Tag Archives: Economy

0.3% of Lebanese Own 50% of Lebanon

Lebanon isn’t a country where population studies are omnipresent. However, given the data that the country has, Credit Suisse, in their yearly report on Global Wealth, has managed to paint a picture on how things in this country actually are.

The report dates back to October 2014, and frankly I am surprised that these numbers did not cause a stir and were not discussed. The report, at 160 pages, can be found here. Perhaps no one noticed the info, so here they are:

At an estimated population of 4.37 million, Lebanon’s wealth is estimated at $91 billion. That actually constitutes 0% of global wealth. How anticlimactic.

When it comes to the Middle East, and despite the reputation we get of being oil-rich, things are similar: Saudi Arabia has an estimated wealth of $653 billion, which ends up as roughly 0.2% of global wealth. Qatar, and all our shoukrans, has $200 billion, which is 0.1% of global wealth. The UAE is at $461 billion, and 0.2%. Meanwhile, Israel has an estimated wealth of $843 billion, translating to 0.3% of global wealth.

All of these numbers look flimsy compared to the United States’ $83708 billion, constituting 31.6% of world wealth.

Keep in mind that – with the exception of Israel and the United States – Credit Suisse considers the data for Lebanon and other Middle Eastern countries to be poor in quality. However, I highly doubt that any estimations are overly erroneous in any way or that the margin of error they are admitting to will change the findings considerably.

But this isn’t the story. We all know the country has money. Recent leaks out of Switzerland placed the country at #11 in total customers at their banks and #12 in total deposits within the few months whose data was actually leaked. We’re 10452 km2. That’s a lot (link).

The story is in how that money is actually divided on the 4.3 million Lebanese living here.

Out of all those $91 billion, 0.3% or approximately 8000 people of the estimated workforce according the study own about half (48% to be exact), which is approximately $44.6 billion. Meanwhile, 99.7% of Lebanese own slightly more than half at $46.4 billion.

To put those numbers in perspective, Credit Suisse employed a criteria called the Gini score. The score, according to Wikipedia, is essentially a “measure of statistical dispersion intended to represent the income distribution of a nation’s residents, and is the most commonly used measure of inequality.”

Lebanon’s Gini score is 85.6. a score of 85.6 places Lebanon 6th worldwide in terms of wealth inequality behind Ukraine, Denmark, Kazakhstan, Seychelles and Russia.

The story doesn’t end here. Even among those 0.3%, there are disparities. That 0.3% basically any Lebanese who has an estimated wealth above $1million. But who actually owns most of the country? The answer is two families: The Hariri and the Miqatis.

Forbes Lebanese Billionaires Miqati Hariri

According to the Forbes latest list of billionaires, there are 6 Lebanese on the list whose ranking ranges from 530 worldwide to 1478. Two of those 6 are the Miqati brothers. The other 4 are the Hariri brothers, including former PM Saad Hariri. Their cumulative wealth is estimated, according to Forbes, at $12.6 billion. This is 30% of the total wealth owned by those 0.3% of Lebanese – except it’s owned by just 6 men.

This isn’t to say that the Hariris and Miqatis do not deserve their wealth. The Miqatis started and ran a telecom empire. The Hariris started and ran a major contracting company in Saudi Arabia. Good for them.

The problem with these numbers is the other side that they portray. About two thirds of the Lebanese population (64.6%) have an estimated wealth of less than $10,000. Such numbers indicate massive poverty in the country, and yet I was unable to find substantial studies apart from one that was recently done by the UN about Tripoli.

In numbers, (link) the UN found that 57% of Tripoli’s families struggle to reach an acceptable standard of living, while 26% are considered extremely deprived. It wouldn’t be a stretch to assume that things are similar in other regions beyond Beirut.

To the background of this massive poverty is the 0.3% who owns 50% of the country’s wealth, and those 0.3% happen to include most (if not all) of our politicians. Aoun is in it. Geagea is in it. Our MPs and ministers are probably part of those 8000 people too. There are no estimates of the wealths of Lebanese politicians if their last name isn’t Hariri or Miqati, but one assumes they are not middle class folk who are going by paycheck to paycheck.

Of course, it only makes sense that money brings influence, and then influence brings power. A politician’s job in Lebanon isn’t only to legislate but to “provide” for the voters. This is how democracy works here.

The problem with those 0.3% (not all of them obviously) being those running the country is that the country’s policies over the years have not served to close the gap or make those 64.6% with little to no wealth slightly better off. The Gini coefficient clearly shows as much. The country’s policies have not aimed at improving education, providing economic opportunities (for instance, a 1 million m2 zone in Tripoli to bring in international technology has been on hold over sectarian causes for the past 6 years) or making living standards better. Those 0.3% do not get how things are for the 64.6%, the people they’re in contact with once every 4 years for that pre-electoral paycheck. And honestly, there’s no reason for them to get it. And yet our MPs and ministers wanted to increase their salaries?

Meanwhile, the Lebanese population who happens to be of the third that has wealth above $10,000 is pre-occupied with selfies, porn stars, bananas and Kardashian-like reality TV shows because those are what matters.

Lebanon To Have Its Very Own High-Tech “Silicon Valley” Soon?

Batroun hollywood sign

Back in 2012, I wrote about an economical boom coming my home district Batroun’s way (link). It promised great things for the caza and North Lebanon. Now, more than 2 years later, that project is going through the bureaucratic motions of Lebanese governance on its (hopeful) way for fulfillment.

A parliamentary committee consisting of MPs Ibrahim Kanaan (Metn), Nadim el Jesr (Tripoli), Hekmat Dib (Baabda), Jean Ogassapian (Beirut), Neamtalah Abi Nasr (Keserwan), along with a representative of the Minister of Economy Alain Hakim, is studying the law required in order to make the zone a reality.

The zone will be spread over an area of 200,000 m², donated by the Maronite Church in Batroun. The project was championed mainly two years ago by the Maronite League (الرابطة المارونية).

The purpose of the Maronite League behind the project is to improve the economy of that region in order to prevent its people from moving to Beirut and its youth from emigrating. Certainly, even if unknowingly by the League, such a project’s benefits will not be exclusive to the people of Batroun or Maronites for that matter. Let’s hope they don’t mind.

The feasibility study of Batroun’s economic zone indicates that there’s a possibility to generate over 5000 jobs. The companies that will operate in said area won’t be those of heavy industries akin to the ones present in nearby Shekka or Selaata; they will be high-tech industries similar to the ones operating in California’s Silicon Valley, which is where many Lebanese youth today are heading as career choices.

In order to bring in such high-caliber investors, the law that is being studied by parliament will give investors and their companies many advantages:

  1. The zone will not be run by the Lebanese government, but by a separate appointed committee whose members are, in theory, not chosen based on sectarian distribution but on qualifications,
  2. They will have their products exempt from custom fees, which would make their prices competitive,
  3. They will have their mode of business not constricted by Lebanese bureaucracy, which means they won’t have to face months of legal paperwork to finish anything that’s remotely crucial for business,
  4. Permits will be issued by the committee in charge of the zone and would therefore be more easily obtained,
  5. Taxes will be reduced on companies to make their business more profitable.

As is always the case in Lebanon, there’s big fat “HOWEVER” lurking in the background. It is not all awesome news. Is it ever?

Tripoli's "Tall" Area

Tripoli’s “Tall” Area

Batroun’s Silicon Valley-like area isn’t Lebanon’s first to be suggested. Back in 2004, late PM Rafic Hariri came up with an idea for a similar zone in Tripoli, and in August 2008 Lebanese parliament actually passed the law required to set such a zone in action. This is a copy of the law (link) if you’re interested.

For the first time in years, Tripoli – and North Lebanon – were to have major development coming their way. Keep in mind that in 2008, Tripoli was not the war-torn city you all love to criticize today. It was, at the very least, much stabler than Beirut.

In numbers, Tripoli’s zone was more impressive than Batroun’s. Its area was to be spread on 1,000,000 m² of reclaimed land facing the city’s port, of which 350,000 m² has already been done.

At poverty rates ranging between 57 and 63%, Tripoli would have witnessed a tangible and drastic improvement in its economical state as well as the living standards of its people. The study of the area indicated the possibility of generating more than 6000 jobs.

Couple that with Batroun’s numbers and North Lebanon, the country’s poorest and most forgotten mouhafazats, gets more than 11,000 new jobs for its market.When has it ever had such development take place? Never.

Soon enough, the situation in Tripoli decompensated miserably into what things are today. The situation in the country as well wasn’t better. Tripoli was Lebanon’s battleground for the subsequent years. However, those two broad headlines weren’t the only reasons why Tripoli’s zone came to a standstill. Our government couldn’t appoint the committee that would oversee the project. As such, that massive economical development has been sitting on shelves for the past 7 years.

Why wasn’t our government able to appoint the required committee? Because they haven’t found the appropriately backed people of appropriate sectarian backgrounds. Even getting decent jobs to the poor and unemployed in this country is a matter of religious calculations.

Today, here’s what’s at stake. The country can remain as it is, with our youth leaving the country and ending up on best end-of-year lists (link) for doing things abroad that they could have done here. The status quo can remain. Excuses such as “Tripoli is too unstable” and “Batroun is too far” can be used to kill such projects in order to keep all the money flowing to Beirut and Mount Lebanon because only those matter. Tripoli can be kept poor, Batroun can be kept underdeveloped and North Lebanon can also easily be kept needy. The people can be kept jobless and uneducated. Let them stay hungry, let them stay foolish, let them forever remain prone to political manipulation.

Or, infrastructure-issues notwithstanding, we can realize that such projects are a solution, not a symptom, and that it’s high time to realize that Lebanon is 10452 km², not only confined to Beirut, and that sectarian balances are second-rate when it comes to being part of a 20 trillion dollars economy (this is the number in zeros for magnitude: 20,000,000,000,000). Let’s hope those in charge realize the latter, and don’t succumb to the former.

 

#SwissLeaks: Lebanon Is #11 and #12 In Countries With The Most Money In Swiss Banks

We often hear that the Lebanese diaspora has a lot of money and is quite well off. That is the impression that we leave abroad. When I was in France, the stereotype that many seem to attribute with Lebanese is being rich. As my grandma would say: a reputation of richness is better than that of poverty.

But how rich are the Lebanese abroad? How much money do they have in foreign banks? Well, how about we discover the situation in the banking capital of the world: Switzerland. After all, aren’t we the Switzerland of the Middle East?

A fascinating report has surfaced online yesterday  detailing information that was “stolen” by Hervé Falciani, a former employee at HSBC Switzerland’s HQ in Geneva. The information dates back from 2007. It encompasses a timeframe of a few months’ worth of transactions across HSBC in Geneva: between November 9th, 2006 and March 31st, 2007.

The information was recently uncovered by French newspaper “Le Monde.” Going over the hundreds of thousands of info has allowed investigative journalists to compile a list of top countries when it comes to clients at HSBC in Switzerland as well as top countries by deposited amounts.

This small country of 10452 squared kilometers and of about than 4 million people has the #11 highest number of clients in the world, ahead of places like Germany, Spain and Canada. Moreover, when it comes to the amount of money that those Lebanese have deposited, Lebanon ranks at #12 with a staggering amount of $4.8 billion of transactions in those 4 months alone. That amount puts Lebanon ahead of countries such as Germany, the Netherlands and Cayman Islands.

To assess how big the $4.8 billion amount is, I made a quick search to see the situation of deposits in Lebanese banks. According to this report by the Audi Group Lebanese banks saw a total of $5.8 billion in growth in transactions during 2014.

Sure, the comparison is not entirely sensical, but it still serves to assess exactly how gargantuan an amount Lebanese citizens had at a foreign bank.

Why would Lebanese want that much money in Swiss banks? Well, for starters Swiss banks are known for their secrecy, although that’s ironic at a time like this. The situation in Switzerland, with its stability and neutrality from international conflicts, also permits ease of mind when it comes to such massive amounts as opposed to the volatility of the Lebanese side. Moreover, having such deposits at Swiss banks enables easier access to the European market for possible investments. The date of the information being 2006-2007, however, could have skewed numbers post the July 2006 war although I’d assume the recent situation isn’t exactly much better for investors.

Who are some of the names with money at HSBC in Switzerland? The leaked information has some of those too according to L’Orient Le Jour.

Elias el Murr, son of Metn powerhouse Michel el Murr and former minister of defense, had a staggering amount of $42 million, in accounts which he says date back to before his birth. Mohammad Safadi, the Tripoli MP and former minister has $75 million deposited at HSBC in Switzerland. Meanwhile, former Keserwan MP Georges Frem has about $3.3 million in deposits.

Good for them! Hopefully many of us have that kind of money one day.

Meanwhile, for some food for thought, it’s worth looking at the situation in Lebanon that is scaring away both foreign and Lebanese investors alike. Between detrimental security, poor governance, terrible infrastructure, a non-manageable refugee crisis, wars all around us that always manage to seep in and dead on arrival civil movements, the extent of such news becomes even more important.

What’s sad is that apart from L’Orient Le Jour, no Lebanese newspaper or media outlet has discussed this information or what it could mean. Obviously, because there are no porn stars, no banana songs and no traitorous selfie with no possibility for a “بالصور ” or ” بالفيديو ” headline, this becomes irrelevant.

 

When Lebanese People Cannot Afford Hospitals

Hospitals have a way of desensitizing you. They overwhelm you so much that shutting off that part of you that is forced to care all the time is the only way possible at coping. And no, I’m not talking about medicine.

There’s a lot to be said about the state of healthcare in Lebanon. I’ve seen some aspects of it. The numbers behind it are all over the place. But no matter how those numbers are shuffled, you are left with almost 1 million or so Lebanese, in a best case scenario, that are not covered in any way or another and are forced to withstand the pressure of Lebanon’s increasingly costly medicine on their own.

Many crumble under that pressure and figure that dying is simply better than getting overwhelmed with debts or simply getting a hospital’s door slammed in your face.

There are a lot of stories to tell. They happen at a lot of the country’s hospitals. I’ve heard of a well-known hospital that wouldn’t take in a 2 month old patient because his parents couldn’t afford to pay down the required deposit for his surgery. I’ve seen old people who have no one left and nothing left to pay for the simplest of blood tests. I’ve seen exorbitant prices for surgeries, some of them possibly warranted given their complexity, that cannot be afforded by 99% of the Lebanese population.

Perhaps Lebanese hospitals focus on the business part of their affairs much more than they should. But are they to blame? They need to run their facilities, pay their employees and still make enough profit to constantly improve their brand of medicine seeing as Lebanese medicine is so specified that not having the latest it-machine at your facility means you’ve fallen behind the times. The people who can pay simply hospital-shop and go to the one with the newest toy, newest hotshot doctor….

Should they provide such highly costly services for free and then not be able to run themselves anymore?

A lot of patients cannot afford healthcare in Lebanon. Insurance companies make sure to screw you whenever they can. The Lebanese ministry of health has a limited budget that is allocated in an even more limited way and benefits mostly those who know someone who knows the minister more than those who actually need something. Many of the people who can afford insurance, for instance, simply do not buy it because they have good enough connections not to pay while those who cannot afford insurance rot at hospital doors.
The national social security fund is not really national and hospitals find themselves in financial problems because of it more often than not and decide to relegate patients who present with that form of coverage into the “we don’t have a place for you bin.”

What does a Lebanese person have to do to receive one of his fundamental human rights? I guess they can just die in a state that couldn’t care less. Many of you probably don’t give this a second thought but it’s time you do. If you can afford insurance, go and buy one as soon as you can. If you can get enrolled in the National Social Security Fund, make sure you do so as well. If you can find any possible means of coverage for you and your loved ones, seek it. There’s no better investment.

After all, we live in a place that is so behind the times that talk about universal healthcare is light years from becoming mainstream enough and where our grandparents’ fate is to get people to feel sorry enough for them to raise money for them to do their blood tests.

I wish I could tell all the stories that I have to tell. Maybe someday.

How The New 50,000 Summarizes Lebanon

20131115-184534.jpgCome on people, is there anything more suitable than that 50,000 to describe the state of Lebanon lately? If anything, we should look at this positively: it might be the first time ever that those in charge of running things are aware of how dismal they have made things to be, even if only with a representative bill. And they have decided to describe things. Here’s an attempt to explain what went on with their brains.

All Those Festivities:

I really don’t know what’s special about the number 70 for it to warrant an honorary bill. Why not 71? Even better, why not 69? I’m positive that number means much more to so many Lebanese than simply 70. Zeros are so overrated if you ask me. Yet again, our currency has so many of them.

I guess we have always been a country to celebrate whenever we had the opportunity. Oh, look – can we turn this into a festivity? Sure, why not, let’s do it!

Identity Crisis:

One look at that bill and the entirety of our Lebanese existence is summarized in front of you with the monetary version of our infamous “hi, kifak, ca va.” Arabic, French and even a word of English thrown in there by mistake is the perfect summary of how this country is: lost in translation, unaware of what it wants to be or what it is.

Let’s stick to our frenchiness would say the people who only know the ca va to every kifak. Except we barely know how to speak French lately as is evident by that hilariously shameful typo on the bill. Side note, is there any other country with a typo on their bills, regardless of what that typo is?

No, let’s move on to English man. That is where the future is. Never. We are Arabs. Mutliple personality disorder, perhaps? Who cares, it’s unique.

Inefficiency:

Let’s leave the fact that the new 50,000 will still be big enough for you to use as a picnic mattress. Shouldn’t they resize all our money into something that fits in normal wallets before redesigning the bills at every possible opportunity?

Anyway, I’d hate to think our bills can get less efficient than they are. There are just so many zeros there and they’re as useless as they come. That 50,000 bill is so inefficient that it cannot afford you a burger at Roadster’s anymore.

Inefficient… I like it.

Blame others:

Our central bank head decided to blame the British company that printed the bill for the fiasco. Typical, I guess. Let’s always blame others for our mistake, as long as it makes us feel better about ourselves and about the messes we keep finding ourselves in. We get into a war, we blame some mysterious entity. Our economy goes to the trash, we blame some other mysterious entity. Our 50,000 gets a tasteless makeover? Let’s blame the company that printed it, not the Lebanese who must have overseen the design (or lack thereof) process, the Lebanese who did not notice the mistakes and the people with a horrendous taste who OK’ed it.

Intact Joie de Vivre:

But no worries, ladies and gentlemen, our Joie de Vivre is still well-represented in that bill. Our love of life, love for drinks and parties and getting high is well defined within those mutliple colors that fill that monetary canvas. Pretty nifty, eh?

Lebanon, summarized:

Unless you’ve been living under a rock, you can’t but notice that Lebanon has been on a downward spiral lately. Culture is dying, sometimes at the hands of the ministry of culture. Fundamentalism is rising across the board. The country is losing whatever it has of itself with each passing day. Looking at all of that, our new bill cannot but stand and shout that infamous line: shou we2fet 3laye?

Our country is the gift that keeps on giving. Can you imagine living somewhere where life was boring? What would we blog about? When it comes to that 50,000 bill I have to ask: why not use it as our national flag instead?