Special Advertising Supplement Government? Who needs a government? Well, of course, it would help. But in a country whose greatest natural assets are its highly educated workforce and generations of entrepreneurial tradition, sectors as diverse as finance, tourism, education, construction and medicine are shrugging off the political upheaval as best they can and pushing ahead with rebuilding the economy. Special Advertising Supplement The triumph of a lifestyle Why would one of the world’s smallest countries, mired in political crisis, expect to grow more than the world’s major economies this year? Because it’s Lebanon, where a lifestyle of optimism and entrepreneurship always wins out.

Perched like a timeless jewel on the shores executives were hoping the administra- of the eastern Mediterranean, Lebanon tion would move ahead on key issues, in- is where the world’s trade routes have cluding petroleum exploration, electricity crossed for at least 3,000 years, ever since and highways. Even if it doesn’t, the Leba- the Phoenicians invented what we now nese people won’t sit around waiting. call globalization. Today, despite seem- In general, the Lebanese business com- ingly endless political wrangling, business munity has become pretty used to stepping leaders in the glittering capital city of Bei- in and doing what’s needed. Electricity is a rut are looking firmly to the future. great example: the state-run utility simply True enough, investment and business can’t maintain a reliable supply. “People activity slowed somewhat in early 2011 as have initiative; it doesn’t have to be a bril- investors waited for politicians to resolve liant idea, but they have the initiative, say, aha | www.meedosite.com | aha a dispute that left the country without a to ship in generators, run wiring through T eedo eedo

government from January to mid-June. a small neighborhood and charge houses M Earlier this year, the World Bank was perhaps US$20 a month,” said Tarek tipping Lebanon to grow by as much as Khalifé, chairman and general manager Lebanon in numbers 4.8 percent in 2011, but when the political of CreditBank. Lebanon measures just 10,230 km2, making it smaller uncertainty dragged on, the Fitch Ratings “When there is no system, anarchy is than all U.S. states except Delaware and Rhode Island, agency chopped its own prediction for the system. So, when you look at any neigh- or just half the size of Wales. Following, some key facts: Lebanon’s GDP growth to just 2.5 percent. borhood, you find people with satellite TV, • POPulation That’s a far cry from the 7 to 9 percent electricity, water, and so on, sustained by 4.14 million in 2011; 87% urban private entrepreneurship.” rates of the three previous years, but still Growth rate: 0.24% per annum better than the World’s Bank’s prediction This can-do, get-it-done approach has • Government of 2.1 percent for countries in the euro kept the Lebanese economy bouncing Republic; suffrage excludes women without schooling area. Nevertheless, Fitch did not down- back — and growing — through countless Head of state: President Michel Suleiman (since May 25, 2008) grade the country. political squabbles. It also powers one of Head of government: Prime Minister Najib Mikati “Lebanon’s … substantial foreign ex- the ’s most vibrant tourism (since June 13, 2011) change reserve buffers, lower debt levels sectors, built around dozens of luxury ho- • Languages and reduced interest costs, relative to the tels, restaurants to rival those of Paris and (official);F rench, English, Armenian also spoken previous decade, mitigate the downside a casino that glitters over the city at night. • Capital Beirut: 1.9 million (urban area) risks to political stability, growth and pub- Much of Beirut was damaged during the • Currency lic finances in 2011,” Fitch said, adding that 1975-90 civil war, but that was followed by Lebanese pound (LBP); US$1.00 = LBP1,507 moves in the middle of the year to form a massive rebuilding. More recently, the city Inflation: 3.7% (2010 est.) new government under Najib Mikati, “a has been transformed by a new construc- • GDP business-friendly politician,” could im- tion and property boom, albeit one that US$39 billion (official exchange rate, 2010 est.) prove the economic and fiscal outlook. has now slowed. Luxury apartment blocks Imports: Oil, cars, medical supplies, clothing, While permanent political peace was sell well both to local residents and the consumer products far from guaranteed with the formation huge Lebanese diaspora, many of whom Exports: Jewelry, consumer goods, fruit, tobacco, of Mikati’s new government, business have leveraged their native Lebanese flair ornamental stone

2 Lebanon Special Advertising Supplement

for trade and business into success abroad, Resilience: a good thing, but … particularly in Europe and the Americas. Investors also see other areas of oppor- Resilience: defined byM erriam-Webster as “the ability to “macroeconomic policy discipline and strict oversight of the tunity. International franchises have become strong, healthy, or successful again after something financial system.” moved into the country, while Lebanese bad happens; an ability to recover from or adjust easily to Bankers point out the pluses: brands are franchising abroad. Higher misfortune or change.” • “The banking sector has a lot to do with resilience, the capac- education is booming, and a range of pro- Normally, resilience is a good thing. But some people argue ity to overcome major problems.” – Freddie Baz, Bank Audi fessions are finding that Lebanon offers that the Lebanese have become too resilient: they’re now so • “Lebanese banks are very resilient; we learn very quickly.” – an ideal base for operations within an adept at carrying on despite political upheaval that there’s less Anwar Ali Jammal, Jammal Trust Bank extremely prosperous region. Beirut is a pressure to actually resolve problems. • “Lebanon as an economy is resilient for two major reasons: place where the various cultures and reli- The idea of resilience has been much in vogue since 2009, first, the entrepreneurial spirit of the private sector, not the gions that swirl around the Middle East when the International Monetary Fund praised “the remark- public sector; the second is ‘belongingness,’ which is more can coexist more easily, making it a favored able resilience of the Lebanese economy in the face of the intangible – the will of the people to maintain this relationship location for expat employees. global financial crisis” and commended authorities for their with their country.” – Tarek Khalifé, CreditBank

Lebanon 3 Special Advertising Supplement Lebanese banks stretch their wings

Bank Audi One of Lebanon’s two largest banks in terms of customer deposits and total assets, with origins in a family-owned foreign-exchange house established in the early 19th century. Won the 2009 Euromoney “Best Bank in Lebanon” award. Largest shareholder is Deutsche Bank Trust Company Americas. BLOM BANK Lebanon’s financial institutions have shares, and we discipline credit for real One of Lebanon’s two largest banks; founded in 1951; learned how to cope and profit despite estate. All this improved confidence, full name Banque du Liban et d’Outre-Mer, with 69 occasional political unrest. This has and cash inflows from Lebanese citizens branches and affiliates in Lebanon and 85 abroad. made the country’s financial sector working overseas increased. Bank depos- Named “Best Retail Bank in the Middle East” and “Best a byword for security amidst the its grew 10 percent by 2010, and we ex- Investment Bank in the Middle East” for 2010 by The confusion, giving banks a sound base pect them to grow another 5 to 7 percent Banker Awards. from which to expand internationally. this year.” Early signs in 2011 were that deposit BYBLOS BANK growth was slowing down, possibly to Founded in 1950; 75 branches in Lebanon; present t the heart of this success lie below Salameh’s projection, as investors in Armenia, Belgium, , France, Iraq, , generations of cautious financial reacted to the country’s most recent po- Sudan, Syria, the , the United A management. It’s the kind of old- litical confusion. However, there were Kingdom and the Democratic Republic of the Congo. fashioned, oak-counter banking where also suggestions that Lebanese banks Listed on the London Stock Exchange since 2009. trust is everything, bolstered by sensible might yet profit from unrest in neigh- government regulation and the modest boring Syria, offering Syrians a familiar, BANKMED levels of leverage that many far more nearby safe haven for their investments. Established in 1944; now the country’s fourth-largest adventurous institutions in the United Short-term difficulties aside, Leba- bank, with 10 percent market share, 51 branches and States or Europe would have laughed nese banks look set to continue their assets of US$10 billion; has a presence in Cyprus, at — until, that is, the 2008 financial long-term regional expansion. According Turkey and Geneva; largest shareholder in Solidere, a crisis came along and excessive leverage to the Association of Banks in Lebanon, major Beirut real estate developer. suddenly fell out of fashion. its 68 member institutions have more “Lebanon did not suffer like many than 200 branches in subsidiaries and FRANSABANK other countries during the financial sister banks in 33 countries, plus a large One of the country’s oldest banks, established crisis, because we have a very conser- network of correspondents. There is also in 1921, with majority local ownership and minority vative banking sector,” explained Riad a substantial local presence of branches international participation. Fransabank ended 2010 Salameh, governor of the Lebanese cen- and representative offices of foreign with 107 branches and 40.2 percent growth in net tral bank. “Our commercial banks are banks, in particular from Arab countries. profits, to reach US$146 million. Present in Lebanon, not allowed to invest in speculative “We have encouraged banks to expand France, Algeria, Syria, Sudan, Belarus, Libya and Cuba. investments such as derivatives or their activities outside Lebanon, essen-

4 Lebanon Special Advertising Supplement

Lebanese banking: strength in numbers Liquidity requirements: Key figures: • At least 10% of foreign currency liabilities held as net liquid assets • Total deposits (commercial banks): US$42.6 billion • At least 15% of foreign currency liabilities deposited with the central bank • Average interest (LBP deposits): 2.92% • 25% of LBP* demand liabilities and 15% of LBP term liabilities deposited with the central bank • Checks cleared (2010): 101,700 *Lebanese pounds | (Source Association of Banks in Lebanon; data April 2011; conversion US$1.00 = LBP1,500)

Mohammed Hariri Chairman of the Board, BankMed

“We were seen as a corporate bank catering to high net worth (individuals) and corporations. Today we are on every street corner.” tially in Arab countries and in Africa,” such as Armenia, which is routinely What are the main lines of BankMed’s said Salameh. “This is important for their overlooked by bigger international com- business strategy? own industry and for the Lebanese econ- petitors. We have been following the same strategy since omy; it could give Lebanon a strategic role Jammal Trust Bank (JTB) boasts of 2005, going more and more into the retail sector, in the area. The presence of Lebanese being the first Lebanese bank to offer ser- attracting more deposits and offering new products banks abroad helps Lebanese expatriates vices in the United Kingdom and , that meet the needs of the country. We concentrate finance their businesses overseas.” but its name has been largely built on mainly on the local market, where we see growth However, the central bank supervises targeting lower-middle-income custom- eventually happening. I’m not saying that there’s this overseas activity, running stress ers — “basically the proletariat, the work- no growth now, but not with the levels that tests to ensure that banks establish ade- ing man,” says JTB Chairman Anwar Ali we’ve seen in the past couple of years, due to quate controls and maintain proper lev- Jammal. “Most of my clients have proba- the political situation. els of capital for their expansion. “Banks bly never been inside an airplane. So, you abroad must operate with the same con- see me moving to wherever I can repli- What are your expectations for 2011? servative approach as in Lebanon,” the cate that kind of business.” This approach Maintaining the same level of liquidity or growth governor said. militates against the high-profile, super- due to the political situation in the country. Last year, There is a natural tendency for Leba- rich Gulf markets, even though JTB also we had a spike in our growth; also in the inflow of nese banks to draw on their domestic serves smaller corporate clients. “I will capital and deposits. market expertise when going interna- go to a market where there are clients tional. BankMed, for example, set up the that do not believe they are bankable, and You have said that in order to compete, you want SaudiMed investment company to offer I will say, ‘No, you are bankable. I have to double the equity of the bank. How will you financial and investment advisory ser- faith in you.’ That is our approach.” achieve this? vices and investment funds management That means targeting selected coun- We are different in that our capital base is currently in Saudi Arabia, while CreditBank opted tries in Africa and maybe South America, owned mostly by one family. In order to grow, to initiate its overseas presence with but always working with a local partner. we definitely need greater equity. We have many subsidiaries in Russia and Armenia. The “Our approach is to find a local player options, for example a private placement or an IPO, bank is looking to leverage its know-how who is doing a good job and give him the depending on the political situation in the region. We by implementing effective internal con- necessary equity and know-how. We do will decide the timing of this, but basically, these are trols to compensate for the risks related not pretend to know Ghana better than the paths available. Or maybe the family will decide to operating in a less-regulated market, the Ghanaians.” to increase the capital themselves.

Lebanon 5 Special Advertising Supplement

Point of view Riad Salameh Governor of Banque du Liban, the Lebanese central bank

TODAY, WE ARE CONFIDENT ABOUT THE CURRENCY: WE ARE CONFIDENT ABOUT OUR BANKS

Lebanon’s prize-winning central bank governor has the unenviable task of maintaining a stable currency and keeping the economy on a path of growth, despite moments of political turmoil.

Peninsula Press: What has been the role of of the banking sector as a whole. So in agreement with the Banque du Liban over the last decade or two CV owners of the bank in question, we found a very adequate Riad Salameh when Lebanese banking has done so well, solution by having the assets and liabilities of this bank sold despite the nation’s political ups and downs? 1950 Born in Kfardebian, Lebanon; to another institution and by cancelling the bank’s operating educated at the Jesuit College of Riad Salameh: I would say that we have been license. We are serious about fighting money laundering. Notre Dame de Jamhour; received a instrumental in avoiding the negative impact of the B.A. in economics from the American We have laws and regulations, and the central bank’s Special various crises that this country has gone through. University of Beirut Investigation Commission does what is necessary to avoid The central bank has been able to create growth 1973 Joined Merrill Lynch illegal funds entering the country. in the past 18 years, multiplying tenfold the resources 1993 Appointed governor of the central in the banking sector, keeping a stable currency bank; reappointed in 1999 and 2005 PP: Some people have expressed fears that this could and maintaining general confidence. In this way, Awards: affect banking secrecy. Is that a valid concern? we have helped the Lebanese people maintain a better 1996 Euromoney, Best Central Bank RS: Lebanon’s banking secrecy is one of the reasons standard of living despite all the difficulties — despite Governor in the Arab World for confidence in the sector; it represents protection for wars, internal fighting, and the global and regional 2003 Euromoney, Man of the Year the privacy of individuals and their funds, but it is not financial crises. 2005 Euromoney, Best Central Bank intended to hide illegal funds. So we have the authority Governor in the Middle East to waive secrecy in cases where we are investigating 2006 PP: What were your priorities when you Euromoney, Best Central Bank money-laundering crimes. Governor in the World became governor, and what are they now? 2009 The Banker, Central Banker RS: When I was nominated in 1993, the country was PP: You were with Merrill Lynch for many years before of the Year coming out of a war and my first concern was to restore joining the central bank. How did that help you? confidence in the Lebanese pound, because this would RS: I think my experience with Merrill Lynch gave me the create overall price stability. Now that the pound has PP: One Lebanese bank was recently accused by the ability to sense the markets and their directions and effects been stable for 18 years, our priorities are to enhance U.S. Treasury of money laundering. What are the on our policies. Markets play a big role in determining the credit to the private sector and expand financial consequences of those allegations, and what is the success or failure of central bank policies. In Europe and resources in the banking sector so that the government Lebanese central bank doing? the United States, the crisis was due to a general lack of can develop infrastructure projects in association with RS: The accusations were limited to that one bank. Our sensitivity to market reactions at the regulatory level. It the private sector. That will help Lebanon have the proper concern was not to let the problem affect our market or was not commonly perceived that the regulators should infrastructure without increasing our national debt. create risks for our system of payment, or for the reputation also have a market approach.

6 Lebanon

Special Advertising Supplement

What’s the future for banking in Lebanon? And what is your own strategy, within that trend?

Tarek J. Khalifé then it is something that they can live with. Chairman and General Manager, CreditBank They evolve with it.” “The essence of a bank is the factor of trust. situation there will certainly be mergers If a customer has a question with regards and acquisitions, but they won’t be part of to his bank, then there are plenty more our growth strategy. Given the right target fish in the sea; he can jump to any other and opportunity, we would be open to bank where he doesn’t have that particular acquisitions, but it would be opportunistic Anwar Ali Jammal problem. So we have to change very slowly, “Lebanon has two main advantages in the and not our main objective.” Chairman and very gradually.” financial sector: regulation and human “We might be in the first tier of banks General Manager, “We see ourselves as specialists in small Jammal Trust Bank resources, including both people educated catering to the private sector, but we must and medium enterprises, but we are at local universities and those who have keep things in focus. One is that we have to “Especially in a country like Lebanon, different from a nongovernmental studied and lived abroad. These two major act fast. People like responsiveness from a which has its customs and rituals, change organization that provides micro-credit things give the Lebanese financial sector an bank. If you try to fit everybody into your is one of two things: it is either using grants from the European Union, advantage and the potential to expand in own mold, you will lose a lot of business. revolutionary, or it is gradual. But for example. We are a for-profit company. the region.” Tailor-made and value-added solutions are revolutionary change does not work in a We explain to our customers how the system “CreditBank made a major acquisition in very important; when somebody comes to bank; you lose your whole stakeholder works; we tell them that they are borrowing 2002 that kick-started our client services, you with a transaction, you have to give him base — your customers, your staff, your money from a bank, and we will follow up giving us critical size. Within the current advice over and above what he wants.” managers, everything. If you do it gradually, and chase them to get our money back.”

8 Lebanon Special Advertising Supplement

Freddie C. Baz Saad Azhari General Manager and Chairman and General Group CFO, Bank Audi Manager, Blom Bank

“I believe that since the early 1990s, Lebanese banks have gained a great deal in both size “The recent trend in expansion has been more toward opening full-service banks and and standing — size meaning immunity, while standing is measured by capitalization levels. establishing branches in Egypt, Saudi Arabia, Qatar and other nearby markets. So the perception has improved a lot since the early 1990s about the financial standing of “In the past — say, 30 years ago — when we opened branches outside Lebanon, it was leading banks in Lebanon. basically to follow Lebanese customers who were moving abroad, to London, France or the “We — Bank Audi — are the number one bank by far, because the asset differential United Arab Emirates, because of the war or for other reasons. But today the goal is not between us and Blom Bank, the second bank, is US$6 billion. That gap is as big as the just following Lebanese customers but to grow wherever we can; we want to become the eighth-largest bank in the system. Being the number one bank in our country gives us a leading regional bank in the area. very big responsibility toward our market, our country and our industry, but I believe at this “We think that the future for Blom Bank is extremely bright, given the way our branches are level we are completely fulfilling our role. developing in the region and building market share. It’s an emerging region, and there is “If you go back three or four years, you see that most of the global banks were affected by great potential. the financial crisis, and most of the regional banks followed suit. Lebanese banks, on the “Our motto is ‘Peace of Mind.’ We chose this because our customers feel safer with us, not other hand, have been showing significant increases in assets and earnings at a time when only financially but also because of the work we do within the community. We have helped most of the global and regional banks are showing a reduction in their size and earnings.” with land mine clearance, education and children, for example. “We are a conservative bank, but we aim to be dynamic — not just a local bank.”

Lebanon 9 Special Advertising Supplement Hip Hop Beirut Some years ago, British writer Jan Morris called Beirut “a phenomenon, beguiling perhaps, but quite, quite impossible.” Many outsiders are amazed how the city’s traditional mix of vibrant business and world-class nightlife can not only survive but thrive amidst the chaotic traffic and political confusion. But thrive it most certainly does. 01 As visitors quickly learn, the very best thing to do in Beirut is eat Q&A Elie Saab out. Restaurants are packed into the wee hours. Three recommen- “I am not only a dations: fashion designer; I am a Babel — A striking new venue businessman as well.” overlooking the Mediterranean on the Dbayeh highway. Tra- Beirut-born Elie Saab is known ditional Lebanese dishes with around the world for his creative flair. sumptuous, elegant evening dresses and wedding gowns. Momo at the Souk — Spec- In 1997, he became a member tacular interior design sitting of Italy’s Camera Nazionale above the Jewelry Souk in Beirut della Moda, the first non-Italian Souks. Menu described as “North designer so honored. African flavors meet some more How would you describe traditional French recipes.” your style? Al Mayass — A beautiful ven- It’s more Western, even when I ue in Achrafieh, an old Christian design for women from the Far district of East Beirut. Armenian East, because there are rules to dishes are a specialty. The live respect. Certainly, I was inspired 02 by Middle Eastern culture music and cozy atmosphere at- and the richness it offers. But tract families and lovers. these days fashion speaks the Wherever you eat, do try Leb- same language, and my style anese wine, a delicious undiscov- corresponds to all women from ered secret. And before or after different parts of the world. I believe it is my vision of women visiting the casino, don’t miss all over the world and how I see the spectacular SkyBar, perched femininity that makes the brand atop the Beirut International Ex- internationally recognized. I hibition and Leisure Center. present what women need, with Where to stay? Beirut has the appropriate embellishment. many world-class hotels. Two Is living in Beirut important? options: It’s been a great asset and Four Seasons — A place to inspiration. In general, this is see and be seen, favored by many reflected through my choice of business and political leaders. fabrics. I use rich materials and warm colors. Offers an impressive rooftop bar, a luxurious spa and super-fast What are the secrets of your Internet. success? Creating your own identity is Phoenicia InterContinental 03 the first and most important — A traditional downtown hotel, 01. Elie Saab Collection  thing in the fashion business. very convenient to the business 02. The Mohammad Al-Amin Mosque, located in Martyrs’ Square in downtown Beirut Perseverance, hard work and banking district, with great 03. The famous Raouché (Pigeon Rocks) and ambition are also very views of the Mediterranean. important.

10 Lebanon Special Advertising Supplement BEST PLACES TO SEE Truth be told, there is almost too much to do and see in Lebanon. Here are just three great places you will never forget. But there are many more … Baalbek A UNESCO World Heritage site UNESCO World Heritage site is emerging as with big, impressive ruins of a Roman an upscale tourist destination. Enjoy Byblos’ temple complex, less than two hours’ sandy beaches and seafood restaurants, as driving time from Beirut. See the Jupiter well as open-air bars and cafes. Temple, the Bacchus Temple, a circular structure known as the Temple of Venus Faraya Mzaar A mid-20th century winter and the remains of a fourth temple dedi- ski resort 1,550 meters up in the mountains cated to Mercury. and just 44 kilometers northeast of Beirut. In the summer, visitors can enjoy great Byblos An ancient town on a cliff 40 views, hiking, picnicking and ATV rides. The kilometers north of Beirut with a fascinat- area also includes ancient monuments with ing port and castle, ancient Phoenician temples, columns, altars and tombs cut temples, a historic quarter, and souks. This into the rock. Byblos BEST PLACES TO SHOP Beirut is renowned as a great shopping town, offering everything from back-street bazaars to a striking modern mall complex that combines the flavor of traditional Middle Eastern markets with the comfort and elegance of a high-end shopping center. Among the city’s more popular souvenirs But the old souks were largely destroyed are silver items and jewelry, carpets, during the civil war. handmade cutlery, antiques, hand-tinted Solidere, the development company lithographs, satin slippers, chessboards responsible for rebuilding downtown Beirut, and backgammon sets, ceramics, carved put together a visionary plan to rebuild the wooden boxes, cushion covers, tablecloths, souks in a way that preserved as much as handmade soaps and candles, and tradi- possible of their unique prewar character. tional clothing and Persian fabrics. In addition to Beirut Souks, look for these 05 One place absolutely not to miss is Beirut two popular shops: Souks, right in the heart of the city. Many Sophie’s Choice (Patriarch Hoyek Street, centuries ago, a souk was a temporary Downtown) – Styles itself as a “concept market set up on the edge of town by boutique” stocking the work of hot new 04 traveling merchants. The name then designers like Matthew Williamson, 04. BAA LBEK Some of the world’s most became used to describe more permanent Sass & Bide and Jason Wu. There’s also spectacular Roman ruins markets within cities, and in the case of a great café. 05. FARAYA MZAAR 42 slopes, beginners to Beirut various souks formed a maze of Aishti – A major Lebanese luxury goods advanced; hiking in summer commerce that includes traditional shops company with various stores in Beirut 06. SkyBar, one of the best night clubs high and more fashionable boutiques, together (including Beirut Souks). Carries the most above the Mediterranean coastline 06 with vegetable, fruit and flower markets. prestigious brands from around the world. Casino The Casino du Liban, opened in 1959, is Lebanon’s only legal gambling venue. And it’s enjoying a boom, with net profits up 73 percent last year. Chairman and General Manager Hamid Kraidy has great plans, including a private casino, a 300-member dining club run by top French chef Alain Sophie’s Choice Ducasse and a poker room featuring Texas Hold ‘em. “With the globalization of the world, you don’t have things that are really private, really glamorous anymore,” said Kraidy. “We are trying hard to promote Lebanon Mireille Issa for more upmarket tourism.” Sophie’s Choice Jewelry

Lebanon 11 Special Advertising Supplement Sun, shopping and surgery

Tourism has traditionally been one of Lebanon’s major dollar earners. But it’s a sector that is very vulnerable to the ups and downs of political stability.

Initial data for airport and security for visitors have been hotel occupancy in 2011 sug- exaggerated. gests that Lebanon’s tourism “You can find insecurity all industry could be heading for a over the world, even in Swit- slower year after a period of zerland, but here (in Beirut) Tourism Organization (WTO), have traditionally pulled in the rapid growth. Nevertheless, there is no problem — apart Lebanon received 2.2 million big spenders. interim Tourism Minister Fadi from the traffic!” said Hamid foreign visitors in 2010, up 17 Beirut in particular draws Abboud told a travel forum in Kraidy, chairman and general percent from the previous year much less package tourism, May that Lebanon would prob- manager of Casino du Liban, and three times the level of a with a preponderance of top- ably hold up better than most the country’s premier gam- decade earlier. These visitors line hotels and a shortage of countries in what has been a bling establishment. “There spent around US$8 billion. good three- and four-star ac- turbulent region. are no pickpockets in this Returns for 2009 showed 42 commodation. And of course Businesspeople working in country, and women are com- percent of Lebanon’s visi- the capital’s reputation as the the country’s capital say that pletely safe on the streets.” tors coming from surround- “Paris of the Middle East” was foreign fears about a lack of According to the World ing Arab countries, 25 percent not built on serving the cheaper from Europe and 11 percent segment of the market. from North America. Lebanon has innumerable Based on 2009 data from attractions — fabulous beach- the WTO, the average expendi- es, the casino, the incredible ture per foreign visitor to Leb- Roman ruins at Baalbek and anon was around US$3,700, no eco-tourism in verdant moun- less than four times the aver- tains — but first and foremost age US$900 per head for visi- is Beirut, one of the world’s tors to Egypt. This figure high- iconic cities, where local res- lights that while Egypt, until taurants garner rave reviews the recent crisis the region’s in the world’s top newspapers. single largest tourism destina- The old adage that you can tion, might boast mass-market ski in the mountains in the volume, Lebanon and particu- morning, swim in the Medi- larly the capital city of Beirut terranean in the afternoon,

Facts&Figures

Who visits Lebanon? Jordanians, 12%; Saudi Arabians, 9% Iranians, 8%; French, 7%; Americans, 6% (2009 data)

Beirut snapshot 4- and 5-star hotels: 35 Average August high: 87º F (30.6º C) Average February low: 62º F (17.2º C ) Average rainy days: January, 9; June-August, 0

12 Lebanon Special Advertising Supplement

Salam Rayes CEO, Saint George Hospital “The differential of Lebanon is that we have coherent healthcare services.”

Saint George Hospital dates back more than 130 years, with religious origins. Is that important? We are a Lebanese hospital owned by the (Christian Orthodox) church, but we have patients from all denominations. Disease does not have a religion. More than 50 percent of our staff are non-Orthodox; we employ people because of their qualifications.

What will Saint George Hospital specialize AISHTI in, internationally? We are going to have major centers for pediatrics, geriatrics, orthopedics, cardiology, and then party or gamble the industries: global revenue countries is our manpower. oncology and intensive care services. We are night away has never been could reach some US$100 bil- We don’t import doctors; we well known for pediatric neonatology. truer. That’s if you don’t take lion by 2012, the U.S.-based have excellent nursing staff The Saint George Hospital has close ties with time off to check out the jew- Medical Tourism Association and paramedical personnel, two leading French hospitals, the University elry stores. reported. As many as 1.6 mil- all trained here. If you go to Hospital Centers of Toulouse and Poitiers. To facilitate tourism Leba- lion Americans could travel some other places, they may How important are these international links? non is talking to Syria, Jordan abroad for treatment in 2012. have better hospitals than we Our relationships with Poitiers and Toulouse and Turkey about introducing Four out of five will take a have in general, with some were established to help us conduct medical a single visa to enable tourists companion with them, and 90 larger, computerized equip- and teaching conferences, and we still send to move freely across borders, percent of patients or com- ment, but they have foreign residents there for training. They can learn Minister Abboud said. panions will engage in regular staff,” Rayes said. more specialties. Mohamad El-Hout, chair- tourism. Lebanon isn’t yet man of Middle East Airlines, a major center for medical Lebanon’s national flag car- tourism, but it has the neces- rier, agreed that negotiating sary high-quality hospitals visa-free movement was im- and additional attractions. portant: “When Cyprus im- “Medical tourism is not posed visas on the Lebanese, only to provide healthcare but the volume of traffic between also services to the families the countries dropped by and those accompanying the more than 50 percent.” patient,” said Salam Rayes, One of the most prom- chief executive officer of the ising areas for boosting 260-bed Saint George Hospi- high-income tourism is tal, a leading Beirut institu- medical treatment. Interna- tion that is gearing up for the tional health travel is one of global market. “What differ- the world’s booming service entiates Lebanon from other

Lebanon 13 Special Advertising Supplement The way forward: Lebanon 2020 Lebanon faces interesting development options for the years ahead. Some projects might move faster if there is a lasting political settlement; others just require a modicum of stability and traditional private sector drive.

Top of the list for Lebanon’s development to move the process is undoubtedly oil. Mineral products — re- forward. fined petroleum derivatives and natural The promise of hydrocarbon wealth agreement with Israel to survey the sea- gas — account for around one-fifth of Leba- could transform Lebanon into an ener- bed. Lebanese Foreign Minister Adnan non’s total import bill, estimated at US$18 gy exporter with huge financial impact. Mansour said in July that this violated billion in 2010, with power generation by Substantial natural gas fields have been Lebanese interests, but Israel said Leba- far the biggest culprit. Electricity is in the discovered in an area of the Mediterra- non had moved the demarcation line. hands of state-run Electricité du Liban, nean Sea whose borders are disputed by Some hotter heads have spoken of “ag- a perennial loss-maker that is bailed out Lebanon and Israel. Both countries have gression” and of using armed force to most years by the government. Plans have filed seabed claims with the United Na- defend national interests, but both Beirut long been on the table to overhaul the sec- tions, but the maritime boundaries of the and Tel Aviv have reiterated their determi- tor, seeking an end to constant blackouts, offshore reserves overlap substantially. nation to press their claims diplomatically. and the inaugural ministerial statement A further complication is the poten- The question also becomes tangled in the of Prime Minister Najib Mikati’s new gov- tial interest of Cyprus, some 200 kilome- countries’ wider border disputes. Going for- ernment promised, albeit rather vaguely, ters northwest, which signed a bilateral ward, however, Lebanon’s ability to defend

Baha Bassatne Chairman, B.B. Energy

“We´d like to cover the entire world; we want to be a real international oil company. We are still looking for more expansion”

B.B. Energy is a -registered oil because this will need a lot of capital. We trading, storage and distribution company are looking at it within the group, but belonging to Lebanon’s Bassatne family. until the law is published, we can’t do Since taking over the reins three decades anything,” he said. ago, Baha Bassatne has propelled B.B. to a As a relatively small, family-run operation, US$6 or US$7 billion a year operation, with B.B. Energy enjoys the flexibility to move ambitious plans to expand internationally quickly. “We don’t have to go to a board and potentially venture upstream as well. for approval; we can just meet between “Our main priority is regional distribution; us and decide. We can follow the market we are looking to go to Syria, Jordan very quickly,” explained Bassatne. and Turkey,” Bassatne said. Iraq is also in “We are looking to grow either by the plans, as soon as it seems peaceful expanding our business or by taking enough. This expansion would be strictly over another company.” downstream. But no oil industry executive Like many Lebanese businessmen, he in Lebanon today can fail to think about values personal relationships. “Most of the country’s offshore deposits. “I don’t my workload today involves maintaining know if the private sector will be able friendships with the people we work with to get involved on the exploration side, — keeping the personal touch.”

14 Lebanon Special Advertising Supplement

Hisham Itani Chairman, Inkript “We partner with many European companies (providing technology) ... the value added comes mainly through providing and managing the service.” its corner may depend in part on Beirut’s ability to maintain a strong government. Inkript is a Lebanon-based high-technology company Some business executives worry that involved in security printing, with operations in more than if the arguments drag on, gas fields in the 40 countries. The company produces smartcards, SIM cards, disputed region may vanish. “If we don’t scratch vouchers and tailor-made packaging solutions, in do it (resolve the problem) very quickly, addition to identification and payment solutions, telecom Israel will be pumping all our gas very value-added services, turnkey election supplies, and soon,” said Baha Bassatne of B.B. Energy. other related products. Inkript traces its origins back three Education is another strength. Busi- decades to the firm Itani Printing and Trading. It is now a ness leaders in finance, hightech and subsidiary of Resource Group Holding SAL, an investment other sectors emphasize how Lebanon’s vehicle also chaired by Hisham Itani, with additional well-educated population constitutes nese American University are examples operations in real estate, lottery services and telecom a major asset. “Lebanon is such a small of excellence. “The Lebanese are inher- infrastructure. country with a small market, without ently smart, and there is a huge individ- “I can’t give you a 10-year vision, but looking five years natural resources. Our big advantage is ual, family and community commitment ahead, I would say that we want Inkript to be the gateway our human capital,” said Salim Zeenni, to educating children,” said AUB Presi- to Africa and Middle East markets, a counterpart for the president of the American Lebanese dent Peter Dorman. major European companies,” Itani said. “Our next target Chamber of Commerce. “Lebanon has highly educated people will be the potential acquisition of an existing company One example of this educational with excellent skills and good experience”, that has intellectual property in the security and telecom strength is Sabis, an international net- said Hisham Itani, chairman of the high- market and in government applications. Most probably, it work of high-end preschool, primary and tech security printing firm Inkript, which will be a European company.” high-school institutions created a cen- employs 500-plus highly qualified staff in This acquisition, he said, would place Inkript in “a totally tury ago in Beirut and now serving more its Beirut head office alone. The country new quadrant” and transform it from being an operator of than 56,000 students in the Middle East, offers “very well-rounded people who have technology to a provider of technology. Africa, Europe, Asia and United States. graduated from Ivy League universities “I believe that in the next five years, we will be among the In higher education, both the American and have spent a lot of time in Europe, the 10 biggest companies in Europe, the Middle East and Africa University of Beirut (AUB) and the Leba- United States, Africa or the Middle East.” in our businesses. “

Lebanon 15 Special Advertising Supplement

Before After The Rebirth of Beirut nyone visiting Beirut for the first nership, this new venture made everyone a very high standards.” time might be amazed to learn that stakeholder in success. Solidere implements its own projects and A less than a generation ago, the city The company is Solidere, the Lebanese conducts joint ventures with private devel- center was a war-torn mess of rubble and Company for the Development and Recon- opers. It also offers investors services such ruin, shelled for years and given over to struction of the Beirut Central District. It as architectural design, development pack- squatters. With the postwar government was given special powers of eminent domain aging and property management. desperately short of money, the typically and some limited regulatory authority. Then Developers seem to approve of the model. entrepreneurial Lebanese solution was to it prepared an ambitious master plan. “What Solidere has done in 10 years is im- form a very special kind of joint-stock de- “It’s the policy of Solidere that we should pressive; it deserves to be more widely rec- velopment company where tens of thou- do something almost perfect,” said Maher ognized internationally,” said Farouk Kamal, sands of local property owners became Beydoun, the company’s vice chairman. chairman of Stow Capital Partners, a high- shareholders alongside major investors. “The ultimate goal is to have the finest city end international real estate developer with Essentially a form of public-private part- center in the Middle East, and to build to interests in London, Beirut and Oman.

“If peace comes to the Middle East tomorrow, the advertising and media PIECE BY PIECE, BUILDING business will triple in a year and grow A BETTER WORLD exponentially after that.” Eli Khoury CEO, Quantum Communications “Lebanon has, in a way, spearheaded the advertising industry or even the whole communications and media industry in the Middle East, and one of the reasons is that historically, against all odds, we’ve managed to keep a certain level of freedom of speech in this country, even during the worst days of war and occupation. “However you portray Lebanon today, whatever you say, it’s difficult to be really accurate. If I were to tell the world about Lebanon today, I would ask: Is it the place? Is it the people? Or is it a combination of the two? I think it’s really about how resilient the Lebanese are, how much they love life and how, despite the difficulties, you can still find a smile and a good drink, enjoy good food and a good night out. That’s an honest description of Lebanon. But I wouldn’t paint it golden and absolutely rosy.”

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Editor-in-Chief Stella Klauhs Research Director Remco van Photography CMC Medical Regional Director Carolina Mateo der Graaff Center, Elie Saab, Edde Sands Project Directors Adrian Writer Brian Nicholson Beach Resort, The Four Seasons Viñuales, Taylor Thomson Creative Director Marta Conceição Beirut, Stow Capital Partners, Editorial Assistants Claire Designer André Noivo Solidere, Clemenceu Hospital, Vuylsteke and Eileen Park Illustration André Kano InterContinental Mzaar, AISHTI

16 Lebanon Creditbank - Ad 89x120mm