between rights and capital: bank accounts for minors

On Thursday, Bank of Beirut and the Arab Countries celebrated the first Lebanese woman to open a bank account for her minor children. The Women’s Union of the Progressive Socialist Party (i.e. Walid Junblat’s party), in coordination with the Central Bank and the Association of Banks in Lebanon, was instrumental in bringing about this accomplishment. Initiated locally, the project was funded by USAID and based on a legal study by the young lawyer Paul Morcos of Justicia.

PSP’s Women’s Union marketed the project primarily using the language of rights. But the problematic and the way Morcos proceeds to deal with it is a bit more complicated. The full study can be found here, but the main obstacle, according to the banks, was that in Lebanon the father is the compulsory legal guardian (وليّ جبري) for minor children. This is according to “secular” and religious law, both Christian and Muslim. This is a long story, but “secular” in this particular case relates to an article from Majallat al-Ahkam al-Shar`iyya, or Mecelle in Turkish — this being the Ottoman civil code of 1877 which was an attempt to codify the principles of the religious (Hanafi) court. Byzantine indeed!

The issue, hence, risked stepping on spiritual toes and questioning the patriarchal and sectarian foundations of Lebanon (God forbid). Morcos circumvented the problem by shifting the focus from the Gordian knot of guardianship and highlighting instead how allowing a woman to open such accounts not only does not threaten this existing structure, but also contradicts rights accorded to women and enshrined in Lebanese law. A very intelligent solution given the imperfect circumstances. The recommendations in Morcos’s study deal with the woman not from the point of view of her rights as a mother, but as a “stipulator/assignor in trust” in a commercial contract. Her son or daughter is “the beneficiary” and the bank “the assignor.” The achievement, nevertheless, is not to be underestimated. More so because it had to do with asserting rights already accorded to women by law and of which she has been stripped through cultural/economic practices. To meet this recommendation halfway, the banks need to engineer account types to allow it to progress legally.

Which brings me to another aspect of this accomplishment. The other study that fed into the project was led by economist Kamal Hamdan and dealt with a completely different aspect of the issue at stake: economic benefits. The study demonstrates that this bank “service” would lead to an additional 100,000 bank accounts over the next ten years with a cumulative value of $400 thousand. I think this too is key to understanding how concrete results were achieved in less than a year. The project has all the right ingredients, indicating broad political support: a civil society actor linked to a sectarian party, private banks interested in expanding their economic possibilities, public institutions interested in empowering private interests, and outside funding interested in shaping the world in its own image. Far from ideal, but it seems to get things done.

 

heart of darkness

One of  Slavoj Žižek’s recent pieces in Le Monde Diplomatique has nothing to do with Lebanon… and everything to do with it. It is about the war in Congo, but — like this previous post — it is also about how seemingly archaic forms of civil strife are actually embedded in their “modern” conditions and about the banality of trying to separate the one from the other. It is also about why Africa receives less attention in the media than places like Lebanon or Palestine: the more “tribal” the conflict seemingly is, the more “natural” its violence is perceived to be.

I have not been able to find the original article, so some of the subtleties might be lost in this translation of a translation, but Žižek’s main point is this:

We can discern the contours of global capitalism under the facade of ethnic conflict. After the fall of Mobutu, Congo no longer existed as a unified, operational state, especially not the eastern part which is a patchwork of territories ruled by local warlords each controlling their own patch of land with an army which normally includes doped children. All the warlords have business contacts with foreign companies or industries who (mainly) profit from mining the riches of the region. This arrangement works well for the partners: the businesses receive exploitation rights without being burdened with taxes or other inconveniences, the warlords get money… The irony is that many of these [extracted] metals are used in high-technology products like laptops and mobile phones. In short, this is not about the local population’s primitive customs: if we remove the high-technology companies from the line, the entire structure of ethnic civil strife driven by old hate will collapse.

You might not agree with the final conclusion about the collapse — and Žižek is prone to theatricals — but the heart of the argument holds in the concluding sentence, a play on Joseph Conrad’s Heart of Darkness:

There is definitely a lot of darkness in the dense Congolese jungle, but its heart is to be found elsewhere, in the illuminated head offices of our high-technology companies.

 

delicious tidbits

• In the wake of Yusuf al-Qaradawi’s attack on Iran and the Shi`i expansionist threat it poses to Sunni Islam, rhetoric against Hizballah, Iran, and the Shi`a in general found new wind. Only this time, Salafi websites are using the writings of Christian kuffar to argue their finer points.

• Nawwaf Musawi, Hizballah international relations officer, attacked David Miliband for calling Hizballah’s militant arm terrorist, asking whether De Gaulle’s resistance from Britain was also terrorism, as Nazi propaganda called it back then. Musawi further stressed his point by likening Miliband’s characterization to Goebbel’s Nazi propaganda.

• With its transformation from financial to economic, the crisis finally made an entry to the Lebanese market… through the jewelry sector. Demand has apparently decreased by 50% [Note: maybe this means it is approaching normal]. While a certain class of people with investments abroad is obviously suffering over jewelry, the economy as a whole is now bracing for an upcoming world-wide recession.

• The Lebanese national debt is now at $48,414,000,000, or about 196.47% of the GDP. Have a nice day.

 

teachers strike a sensitive chord

Yesterday, all branches of the Lebanese University (public), private and public schools, professional and technical schools, as well as the general administration participated in a teachers’ strike. About 100,000 teachers educating 1 million students. The strike was accompanied by a well-attended sit-in in front of parliament. Press coverage was mostly pathetic, consisting of a few lines (as in al-Nahar), discussing primarily Fatih al-Islam under the heading of the strike (as in al-Balad), or covering more of Bahiya al-Hariri, Minister of Education, than the strike itself (as in al-Mustaqbal).

No surprises there. The strike is not interesting because this time it is not “political,” in the only definition of “politics” that finds resonance in Lebanon. i.e. The teachers are not being used as a mule by one political party or other in the pursuit of larger goals, such as the vagaries of identity, resistance, or democracy. The demands are, simply, their wages and retirement plans.

Given that their demands are not “political”, do not expect Ghassan Ghosn, head of the General Labor Union, to come out in support. According to Ghosn, the Union “mobilizes according to a set agenda.” It would have been a more honest, non-roundabout justification to say “mobilizes according to someone’s set agenda.” In an irony of ironies, president Sulayman called upon Ghosn to put an end to the divisions and unify the efforts of the workers.

Do not expect Hizballah, defender of the weak and liberator of the oppressed, to shut down the country on their behalf either. Do not expect “their” parliamentary representatives to take up the issue (only one parliamentarian was at the sit-in). And do not be surprised that Nabih Berri, Muhammad Shatah, and Fuad Sanioura have not even deigned to reply when the teachers’ unions tried to schedule a meeting. Bahiya al-Hariri responded the day before the strike was planned. Everyone is busy with much more important things, like David Miniband, Jimmy Carter and whoever else constitutes the real, rather than imagined, constituency of Lebanese parliamentarians and ministers.

The most audacious justification for not joining the strike came from the Workers’ Liberation Front. According to `Ismat `Abd al-Samad, “The political situation is comfortable, let it continue like this. Why would anyone want to unsettle it?” Which makes for a very interesting argument since if such a strike was to take place when the political situation is unsettled, then it would be termed a “political mobilization.” Ihtarna ya qar3ah min wayn badna n-bousik! (You have confused us, oh, squash, were to kiss you from).

Although the teachers’ unions made clear that this move comes at a time when there is a unity government and, therefore, does not play into party politics, there have been countless self-serving moles calling their demands “political.” No one heeded these sabotage attempts as calls for the strike were answered across Lebanon — in the south and Beqa` as well as Tripoli, Sidon, Kurah, and Matn. There is nothing more threatening to the complacency of Lebanese politicians than these strikes when the sectarian divisions they build their popularity on are momentarily forgotten. The frustration is that in a mess of complex, contradictory, and multifaceted identities the Lebanese like to wear, when the only accepted and narrow definition of “politics” rears its ugly head again, only the sectarian identity comes to the fore.

 

more on the financial crisis

The same tone of careful optimism pervades the Lebanese press today with the regards to the financial crisis. Citigroup reiterated its positive assessment, saying that Lebanon’s economic “insulation” has become an asset under the current crisis. It warned at the same time, that Lebanon is not past the danger mark (Arabic & English links). An al-Nahar writer has even given himself the liberty of dreaming of a return to the “golden age” when Lebanon was the main bank of the region (Arabic link).

A more cautious assessment was delivered by economist Ghassan Dibah in a lecture at the Lebanese Communist Party’s HQ in Witwat (round the corner from the best fawwal in town). While repeating the mantra of the Lebanese banking sector’s relative immunity from the effects of the financial crisis, Dibah outlined three possible dangers:

• Decrease in Lebanese commodities’ ability to compete in European markets, especially because the Lira is linked to the Dollar, which is rising.
• Decrease in migrants’ remittances due to the crisis abroad. This might be somehow off-set by cash flow coming from the Gulf in search for a safe investment haven.
• Increase in unemployment, due to the high rate of exported Lebanese labor or, what he calls, “exported unemployment.”

Dibah also said that while supply and demand is already bringing down real estate values, he thought it unlikely that a real estate crisis will ensue in the near future (since the real estate market is not linked to the elaborate investment schemes that triggered the international crisis).

 

the financial crisis and lebanon

The Lebanese, like everyone else, have been watching the international financial crisis with a mixture of excitement and apprehension. A crisis of a different sort has already hit Lebanon earlier with the inflation in the prices of primary materials. It hit Lebanon even harder because of a system of monopolies and cartels over gaz, petroleum, pharmaceuticals, and wheat. The inflation rate over the past year was 12%, three times the average of countries exporting to Lebanon (Arabic link).

But with the current global crisis, prices of primary materials are going down. The Lebanese Lira is also rising with the dollar (from 1EURO=2201 to 2051.26 LL). In addition, ironically, the fall in share prices on the international scene has invigorated the Beirut stock exchange. Investors who are losing money abroad are selling shares on the BSE to acquire liquidity, which has stirred up a buying movement (Arabic link). In addition, expats and Arabs have been transferring assets to Lebanese banks, which are regarded as safe by many (English link).

The reason Lebanon has been spared the repercussions of the crisis so far has less to do with its being a developing country and more to do with the Central Bank carrot-and-stick policy: high-interest government bonds and stringent rules on risky investments. The confidence inspired by the Lebanese banking system is the result of reputation as well as reforms undertaken over the past twelve years — a confidence recently reinforced by the positive assessment of a World Bank delegation (Arabic link).

All is not rosy, however. The director of the World Bank in Lebanon, Edward Gardner, believes the crisis might still hit Lebanon from the back door: the Gulf. Direct investments aside, a crisis in the Gulf could affect Lebanon in two ways: decreasing migrant remittances and increasing unemployment (Arabic link).

It is too soon to say whether this long-term scenario will materialize or not, and obviously it depends on how long the crisis will last and how severe its impact will be. But the short-term view is working to the country’s advantage for a change. With its characteristic blend of parochialism and internationalism — a finance economy revolving around local banks and an investor/depositor body in Diaspora — this particular cup might actually pass.

 

capitalism à la libanaise

One of Marx’s more interesting thoughts on capitalism concerns its ability to overcome its internal contradictions by engulfing them. One such contradiction can be simplified as such: the desire to hoard is contradicted by the need to recirculate, for to only hoard would otherwise lead to stagnation. That is why capital is constantly looking for new ways for recirculating itself: by creating new market niches, investing in infrastructure, expanding into new geographical areas, etc. By constantly expanding and increasing its productivity in these ways, capitalist incentives generate more capital which, in turn, searches for more release – thus creating a vicious dynamic of which capitalism is both prisoner and generator.

What does this have to do with anything? Apparently, the Ministry of Telecommunications auctioned “platinum” mobile phone numbers in order to fund itself. 13 of the 110 richest people in Lebanon paid a total of $2.5 million for 32 numbers. 70707070 sold for $450 thousand. Next were 70777777 and 70700000 which sold for $400 thousand each. Ridiculous sums by ridiculous people. Or are they?

Doubtless, to some of the buyers, like Wadih Kassab, a few hundred thousand dollars is peanuts. Money is made elsewhere. It is spent elsewhere. Lebanon is just for “recreation”, including throwing money around for show. But it seems to others, this is actually an investment. To sell to the Gulfites, according to Bilal Bundaqji, owner of Petit Café.

A handful of people in Lebanon are making (too much) money that needs to be recirculated and Lebanon is as good a place to do it as any. Given the instability, however, investments generating work for people and producing more capital that can then be reinvested in the country — a sound basis for some economies — are a risk. The real estate market, a classical area where capital recirculates itself, has reached stagnation point — too much to sell and not enough buying power. The Lebanese themselves can barely cough up enough cash to lead a decent life, let alone spend it on Zein al-Atat ($42 thousand for two numbers) products and Ramadan nights at Petit Café. There are Gulfites, on the other hand, with even more capital in need of recirculation and we have already offered them all the vacation apartments we can build, all the women we can sell, and all the intoxicants we can ferment. So, what to do? Why of course, buy ridiculously expensive mobile phone numbers and sell them for even more!

Thus a new market is created. Ingenious. And when you feel like venting, you know the numbers to call.

 

power starved lebanon

The disastrous Électricité du Liban (EDL) is unable to keep up with the country’s demands for power – a crisis exacerbated by fuel prices – so Jordan and Egypt are lending a helping hand. It is a travesty that a country so rich with water cannot find the long-term will to harvest hydraulic energy to supplement its needs (or provide clean drinking water! – but that is another story).

But of course, it already has been done with even more disastrous results. al-Barid Electricity Company (شركة كهرباء البارد), involving the Khuri family, has a concession from the Lebanese government to operate a small hydraulic power plant which supplies villages in the north with electricity.

In 2004, al-Barid’s workers went on strike to demand some overdue payments. The company at the time claimed that EDL owed it money which needed to be payed before it could pay its employees. It turns out that the company actually owes money to the Lebanese government. The company has not paid its dues since 1995, thereby breaking the law that grants it the concession. When in 2007 Salim Nakat, head of concessions at the Ministry of Energy & Water, tried to get the company to pay its dues, he was removed from his post by Muhammad Safadi – then acting Minister of Energy & Water, today Minister of Economy and Trade. Apparently, Mr. Safadi had electoral considerations.

The issue with al-Barid Electricity has been standing at least since 2002 and so have others, such as Aley Electricity and Jbayl Concession, both for power distribution. If the suspicions are/were well-founded – and it is so in the case of al-Barid – the crisis at EDL and the exorbitant amounts spent on power (25% of GDP) are partly the result of money being funneled into private pockets.

Another reason is discussed in a well-documented paper prepared by the Lebanese Communist Party (in Arabic). $1.38 bn were spent on setting up gas powered plants after the civil war and they remain since their completion in 1999 without gas supply. $370 million a year is being wasted by using fuel instead.

So, EDL is being undermined by its parent Ministry (Amal, Hizballah, and Safadi have taken turns at this ministry). A small sample of using hydraulic power is being used to suck money out of the beleagured public pocket. At the end of the day, we end up having to buy favors from Syria, Egypt, and Jordan for power that we could produce ourselves by investing in clean energy. Only we are too busy being power hungry.

 

telecommunication breakdown, continued

As a follow up on the previous post, al-Akhbar today reports that, according to Jubran Basil, the income provided by the Ministry of Telecommunications constitutes 42% of the entire income of the national treasury. Basil, Free Patriotic Movement minister of telecommunications, reiterates promises that there will be a reduction in mobile connection fees after due study and investment. In the mean time, the government better start thinking of alternative means of balancing its income. Cutting down on ministerial posts could be a start!

 

telecommunication breakdown

Mobile connection in Lebanon is the most expensive in the region where almost 2/3 of the fees is accounted for by overheads and taxes. The new coalition government has retracted previous governmental promises to decrease mobile subscription rates. Apparently, under pressure from Sanioura, the price cut was postponed because the mobile sector provides the main income in (much needed) foreign currency for the public pocket.

More importantly, the decision to postpone price cuts follows an established policy of eliminating competition and insuring maximum profit with the eventual aim of fully privatizing the telecommunications sector. The ridiculous prices the Lebanese pay for their mobile connection is the bait that will lure the highest bid (estimated to be between $5 & $7 bn). This policy, by a self-proclaimed liberal and progressive political elite, has gone hand in hand with monopolizing the market and insuring that any competition is nipped in the bud.

The same strategy is followed by the government owned OGERO with respect to Broadband networking. Lebanese ISP’s pioneering work with Internet in the region came to a near complete halt with the absence of proper infrastructure to develop further. Not only did it take forever for OGERO to install the infrastructure, but now they are making it near impossible for the independent ISPs to run a profitable service. OGERO limits their trunk bandwidth, thus limiting the number of subscribers they can have. OGERO also takes its time processing applications for increased bandwidth, undermining private ISPs ability to meet client demands. The result is that OGERO’s share of the market increases. Why? To better the quality of telecom? Rather, the better to privatize with, my dear!

So, while the private sector pioneered Internet connection in Lebanon, the government slows it down, setting us back 10 Internet years with one of the slowest and most expensive Broadband in the region. Instead of supporting and subsidizing private efforts, the government stabs its own memorandum of understanding with the private-sector in the back. Such is government policy of supporting economic and social growth. All this, and the service sector is considered a priority!

It is quite easy to blame it all on Hariri entourage’s economic policy. But now with the coalition government, it is becoming increasingly clear that mindless privatization at the expense of responsible, planned development and sustainable growth is a trait shared by government and opposition alike – if such a distinction holds at all when it comes to their political programs. Once upon a time, when Hizballah was outside government, Nasrallah called the privatization of the Telecom sector “the biggest looting operation in the history of Lebanon.” Not only is the silence deafening now, but the minister of telecommuncations is non other than Orange golden boy. Known for shooting his mouth off from the position of opposition, Jubran Basil is off to a very good start inside the bastion of bowel movement!