Sedan cars buyers' guide2018 )LZ[]PL^LK[VNL[OLY^P[OP[ZJVTWHUPVU^LIZP[L!^^^VWWVY[\UP[PLZJVTSI 0ZZ\LZ\L -LIY\HY` Interest rates will remain high Deflation out. Inflation up Reviving Beirut Central District Lira won't fall: 7 reasons why is everywhere ICT ecosystem Telecom Cyber security Geo-based solutions Opinion influencers Virtual and augmented reality 02 A publication of ,EBANON,, s3AUDI!RABIA32s+UWAIT+$s5!%!%$s"AHRAIN"$s1ATAR12s*ORDAN*$s%UROPE€s5+as53!s#ANADA# EDITORIAL Lebanon Opportunities by the editor-in-chief Publisher & editor-in-chief Ramzi El Hafez Editorial consultant Nicolas Sbeih Responsible manager Open season Iman Chamas Editorial team he electoral season has begun. Be ready to get exposed to the most fantastical Yassmine Alieh Rania Ghanem combinations of alliances, campaign promises, and below-the-belt maneuvers. Shikrallah Nakhoul T Each election has its own flavor. This one will be tutti-frutti. In parallel, there are Samer Rasbey three donor conferences underway, the most significant one is tentatively scheduled in Paris this spring. THE DARK SIDE OF THE MOON Past elections have provided sizeable cash infusions to the economy, as candidates and their parties didn’t spare a dime to ensure victory – or just a decent showing. Not all spending was decent. A lot of moolah was spent to buy votes, secure the withdrawal of adversaries, or reserve a place on a winning slate. This year, spending is expected to be Printing modest in comparison to former elections. This is due to weakening fortunes of local Photogravure Vartan sarl czars and the tightened finances – and lack of funding appetite – of regional regimes that used to take to heart our local suffrage. The dark side of the moon will not be big. Respecting the environment Paper. Since 2006, Lebanon Opportunities has been printed on Terrapint paper sourced from Kable. Its factory A QUEST TO BORROW is approved by the Forest Stewardship Council (FSC). In absence of true reform – and even if it was being undertaken – there is no alternative Its paper is made from wood from sustainably managed to more public borrowing. This time, with preparations underway of the Paris 4 forests certified by ISO 14001, PEFC, and ESC. Five trees are Conference, now renamed ‘Cèdre I’ by the French – notice the numeral ‘I’ – there seems planted for each one cut. to be no cap to what the government will be asking for. The billions in projects being Bags. Lebanon Opportunities is distributed in Reverte bags, which ensures that they are oxo-biodegradable. advanced are staggering. There will be a lot of economists and political pundits who will Recognition. InfoPro, the publisher of Lebanon criticize substantially raising the debt level. Proponents of debt increase will point to Opportunities, has been recognized by the Ministry of the lack of immediate and practical alternatives, and to the parallel impact of increasing Environment for its contribution to a cleaner environment. GDP, which will keep the fabled (but meaningless) debt/GDP ratio within manageable levels. Who is right? Both are. Who is wrong? Both, as well. The international donors will insist to see first steps of reform before doling out any money. First steps toward Distribution reform will need to be demonstrated. But true reform is unlikely to occur. Corruption The Lebanese Company for the Distribution of Periodicals will just morph into other schemes. Phone: (961-1) 368.007, (961-1) 366.684 Fax:(961-1) 366.683 GOING FOR BROKE E-mail: [email protected] The pitch to the conference includes a laundry list of more than 250 projects and wish lists from all corners of government. Pushing for hundreds of stagnant projects to be launched at once may seem overreaching, or unpractical. In practice, the projects will be Dedicated to Leila Osseiran started in phases, as capacity becomes available, and some may take up to ten years to LEBANON OPPORTUNITIES ® be launched. Other projects will not see the light of day because they will be hampered Published monthly by politics, special interests, or sheer incompetent bureaucracy. The government is not InfoPro SAL able to engage in planning for obvious reasons. Short of that, the endless list is not as Hamra Street – Piccadilly Center – 2nd floor stupid as it seems, to put all the chips of the table and see which ones win. What seems P.O. Box 11-4355 Beirut, Lebanon like a reckless approach is actually the sanest in an environment where wisdom and Phone: (961-1) 739.777 good sense have no place. Fax: (961-1) 74.90.90 E-mail: [email protected] Website: www.opportunities.com.lb NO IMMEDIATE IMPACT The level of nagging by businesses has subsided a little as of late. Should the conference in Paris be successful, there will windfalls for the private sector in the middle term, starting with an increased investment and business confidence. Public spending will not start until the elections are over, a new Cabinet is formed, agreements are signed with donors, and actual contracting begins. This is shooting for end-of-year at the earliest, TO SUBSCRIBE with the bulk starting mid-next year. Too long? Not in comparison with the decades of Phone (961-1) 739.777 waiting. Too heavy and expensive? That’s for the next generation to decide. Fax (961-1) 74.90.90 Website www.opportunities.com.lb Copyright © 2018 InfoPro SAL LEBANON OPPORTUNITIES, JANUARY 2018 1 INFORMATION BITS & BYTES SOUND BYTES INFO BYTES We will build the State. No matter what O $1.5 billion is collected yearly from subscribers the country will take off and prosperity by private electricity generator owners. will return Electricité du Liban collects $650 million President Michel Aoun O 38 percent is the real estate share of $67 billion Fighting for employee rights should not in bank loans to the private sector lead to a punishment of citizens Prime Minister Saad Hariri O 95 percent of the public debt in foreign and national currencies is local Those who employed McKinsey are idiots Walid Jumblatt, MP O 60 closed compartments have been identified underwater within the blocks surveyed for oil and gas Maybe the idiots can do what the smart ones failed to achieve in 28 years O $2.9 billion worth of lira (five percent of total) Raed Khoury, was converted into dollars and $2.6 billion (1.5 Minister of Economy and Trade percent of base) was transferred overseas as a result of the November crisis For a year now I have been asking for a Cabinet session on education without responsiveness. If a meeting DATA BITS is dedicated to electricity ships, they would respond immediately Marwan Hamadeh, FINANCIAL INDICATORS Minister of Education Bank Deposits BSE Market Capitalization I call for a state of emergency on water In billion In billion $175 – 169.1 $16 – 162.5 in light of its scarcity and drought 151.6 Wael Abou Faour, MP and former $150 – 144.4 $14 – 11.9 Minister of Public Health $12 – 11.5 $125 – 11.2 11.2 $10 – I am protecting agriculture. I will stop $100 – $8 – the entry of any product to the country $75 – Ghazi Zeaiter, Minister of Agriculture $6 – $50 – $4 – Increasing interest rates strengthens $25 – $2 – the lira 0 0 Riad Salameh, 2014 2015 2016 Q3 ’17 2014 2015 2016 2017 Governor of the Central Bank Source: Central Bank Source: Beirut Stock Exchange We should start learning Chinese to Gold + FX Reserves Cleared Checks In billion In billion integrate in tomorrow’s economy $80 – Gold Gross FX Gold + FX 69.6 Nicolas Chammas, Chairman of the reserves reserves reserves 68.1 Beirut Traders Association $60 – $60 – $50 – 46.9 51.9 50.7 43.4 44.7 50.4 Those who claim a $1,000 minimum 40.5 $40 – wage in the private sector are living on $40 – another planet $30 – Tony Rami, Chairman of the $20 – $20 – Syndicate of Restaurant Owners $10 – 11 32.4 9.8 30.6 10.7 34 11.9 35.1 0 After joining the oil club, we’re going 0 Jan-Sept 2015 Jan-Sept 2016 Jan-Sept to have the petro-lira 2014 2015 2016 Q3’ 17 2015 2016 2017 Adel Karam, Comedian Source: Central Bank Source: Central Bank 2 LEBANON OPPORTUNITIES, FEBRUARY 2018 FEBRUARY 2018 CONTENTS IN GOOD COMPANY Beirut Port hub for Hamburg Süd.Virgin Megastores only in large malls. Incubator launched at Rafik Hariri University. Hotel de Ville becomes Oak PAGE 8 MONEY & BANKING Central Bank to subsidize loans worth $1 billion. Banks barred from insurance. IFC funds EIP $60 million for SMEs. Banks required to submit strategic plans PAGE 10 IN BRIEF BUSINESS AND ECONOMY People on the move 19 New companies 21 FINANCE Opinion: Mounir Rached 56 The lira will not crumble Inflation up again 48 Interest rates to remain up 58 Opinion: Riad Tabbara 50 Official information and statistics are out of control Opinion: Makram Sader 62 Three issues inherited from last year To Read: The Entrepreneur Handbook 55 COVER STORY: TECH IS EVERYWHERE Preface 25 Growing the startup ecosystem 266 Telecom finally on the right track 30 Fighting cyber threats 34 Cybercrimes can cost a company money, time, valuable data, and reputation. But protective and response plans do exist to alleviate the risks GIS Solutions: Map your business 38 Social media influencers 42 A human touch to reach the target audience The real life of Virtual Reality 46 Brands tapping VR’s potential to enhance consumer experiences – and their strategy 4 LEBANON OPPORTUNITIES, FEBRUARY 2018 OFFICIAL BUSINESS McKinsey to help set national economic vision. 24-hour electricity in Beirut next year.