Lebanon Daily News Brief 05/11/21

DAILY NEWS


Maritime Border Talks Paused, Waiting on Lebanon
US-led maritime border talks between Lebanon and Israel were paused last week after President Aoun ordered the Lebanese delegation to halt their participation. Aoun took issue with the mediation’s starting point, which was to begin at the border lines already registered with the UN, namely the dispute over 860 square kilometers. [Reuters] There is a decree in Lebanon however approved by the caretaker prime minister and ministers of defense and public works that would extend the disputed area to 1,430 sq. km. But Aoun has yet to sign and approve the decree therefore it hasn’t been submitted to the UN. Regarding next steps the US says the ball is now in Lebanon’s court. [Al Arabiya]

Government Plans on Subsidies Start Panic Buying in Supermarkets
Government plans to remove subsidies on basic food items such as fuel, wheat, and medicine have stirred panic buying among Lebanese at supermarkets. It has caused prices of meat and chicken to spike and on Sunday cars lined up outside of gas stations to store up. Caretaker Prime Minister Diab has said the government will not lift subsidies before ration cards for Lebanese families are approved. [The Daily Star]

Drug Raid in Baalbek
Today the Lebanese army raided a drug manufacturing plan in Baalbek and confiscated drugs, machins and equipment used for narcotic production. [Naharnet]

Over 40 Tons of Fish Dead in Qaraoun Lake
Over 40 tons of dead fish have shown up on the banks of Qaraoun Lake in southern Lebanon. Activists and locals blame pollution coming from the Litani River that carries waste from industrial factories and sewage systems. The authorities don’t recognize this as the cause and say it may be disease.

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OPINION & ANALYSIS


FOCUS LEBANON: LIFE is Helping the Lebanese Help Themselves
Jean AbiNader

Disclaimer: The views and opinions expressed in these articles are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.

FOCUS LEBANON: LIFE is Helping the Lebanese Help Themselves

LIFE Lebanon is not your typical professional association. In addition to its highly qualified and energetic financial, banking, technology, and consulting members, it has worked tirelessly to support Lebanon’s humanitarian and reconstruction needs through its vast network of overseas Lebanese professionals. LIFE partnered with MEI and ATFL to produce critical analyses of the rationale for strong US-Lebanon relations and is instrumental in supporting the newly launched Lebanon program at MEI. In addition, its members support scholarship programs, mentoring, training, job placement, and have raised more than $9 million in humanitarian relief for Lebanon.

As overseas Lebanese, they represent the classic emigrant dream – go overseas, do well, help your country of origin. And they continually strive to do more. This blog will focus on one of LIFE’s most recent efforts to help small businesses, the heartbeat of Lebanon’s economy, to recover and thrive. There are two programs currently being implemented.

Facebook Donation to LIFE
In February 2021, LIFE received a $300,000 donation from Facebook to support vulnerable businesses in Lebanon. Using their experience and network on the ground, LIFE will allocate the donation to 100–150 small and medium enterprises (SMEs), helping them and the economy grow in these unprecedented times. 3QA, a Lebanon-based third sector quality assurance organization, will offer support during the vetting and proposal stages and will undertake monitoring and reporting on behalf of LIFE.

Working with 22 project partners, SMEs are being selected based on: impact on the community; vulnerability level; geographical spread; sector diversity; and gender balance.

Accelerate Beirut
More than 10,000 SMEs were severely damaged during the Beirut explosion and many more are still suffering from its economic impact. Accelerate Beirut is an initiative launched as a collaboration between LIFE, Alia Atieh, and a team of consultants from Bain & Company. The objective is to support Lebanese SMEs by establishing connections and enabling collaborations between local SMEs and global corporations. These collaborations take the form of financial contributions, in-kind donations, partnerships and mentorship programs, or technical assistance from large companies.

Achievements to date:
• The rehabilitation of 5 restaurants in Mar Mikhael working with Nusaned through a $50,000 donation from the Accor Hotels Group
• The Sisley-d’Ornano Foundation donated $24,000 to fashion designer Sandra Mansour
• Eres donated 500 items of clothing to Stand for Women beneficiaries
• L’Oréal Levant are working on a collaboration with Sarah’s Bag
• House of Zejd and Joyau d’Olive are two other SMEs who have received $20,000 of funding

Georgy Rahayel, Founder of Le Joyau D’olive, one of the small businesses who received funding through Accelerate Beirut.
Le Joyau D’olive is a Lebanese artisanal biodegradable vegan soap made of virgin olive and essential oils.

Georgy Rahayel, founder of Le Joyau D’Olive: “Accelerate Beirut has been an eye-opening experience as it took our thought process to a new level. It has exposed us to the right people who can help us scale our venture.

 

Sarah Beydoun, founder of Sarah’s Bag at her workshop. Through Accelerate Beirut, Sarah’s Bag worked on a collaboration with L’Oréal Levant

Sarah Beydoun, founder of Sarah’s Bag: “I really think it’s a brilliant idea and a creative solution, asking big international corporations to support local businesses each in their own field of expertise.”

 

House of Zejd builds on two centuries of family heritage of pressing locally sourced olives from the northern hilly Beino landscape. This is another SME who received funding and support through Accelerate Beirut

Youssef Fares, General Manager, House of Zejd: “Thank you Accelerate Beirut for this great initiative bringing Lebanese products and know-how to the forefront and for the valuable contribution to our brand visibility in target export markets.”

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

Lebanon Daily News Brief 05/10/21

DAILY NEWS


Central Bank Looks Into Mechanism for Dollar Withdrawals
After a civil society group submitted a legal complaint against banks who have frozen Lebanese depositors out of their accounts and blocked withdrawals, the Banque Du Liban announced yesterday that it will be looking into a mechanism that would allow Lebanese to have access to their funds. Many depositors have been locked out of their accounts since 2019. [Reuters]

Turkish Company Warns It Will Cut Power to Ships in Lebanon
After Lebanese Financial Prosecutor Judge Ali Ibrahim ordered two Turkish power ships to be detained last week, the Turkish company Karpowership is urging the Lebanese government to engage in talks. Karpowership served a final notice that it will suspend services while Lebanon struggles to pay over $100 million owed to the company. [Bloomberg] The judge ordered to detain the ships on suspicion of corruption in dealings of the ships production. [The 961]

Friends of President Aoun and PM-Designate Hariri Seek to Revive Talks
After French Foreign Minister Le Drian’s visit to Beirut last week, local mediators and common friends of President Michel Aoun and Prime Minister-designate Saad Hariri are reportedly conducting behind-the-scene efforts to resume talks between the two government leaders to find a solution to Lebanon’s cabinet formation. Lebanon is now rounding its ninth month without a government. [Naharnet]

Developing Cross-Border Cartels in Syria and Lebanon
Concern is growing over Syrian and Lebanese developing drug networks. Saudi Arabia recently imposed a produce ban after it seized millions of Captagon pills being smuggled into the country from Lebanon. Over the last two years, at least 15 other shipments of Captagon have been intercepted in the Middle East and Europe. Some officials report that these shipments originate from Syria and Lebanon cross-border cartels, made up of networks of crime families, militia leaders and political figures. [The Guardian]

Hezbollah Leader’s Support for Recent Iran Talks
Hassan Nasrallah’s latest televised speech revealed the Hezbollah leader’s support for Iran talks with the United States and Saudi Arabia. This support comes after mediated talks between Tehran and Riyadh in Baghdad and between Tehran and Washington in Vienna. [Associated Press]

OPINION & ANALYSIS


The Value of a ‘Seat at the Table’: How Elites Interfere in Lebanon’s Infrastructure Procurement
The Lebanese Center for Policy Studies
Mounir Mahmalat

Disclaimer: The views and opinions expressed in these articles are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.

Lebanon Daily News Brief 05/05/21

DAILY NEWS


Port Blast Investigator Requests Satellite Images
Associated Press

President Aoun’s Response to Yesterday’s Maritime Talks
Reuters

Unclear Future for Hariri Ahead of Le Drian’s Visit
The Daily Star

OPINION & ANALYSIS


‘We Want a Nation’
Kim Ghattas
The Atlantic

Disclaimer: The views and opinions expressed in these articles are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.

Lebanon Daily News Brief 05/06/21

DAILY NEWS


French FM Le Drian Meets with President Aoun and Speaker Berri
Al Jazeera

59 Containers of Chemical Waste Shipped From Port of Beirut
The Daily Star

Lebanese Judge Orders Asset Freeze of 14 People Connected to Major Banks
Reuters

OPINION & ANALYSIS


Freedom of Speech in Lebanon is Under Attack
Aya Majzoub
Human Rights Watch

Martitime Border Negotiations – Is It A Family Business?
Tracy Chamoun

Disclaimer: The views and opinions expressed in these articles are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.

Subsidies Mean Survival for the Majority of Lebanese

In his latest message to the Parliament, Caretaker Prime Minister Diab emphasized the imminent danger facing Lebanon due to the lack of funds to sustain subsidies. While the Parliament sought to hobble the requirements of the $256 million pledged by the World Bank to benefit their interests and obscure distribution accountability, the lira continued to plunge in value. Now hyperinflation has set in, and the number of poor has skyrocketed.

While Hezbollah is well placed to care for many of the basic needs of its constituents, there is an overall deficit in social, health, fuel, and food for most Lebanese regardless of sect. One story reported that “Lebanon has been spending up to $7 billion a year on subsidies, including a total of $5 billion spent on subsidizing goods that benefit Lebanese families [and that] the government was looking to lower that number to $1.2 billion for subsidies.”

There are three types of subsidies in the Lebanese system. The largest by far is to the electricity company, at around $1.5-2 billion a year for the purchase of generator fuels. After this comes a list of some 300-400 (down from 600) essential food and living supplies for the people through subsidized imports. Finally, there are payments under the social security system for those who have paid into the government program.

What boggles the mind is that about 75% of the Lebanese population is now in need of financial assistance to cope with the economic catastrophe. This represents some 750,000-800,000 FAMILIES in dire straits.

The Caretaker Prime Minister’s goal is clear: “As I have mentioned, Lebanon would be cutting our spending on goods by $3.8 billion. Moreover, the money that Lebanon was depleting on subsidies and imports will be put back in the economy inside the country via the ration card as nearly 3 million Lebanese will be benefiting from it to buy goods and other material from the internal market.”

He added, “Without a government that can implement reforms, the future looks bleak. It is unacceptable to be in a political deadlock at a time when Lebanon is going through social, economic, and financial crises.”

The scope and severity of the poverty may be news, but the reality of subsidies ending this month has been known since at least early April. Caretaker Finance Minister Ghazi Wazni said he was informed at that time by the Central Bank Governor that “Lebanon’s mandatory reserves to fund basic imports” would run out by the end of May. He also warned that “delays in launching a plan to reduce subsidies are costing the country $500 million a month.”

A group of ministers, prominent business people, and economists has presented a plan to President Aoun that would eliminate general subsidies and replace them with cash cards to be targeted to specific families based on transparent criteria. According to Aoun’s media office, the paper suggested two strategies. It said the government should “enforce a number of urgent measures for 12 months, addressing gasoline, fuel oil, gas, medicine, wheat, electricity, and the rest of products; as well as working on reducing the public sector’s expenditures in dollars and shifting the current subsidy policy into providing direct cash assistance, in line with the measures to gradually lift subsidies.” They said that if subsidies are lifted and the ration cards adopted, $6 billion will be saved from the annual expenditure.

What is quite sad is that under the formula being proposed, which deviates a bit from the World Bank estimates, is that the annual subsidy for a family of four is $1645, hardly a significant amount, which is indicative of the disastrous condition of the economy. The ration card is considered an alternative to the subsidies for basic commodities that the Central Bank provides today.

Diab has asked that the Central Bank or the Parliament fund the rationing card project rather than going through the government as printing more money would add to inflationary pressures since the lira lacks a fixed value. Another consequential factor is that the Ministry of Social Affairs has yet to develop a database of potential recipients, meaning that many people will not receive the card at all.

It’s time for the Parliament to recall that next spring there will be an election, and people will remember who came to their aid at the most depressing period in their lives.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

Lebanon Daily News Brief 05/04/21

DAILY NEWS


Diab Calls On Parliament to Pass Draft Law on Ration Card Funding
The Daily Star

French FM Le Drian to Arrive in Beirut Tomorrow
Naharnet

Locust Swarms Now Under Control
The 961

Lebanon and Israel Resume Maritime Border Talks
Reuters

OPINION & ANALYSIS


We Want a Nation’
Kim Ghattas
The Atlantic

As Lebanese Cry for Justice, Politics Paralyzes the System
Bassem Mroue
Associated Press

Disclaimer: The views and opinions expressed in these articles are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.

Lebanon Daily News Brief 05/03/21

DAILY NEWS


Two Brothers Suspected in Smuggling Attempt Arrested
Al Arabiya

NGO Submits Legal Complaint Against BDL Governor
France 24

Maritime Border Talks Set to Resume Tomorrow
Reuters

OPINION & ANALYSIS


Breaking the Cycle: A New American Approach to Lebanon
Nicholas Noe
European University Institute

A Failing State: What’s Next For Lebanon?
JINSA National Security Digest Podcast

Lebanon’s Disabled Community is Dying
Adam Nasser
Diplomatic Courier

Disclaimer: The views and opinions expressed in these articles are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.

Lebanon Daily News Brief 04/30/21

DAILY NEWS


France Imposes Sanctions on Lebanese Political Leaders
France has begun imposing sanctions on Lebanese politicians for their role in obstructing government formation and/or their involvement in corruption. The list of names has not been released publicly yet, but French diplomats say people on it are being made aware. [Al Jazeera] French Foreign Minister Jean-Yves Le Drian will travel to Beirut next week for a two-day visit. [Naharnet]

Christian Parties Call for Parliament’s Resignation
Several Christian parties are calling for the resignation of Parliament. Leaders of the Independence Movement, Lebanese Forces, Kataeb Party, and the National Liberation Party have reiterated the need for Lebanon’s sovereignty to be upheld, and accused the Hezbollah-run Parliament of dominating Lebanon. [Arab News]

BDL Gives 95 Percent Of Required Material to Alvarez
Today is Banque du Liban’s deadline to handover data and information requested by Alvarez & Marsal to conduct a forensic audit. A source close to the government said that BDL has given 95 percent of the information required. The remaining 5 percent is said to hold information on Lebanese commercial bank accounts. [The Daily Star]

OPINION & ANALYSIS


The Future of the Bekaa Valley, Up and Coming CBD Capital
Jean AbiNader

Disclaimer: The views and opinions expressed in these articles are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon, a non-profit, nonpartisan leadership organization of Lebanese-Americans.

The Future of the Bekaa Valley, Up and Coming CBD Capital

https://upload.wikimedia.org/wikipedia/commons/9/90/Beqaa_valley_12.jpg

A recent special by VICE News highlighted the potential future of cannabis production in Lebanon. Anyone who visited the Bekaa Valley before the Civil War quickly discovered that hashish, an Arabic word, was liberally handed out to sample as you walked in the area. It was 1972 with my brother Roger and we couldn’t turn a corner without someone saying, “You Amreekee? Want some really good bad stuff? Try, free, come back when you are ready to buy, cheap…”

Since then, these mom and pop (and uncles and cousins) shops have morphed into around a dozen family-based mafias who harvest and export the hash throughout the region and beyond. If you use the metric of illegal drugs confiscated by governments around the world, “Morocco remains the country most reported by governments as the source of seized ‘cannabis resin’ (hashish), followed by Afghanistan and, more distantly, by Lebanon, India, and Pakistan.” So as the world’s third largest producer, Lebanon is slowly shifting its business model to one based on production for CBD medicinal-quality products. From drops and gummies to pills and sachets to ease pain, relieve stress, and promote a general sense of well-being – all this without even having to smoke something and worry about that distinctive odor.

This past year, Parliament finally passed legislation legalizing cannabis for medical purposes, which means most anything except resin and grass for smoking. The industry is projected to grow with “the global market for cannabidiol (CBD), valued at $9.3 billion in 2020 and forecasted to reach $23.6 billion in revenue by 2025. With an expected compound annual growth rate of 22.2% from 2019 to 2025, the future is looking incredibly promising for businesses tapping into CBD’s explosive popularity.”

It is this angle that is at the center of the VICE report. VICE follows a Lebanese-American entrepreneur to a meeting with one of the main family producers in the Bekaa to make the business case for shifting from exporting the base commodity of grass to refined oil that has a much higher, more lucrative, and legal future. Along the way, near the Syrian border, they also encounter smugglers, check points (both legal and local), and indicators of the vast wealth disparity between these rural areas and their overlords.

The story is engaging from a number of perspectives. First of all, the family spokesperson is young, firmly against the government interference in their business, and quite articulate about how their operations benefit the local people. Contrary to the usual image of the Bekaa, he repeats the claim that nothing of value can grow in the area except hashish, or as Ben Hubbard in the New York Times reported, “In a Lebanese farming village of rocky soil and stone villas, cannabis grows everywhere.” But the industry has fallen on bad times as part of the overall decline of Lebanon’s economy. “The costs of imported fuel and fertilizer needed to grow the crop have soared, while the Lebanese pounds that growers earn by selling their hash are worth less and less,” according to Hubbard.

To the locals, the passage of the recent law means government overreach into their lives and livelihood to enrich corrupt officials and their cronies rather than benefit the people. They claim that the government has done nothing in concrete terms to provide legal farming options despite government reports to the contrary. When the government has stepped in, the result has usually been the destruction of crops to extort money from the farmers, reported Hubbard. And it is to the cartels that the farmers turn to for relief.

As a recent Brookings article reported, “Lebanon legalized the cultivation of medical cannabis production (though not any form of consumption) in the spring of 2020. Legalization proposals languished for years, caught up in tensions between the two main Shia forces, Hezbollah and Amal, over the design of any legal regulation and, especially, the control of production.” On a national level, more than 40 warrants have been issued for leaders of the families, despite the promise of an amnesty some 20 years ago. It is this lack of a carrot and stick approach that most upsets the young producer who cannot even consider switching to legal hashish pursuits with a warrant hanging over him.

So the future remains unclear. With cannabis a main source of revenue for Hezbollah and Amal, and the continuing efforts to turn this into an industry that can contribute directly to Lebanon’s economy, the resolution will be another test of the country’s capacity to seize opportunities for growth that genuinely make a difference is the lives of the people in the poor part of the Bekaa.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.