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EntrepreneurshipQ&A

A fund manager’s dream

by Thomas Schellen March 19, 2018
written by Thomas Schellen

The MIC in MIC Ventures is not short for Mission Impossible, Cruise. But it could be. Khaled Zeidan, the managing director of MIC Ventures, could easily have a second career modeling cool shades, and the chosen mission of MIC Ventures, should it succeed, will bring life to a sector whose true potential in Lebanon has lain dormant for the past 15 years or more.

This sector is information and communications technology (ICT). MIC Ventures approaches mainly local ICT investment opportunities with a $48 million war chest. Over the next four years, it aims to deploy this money through investments into Lebanese companies with value-add potential, mainly in four verticals: fintech in all its varieties, gaming (including anything virtual reality), content, and logistics and delivery. Beyond ICT companies and value-creation opportunities related to these verticals, MIC Ventures (MICV) also looks at opportunities that have an internet of things angle—for example, in agriculture, Zeidan explains.   

According to him, MICV, as a venture capital fund company, has a projected lifecycle of seven years, during which it wants to add value to companies in the tech entrepreneurship sector, to the Lebanese economy, and to the two equal owners after which it is named: MIC 1 and MIC 2, better known in the market under their associated mobile communications brands, Alfa and touch.

These fine bureaucratic twins called MIC have carried superbly ironic—but not by design—names of Mobile Interim Company 1 and Mobile Interim Company 2 since they were reborn in the early 2000s to succeed the former Build-Operate-Transfer (BOT) companies FTML (operating under brand name Cellis) and Libancell. BOT, the period’s fashionable version of a public-private partnership, was the model the Lebanese state under the late Rafik Hariri had embarked on from 1993 to 1994, through a highly successful rollout of second-generation GSM cellular services.

A tangled past

With FTML and Libancell, the Lebanese telecommunications sector had been blooming and innovating at levels head and shoulders above all other Arab countries between 1994 and about 2002. But on this path of strong growth, the mobile communications duo—and de-facto duopoly—were also accused of being corrupt and characterized as illegitimate profit-reaping corporate monsters. The Lebanese Republic first unilaterally changed and then terminated their BOT agreements in mid-2001 and took ownership of the networks as state-owned enterprises (SOEs).

Costly rebranding and years of languishment and backsliding in mobile communications rankings were to follow. Soon, the only narratives of note to surround the political-economy animals MIC 1 and 2 and the entire Lebanese telecoms sector were, from about 2002 to 2016, anti-strategic stories of arbitration, temporary management contracts, failed privatization attempts or aborted auctions to sell off telecoms licences, general lack of innovation, and allegations of corruption, criminal activity, and shady deals by even shadier figures hiding behind certain desks at the Ministry of Telecommunications (MOT).

The new chapter in the narrative of Lebanese ICT—one that MICV is a key part of—began with a round-table meeting organized by Prime Minister Saad Hariri’s economic team about a year ago. A number of ideas and proposals for invigorating sectors in the Lebanese economy were discussed, and among the ones contributed by Zeidan was the idea of a fund under the ownership of the two mobile SOEs, MIC 1 and MIC 2.

Zeidan’s proposal was founded on the reasoning that telecom operators had missed many value-generation opportunities as they generally had “stopped innovating” in the rapidly changing ICT environment about a decade after mobile communication’s hyperactive growth years in the 90s and early 2000s, when cellular license auctions made top news and mobile companies were as hyped as today’s behemoths, Google, Apple, Facebook, and Amazon (GAFA).

Besides the rise of these online giants, a lot has changed in mobile communications in terms of technology, user experience, and user behavior—and mobile providers had to transform accordingly. Voice traffic is the opposite of a growth engine; data accounts for most activities in mobile communications. Regional operators such as Zain Group (formerly MTC) of Kuwait and Riyadh-based STC set up their own venture capital funds or comparable initiatives earlier this decade, seeking to compete with mobile-tech investments by other players such as large funds by conventional VCs or GAFA.

The bold idea

By Zeidan’s reasoning, the general logic of mobile operators’ need to invest in innovative companies applies to the Lebanese market, but with the twist that Lebanon is late to this particular game and that the ICT niche has not been covered in the rising entrepreneurship ecosystem. He explains that many companies in this specialty space already exist, have operational revenues, and could rise on steady growth trajectories over time with the help of capital injections. They face barriers on this path, however, because their service orientation or projected growth profiles do not make them top targets for funds organized under the central bank’s Circular 331, he claims.

“I made a recommendation to set up a fund that invests in those companies and builds a partnership between them and the two MICs,” Zeidan says, based on the notion that the two MIC entities could benefit substantially from having access to product and service offerings produced by companies funded with their investments.

The plan for this fund was discussed by stakeholders and simmered for several months while its progenitors, including Zeidan, went looking for a person to assume full mental ownership as fund manager. “I was not supposed to manage this fund. I worked on this fund with the intention of having somebody else manage it,” he says.

After leaving his job as head of BankMed Group’s investment banking firm Medsecurities in the middle of 2017, Zeidan shelved plans for a personal sabbatical and instead engaged more deeply with the fund project plan starting in around September. In the following months, he gained stakeholders’ trust, he says, including people at the two mobile networks’ operators, Alpha and touch, but still could not find a person willing to run the fund. “I pitched a lot of managers to take on this fund, but nobody accepted the job because they thought it was a pipedream,” he tells Executive.

A decision to set up the fund was taken with the support of political stakeholders around last October. In November, the fund project presumably passed through a patch of deepest political darkness along with the whole of Lebanon. Then came the miraculous resuscitation of the Hariri government, and toward the end of last year, the dawn of MIC Ventures’ creation was realized through the establishment of a holding company.

As Zeidan describes it, the minister of telecommunications and the two MICs asked him, as the idea’s parent, if he could take on the management responsibility for getting the fund off the ground. He accepted the mantle of steering this new financial vehicle toward the goals of creating new jobs and initiating a conversation between the private and public sectors.

According to him, MICV has a three-tiered process of operations. The management team sources prospective deals that are assessed at periodic meetings by an investment team comprised of seasoned experts from the relevant fields. “I wanted to make sure that there is somebody who is an expert in every concerned vertical, so that, if a proposed deal is on the table, I have someone who understands the related sector from the inside out—for example, cloud technology, or payments and transfers,” Zeidan says. He adds that the investment committee’s size could be expanded from the current five to six members to assure that a sufficient number of experts are available to attend the meetings, which are intended to be held every other month in the initial phase of operations and less frequently later on.

Investments that are endorsed by this committee are then presented to the board of MICV for a final decision. The board, which represents MIC 1 and MIC 2 as the equal owners of the fund company, presently has five members, one of whom is independent, Zeidan says. He concedes that MIC owner MOT—and thus the current holder of the ministerial post—by default plays a decisive role in the equation. He claims that the ministry has recently become conversant in financial and entrepreneurship language that was never heard in MOT offices just a year or six months ago, and confirms that the current Minister of Telecommunications Jamal Jarrah has given full support to the fund project.

Total buy-in

The minister, his main advisors, and the top management of the two MICs have fully bought into the MICV project, claims Zeidan. “They and I see the fund as a very good thing for the MOT, for the two MICs, the Lebanese entrepreneurship sector, and hopefully for the country as a whole,” he enthuses. He acknowledges the possibility of political change affecting the ministry and notes that he often heard such concerns in discussions with people in Lebanon, however, he argues in response that the decision to set up MICV was carried by the full range of stakeholders and would not have happened otherwise. Moreover, the possibility of shifts in the political landscape, as far as it might affect his role, does not deter him. “In the event that there is any [political] change and if this change results in a change in the manager, so be it. I will have no grievances whatsoever in this respect,” he declares.

Sitting in his corporate office in a Beirut downtown quarter that has found favor as the base of operations for local financial players and law firms as well as international actors up to the World Bank Group, Zeidan makes a strong personal impression of being situated in a very safe distance from any economic precariat status or existential dependency on a government-related job. Concerns over partisan communal interests and individual corruptibility are not screaming from the walls of this office. 

However, in the wider context of national economic development prospects, the ghouls of Lebanese politics have darkened the pages of the country’s ICT narrative for so many years that many questions beg to be answered in any scenario that includes the terms MOT and ICT. How to defuse worries about monopolistic structures, and dependencies on political deciders and oft-changed ministers in charge of the telecommunications portfolio? How to restore confidence among local ICT firms and international partners whose memories of Lebanese mobile telephony have been tainted by experiences of a sovereign who chose to abandon contracts and break promises? How to assure a sector that it would not again be treated as welcome cash cow and milked to excess, just because it succeeded at a time when the state faced cash flow problems and other political economy issues? Such questions, or issues such as the proper accountability and reporting of monies that might flow from successful investments back into public channels, are not among Zeidan’s declared priorities. 

He explains that what happens between the MIC shareholders in MICV—up the line to the MOT and beyond in terms of reporting—is not under his purview, and prefers to emphasize the potential he sees on the level of the new fund and further opportunities for improving public sector partnerships with private sector actors. He says, “The reason why I am managing this particular venture is because I was the person that initiated the process to establish it. My intention is to make this fund happen and getting it to work, and I feel that we can make this work. Transfer of private sector culture and language has happened now at the MOT and I see the potential for the same to happen at other ministries, such as the Ministry of Economy. My belief is that you will see other, similar initiatives from other ministries. I think this will be fantastic.”

March 19, 2018 0 comments
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Economics & PolicyOil and gas

The petroleum legislative framework for Lebanon

by Talal F. Salman March 19, 2018
written by Talal F. Salman

Now that Lebanon has signed the first two exploration and production agreements (EPAs) for offshore oil and gas, companies will prepare the groundwork to start drilling at the beginning of 2019. This achievement is a long time coming. The first oil-related legislation, the Offshore Petroleum Resources Law, was enacted in 2010; the sector’s regulator, the Lebanese Petroleum Administration, started operating back in 2012; the block delineation and the model EPA were enacted as decrees in January 2017, almost four years after they were first drafted; and the petroleum-income tax law—a necessity to complete the Lebanese petroleum fiscal regime—was enacted in October 2017, two years after it was first drafted.

This process has taken far too long. Egypt started production of the giant Zohr gas field within three years of finding it. But the constant delays that Lebanon’s oil and gas sector witnessed over the past years—very much interconnected to major regional crises—should not be the reason for interest groups such as Lebanese Oil and Gas Initiative (LOGI) to be blasé when evaluating the current efforts to complete the legal foundations of the sector, which are a prerequisite for a successful, well governed, well invested, and regulated sector. The late arrival of LOGI to the game does not mean the work that has been done over several years needs to be halted because LOGI thinks so.

There are still very important laws that need to be enacted to promote confidence in the Lebanese petroleum investment climate, ensure transparency toward the public—the ultimate owner of any resources found—and lay down solid legal and governance foundations for operating the sector. Four important laws are currently at the initial stages of the parliamentary process: They cover the establishment of a petroleum asset-management department, a sovereign wealth fund (which this author helped draft), and a national oil company, as well as prospects for onshore exploration. The proposed legislation is not being hurried through Parliament, but rather is being discussed at length in subcommittees. The fact that Lebanon currently has the right set of circumstances to make up for the years that we missed should not be mistaken for the conspiracy theory that the laws are being rushed.

These laws have been prepared by very capable Lebanese policymakers and legislators for more than two years. It is vital in any policymaking process to involve interest groups, the media, civil society, and independent experts. It is also essential that Lebanon not fall into the trap of the resource curse, a situation where countries rich in resources tend to have poorer economic growth, flawed democracies, and less development than those without. Interest groups and experts are rightfully highlighting the risks—however, they should know that these laws have been proposed to protect us from the resource curse, and so should be careful about what kind of messages they are trying to send to the public. Halting the laws is not the solution, reaching out to the legislators behind them and providing constructive comments is far more useful. Joining in the efforts to achieve the ideal legislative framework is more productive than campaigning against the need for new laws.

Additionally, last year’s Right of Access to Information law, the Petroleum Transparency Law—which is reaching the final stages in parliament committees—and the plan to join the Extractive Industries Transparency Initiative will all contribute to the transparency of the sector.

The Lebanese economy has struggled for many decades to overcome various internal and external hurdles on the path to proper growth, and is currently at a quarter of its true potential. The proposed petroleum-related laws are important building blocks toward this holistic approach, and there is no shortage of talent in Lebanon to achieve the vision we all share.

 

Here is a summary of the four laws that have recently been referred to parliamentary committees with a brief explanation of why they are essential:

 

1. Petroleum Asset Management Department (PAD) Law: This law would establish a new department under the Ministry of Finance with two major duties. The first is to assist the Minister of Finance in drawing up an investment mandate for the sovereign wealth fund (SWF), which would then need to be approved by both the Council of Ministers and Parliament. Following best practice worldwide, the investment mandate would be a technical document prepared by experts at the Ministry of Finance and approved by the government, setting out general guidelines for the SWF in the context of Lebanon’s macroeconomic policy, including risk tolerance of the investment choices. The role of the SWF is to manage the funds and not to design fiscal or investment policies; the investment mandate, prepared worldwide by policymakers at the Ministry of Finance, presented by the minister, and approved by government, is designed to ensure the SWF is in line with the central government’s vision for the economy. The second role of the PAD is to audit the companies operating in the petroleum industry to ensure the proper collection of the 20 percent income tax. Auditing petroleum activities is a new responsibility for Lebanon, and the proper experts should be hired to support the MoF in its revenue collection role.

2. Sovereign Wealth Fund Law: The cost of debt in Lebanon has become very high, and economic fundamentals would suggest that debt should be paid down with any influx of extra government funds before attempting to generate higher returns in financial markets. But this logic is flawed and dangerous in the context of Lebanon. The problems of chronic debt, lack of investment in infrastructure, failing public services, and high yearly deficit are not caused by a lack of funds, so using income from petroleum activities to pay down the debt is not the solution.

Public-private partnerships can resolve the infrastructure and public-services problem, while cutting non-productive subsidies and improving the tax-collection system can solve the chronic deficit and debt problem. Income from non-renewable resources should be turned into off-balance-sheet renewable financial resources for future generations, to be used only under strict terms and in the right sectors of the economy.

The current draft of the SWF law has very strict fiscal rules for spending, and only allows minor alleviation of the debt burden in the specific case where the government has turned its chronic deficit problem into a debt-sustainable primary surplus—a major achievement, if it were to take place. More importantly, the law ensures checks and balances based on the best corporate governance practices, helping the board of the fund, the finance minister, the cabinet, Parliament, internal auditors, two external auditors, the PAD, and the SWF management interact without overstepping their responsibilities. Moreover, it ensures full transparency of operations by publishing all reports online.

It will take several years to have an able home-grown team in place to manage such a fund, so any delay now will be magnified down the road. The tens of millions of dollars already generated by selling geophysical data to companies could be the seed money for the fund. Lebanon has always been a borrowing country, so launching a culture of savings is important. The fear of building new institutions, overstaffing them, and causing wasteful spending is justified, given the weak corporate governance practices in Lebanon, but should not be a reason to choose the do-nothing approach. Rather, it should encourage a do-it-right approach.

3. National Oil Company (NOC) Law: This law does not establish the NOC, but rather organizes its corporate governance, defines the participation methodology of the government, and starts consolidating government oil and gas assets under one legal entity. The law clearly states that the NOC will be established in accordance with the 2010 Offshore Petroleum Resources Law (OPRL), which states it must be established by a cabinet decree—and after the proof of commerciality, not right away, as some misinformed experts suggested. Hence, this law would send the proper signal to international oil companies about the methodology of government participation. The objective is to be transparent about the incentives of the government in future licensing rounds since the participation method of the state will impact the economics of future exploration and production agreements.

4. Onshore Exploration Law: As the OPRL covers only offshore exploration, production, and decommissioning activities, a legislative framework is clearly missing for any onshore activities, which are usually very different in nature, but equally important to organize the activities of the sector as a whole. This law would set the scope of onshore activities including development, production and decommissioning, the ownership of resources, the methodology for land expropriation, the participation of the state, the role of different government entities, and the preservation of any cultural or historic heritage, among other important components that the OPRL similarly covers.

March 19, 2018 0 comments
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CommentEconomics & Policy

A nudge in the right direction

by Fadi Makki March 14, 2018
written by Fadi Makki

From preventing simple traffic violations to curbing rampant corruption, ensuring compliance with the rule of law in Lebanon is a serious challenge for policymakers. Heavy-handed controls often do not work, as they rely on individuals making rational decisions, and financial incentives are not sustainable in the long-run. What else can the government do to improve compliance and promote a rule-of-law culture?

Part of the answer lies in a concept known as nudging: using cost-effective policy tools to steer people in the right direction by making small changes in the environment, without restricting their freedom of choice. Effective nudges include placing healthy food items at eye level in cafeterias to increase healthy eating habits, telling households about their neighbor’s energy-consumption levels to encourage them to reduce their own consumption, or texting parents about their children’s progress in school to engage them in their kids’ academic performance. The trick to getting people to change their behavior is, as the 2017 economics Nobel laureate Richard Thaler put it, to “make it easy.”

Irrational beings

The theory behind nudging integrates psychology and other insights from behavioral sciences into policymaking, designing policies with realistic assumptions about how people behave.

Classical economic theory is premised on the core belief that humans are rational and base their choices on unbiased beliefs. But books such as “Nudge” by Richard Thaler and Cass Sunstein and “Thinking Fast and Slow” by Daniel Kahneman question that rationality, and provide much of the intellectual backbone for nudging in the past decade.

Former UK Prime Minister David Cameron’s Behavioral Insights Team was the first government agency focussed on nudging, or nudge unit, in the world, and was soon followed by other governments, including former US President Barack Obama’s Social and Behavioral Science Team. In the region, Qatar’s Behavioral Insights Unit led the way in 2016 and was soon followed by Lebanon and Kuwait; Saudi Arabia, among others, is looking to create its own unit in the future. This global explosion of nudge units is driven by the desire to experiment with what works—data-backed interventions—in policy areas such as health, education, inclusion, and finance, rather than rely on intuition.

The impact of such interventions is tested through randomized controlled trials, a common experimentation method traditionally used in clinical trials. Lebanon’s first nudge unit, Nudge Lebanon, has tested numerous small behavioral interventions and demonstrated the profound impact it has on increasing citizen compliance with the law.

In one experiment, Nudge Lebanon partnered with Electricité du Liban to improve timely payment of electricity bills in Saida by sending customers letters informed by behavioral psychology. Among the intervention letters was one that read, “Your country needs you. Be a good citizen and pay your due electricity bill on time,” priming people’s sense of patriotism. Another informed people when 90 percent of their neighbors had already paid, asking if they wanted to join them. These nudges increased timely payment by 15 percent and 13 percent respectively, compared to the control group.

Nudge experiments

In an experiment aimed to encourage drivers and passengers to fasten their seatbelts, hotel valet parking attendants delivered a verbal prompt, “Be safe; please don’t forget to put on your seatbelt.” This increased  the number of those who wore their seatbelt by 82.8 percent compared to the control group. Another experiment reduced the amount of plastic cutlery that restaurants gave out with delivery orders by 79 percent simply by asking people if they actually wanted them.

Other nudge experiments currently underway include efforts to increase payments in Lebanese lira (in line with the central bank’s strategy to reduce dollarization in Lebanon), promote voluntary compliance with the smoking ban in restaurants, reduce illegal u-turns, and encourage victims and witnesses of government corruption to report these incidents and seek legal advice.

Many of Lebanon’s policy challenges have underlying behavioral roots that cannot be addressed with traditional tools: for example, people might have limited willpower to act on their intentions. Policy levers like command and control—threatening punishment to secure compliance—or financial incentives and subsidies fall short in addressing these behavioral pitfalls. Nudging people in the right direction using simple changes in context can help close the gap between people’s intentions and actions.

These evidence-based methods have their efficiency gains for government as well: They could nudge citizens into complying with traffic rules and regulations, bring in much-needed cash flow by increasing on-time payments of taxes and utility bills, get people to save more for their pensions using default rules (rather than relying on people to opt-in to pension schemes), and encourage regular health checks with timely reminders via SMS. While these interventions might not solve all the problems plaguing Lebanon, they can provide inexpensive, measurable improvements that can be built on in the future.

March 14, 2018 0 comments
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Economics & PolicyPPP Law

The new PPP law

by Malek Takieddine & Maryline Kalaydjian March 13, 2018
written by Malek Takieddine & Maryline Kalaydjian

Previous experience in a number of countries has proven that public-private partnerships (PPP) are an efficient method for developing long-term infrastructure projects. Under a PPP model, the government remains focused on its primary regulatory role, while the private sector injects funds and expertise into developing projects for the benefit of the government and, ultimately, the public. One of the main factors of a successful PPP is the existence of a legal regime based on the principles of transparency, competitiveness, and accountability.

After a decade of delays, the enactment of Law No. 48 on  September 7, 2017 will undoubtedly create new prospects for the implementation of PPPs in Lebanon for both existing and future projects. The enactment of the law cannot be dissociated from the upcoming international donors conference, Cédre, which is scheduled for April 6 in Paris for the purpose of supporting the Lebanese economy, and in particular for the financing of infrastructure projects in Lebanon—expected at around $16 billion over a period of 10 years.

The law introduced a new legal regime for PPP projects in Lebanon, replacing the traditional procurement processes, which suffered from weak transparency, competitiveness, and accountability standards. The PPP law renames the “High Council for Privatization,” a ministerial committee, to the “High Council for Privatization and PPP,” and grants the council the power to assess and evaluate potential PPP projects. Once a PPP project is identified by the council, a PPP project committee will be established to study the technical, economic, legal, and financial aspects of the project, and to determine the criteria for qualifying the private partner. The PPP law stipulates the main mandatory provisions that must be included in the PPP agreement governing the contractual relationship between the public and private parties, and defines the procedures that should be applied by each party and their obligations. Therefore, the private partner is provided with sufficient clarity and visibility on the implementation of the project.

In addition, the PPP law provides that the private partners must submit both a technical and financial proposal, and that at least three offers will have to qualify, or the project will be reopened for another round of bidding, ensuring equality among the bidders and creating fair competition. Moreover, it is worth nothing that the appointment of experts and consultants to support a PPP tender may be based either on the provisions of the Lebanese Public Accounting Law or, if available, the relevant internal regulations of the High Council for Privatization and PPP, or the relevant state authority that is involved in the tender. This possibility provides for additional flexibility in terms of developing the necessary tender resources.

Private sector knowhow

The PPP law is expected to create a favorable environment for the private sector to invest in infrastructure projects in Lebanon. The private sector will be keener to enter into partnerships with the Lebanese government and to provide much-needed funding when the partnership is governed by a strong legal framework that protects their interests. In this respect, the country will benefit from the private sector’s knowhow and managerial skills, contributing to the efficient development of infrastructure projects in Lebanon. In addition, the adoption of the PPP law will play an important role in attracting foreign investments and international funding opportunities. And most importantly, PPP projects are expected to create job opportunities in various sectors in Lebanon, and hence ultimately increase revenues and stimulate economic growth.

Nevertheless, the PPP law includes certain gaps that must be bridged. For example, the law does not provide for a specific time frame between a PPP project proposal and the signature of a PPP agreement between the parties, which may discourage the private sector if the process is unreasonably lengthy. In addition, the law does not deal with PPP financing, although this is a crucial element in large-scale and long-term projects. Moreover, there is no local content requirement, like a provision requiring PPP projects to employ a minimum percentage of Lebanese nationals. In addition, the law does not stipulate that the PPP agreement should include stabilization clauses that consist of contractual clauses to protect the private party from any future changes in legislation after the execution of the contract with the public party, which are considered an important protection mechanism for the private partner against the discriminatory power of the government. Foreign investors will certainly request the insertion of such clauses to protect their investments from unexpected changes in applicable laws after they inject large capital and invest skills and intellectual property in the development of a PPP project. 

There is a substantial need for the development of infrastructure projects in Lebanon in various fields: water, electricity, waste management, healthcare, and many others. The new law is largely compliant with international standards and provides the private sector with a basic framework to enter into PPPs, and hence, increase private investments in infrastructure projects. However, the gaps highlighted above should be urgently addressed by the Council of Ministers through regulatory decrees, which will, along with the law, constitute a comprehensive legal framework for PPPs in Lebanon.

March 13, 2018 2 comments
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Cover storyWomen's empowerment

Making the most of it

by Bettina Bastian March 12, 2018
written by Bettina Bastian

Amartya Sen, the Indian economist and philosopher, wrote in a 2001 essay that in a world afflicted with “the deeply unequal sharing of the burden of adversities between women and men,” gender inequality must be understood as a “collection of disparate and interlinked problems.”

Gender inequality is reflected in laws, regulations, rights, norms, responsibilities, and opportunities. The World Economic Forum (WEF) has issued Global Gender Gap Reports (GGGR) since 2006, aiming to measure gender gaps in four key areas: health, education, economics, and politics. It found in its latest GGGR last year that “gaps between women and men on economic participation and political empowerment remain wide.” According to the WEF, recent years have even seen a partial reverse in what had been a slow but steady trend of closing gender gaps worldwide over the past decade.

In the economic sphere, gender gaps include painful inequalities in labor force participation, with a global average of 54 percent of women actively involved in the workforce, compared to 81 percent of men. Also, women earn on average 50 percent less than their male counterparts, despite the fact that they work longer hours, and do most of the unpaid labor, like household work and child care.

Gender inequality also impacts entrepreneurship. Research has shown that the number of female entrepreneurs is still lagging behind in most countries, but especially so in the Middle East and North Africa (MENA) region. According to the Global Entrepreneurship Monitor 2016 gender report, women in the MENA region run established businesses at one-third of the rate of men. Moreover, women start new businesses at less than 60 percent of the rate of their male counterparts. The report measures these discrepancies based on the so-called total entrepreneurial activities of individuals in the working age population (18–64 years). Moreover, the report finds that women-led businesses are 60 percent more likely to remain a single-person firm, and only one in 10 female entrepreneurs expect their business to grow in the coming years.

Looking only at these stark percentages gives a grim image of the immense detriment that gender inequality poses for women in entrepreneurship, but this is not the whole story. Research on entrepreneurship in the region indicates that the effects of gender inequality are more complex. A look at several important elements for entrepreneurs reveals a picture of women determined to overcome the disadvantages under existing gender gaps by venturing into self-determined entrepreneurial careers, and thus, becoming pioneers and role models for societal change. Limiting our view of female entrepreneurship in the MENA region to just the percentage of the gender gap might distract from very encouraging developments taking place in the region.

Self-confident women

The majority of women-led entrepreneurial projects in the region are opportunity-based innovative ventures with high market and growth potential. The region has a large reservoir of highly educated women: 38 percent of its researchers are female, a significantly higher percentage than the 30 percent ratio found in the rest of the world. Generally, researchers are an important source of innovation. The region also hosts a high number of female internet entrepreneurs: 35 percent, compared to 10 percent worldwide.

Women in this region have been able to derive business opportunities from this challenging environment, and many of the business models they have developed involve empowering others. For example, Ayah Bdeir, who is Lebanese, created  littleBits, easy-to-use, open source, modular electronic building blocks for prototyping and learning that enable users to develop their own innovations. Rana Chmaitelly, the founder of The Little Engineer, was concerned about her own kids’ addiction to smartphone technology, so she created workshops that engage kids with science, engineering, and technology. Many successful female entrepreneurs in the region develop business models that solve social and environmental issues while creating economic opportunities, such as using plastic trash to develop furniture in Hend Riad’s Reform Studio in Cairo.

Moreover, it appears that the unfavorable environment functions as a catalyst for many women as it increases their intention to become entrepreneurs. This is rooted in women’s widespread dissatisfaction with their current situations and the discriminatory working conditions that limit  their career paths in established organizations. Besides the glass ceilings that limit women’s opportunities, gender stereotypes against employed women as well as discriminating labor laws and limited job opportunities motivate some women to start their own business.

The gendered workplace context does not leave too many conventional opportunities for women, so, many create their own opportunities. This might stem from a strong sense of self-confidence among women entrepreneurs in the region. Worldwide, women have been found to have little self confidence in their entrepreneurial abilities and potential—regardless of their educational background—compared to their male counterparts. But while female self-confidence levels differ from country to country, research published in 2012 found that Lebanese women entrepreneurs were among the most self-confident globally, together with women in Saudi Arabia and Iran.

Contrary to women entrepreneurs, who take significant risks to launch themselves into freelance careers, gender inequality was shown to have the opposite effect on many men. In societies where men hold the position of decision-maker and breadwinner in a family, they are less likely to invest in the uncertain future of a new business. This is especially true in Gulf countries, where starting a small business does not afford social status. Instead, the most prized jobs, with higher salaries and benefits, can be found in public administration. Men in the Gulf region tend to start a business only when they are unable to secure a public appointment. In that sense, gender inequality takes its toll on male entrepreneurial potential in the region as well.

International findings have shown that the likelihood to start a venture increases with the presence of entrepreneurial role models and exposure to supportive social networks. However, in highly gendered societies, women entrepreneurs still depend primarily on non-professional networks, notably family and close friends, as research on Tunisia, Lebanon, Jordan, Bahrain, and the UAE shows.

Building networks

The lack of exposure to professional social networks and the reliance on private networks like families, is mostly tied to cultural and social restrictions on women’s mobility and interaction with males outside their families. Thus, there remains a great need for professional support systems that can introduce women to vital connections in the wider social space. Such support systems can open doors for women to meet potential collaborators, customers, and suppliers, in addition to providing mentoring and professional advice.

Therefore, women-centric networking and professional organizations like the Arab Women Organization, the Bahrain Businesswomen’s Society, or the Lebanese League for Women in Business (LLWB), are pivotal in enhancing leadership and entrepreneurial skills. LLWB, for example, offers networking events, mentoring, training, and lobbies the government for women’s rights and development.

In the economies of Middle Eastern countries, where economic progress is a predictor of female empowerment and higher rates of entrepreneurship, gender inequality has not deterred female entrepreneurs. Although gender equality still has a long way to go in the region, evidence suggests that women in the Middle East and North Africa remain determined to carve out a significant space for their inclusion in the economy and polity of their countries through entrepreneurial leadership.

March 12, 2018 0 comments
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Cover storyq&aWomen's empowerment

A community effort

by Nabila Rahhal & Jeremy Arbid March 12, 2018
written by Nabila Rahhal & Jeremy Arbid

Executive sat down with the country’s first-ever minister of state for women’s affairs, Jean Oghassabian. The ministry was launched one year ago with a mandate to empower and protect women and promote and develop gender equality in Lebanon.

E   This is the first term for you as minister of women’s affairs and, in fact, the first time that a women’s affairs ministry has existed in Lebanon. Why was there a need for such a ministry?

This ministry was formed because Prime Minister [Saad Hariri] is convinced that [women’s rights] need to be put in the spotlight [as issues] related to human values and respect for all people. This ministry is showing that women’s rights are the responsibility of the whole society, and men should participate on many levels to reach complete equality because, for me, women’s issues are not limited to women only. For that reason, the prime minister, with the approval of the president of the republic, decided to establish this ministry.

What I tried to do [during my term in office to date] is to create momentum all over the country. I always wanted to prove that the Lebanese woman has huge capacity and potential. As she has succeeded in the private sector in all levels and industries, she also has the capability to succeed in [state] institutions. For the upcoming elections, we have a campaign [to increase] female involvement in politics. We conducted a conference, and [recently] organized a workshop for [female] candidates in the elections, [both for] candidates representing political parties and for independent candidates. We have a media campaign, “Half of society and half of Parliament,” and, so far, I have attended maybe 15 to 18 conferences everywhere in Lebanon to promote the idea that women in Lebanon have potential. When we talk about half of society, it’s not a question of number; it’s a question of power. It is a question of the future. If you don’t have women in Parliament, it’s not [only] a loss for women; it is a loss for Parliament, a loss for the government, and a loss for the whole country, because the country is not benefiting from a big part of the potential [that exists].

E   You say that there has been progress, but what guarantees do the Lebanese people have that this ministry will continue to exist after the elections and the formation of the new cabinet?

This is a question that is even asked by different stakeholders in Lebanon working on women’s issues, such as UN agencies, NGOs, embassies, and donors. I could perhaps accept such a question if upon my appointment as minister I had said, “Okay, I am a minister now, [so] I will have one assistant and [do the bare minimum] of work on my own.” [In such a case], the new government might just say, “We don’t have a [real women’s affairs] ministry,” and it would be completely neglected [after the next elections]. But this is not the case. Actually, we have established a complete ministry with staff, with a budget, and with a lot of projects in process of being implemented. We have a lot of upcoming projects with international donors such as the World Bank, UN, ESCWA, UN Women, and many embassies. We have so far [presented] six amendments to [existing] laws and [drafted] new laws.

E   Aside from the promotion of female candidacies in the upcoming parliamentary elections, what has the ministry been doing to encourage and develop greater participation of women in the overall public sector in Lebanon?

I proposed to the prime minister and to the government to have a quota in all the nominations of the boards in different institutions. To date, in all these nominations issued under the current cabinet, we [had a] minimum [of] 25 percent of women nominees in security institutions. The judiciary [and] the committee controlling the elections have  28 percent women, and in the Economic and Social Council of Lebanon we have 27 percent female representation.

E    That is achieved by having a quota system?

It’s not by law, but it’s a decision taken by the government because I pushed this issue, and we are following up on that. Every time [the government] has to make appointments to any public position, we should have minimum 30 percent women; we reached 25 to 27 percent, but we are going up.

E   And are there any data indicators that you look at for measuring the achieved progress in ensuring women’s rights?

Now we are working with ESCWA Women, UNFPA, the Ministry of Justice, and with the Central Administration of Statistics [to establish] indicators, and also to study the impact of [gender-based] violence on society, as a societal issue and as an economic and educational issue.

E   So, if we talk about crimes against women, have you seen an increase in the number of reported cases?

Yes. Many more people are now reporting, but we may have [incidents of] violence that nobody knows about, because, in some societies or some families, [people] don’t want to talk about [such incidents]. This goes back to cultural issues, and it is for this reason that I decided to educate primary school children from the ages of 10 to 12, or even eight years old, on the negative effects that violence against women has on family relations. We prepared the concept note and are talking to various [potential] donors about it.

E   Is it correct to say that this is a project that is not yet being implemented today, and that you are looking for funding from international sources?

We are looking for funding, and we can find it, because, as I mentioned in the beginning, there are a lot of donors who are willing to fund [projects of] this ministry. The budget that I have from the government is only a working budget: I can cover  salaries and some small expenses, but the projects are financed by donors. I decided to establish this ministry as a UNDP program. For that reason, I [was able] to move quickly in everything. This [collaboration] also gives me credibility in front of international agencies and donors. I had the ability to [organize] all this in a short time because I was the minister for administrative reform in 2005. [The Office of the Minister of State for Administrative Reform] is also a UNDP program which gets working capital from the government and ensures the funding of the other projects from donors.

I also worked with international donors in the private sector on many projects related to public sector improvement. This gave me some knowhow to move quickly, and also to benefit from all assets that are available inside the country. But if they had brought somebody that is not “in the business” as a minister, he would have taken time to learn all these issues. I think that we have a lot of achievements that will guarantee that this ministry will be permanent and sustainable. As a lot of involvement in many projects with international donors is at hand today, I think that any consideration [to terminate the ministry] by the coming government would be a mistake and send a very bad message to the international community.

E   Moving forward, what is the ministry’s legislative roadmap?

I do my homework. So far, I succeeded in getting the approval of the government for three amendments. The first is to punish sexual harassment. It has not been approved by the Parliament yet, but it is not easy to get approval. It will take three to four months because it has to be approved by all ministries and by Ministry of Justice and the legislative council. This one was approved by the cabinet, [as was] the amendment to eliminate discrimination in the provisions of the social security law. [Also] we have the three-day paternity leave. People told me it doesn’t work. I said for me it is not question of three days; it’s a question of creating a new culture and convictions that the father has the same responsibilities as the woman when the child is born and not only logistical responsibilities. 

March 12, 2018 0 comments
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Economics & PolicyOil and gasSpecial Report

Troubled waters

by Mona Sukkarieh March 12, 2018
written by Mona Sukkarieh

A comment made by Israeli Defense Minister Avigdor Lieberman at a Tel Aviv conference on January 31 sparked outrage in Lebanon, bringing the issue of the maritime border dispute between Lebanon and Israel back into the spotlight and catching Washington’s attention once again.

The Obama administration started mediating between Lebanon and Israel to help contain the dispute in 2012, but little happened on this front after President Trump took office in 2017. It seemed to all parties that mediation was no longer a priority for the US. Then, in October, during Lebanon’s first oil and gas licensing round, a consortium of companies led by France’s Total bid on Block 9, which includes a disputed maritime area. The bid rekindled interest in the dispute, but the buzz was discreet, confined to experts and diplomatic circles, until it was thrust out in the open again when Liberman described Lebanon’s offshore tender as “very provocative” and urged international companies not to bid on it, about a month and a half after licenses were awarded (see timeline).

Moving borders

The dispute goes back to December 2010, when Cyprus and Israel signed a maritime border agreement that was denounced by Lebanon because it encroached on parts of its exclusive economic zone (EEZ). On July 10, 2011, the Israeli cabinet approved a map of Israel’s northern maritime border, and two days later, the Israeli mission to the UN included a list of coordinates delimiting the northern end of Israel’s territorial sea and EEZ. Some of these coordinates overlapped with the Lebanese EEZ.

But to understand how we got here, we must go back to 2007. On January 17 of that year, Lebanon signed a maritime border agreement with Cyprus. It followed the standard procedure outlined in the UN Convention on the Law of the Sea, or UNCLOS, marking a series of points that are equidistant from Cyprus and Lebanon known as the median line. Point 1 was used to mark the southernmost point along this line, while Point 6 marked its northernmost point. The agreement included a standard clause specifying that the coordinates of the first and last markers—in this case Points 1 and 6—may be adjusted in light of future delimitation of the EEZ with other neighboring states, since a bilateral agreement cannot define the borders of third states.

The agreement was never ratified by the Lebanese Parliament, largely because of pressure from Turkey, which denounces all maritime border agreements signed by the Republic of Cyprus with its neighboring countries. As such, the agreement never entered into force.

It wasn’t until April 2009 that a Lebanese commission tasked with defining the coordinates of Lebanon’s EEZ completed its work, identifying Point 23—17 km south of Point 1—as the southernmost point of Lebanon’s EEZ. The coordinates were approved by the cabinet on May 13, 2009 and by Parliament on August 4, 2011. In accordance with UNCLOS, Lebanon submitted the relevant charts and lists of coordinates to the UN in July and October 2010 and in November 2011. Just like Israel’s 2011 submissions, these were unilateral determinations and do not amount to border delimitation.

The question is: Why did Lebanon sign a border agreement with Cyprus in 2007, more than two years before it had a precise definition of the borders of its EEZ?

israel’s opening

While the Lebanon–Cyprus agreement was never ratified and did not reflect Lebanon’s final position on the southern boundary of its EEZ, it did provide Israel with an opening. In December 2010, Israel signed a similar offshore border agreement with Cyprus. This deal ignored the coordinates that had been declared by Lebanon and sent to the UN a few months prior, instead using Point 1—the southernmost marker referenced in the 2007 Lebanese–Cypriot agreement—as the northernmost marker in the Israeli–Cypriot agreement. It allowed Israeli Prime Minister Benjamin Netanyahu to say in July 2010 that “the outline that Lebanon submitted to the UN … conflicts with the line that we have agreed upon with Cyprus and—what is more significant in my eyes—it conflicts with the line that Lebanon itself agreed upon with Cyprus in 2007.”

While Israel objected to the southernmost coordinates submitted by Lebanon, less known is the fact that Syria also objected to the delineation provided by Lebanon. In a letter transmitted to the UN Secretary-General on July 15, 2014, Syria stated that the delineation does not have “any binding legal effect on other states. It remains only a notification, and one to which the Syrian Arab Republic objects.” This could open Lebanon to similar dispute with Syria in the future.

Of course, the Israeli–Cypriot agreement, like the Lebanese–Cypriot agreement before it, included the standard clause specifying that the geographical coordinates of the first and last markers may be adjusted in light of future delimitation of the EEZ with other neighboring states. This left room to maneuver.

The overlap is a triangle around 856 square kilometers in size that widens as it goes further out to sea. According to Frederic Hof, the first US mediator to be involved in the EEZ disagreement, disputes of this nature are common, and “both sides acted professionally in their calculations and performed in ways fully consistent with customary international practice.”

American mediation

Because Israel is not a signatory to UNCLOS and because of the political situation between Lebanon and Israel, a third-party mediation was the optimal choice to try to find a solution to the dispute. Cyprus offered its services a couple of times, but the Americans were the first to submit a potential resolution to the impasse. Hof presented a plan in May 2012 to create a provisional but legally binding maritime separation line and a buffer zone with no petroleum activities. According to media reports, it acknowledged that around 500 square kilometers of the disputed area belong to Lebanon. It received mixed reactions in Lebanese media but was neither approved nor officially rejected at the time.

Amos Hochstein, the deputy US assistant secretary of state for energy diplomacy, took over Hof’s mediation efforts at the end of 2012. In Beirut, the handoff was seen as an opportunity to put Hof’s plan aside and seek more favorable proposals. In November 2013, Hochstein reportedly submitted to Lebanese officials a plan to draw a maritime “blue line” similar to the one established by the UN in June 2000 to demarcate the Lebanese-Israeli land border. The line would be temporary in nature and was meant to curtail tension between the two countries by prohibiting any exploration within the disputed area until a solution is reached. The plan made room for a limited role for the UN, acknowledging a Lebanese demand to involve the UN in the process. It was seen as a good starting point in Lebanon but was not met with enthusiasm in Israel. Frequent power vacuums in Lebanon did not help. By the time Lebanon had fully functioning institutions, with a new president in Baabda in October 2016 and a new cabinet in December 2016, the end of the Obama administration was only weeks away, bringing with it the end  of Hochstein’s mediation. The Trump administration had other priorities, and didn’t actively involve itself on the subject until recently. A week after Liberman’s comments in December 2017, Acting US Assistant Secretary for Near Eastern Affairs David Satterfield visited Lebanon in preparation for Secretary of State Rex Tillerson’s visit to Beirut on February 15. The US appeared to be dusting off the Hof plan, and Beirut was not thrilled. Lebanon made a counter-proposal to demarcate the border via a trilateral committee including Lebanese, Israeli, and UN representatives, in addition to experts and American diplomats—a procedure similar to the one used in 2000 to demarcate the land border known as the Blue Line. (The offshore extension is now being referred to as the White Line.) But both the US and Israel prefer to keep any UN role minimal.

For now, there is a lack of urgency in Beirut to settle the dispute—or, more precisely, to move forward with plans that seem unfavorable to Lebanon, now that Block 9 has been awarded and actual escalation is not expected, given that it is likely not in the interest of any party. The awarding of Block 9 and the upcoming exploratory activities within it were what triggered the Israeli comments at the end of January.

Block 9 covers 1742 square kilometers, out of which around 145 square kilometers (around 8 percent) fall within the disputed area. At the official signing ceremony for the exploration and production agreement on February 9, Total’s Stéphane Michel confirmed that the company’s target for drilling in Block 9 is going to be in the northern part of the block, some 25 km away from the disputed area. It is hoped that this will contain tension and allow the company to proceed with its work undisturbed. But will it be enough? Total has committed to drilling at least one well in Block 9. Failing to drill will incur a penalty worth tens of millions of dollars. But it’s not uncommon for a company to take that hit if it estimates that a penalty is less costly than drilling. In fact, in early 2015, just before the discovery of Zohr, a large natural-gas field off the coast of Egypt, reignited interest in the region, Total failed to proceed with its commitments in Cyprus and relinquished Block 10 without drilling any well.

Until next year, then, all eyes will be on the political actors in this tale.

March 12, 2018 1 comment
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Cover storyProfilesWomen's empowerment

The countdown to political progress

by Nabila Rahhal & Thomas Schellen March 8, 2018
written by Nabila Rahhal & Thomas Schellen

This year will see some economic actors sitting in the sun. It does not require special astrological powers to predict that the first half of 2018 will be good for the bottom lines of local advertising companies, social media platforms, billboard operators, pollsters, and audiovisual companies. Driving down any urban highway or country road and browsing through their favorite media, the Lebanese political consumer is being bombarded with messages about the upcoming parliamentary elections. 

State institutions set the stage in late 2017 by booking advertising and media space for several public awareness campaigns to encourage voting. Also, since early this year, campaigns by political parties, new movements, and individual candidates are coming out in increasing numbers, as contenders enter the contest for winning public attention, and ultimately, voters. This, too, is only normal, and even gives room for hope that the next Parliament will enjoy a double blessing of greater diversity and less stagnation and political paralysis.

The May 6 vote will be important for economic and social peace and development. Lebanon’s first elections in almost a decade will be conducted under a new election law, and marks—for the first time in most citizens’ political memory—an opportunity to challenge an equilibrium of interest-mongers that has blocked the nation’s advancement internally almost as much as the external phenomena of regional violence and international power plays.   

Within the mix of election campaigning and politicians’ positioning to look attractive to voters, one novelty stands out, and could even be more hopeful than the general bombardment of promises. It is the presence of female candidates in the elections. More women have announced their candidacies—or at least their strong intent to run for Parliament—than in 2009, when the last elections were held, or in any previous election in living memory. According to figures from the Inter-Parliamentary Union, only 1.7 percent of the candidates for parliamentary elections in 2009 were women.

While no assessment of registered parliamentary candidates can be made before the official lists are published after the March 7 registration deadline, political officials in Lebanon have spoken out publicly and in interviews with Executive for more women in Parliament (the Ministry for Women’s Affairs adopted the slogan, “Half of society, half of Parliament;” see interview with Minister Oghassabian, while other sources within the political class have for several months been speaking of expectations that more women will run. No one interviewed for this article placed the figure lower than 80 women candidates.

Executive reached out to women who had announced their candidacy for the upcoming parliamentary elections in early February in an effort to gain a deeper of understanding of what motivated them to run for Parliament, and of their experience in what some prejudiced parts of society have viewed as a men’s arena for far too long.

Not new to the game

Hayat Arslan, a candidate for the Druze seat in the Chouf, says she has worked for women’s political empowerment since 2001 through an NGO called the Committee for Women’s Political Empowerment, which she founded that year to lobby for a quota for women in politics. As one of the NGOs encouraging women to run for the elections in 2013, which were later postponed, the organization counted 40 female candidates at the time, including Arslan. She says that some of these women stepped up to the plate again as soon as the current elections were announced.

Many of the female candidates that Executive spoke to built up public experience doing social work at charity organizations or NGOs, while others got their start in municipal politics. Victoria Zwein, a candidate in the Metn district, was one of the first women to run for—and win—a municipal council seat. She was elected to the municipal council in Sin El Fil, a district adjacent to Beirut, in 2004. Adding to her experience were activities in the areas of urban development and women’s empowerment, as well as projects with the international UN body ESCWA.

A breakthrough into politics on the municipal level also provided an important stepping stone for Josephine Zgheib. She is currently a municipal council member in Kfardebian, in the mountain area to the north of Beirut, where she was the first woman to win a seat, she tells Executive. Her biography also contains experience in the NGO field, through an organization she founded.

Nada Zaarour enters her race with experience in the national political scene: She is a candidate in Metn, and one of four parliamentary contenders—two women and two men—nominated in four different electoral districts by the Green Party of Lebanon. Zaarour is in her second-term as president of the Green Party of Lebanon, which was founded in 2004 to advocate for environmental protection and sustainable development, as well as human rights.

Breaking point

It is perhaps these women’s interaction with their communities’ challenges through public service work, and with the challenges of their own daily lives, that drove them to decide to run for Parliament. Kholoud Wattar, a candidate for Beirut 2, recounts an incident that occurred during her charity work, where she was trying to raise money for someone who needed urgent medical care and had to sweet-talk a certain politician to secure his help, despite the fact that healthcare is a basic right for citizens. “I decided to run for elections because I never again wanted to be in a position where I had to beg for my rights in my country,” she says. Wattar tells Executive that she aims to assemble a complete women’s list that can compete for the seats allocated to Beirut 2.

Every female candidate who spoke to Executive identified the country’s dire economic, environmental, and social state as the main motivation for their candidacies. “It’s a sin if we don’t run for Parliament in these elections because the situation in the country has become very dangerous. The level of pollution is extremely high, there is no greenery in the mountains to speak of, [and] our constitution is not being respected. We can no longer watch from the sidelines,” says Zgheib.

According to the candidates, it would be futile to complain about the political establishment’s performance without providing voters with an alternative. “The situation [in the country] has deteriorated badly, and no one has the boldness to stand up against the establishment and say enough is enough. We have reached a critical point where we either initiate positive change through this election and give future generations hope in the country to work further for it, or continue [on our current path], with generation after generation of people in the establishment holding on to power,” says Paula Yacoubian, a former political show presenter for Future TV who is running in Beirut 1 with Sabaa, a party formed last year.

Most of the women Executive profiled say they are running as independents on lists that are not from establishment political parties—groups with current representation in Parliament—but rather have been put together by coalitions of “anti establishment” political actors who come from civil society, protest movements such as the anti-garbage groups of 2015, or political backgrounds that are otherwise separate from the mainstream establishment.

While establishment political parties spoke positively about the potential increase in female candidates in the early run-up to the elections, several of them announced candidate lineups in late February that did not include a single woman. Of the three parties who announced their candidates at that time, one—Hezbollah—had already stated that it did not consider fielding female candidates to be coherent with its positions; another, the Druze-dominated Progressive Socialist Party, presented a female-free list; and the third, the Shia Amal party founded by cleric Musa al-Sadr in the 70s and for decades led by Speaker of Parliament Nabih Berri, announced a sole female candidate, sitting Minister of State for Administrative Reform Inaya Ezzeddine.

The difficulties that female candidates face in the machines of political parties were further illuminated at a Beirut conference about female candidacies in late January, where the overriding tenor of established parties was revealed to be power-centric, prioritizing their perceived short-term chances to win or defend parliamentary seats over the idea of diversifying their candidate lists by including more women.

Some women who were still contemplating their candidacies when they spoke to Executive said, speaking on condition of anonymity, that they had been pressured by political parties when discussing the possibility of running. One businesswoman with NGO experience who was leaning toward running as an independent revealed that a political party had pressured her to either join its list or not to run at all. This sort of behavior by political parties is hardly surprising, given that power pressures and entrenched practices in systems all over the world rarely fully deserve their “democratic” labels, but it seems specifically noteworthy in the Lebanese context because of two factors.

First, many female candidates relate more to independent agendas and feel more represented and equal in the political company of other independent candidates. “Women and men are equal as activists outside of this circle or club of politicians,” says the Green Party’s Zaarour. And Zwein, who began her political career in 2004 with the National Liberal Party that was established by the venerated politician Camille Chamoun in 1958 and has been led by his son Dory—today an octogenarian—since 1990, said she can no longer identify with a party which revolves around a patriarchal leader.

Zwein declares that she will be running with Sabaa in the parliamentary elections. “I’m a person who believes in political parties as major stakeholders for positive change in any country. But I couldn’t find any party in Lebanon which I believe I can work with. Most of the time, it’s a family business or a family political party, or it’s really extreme religion. It’s hard to believe that political parties will actually allow women to be present as ministers or as candidates, and the proof is that till now there are no women on the parties’ lists,” says Zwein.

Secondly, in cases where political parties do embrace female candidacy, the support structures for women aspiring to political roles appear to need much more development. Rindala Jabbour, a high-ranking member of the Free Patriotic Movement who won the party’s internal elections to run for parliamentary elections in West Bekaa–Rashaya, tells Executive that men and women are treated as equals in the party, but that she would have hoped for affirmative action to support qualified women like herself. “In some areas, you feel there is no difference between men and women, and it’s all about having the right personality [and skills] for politics, such as being able to negotiate and present your ideas clearly. In other regards, however, you feel that there should be some positive discrimination,” she says.

“Today, we’re fighting for women’s representation in politics in Lebanon. Thus, as a party, you should support your female members, and maybe give them some privileges over men to level the playing field, so to speak. I believe there should be some initiatives to support qualified women within their parties to help them rise to power. This is not the case, and you run for party elections like a man,” Jabbour elaborates, adding that one such initiative could be to assist female candidates with campaign financing, as she herself comes from a working-class background and not from a rich family.

Outside old boxes

Beyond the internal realities of anti-establishment movements and political parties alike, the rise of independent women in Middle Eastern politics is noteworthy on another level. This level is the political context of a region where many countries that are not equipped with one of two conventional power-transmission mechanisms.

Conventional wisdom in past research of women’s entry paths into political arenas worldwide was that overcoming gender barriers in parliaments required either the support of a political party or the presence of a gender quota, said Bozena Welborne, a researcher and professor of Middle Eastern politics and the role of women in politics at Smith College in the United States, at a conference panel on political inclusion hosted by the American University of Beirut’s Issam Fares Institute at the end of January. Curiously, this perception matrix is not necessarily as applicable in the Middle East, she explained. “The Middle East and North Africa lead the world in terms of the number of women who have been elected as independents,” she said. 

Her findings about independent female MPs in the Middle East showed that they succeeded in many countries of the region because of quotas, but without any party support. Welbourne later elaborated by email. She and a student had conducted research into the allegiances of parliamentary women in countries around the world between 2015-17.

That MENA leads the world in this regard, when seen in the context of the often weak roles of political parties in the formation of popular will in MENA countries, suggests that highly educated women with well-developed personal social networks (educators, for example) who compete for office in countries with flexible, parallel, or mixed electoral systems (thus outside of completely closed-list electoral systems), have a comparatively higher chance of succeeding as independents.

In the wider context of ongoing change in the political environments of professed democracies, the increasingly effective use of social media hints at an evolution in politics where non-party-dependent agenda-setting mechanisms and access roads to politics are gaining importance, functioning either as an alternative to or in conjunction with political parties.

Underrepresenting women in their lists might backfire on political parties, but so too might any attempts to use women as insincere tokens of pretend-equality, or stooges of interests of whatever partisan group, tribe, or sect, and not as equal decision makers. When such attempts of utilization or political exploitation of female authority are made, they are not missed by politically astute women. “Parties are choosing dull women who are not prominent in their communities to be on their lists because they don’t want women to challenge them or compete with them on the preferential vote,” Wattar notes with disdain. “These parties need to show that they have women to appear as ‘politically correct,’ but who are these women?” she asks.   

Support a sister

While encouragement for women’s participation in Lebanon’s political life has come a long way since 2004, it still has some way to go. Zwein was pregnant when she ran for municipal elections in 2004, and she recalls people telling her that she should go take care of her family instead of campaigning. Zgheib was single when she ran for municipal elections in 2010—she was the only female candidate—and people attempted to discourage her by asking her what she would do if she got married and left town. Wattar says that when she told her family that she had registered for the 2013 elections, her husband was shocked and her seven brothers threatened to disown her. For these women, things have changed a lot: Now, the three of them have the full support of their families and communities, and Zgheib proudly recounts that four women ran for the Kfardebian municipal elections in 2016.

Confirming a philosophical maxim from Friedrich Nietzsche—a man perceived as deeply misogynistic but perhaps also an indiscriminate hater of homo sapiens—that says, “What does not kill us makes us stronger,” Lebanese women in politics say they have turned the opposition to their dreams into whetting stones to hone their individual strengths. Wattar says she feels certain that she can influence a whole legislature of men just as she turned her own male relatives from opponents to supporters of female participation in politics.

 The women profiled for this article say they were largely supported by the women in their communities when they announced their candidacy. Jabbour says she was worried about the response from other women inside the party because she had the misperception that women tended to be jealous of each other’s successes, but the response was the exact opposite, and she counts the women of the FPM as her biggest allies and supporters.

[media-credit id=2635 align=”alignright” width=”590″][/media-credit]

“Being aware of our role and power as women started with the 2013 elections, and many of the same women are running today for Parliament. So we have already started to work together and have already decided that we will empower each other. Although some of these women are from contradicting parties, we are working together for the welfare of women, and it’s amazing,” explains Wattar.

Despite progress, elements of a patriarchal mentality still abound in Lebanon, and despite the vocal support they have been given, some of the candidates Executive spoke with worry that the prevailing cultural environment will sway voters into voting for male establishment types. “Voters say they want to vote for women, but so far, the fearmongering has been stronger in instilling fear in these people that they should vote according to their sect so that the za’eem will not lose. This mentality is stronger than the motivation to have more women in Parliament and to vote for women,” says Yacoubian.   

The road of women candidates to Election Day on May 6 is by no means easy. “There are many handicaps for women running for elections. To begin with, women are not rich in their own right; their husbands, fathers, or male relatives are rich, and they prefer to spend [money] on men who are running. You also have the patriarchal mentality that still prefers men to run, not women. And you also have the media, which is very partisan and controlled by the politicians,” cautions Arslan.

The bottom line is whether female candidates—be it as full independents, anti-establishment, or establishment members—will have succeeded very convincingly or only “fought respectably” in this good fight for increased presence in Parliament.

Hopefully, Lebanon will at least move forward enough to no longer be among the countries ranked lowest for female representation in their national legislatures, a ratio that neither reflects the skill and leadership abilities nor the many achievements of Lebanese women over the decades in different areas.

The upcoming election will be a step toward better governing if it results in higher rates of  inclusion for women. Hopefully, the bedtime stories that the first-time Lebanese voters of 2018 will one day tell their granddaughters and grandsons about the political dominance of men in Parliament and cabinet will all start with, “Once upon a time … ”

March 8, 2018 0 comments
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Lifestyle

Raising voices, raising women

by Em Khalil March 7, 2018
written by Em Khalil

Some of the world’s most prominent companies are led by women. These accomplished female business leaders include Sheryl Sandberg, the COO of Facebook; Indra Nooyi, CEO and chair of PepsiCo; Ginni Rometty, the chair, president, and CEO of IBM, and first woman to head the company; and Diane Von Furstenberg, president of the Council of Fashion Designers of America.

What is the difference between these women and business women in Lebanon? Nothing at all. In fact, as impressive and accomplished as these women are, I’d wager I could find a woman who’s as much of a whiz at diplomacy and negotiation while haggling with a store manager in Bourj Hammoud on a Tuesday as any of the more high-positioned ladies referenced above.

The dismal number of women in the upper echelons of Lebanon’s business world has nothing to do with a lack of talent, determination, ambition, or smarts, and everything to do with lack of opportunity. The sad truth is that the playing field is not level for women here. Time and time again, an up-and-coming female talent starts out at full speed, but soon afterward, her male counterparts breeze on by as she struggles to push her boulder up the mountain.

It’s all about opportunity—but opportunity is the exception for most women in Lebanon, and will remain so unless something is done to turn it into an expectation. That something is the passing of laws and regulations to make gender equality in Lebanon a reality.

You might be thinking, “Sure, why not?” But for the situation to change, people need to do more than just agree. Laws don’t just magically appear. It’s a matter of supply and demand. Without a change of mindset—without people demanding, lobbying, and even badgering those who wield the power of the legislative pen—the only thing women can look forward to is a career of swimming upstream in a raging river. That might work for salmon, but it definitely will not work for us.

Here’s another list: Callie Khouri, who won an Oscar for writing the screenplay of Thelma & Louise; Mayssa Karaa, a Grammy-nominated singer; Sara Ganim, CNN journalist; Donna Shalala, former US Secretary of Health and Human Services; Amal Clooney, lawyer at Doughty Street Chambers specialising in international law and human rights; and Ayah Bdeir, CEO of littleBits, a company that produces educational electronic toys. All of these women are of Lebanese origin, and all of them have achieved success in countries that gave them the tools, the inspiration, and the opportunities that so many of their counterparts living in Lebanon do not have.

We can do better as a country. We can protest, we can petition the powers that be, especially in the run-up to elections; we can put into place a system to empower women and achieve equality in the decision-making process in politics and public life; we can advocate for public awareness of violence against women and challenge the negative attitudes that perpetuate the cycle of harm; we can start it all by educating the public at large and the upcoming generations about the necessity of equality as a human right; and most importantly, we can build a strong women’s movement, which studies have consistently shown is the most effective way to achieve real change. There is so much that we can do, and more crucially, that we should do. And it starts with you and me, right now.

It is past time to unleash half (if not more) of the nation’s power. The next time a Lebanese woman decides to challenge the current, it should be because she wants to, not because she has to.

Em Khalil is Bou Khalil Supermarket’s counter brand, the voice that tackles gender-associated laws and societal stereotypes in Lebanon. For more of Em Khalil’s thoughts, follow her on Instagram: @therealemkhalil

March 7, 2018 0 comments
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Cover storyOverviewWomen's empowerment

Moving into a new world of parliamentary participation

by Nabila Rahhal & Thomas Schellen March 7, 2018
written by Nabila Rahhal & Thomas Schellen

At the end of February 2018, German women did it again. Chancellor Angela Merkel—supposedly the most powerful woman in the world, if one believes Forbes—won her Christian Democratic Union (CDU) party’s election overwhelmingly to form a coalition government with the Social Democratic Party (SDP), which had been hotly debated at the party and national level for months. Also, the candidate for the CDU’s powerful general secretary position, Annegret Kramp-Karrenbauer, was elected by party delegates with a democratic majority of 98.87 percent. (If she ever comes to Beirut on a political visit, her name will be another tongue-twister for Lebanese anchors.)

Moreover, only days before the CDU met on February 26, Merkel had announced the names of CDU ministers in the coalition government (which at time of this writing still required internal approval of the SDP party) and named three women to be among the six CDU ministers. The SDP, meanwhile, is also led by a woman, Andrea Nahles.

When will Lebanon have a Council of Ministers with a female prime minister, a female minister of defense, and 50 percent or more women in ministerial posts?   

Let’s keep things in perspective. Numbers, it is said, do not lie. That is very useful for keeping things in perspective, especially when it comes to issues that are extremely contested and fraught with partisan interest, like gender in politics and gender relations in general. Anyone who claims to be free of bias in the issue of men and women at best deceives themselves. Men are biased in gender issues. Women are biased in gender issues. This shouldn’t surprise any woman or any man, given that the overwhelming majority of people identify themselves as either female or male, and identifying oneself is, in essence, to be biased.

As opposed to the many ideologies and biases in gender matters, simple numbers can quickly clarify a few things. Even allowing several percentage points for marginal biological and self-identification driven exceptions, global gender proportions differ only in the most minute terms among countries. At birth, boys outnumber girls by a very small margin—around 1.05 to 1—and with increasing ages, the balances slowly shift until they tilt in favor of women for groups above 55.

The equality mandate

In the big-picture sense, half of the estimated 7.5 to 7.6 billion people on earth are women. By these ratios, there is every reason for the female share of political representation and decision making to be equal to that of males in a county that is proud of its democratic system—like Lebanon, if you ask any of its overwhelmingly male political leaders. But although the two genders are about equal in numbers, women neither globally nor locally enjoy full equality in terms of healthcare, education, labor, and politics.

For the humanly foreseeable future, it is to be expected that biological gender roles will remain distinct. That, according to the ruling cultural perspective of the 21st century, makes it even more important that gaps between the genders are closed and unjust discrepancies brought down in healthcare, education, labor, and politics. Of these four realms, where gender gaps have been measured annually since 2006 in the World Economic Forum’s Global Gender Gap Report (GGGR), the area with the most pronounced gender inequality is politics. In the GGGR’s four categories, education and healthcare have the lowest gaps and show the most countries with inexistent or very small differences in equality. The distances increase for labor, but they are by far the largest in politics.

Put numerically, the distance between the countries with the smallest and the largest gender gap on national terms in healthcare is merely 0.062 points on a scale from zero (total inequality) to one (total equality). The gap in education attainment is for most countries similarly small and stands at 0.092 points, between 28 countries with full parity score of 1 and Malawi, ranked 126th. Between the top countries and lowest-ranked Chad (144th), the gap is much more significant, at 0.428 points.

In the labor realm, where economic participation and opportunity are measured, the distance between top country Burundi’s 0.911 score and 126th-placed Mali is 0.393 points. However, across the 18 countries with the lowest index rankings, the economic participation and opportunity gap amounts to another 0.244 points, which translates into a total top-to-bottom gap of 0.673. In the political field, the gap is a whopping 0.736 points between Iceland, topping the sub-index at 0.750 points, and 144th-ranked Yemen, with a dismal 0.014 points.

At the same time, politics is the realm where women need the most support and arguably can affect the most to change the status quo and improve realities—and relatedly, conflict management and reconstruction. This is reflected in the adoption of a resolution by the United Nations Security Council, Resolution 1325, in the year 2000 (see box). This resolution was not only approved in a unanimous vote by the 15 Security Council members at the time, it has also been translated into National Action Plans adopted by over 70 UN member countries as of the end of 2017, according to the NGO Women’s International League for Peace and Freedom.

Under the influence of Resolution 1325 and also of the UN’s Millennium Development Goals (adopted in 2000 for a 15-year timeframe) and Sustainable Development Goals (adopted in 2015 for the 15 years till 2030), concerted global efforts for mitigating gender inequality, in the political spheres of UN Member States and the world organization itself, have visibly increased and shown numerically measurable results.

An organizational effect on the UN level was the creation of UN Women as the international body’s consolidated entity working for the empowerment of women. Another effect was the boosting of the political participation of women in the parliaments and cabinets of member countries around the world. The Middle East and North Africa region, which had lagged behind the rest of the UN’s regions in terms of political participation of women, actually showed the largest gain percentage-wise in the political participation of women in this period, at nearly 400 percent (see graph).

Lebanon in global gender context

By the ratio of female MPs, Lebanon is one of the countries with the lowest female representation. This is fact. But whether it will remain so is very much in question. For all its specificities, communal juxtapositions, and cultural diversity, Lebanon is no different from other countries when it comes to gender ratios at birth. The question of whether the country is disadvantaged in closing the gender gap because of its political structures, or if it is merely slower than most other countries, including many Arab neighbors, in adapting to the 21st century’s global gender realities, is a matter of perspective.

Sofia Saadeh, a professor of political science at the Lebanese University and a lifelong advocate of women’s political inclusion, sees it is almost impossible for qualified and independent women to make it into Parliament under Lebanon’s confessional system of governance with patriarchal organization. “Historically, so far, we have had very few women in Parliament, and those who are there are not really there on their own merit. This is because we don’t have modern parties, but sectarian parties which are based on a patriarchal system, so unless the patriarch wants you, you are not in. In the patriarchal system, those who vote are mainly male, or [are] led by a male, so they will not easily vote for a woman,” she tells Executive.

Women who registered to run in the upcoming parliamentary elections have no misgivings about the challenges they face, and the extra barriers that stand in their way, from the lack of a quota system to the high costs and missing support that female candidates have to deal with even when registering their candidacies. But as campaigns have been getting underway for the 2018 elections, women nonetheless are appearing in unprecedented numbers and with extreme determination, sharing in interviews with Executive their aims and ambitions (see story).

There is also the matter of international support and the extension of the global pro-political participation mindset and organizational framework to Lebanon. The Special Representative of the Regional Director at UN Women, Begoña Lasagabaster, conversed with Executive in the new UN Women office across the street from the Lebanese Parliament. According to Lasagabaster, UN Women, working in coordination with the whole UN system, seeks to accompany all stakeholders in member nations, from national institutions and the public sector to civil society, and academia. This appears, in the case of Lebanon, to involve developing the national action plan for implementing UN Security Council Resolution 1325, which calls for greater participation of women in security forces, peacebuilding, prevention of conflicts, and efforts to protect weak or disenfranchised strata of society.

In spite of Lebanon’s political system, which as Lasagabaster acknowledges, complicates the achievement of change, she expressed having a sense that the stakeholders in Lebanese institutions and society all fundamentally know that things in the country have to change in favor of increased female political participation. In her view, a transformational attitude is present in Lebanon, and change is therefore a very real possibility, as long as it is approached with sensitivity to stakeholders’ need to maintain political equilibriums and implemented in small steps—which according to her, does not need to take a lot of time.

A struggle of more than 100 years

The philosopher Aristotle said that “man is by nature a political animal.” The concept of politics has indeed been ingrained in human societies since the days of the ancient Greeks—but so has the human struggle of comprehending the sexes and their political equality. The very example of Aristotle illustrates this, as he thought men superior and rulers by nature and women inferior and men’s objects. His views on women and their political inferiority to men influenced (other male) thinkers in the advancement of male-centric civilizations over many centuries.

When the political systems that today are called liberal democracies began to take shape in the 19th century, the battle for equality had its form in the quest for female voting rights. It helps explain the enormous difficulty of this struggle that it took what were considered to be the most advanced countries of the age half a century or longer to establish female voting rights.

[media-credit name=”Ahmad Barclay & Thomas Schellen” align=”alignright” width=”590″][/media-credit]

In Great Britain, it took decades of protests and demonstrations for women to win these political rights. In Finland and the Nordic nations, which are leaders in female political participation to this day, female voting rights were established beginning in 1907. In Germany, active and passive voting rights of women were first instituted in 1918. In the United States, it took from the 1870s until 1920 for a proposed constitutional amendment prohibiting discrimination in suffrage on the basis of gender to be adopted. Even when one discounts outlier countries among parliamentary democracies that were comparatively early or late in introducing them, the implementation of female voting rights came to pass from the aftermath of World War I up to the period right after World War II.     

[media-credit name=”Ahmad Barclay & Thomas Schellen” align=”alignright” width=”590″][/media-credit]

[media-credit name=”Ahmad Barclay & Thomas Schellen” align=”alignright” width=”590″][/media-credit]

Compared to the length of the struggle for political equality in terms of women winning the right to vote, the ongoing momentum in the development of female political participation with the UN, international civil society, and many national governments as proponents, appears to be deeper, wider, and much more comprehensive than in previous periods of societal evolution.

The question is thus: Will Lebanon and its sovereign, the people, remain in denial of the many advantages that significant progress toward greater women’s inclusion in Parliament and the Council of Ministers can realize? Or, will Lebanon implement greater equality in political decision making, furthering national progress and giving hope that solutions could be found to problems that have not been solved under previous political structures? This spring, the people will give us their answer, and the world will take note.

March 7, 2018 0 comments
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Since its first edition emerged on the newsstands in 1999, Executive Magazine has been dedicated to providing its readers with the most up-to-date local and regional business news. Executive is a monthly business magazine that offers readers in-depth analyses on the Lebanese world of commerce, covering all the major sectors – from banking, finance, and insurance to technology, tourism, hospitality, media, and retail.

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