018, along with other goat milk products, to satisfy both local and export demand. (Its goat cheese products are currently exported to Qatar, Dubai, and Kuwait.)

Bou Habib says Goût Blanc also has expansion in mind, although its aim is to first meet local demand before it considers exporting. “Our goal is to have a total herd of 5,000 goats and use that to build a very strong brand in Lebanon before [exporting]. Once we feel the market in Lebanon is saturated, we would consider investing abroad, or increasing our production to export it. But there is a lot of potential in Lebanon itself. Hopefully, if we follow the global trend, the goat milk market should be around 10 to 15 percent of the total dairy market in Lebanon—to get to that figure, we would have to have 10,000 goats, not just 5,000,” he explains.

The main limit to the growth of the goat dairy products in Lebanon is that the feed is imported, which drives up production costs, and therefore price. Khoury says that the feed produced locally—mainly corn yeast and straw—can only satisfy 30 percent of a goat’s nutritional needs. And even then, it is cheaper to import all their feed.

Because of this, Lebanon cannot hope to be competitive with global leaders in goat cheese production unless the country specializes in niche products, explains Bou Habib. “The big problem in Lebanon is that we don’t have enough fields or agricultural spaces. It’s not normal to import feed and essentially transform it into milk, in Europe for example you have the milk where you have the feed. We therefore cannot be competitive in the international market unless we are competitive in special products where we can give added value,” he says, citing goat labneh as one of these products.

Even so, dairy producers say that certain governmental actions, such as protection of local dairy products from foreign competition and supporting dairy producer’s energy and export costs, would go a long way in strengthening their businesses both locally and abroad. If goat dairy products do someday constitute even 15 percent of the total dairy market in Lebanon, it would open up fresh opportunities for those looking into investing in Lebanon’s dairy market and for existing producers to diversify their pastures.

April 16, 2018 0 comments

Eden Bay Real estate

The untouchable hotel

by Scott Preston April 16, 2018

written by Scott Preston

While it is widely assumed that Lebanon’s real estate business is rife with unethical dealings, only a few detailed examples of wrongdoing actually come to light. In the case of Eden Bay, a resort situated along Ramlet al-Baida—Beirut’s last public beach—evidence of violations and fraud piled up throughout 2017.

The disclosures culminated in the form of a report compiled mid-2017 by the president of the Beirut Order of Engineers and Architects (OEA), Jad Tabet. The report alleges eight violations related to Eden Bay and is informed by building documents released by the Municipality of Beirut. The report’s allegations range from the infringement of public property to the forgery of permit application material. As a whole, Tabet’s report portrays a development project for which legal obstacles were fudged or ignored entirely to deliver the lucrative seafront hotel. Public pressure from media coverage, a unified civil society movement, and even lawsuits initiated by NGOs and the environment ministry have not prevented the completion of the hotel.

With the façade completed in recent months and the resort aiming to open this April, Eden Bay’s opponents now view the ineffectiveness of these efforts as proof of the public sector’s failure to adequately govern the real estate market.

Crazy eights

According to Tabet’s report, violations related to the hotel date back to before it was actually conceived.

Initially, the real estate giant that owns Eden Bay, Achour Development, had planned to establish a larger resort in the same location. To manage the project, Achour created a company named Beirut Marina Gate, which set about purchasing two plots of land in the area. In 2011, Beirut Marina Gate signed a contract to buy two parcels—numbered 3689 and 3687 by the Directorate of Land Registration and Cadastre (LRC)—from a company called Eden Rock Real Estate and Tourism.

But, according to the report, Parcel 3689 was the product of an illegal merger that combined four smaller plots earlier the same year. Two of these component plots were categorized as non-buildable and therefore could not be merged with the others that were eligible for development.

However, in a letter dated June 6, 2012 and seen by Executive, Beirut Governor Chebib requested that the LRC remove the non-buildable status classifications from the properties. The LRC complied, merging the plots into Parcel 3689 without the required approval from the judiciary.

Lama Karame, a lawyer with the non-profit Legal Agenda that monitors public policy, says that the unification of the parcels is one of several violations that should have prevented the construction of Eden Bay from moving forward.

Creating space

Despite the apparent illegal origins of Parcel 3689, it was sold in 2011 along with Parcel 3687 to be used for Achour’s resort, which was also named Eden Rock. Cynthia BouAoun, an architect that has contributed to the coastal protection campaigns of the heritage advocacy NGO Nahnoo, says that Achour then pooled Parcels 3687 and 3689 in a move that grouped them but did not formally merge them in the records of the LRC. This, she says, was done in order to meet the 20,000 square meter minimum developable threshold that was required to build the Eden Rock resort in the zone.

For reasons that have not been publicly disclosed, Achour later dropped its plans for Eden Rock, having only completed the necessary Environmental Impact Assessment (EIA) for the project, according to the report. The developer incorporated a new company, Eden Bay sal, to oversee the establishment of a smaller resort. Karame says that Parcels 3689 and 3687 were ungrouped by the LRC and the former was transferred to the new Eden Bay project; however, she explains that the Municipality of Beirut was not informed of this change, so when Parcel 3689 was transferred to Eden Bay, the project was entitled to a larger building than what would have been allowed if the decision had been based on the size of Parcel 3689 alone.

An unusual decision by the Directorate General of Urban Planning (DGUP) also facilitated the creation of a resort that would have been too large by normal standards. Mona Fawaz, a professor of urban planning at the American University of Beirut who helped research Tabet’s report, explains that development projects close to the shoreline are by convention set back from the sea by at least 20 meters in most places along the Lebanese coast. But in 1964, Fawaz says Beirut’s zoning regulations were changed, and the setback from the public maritime domain was no longer specified. Since the change, however, the DGUP has generally applied the old 20-meter standard.

Fawaz says that in the case of Eden Bay, the DGUP in 2015 suddenly dropped this standard and instead deferred to the building law, which states that the setback for most public property is only two meters.

Even with the diminished setback, Tabet’s report alleges that Achour went on to increase its building size beyond what is allowed by local zoning regulations. The report highlights a substantial discrepancy between the ground elevation claimed by Eden Bay and the elevation from state sources. Mona el-Hallak, an architect and activist, believes that the company tried to pass off levels now marketed as luxury beachfront chalets as underground parking space, which would legally be omitted from the project’s tally of buildable area.

Tabet writes that the topographic map that was submitted for the resort’s construction permit defines the ground height at 7.7 meters above sea level. However, geographical images from the Directorate of Geographic Affairs of the Lebanese Armed Forces mark an elevation of 1.4 meters.

The report acknowledges that the Eden Bay development was originally meant to be built into a hill, which means one side of these floors would have been partially below ground. However, Hallak says the earth has since been cleared away, exposing the two lower stories meant for parking, leading Tabet to conclude in his report that Eden Bay had planned the alterations from the start.

Tabet calculates that the addition of these two levels and the apparent illegal unifying of properties in Ramlet al-Baida doubled the project’s built area from 5,251 to 10,439 square meters. That would mean that Eden Bay exceeded the maximum building size by about twice what was allowed for Parcel 3698.

But even without the aforementioned violations, Tabet argues that the location should never have been cleared for development in the first place, as the country’s national urban master plan, decreed in 2009, specifically declares that Ramlet al-Baida should be protected from real estate construction works.

To the courts

In spite of these issues, a construction permit was issued by the Beirut Municipality for the Eden Bay resort in September 2016. Yet, Tabet’s report states that Eden Bay failed to commission a new EIA to accompany the permit.

In a 2015 interview with Executive, Achour’s lawyer, Bahij Mjahed, claimed that the EIA from Eden Rock would cover the construction of the Eden Bay project. However, Ralph Haddad, an attorney at Bou Chaaya Law Firm who specializes in real estate litigation, and is unconnected to the project or related lawsuits, contradicts this view. Looking over Tabet’s report, he says that a new EIA would have been required, and that regardless the old EIA had expired before construction began. For this reason, the environment ministry filed a lawsuit against Eden Bay on May 5, based in part on information provided by Nahnoo.

On November 28, 2016, the Green Line Association, an environmental-advocacy organization, initiated another lawsuit that contested the building permit held by Eden Bay sal, which the group suspected was intruding on public property. Green Line Association, represented by Legal Agenda, is also challenging the Municipality of Beirut and the Lebanese Government over the project.

On February 8, 2017, the State Council ordered a construction freeze on the resort in response to the Green Line Association’s lawsuit, until the legality of the development could be determined. According to Karame, Eden Bay continued building nonetheless, even when a second stop order was issued by the council on March 6, 2017.

She says that Eden Bay cited multiple technicalities to avoid complying with the council’s decision. For example, Karame says that Achour argued the building permit that Green Line Association was contesting no longer affected it as the company had filed for a modification permit that amended their original. Although modifications are not technically considered separate construction permits, the Council issued another order to halt the building on March 6, 2017. This too had little effect, says Karame.

Legal Agenda then asked Jad Maalouf, a judge of urgent matters, to oblige the construction company to halt its activities under threat of a $100,000 fine for each day that work continued. By March 18, the order was in place, and Karame says Achour stopped contruction soon afer.

Meanwhile, the council required the Municipality of Beirut to hand over Eden Bay’s building permit and related application material. The information garnered from this disclosure largely contributed to exposing the violations alleged in Tabet’s report, which he compiled at the request of President Michel Aoun and Minister of State for Combating Corruption Nicolas Tueni.

Against the current

But less than a month later, on April 11, the State Council reversed its earlier decision and allowed construction to go forward. Karame says the State Council did not explain the decision.

The Green Line Association’s lawsuit is still awaiting a final ruling from the State Council. Karame explains that Legal Agenda submitted Tabet’s report to the court, but one of the council members decided to appoint their own experts to investigate the hotel. She says that so far, the appointees have been unable to conduct site visits because Achour’s attorney claims that the company was not notified and the state maintains that it has not yet selected a lawyer to attend these visits.

Media reports on Eden Bay have also been restricted based on orders from a judge of urgent matters who barred two TV stations from disparaging the company.

All sides of the Eden Bay controversy have been reluctant to provide interviews for this article. Only the lawyer from Achour agreed to speak, on the condition he was not recorded. The municipality was unresponsive and an official at the DGUP was unavailable. For his part, Tabet told Executive he had no further comment at this time.

Who holds the reins?

Executive asked Mjahed to respond to the charges presented in the report. He stated that the only authorities that can evaluate whether the company’s actions were legitimate are the Beirut municipality—which approved the necessary permits—and the judiciary, which ultimately allowed construction to proceed. Mjahed dismissed the accusations of violations as a “fantasy,” saying that it is impossible that all the relevant Lebanese agencies are allied in a “conspiracy” with Eden Bay.

Meanwhile, Eden Bay draws closer to opening. One Achour employee, during a request to be interviewed, put the opening as soon as early April. At the time of this writing, Achour had not announced whether an inhabitance permit, which certifies a building’s completion and enables its occupation, had been issued. The delivery of the permit, if granted, may represent both the finalization of the hotel and yet another regulatory violation, says BouAoun. “When you [apply for] the inhabitance permit, [the municipality has] to verify that what you realized conforms to what you got a permit for. [Eden Bay] didn’t abide by its permit, so of course, the inhabitance permit is not legal,” she says.

Haddad, the unaffiliated attorney, says the violations outlined in Tabet’s report are clear, and that they are common throughout the market. With construction of the first major real estate project on Beirut’s last public beach nearly complete, the question is not only how many Eden Bays are out there, but how many more there will be.

April 16, 2018 1 comment

Book Review Economics & Policy

Troubled and troublesome

by Thomas Schellen & Riad Al-Khouri April 16, 2018

written by Thomas Schellen & Riad Al-Khouri

Every stroll in the Eastern Mediterranean lands means walking in the presence of some historic reference. Transformed into politics and national ideologies, history has long been a tool of identity building. When looking at identity politics, these days may we squirm over the rise of new, presumably white identity politics in the United States or how questions of national identity have in recent years been shaping politics in the European sphere, as epitomized in the Brexit vote. In discourses of academic belief systems around the developed world in the 21st century, one might moreover deride identities as constructs of colonial-nationalistic Europe in the 19th century, or oppose identity concepts on contemporary intellectual grounds. But to escape from identity-driven views will likely be harder in Middle Eastern societies than in any European or American ivory tower. With that in mind, Executive looks at two books with implications for national identities in the Levant.

In Search of the Phoenicians by Josephine Quinn Princeton University Press, Princeton and Oxford, 2018 Hardcover, 360 pages

The book “In Search of the Phoenicians” by Josephine Quinn opens—not counting her introduction—with a 1946 quote by then freshly minted Member of the Lebanese Parliament, Kamal Jumblatt. The quote bubbles with fervor for the Lebanese “ancient young country” and, as Quinn points out, not only connects the nation of Lebanon with the Phoenicians through history and geography but passionately portrays the Phoenicians as being responsible for the idea of the nation itself. In Jumblatt’s phrasing, optimism for Lebanon is rooted via backward projection in the ancient history of the Phoenician coast which saw “the emergence of the first civic state.”

The idea of how a democratic Lebanon in the 21st century might or might not be validated by Phoenician roots—however timely such a discussion might appear in the context of the country’s current quest for a sustainable future and its “economic identity”—is not what drives Quinn, who teaches ancient history at Oxford University in the United Kingdom. Nor is the book really about a search for anything but evidence that the Phoenicians might have been people whose collective identities never rose above the level of their own towns or even families. “The Phoenicians, I will suggest in this book, constitute just such a case,” Quinn writes in her introduction.

The specifics of Quinn’s book thus is a tale of anti-Phoenicianism, as she dedicates her investigation to the deconstruction of any notion, if anyone harbors such, that the Phoenicians were actually a coherent people or nation in their golden era during the first millennium BC. This academic quest and anti-Phoenician stance is directed not against the Phoenician people per se or against the construction of national identities but mainly against the use of the Phoenicians as a paradigm in nation-building myths and nationalist ideologies in later antiquity and in modern ages in Europe and the Middle East. Quinn clarifies in a promotional interview for her book on the Princeton Press website that she does not at all deny the existence of the Phoenicians. She says, “The people we call Phoenician certainly existed as individuals, and they often have fascinating stories,” before reiterating the notion, also expressed in the book’s introduction of how the question of whether these Phoenicians saw themselves as “distinct people” and thus were “a self-conscious collective” intrigued her.

Ethnic ideologies

In this, Quinn draws on the modern academic concept that sees ethnicity “not as timeless fact about a region or group, but as an ideology that emerges at certain times.” In the book’s subsequent body text she explains, through about 100 pages of scholarly writing, that that there is no evidence for this self-conscious collective in the form of either artifacts, including coins, architecture, and various monuments, or written sources through known inscriptions on funerary steles or stone markers, or in early literary sources.

The learned explanations in these chapters of Quinn’s book are adorned with chapter or section titles—from Phantom Phoenicians to Melqart’s Mediterranean—that testify to the author’s craving for attractive story telling. At the same time, the book’s array of antique evidences for Quinn’s thesis of a non-self-conscious Phoenician ethnic group makes for a curiously anemic read, which is somewhat reinforced by a text-heavy layout. Chapter titles come with little graphic flourishes that constitute the book’s core design together with page layouts using a font, Libertine 0, which, albeit attractive for all-purpose use, might strain some eyes due to its very small size.

Modern afterlives

The book’s narration comes full cycle not between the notions of its first chapter and its concluding pages, not from and to Lebanon, nor from the Phoenician settlements in the Eastern Mediterranean to present-day stories of identity in this troubled region. It instead circles, from a reference to Irish plays in its introduction, to citing in its final pages poetry and plays written by authors whose names, being Seamus Heaney and Frank McGuiness, do not exactly signal self-identifications of th§e Phoenician kind.

However, it is this third part of Quinn’s book that the discourse in In Search of the Phoenicians is emotionally most engaging. This part is dedicated to what Quinn calls the “modern afterlives of ancient Phoenicia,” which means anything more recent than the fourth century BC, and specifically the deployment of Phoenicianism in Europe—mainly in England and Ireland, but with diametrically opposed ideological orientations—in post-Enlightenment times “in the service of autonomy, power, and honor.”

For an author whose cradle rocked to Irish or British tunes, it must indeed be captivating to chase the role of Phoenicianism in such contexts of nation-building in Europe. It is the real story in this book. If on the other hand anyone, enticed by the book’s initial quoting of Jumblatt, Charles Corm, and Michel Chiha, ventures to search its pages for Phoenician references that can be utilized in relation to Lebanese quests for political identity in our time, she or he will only be reminded of the, very useful, general insight that the Phoenician past cannot be an ideological panacea in any modern nation-building attempt.

People who seek mental support indicators in developing a forward-oriented Lebanese identity, however, may benefit from the insight that the scarce evidence preserved in artifacts and sources from Mediterranean antiquity testifies to then living people’s open-mindedness in dealing with foreigners, to cultural communication and economic appreciation of foreign cultural goods, and to an ability for building durable networks of trade and relations. People living in the Eastern Mediterranean thousands of years ago also displayed familial and communal qualities.

Viewing this from a local vantage point in Lebanon, no reason appears conceivable why the same cultural and social feats should not be achieved by people living today on the shores that were called Phoenician in various observations throughout history. Moreover, from this same vantage point of experiencing Lebanon at the threshold of a major historic junction in its economy, politics, and identity, it is impossible to deny that, with a quote by American thinker George Santayana, “the picture we frame of the past changes continually and grows every day less similar to the original experience which it purports to describe.” In this sense, Quinn’s In Search of the Phoenicians can serve as useful reminder that turning to the lure of a mythical past for finding a path to the future can be fraught with risk.

Anti-semitism: The Generic Hatred (Mo’adaat as samiyya: Jawhar al-karahiyya) By Shimon Samuels and Esther Webman (eds) translated into Arabic by Hani Abu Laila, translation review by Amro al-Barjisi Editions Le Manusrcit, Paris, 2017 / Paperback, 421 pages

Mo’adaat as samiyya: Jawhar al-karahiyya is the recent, Arabic translation of “Anti-Semitism: The Generic Hatred,” a collection of essays that was initially published in memory of Jewish-Austrian activist Simon Wiesenthal and translated into French, Spanish, and Russian over the past decade. Supported by UNESCO, the book clearly involved a lot of efforts, although from the perspective of this reviewer, some of it may have been misplaced.

By way of background, let me explain that as an Arab Christian who grew up in America, Europe, and the Middle East, I know what it means to be part of a minority. Yet, in those times, being part of the Christian minority in a Middle Eastern country was less dramatic than one might think. Except for episodes of the Lebanese Civil War in the late-20th century that I witnessed, my feelings of persecution, as well as those of many co-religionists around me, were mostly part of the recreational paranoia practiced by some Christians in the Arab World. In that context, musing on “Why they hate us” was not entirely serious.

That was before the ISIS mayhem, which exploded in 2014 and changed the atmosphere for many Christians in the region. Previously mildly anxious, some of them are now deeply afraid, and taking practical steps to emigrate—just as many European and other Jews had done in the 20th century, including to Israel.

In such an atmosphere, one of the good points of the book is to serve as a reminder that anti-Semitism continues to blight regions around the world, impacting new generations of Jews and others. Indeed, this is more relevant than ever: Over 10 years after the book was first published, anti-Semitism in Europe is on the rise. Reported physical assaults against Jews there include beatings, stabbings, and other violence, which have increased over the past few years. Such attacks are associated with rising far-right political parties following the economic crisis of 2008. Parts of Europe have seen nationalist movements accusing Jews of causing economic crises, taking over local economies, and bribing government officials.

As for recent anti-Semitism in the Arab world, a 2011 survey by the Pew Research Center concluded that, in all Muslim-majority Middle Eastern countries polled, few participants had positive opinions of Jews. The survey found that only 2 percent of Egyptians, 3 percent of Lebanese Muslims, and 2 percent of Jordanians reported having a positive view of Jews. Yet, this may be due to general negative feelings in surveyed countries toward the state of Israel and its actions, and the misconflation of Israel with Jews worldwide. The American writer Thomas Pynchon in his great novel “Gravity’s Rainbow” described the mechanism for such processes under the heading “Proverbs for Paranoids,” one of which explains that “paranoids are not paranoids because they’re paranoid,” but because they keep putting themselves “deliberately into paranoid situations.” Bands of Jewish settlers putting themselves in just such situations surrounded by indigenous Palestinian Arabs, or Israeli military forces threatening refugees in Gaza, therefore, really have no right to ask, “Why do they hate us?” By way of response, another proverb for paranoids by Pynchon states: “If they can get you asking the wrong questions, they don’t have to worry about answers.”

Away from Pynchon’s literary flights, the causes of Arab reactions to Israel were elucidated in a 2015 talk on the Israeli-Palestinian conflict by Tony Klug, special advisor on the Middle East to the Oxford Research Group and an international board member of the Palestine-Israel Journal, who himself is a British Jew. Klug describes conflict over Palestine from various perspectives including that of the Palestinian Arabs who feel that the violence is “the product of centuries of virulent European anti-Semitism at home and rampant imperialism abroad, crowned by double or, in this case, treble British-French dealings,” to which I would add current American quadruple-dealing. The Arab reaction to Israel extending to Jews cannot be dismissed as anti-Semitism if Israel—paranoid-style, allied to a menopausal American Empire—loudly and incorrectly touts itself and the US as defenders of the Jewish people.

The book rightly asks us to consider the lessons it holds for non-Jews struggling against hatred and oppression. Fine, but a better point would be to have future generations of Jews and others relearn the importance of confronting virulence like settler Zionism and Israeli militarism—laughably seen as “defenders” of the Jewish people. The only sustainable defense of Israel will be for it to make a just peace with all her neighbors, especially Palestinians. When that happens, anti-Semitism in the region will likely witness a drastic decline.

April 16, 2018 0 comments

Comment Economics & Policy

Lebanese in Brazil will not vote come May

by Peter Speetjens April 16, 2018

written by Peter Speetjens

The Lebanese parliamentary elections on May 6 are bound to make history, as, for the first time ever, Lebanese residing abroad have been granted the right to vote. Their appetite to do so, however, has so far appeared to be rather humble.

In total, 82,900 Lebanese abroad have registered to vote, according to the official Lebanese government website. Numbers quoted in The Monthly, a publication by Information International, a Beirut-based research and consultancy firm, cite 45,827 Christians and 38,329 Muslims registered (the discrepancy in the overall total is likely caused by the difference in those who registered versus those registrations that were accepted).

Some 60 percent of registered Lebanese voters abroad live in Australia, Canada, the US, France, and Germany—in that order. Only 2,106 Lebanese, or 2.5 percent, registered in Brazil, which may come as a surprise, given the country’s status as the world’s “second Lebanon.”

“Estimates vary slightly, but we reckon there are some 8 million Brazilians of Lebanese descent, about half of whom live in and around São Paulo,” says Sabah Khoury, Lebanon’s consul in São Paulo. “They live in every corner of the country. [Other] major concentrations are in Rio de Janeiro and Foz de Iguaçu in the south, where we plan to open another consulate.”

One need not travel far to spot Lebanese and Arab traces in São Paulo. Situated on Paulista Avenue, the city’s most prestigious thoroughfare, the Lebanese consulate sits right across from “Club Homs,” a restaurant and event venue established by Syrian immigrants in 1920.

Several skyscrapers along the avenue boast Arabic family names, while eateries on every corner sell kibbeh and sfiha, which have become staple foods in Brazil. Two of the city’s mayors since 1990 were of Lebanese descent, while a third was Syrian, and Hospital Sírio-Libanês is widely regarded as the city’s, if not the nation’s, best.

Historic ties

According to Khoury, the low number of registered voters in Brazil is arguably due to the complex registration procedure. “People could register online or at the consulate,” she says. “However, the Ministry of Interior in Beirut had to approve the application, which could take a month or more, while the registration period closed in November. I think people may have underestimated that.

“On the other hand, although 8 million is a fair estimate, we should put the figure in perspective,” she added. “The first Lebanese immigrants arrived in Brazil in the late 19th century following the visit of Brazilian Emperor Pedro II to Lebanon. Their descendants often are only partly Lebanese.”

Pedro II had a keen interest in the Orient and visited the region twice in the 1870s. Legend has it that in 1871 he halted his convoy on the way to Baalbek to talk to a group of peasants and encourage them to emigrate to Brazil, where plenty of fertile land and opportunities would await them.

True or not, the first Lebanese immigrants arrived in South America’s promised land in 1871. Driven by economic malaise, hunger, or conflict, many more would follow in this first wave of emigration from Lebanon that roughly lasted till the end of the Second World War.

Naturally, many of the early pioneers married other immigrants. As a result, there are numerous Brazilians who have a claim to Lebanese roots, but their link to the country of their great-grandmother or great-grandfather is cultural or nostalgic at best. To count potential voters among Brazil’s considerable Lebanese contingent, the focus should be on more recent arrivals.

Distant politics

“I didn’t know you could vote through the internet,” says 75-year-old Georges Habib. “I assumed I had to go to the consulate and needed all kinds of documents, so I didn’t bother.”

Habib arrived in Brazil in the mid-1960s. He had done his military service, but did not wish to make a career in the army, which would have been the path ahead had he stayed in Akkar. In Brazil, he worked in textile and electronics, which allowed him to provide his three children with a good education, and today, enjoy his retirement in one of the better parts of São Paulo.

“But, even if I had registered, who was I going to vote for?” he asks. “I don’t follow politics in Lebanon. I don’t know who is good and who is bad.”

And that is coming from a Lebanese emigrant who still maintains strong links with his home country. He and his wife, also Lebanese, regularly visit Lebanon. At home, they speak Arabic, and mainly eat Lebanese food. It is a very different story for their children who occasionally visit Lebanon and only speak broken Arabic. None of Habib’s children registered to vote.

“I have no clue who to vote for,” says Habib’s daughter Tanya. “But also, I don’t have a Lebanese passport. I do feel Lebanese, and I love Lebanon, but why would I get a passport? It’s expensive. It’s easier to travel with my Brazilian one, and whenever I visit Lebanon, I get a visa upon arrival.”

Becoming Brazilian

As in São Paulo, there are plenty of signs of a Lebanese presence in Foz de Iguaçu, a touristic city on the border with Paraguay famous for its massive waterfalls. While the first Lebanese immigrants arrived here over 100 years ago, many thousands arrived in the last three decades. Most are Shiite and left the country due to the civil war and the Israeli occupation of south Lebanon.

Yet, even here, the appetite to register and vote has been virtually non-existent. Nearly all of the 2,106 Lebanese who registered to vote did so in São Paulo.

“Why vote?” says Ali Farhat, a journalist who has lived in Foz for 18 years. “I have to vote in south Lebanon, even though I grew up in Beirut. Now, I thank Hezbollah for the liberation of my village, but I’m not happy with their role in government. They should fight corruption. As politics in the south is dominated by Hezbollah and Amal, my vote would be a lost one.”

Yahya Awali did not register either. “I don’t like any of the parties, so why vote?” he says, “Maybe in the future that new party, Sabaa, can make a difference.” The 42-year-old arrived in Foz in the late 1990s and is the living proof that the Brazilian dream is still alive some 140 years after the first Lebanese immigrants arrived. Awali left Lebanon because he could not find a job, “not even at Sukleen.” Today, he has a thriving business in mobile phone repairing equipment situated across the border in Paraguay, which allows him to financially support his family back in Lebanon. The low voter registration turnout does not surprise him.

“Brazil is a country built on immigration,” he says. “Everyone is welcome here, but everyone must become Brazilian. For example, we have a Lebanese school here in Foz, fully recognized by the Brazilian educational board, where we teach the children some Arabic and the Quran. However, we can only do that a few hours a week as extracurricular subjects. That is the reason why the second generation Lebanese generally only speak broken Arabic, and the third generation not at all.”

The gradual weakening of the connection to their ancestral land casts doubts on the viability of attempts to draw the Lebanese diaspora into voting, this year or in future Lebanese elections. On the other hand, placing members of the diaspora in better empowered positions for determining the course of politics in their homeland could work in the diaspora’s long-term benefit and be in their own political interest. As Awali notes, he remains strongly connected to Lebanon. He visits regularly, and even dreams of returning for good one day. “I’m building a house near Marjayoun,” he says. “And I would like to live there. The problem is I don’t want my children to have the same childhood I had. I want them to live a life in peace.”

April 16, 2018 0 comments