Economic/Business News Briefs

[annie23]

Beirut Port Authority discusses upgrade plans November 15, 2011 01:15 AM The Daily Star
BEIRUT: Beirut Port Authority discussed expansion and computerization plans for Beirut port Monday.

A post-meeting statement called for implementing a series of measures to increase the port’s capacity including separating customs and seaport operations and lessening bureaucratic procedures causing delays in the port’s work.

The statement said a few months delay in works to expand the port’s container storage area will not have a serious effect on the port’s work, given there has been around 10 percent decrease in local consumption this year.

[annie23]

Food prices up 80 percent since 2002 November 16, 2011 01:32 AM By Mohamad El Amin The Daily Star


BEIRUT: A senior FAO official said Tuesday that food prices in the MENA region have risen by up to 80 percent since 2002. “Despite prices of food declining a bit from their highest point during the peak of global food price crisis in mid 2008, recent price increases pushed food prices 80 percent above their 2002 levels.” Saad al-Otaibi, assistant director-general of FAO said at the opening of the Regional Agro-Industries Forum held at Le Royal Hotel Beirut.

Otaibi explained that some of the region’s countries were unable to cope with the increasing food needs stemming from fast-growing populations. “This is particularly relevant to poor countries which have high population growth rates, given continuous pressure international food prices put on economies,” he said.

Agriculture Minister Hussein Hajj Hasan, who also spoke at the opening of the forum, emphasized that Lebanon was facing similar problems.

He said the country was subject to fluctuations in international food prices, a result of importing 80 to 85 percent of the food it needs, he said.

Hajj Hasan argued that this phenomenon was a result of economic policies had been promoting services and real estate sectors and marginalizing productive sectors.

“Our food in Lebanon is tied to any political or economic crisis abroad … We do support free trade but ‘not a free trade’ that eliminates national production and agriculture. Free trade should be also about exporting goods and fostering food security.”

Hajj Hasan called for bolstering trade among the region’s countries saying Lebanon’s trade agreements with developed countries were biased against the agro-industrial sector.

Regional representative of UNIDO, Khaled al-Mekwad, emphasized the role of agro-industries in economic development in the MENA region.

He said it contributed in fighting poverty, lessening emigration and fostering rural development.

The global food and financial crises of 2007 and 2008 have pushed an additional 115 million people into hunger, FAO reports projected. It expects persisting international economic crises are likely to further aggravate food security through affecting employment and incomes internationally.

The three-day event, organized by FAO (U.N. Food and Agriculture Organization) and UNIDO (U.N. Industrial Development Organization), is being attended by government officials, non-governmental organizations, private sector agro-industry enterprises and researchers from across the 20 countries of the region.

Participants will discuss the effects of the 2006-08 world food crisis on food security in the region.

At the end of the forum, they will suggest concrete policy recommendations that organizers say could help promote the region’s agro-industrial sector.

A sector which they have stressed was crucially in need of investment as well as support from the public sector.

Such investments would in turn boost job creation and sustainable economic growth in the region.

The forum had urged, in its opening session, the region’s governments to strengthen bilateral and regional cooperation in the field, harmonize policies and increase food production to foster regional food security.

The World Food Summit of 1996 defined food security as existing “when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life.”

But experts said food security in the region is severely undermined by the region’s constantly growing import of the majority of the food it consumes. All the panelists speaking at the opening session warned against this trend.

[annie23]

Hajj Hasan blasts merchants exporting spoiled potatoes November 16, 2011 01:32 AM The Daily Star

BEIRUT: Agriculture Minister Hussein Hajj Hasan accused some merchants of exporting spoiled potatoes, warning he would not hesitate to reveal the names behind the shipment of such agricultural produce if they continue they behavioral pattern.

Waving photos of rotten potatoes, the minister said he has concrete and undisputed evidence that some wholesalers and merchants have been regularly shipping decayed potatoes to some Arab states.

Saudi Arabia recently stopped importing Lebanese potatoes to the kingdom because most of these potatoes and fit for human consumption.

The Saudi ambassador to Lebanon raised this issue with the minister who promised to investigate the complaints.

Saudi Arabia is one of the main importers of Lebanese potatoes and this moratorium will deal a blow to the local farming sector.

“The ministry did not take any arbitrary measures against exporters and farmers but we are determined to ensure that all exported potatoes meet international standards and are fit for consumption,” the minister said.

He added that two trucks were loaded with potatoes that headed to Saudi Arabia and Jordan were rejected entry to these countries because these potatoes were decayed.

The association of the Bekaa farmers threatened to observe a strike if the minister insisted on examining the potatoes before their shipment to other countries.

But Hajj Hasan threatened to reveal the names of the traders and exporters who refuse to examine the potatoes before shipment.

“It’s time for those who manipulate the prices of agricultural products to leave and they have no right to speak in the name of farmers,” said the minister.

The minister stressed that from now on any potatoes or agricultural produce that fail to pass inspection will be quarantined and will not be allowed to leave the country.

Hajj Hasan thanked Saudi Arabia for re-opening its market to Lebanese goods after it received assurances that all products would be thoroughly examined by the Lebanese authorities.

“We assured all countries we visited that our agricultural produce is of top quality but some merchants tried to export bad potatoes and kept the good ones at home,” he said.

[annie23]

Beirut port figures show improved performance November 16, 2011 01:32 AM The Daily Star
BEIRUT: The International Chamber of Navigation of Beirut said recently issued port figures suggested an improvement in overall performance.

A statement, issued by the chamber Wednesday, said the port’s October figures reflected the economy’s ability “to adapt to local and regional instabilities.”

The statement noted that shipped goods rose by 4 percent last October to around 600,000 tons with the total number of containers growing by 17 percent to 91,184 compared to last year.

The number of containers intended for local markets also rose by 8 percent, reaching 24,080 containers. While transshipment saw a very large 46 percent increase with the number of containers rising to 41,996, also compared to October last year.

The number of cars shipped, however, fell by 44 percent to just 4,608 cars.

Head of the chamber, Elie Zakhour, expected the port’s business to stay steady ahead of the holiday season, when the country more than doubles its imports. Zakhour expected that by the end of 2011, Beirut port will enter the list of the top 100 international ports.

[annie23]

Anti-corruption revolutions part of developments: PM November 16, 2011 01:32 AM The Daily Star


BEIRUT: Prime Minister Najib Mikati said Tuesday the revolutions against corruption were part of the recent political and security developments in some of the Arab states.

“The revolutions against corruption should induce us to reassess the administrative and financial systems in government agencies.

This task necessitates a continuous follow-up from the monitoring and controlling bodies to keep the work in its proper legal framework,” Mikati told participants at the 46th meeting of Arab agencies that focuses on better control of financial spending in government departments which was held at the Grand Serail.

The session was attended by ministers, MPs and Arab ambassadors in Beirut. Mikati stressed that this meeting comes amid a wide increase in spending in Arab public departments to finance broad developments in these states.

He added that this spending should be coupled with broader financial supervision both on the local and regional levels.

Mikati called for greater cooperation among various anti-corruption agencies and bodies in the Arab world to ensure rational use of financial resources of the state.

[annie23]

Alpha group banks’ growth driven by customer deposits November 16, 2011 01:32 AM The Daily Star
BEIRUT: In the first nine months of 2011, consolidated assets of the Alpha group, the top 12 Lebanese banks with deposits exceeding $2 billion, as compiled by Bankdata Financial Services, registered a single digit growth rate of 6.4 percent, driven by a 5.2 percent growth in customers’ deposits.

Both of these levels are below those achieved in the corresponding period of last year, reflecting the less favorable economic environment in the domestic market and the deteriorating economic conditions in several countries where Alpha banks are operating. “Notwithstanding, loans to customers registered a 12.7 percent growth year-to-date, driven principally by a sustained lending activity in Lebanon,” Bankdata said.

It added that the downward activity trend was translated by a 2.9 percent growth in net profits of the Alpha group in the first nine months of 2011 relative to the corresponding period of 2010.

“Nonetheless, the Alpha group’s average does not reflect individual performances, as the most profitable bank reported a growth in net earnings of 61.6 percent while the least profitable one registered [an] earnings contraction of 20.2 percent,” the report said.

It added that this relatively limited earnings growth reflects a year-on-year increase in operating income of 5.3 percent, within the context of an increase in general operating expenses by 7.6 percent and in loan loss provision charges of 13.2 percent, the latter highlighting additional specific and collective provisions taken in order to sustain asset quality in the face of adverse developments.

The increase in operating income, limited to 5.3 percent, is the result of a contraction in the spread by 8 basis points, principally in Lebanon, following a larger decrease in the yield on assets than in the cost of funds, driven by the renewal of maturing Lebanese T-bills at lower yields.

“At the level of overall efficiency, the cost to income ratio of the Alpha group reported a slight deterioration from 47.02 percent in the first nine months of 2010 to 48.07 percent in the first nine months of 2011, without however impacting the profitability ratios, which sustained similar levels over the same periods,” the report said.

[annie23]

Lebanese consumer confidence levels at lowest since 2007 November 17, 2011 01:10 AM By Mohammad el-Amin The Daily Star


BEIRUT: The Byblos Bank-OSB Consumer Confidence Index showed Lebanese consumers’ confidence levels at their lowest during the first nine months of 2011, owing chiefly to political divisions over the Special Tribunal for Lebanon and the ongoing political crisis in neighboring Syria. The index, a joint project between Byblos Bank and Olayan School of Business at the American University of Beirut, was launched Thursday at the bank’s headquarters in Beirut.

The study, covering the period between 2007 and 2011, said consumer confidence levels have been extremely sensitive to political and security developments in the country.

The Lebanese economy has long been subject to the influence of politics and security, but the study is the first-of-its-kind to methodically correlate an economic indicator to the country’s turbulent political landscape.

“The results of our Index show that consumer confidence in Lebanon is significantly affected by political events, whether they are negative or positive,” Nassib Ghobril, chief economist at Byblos Bank, said at the project’s launching event.

Consumer Confidence Index is an economic indicator measuring consumer views of the current economic situation and their expectations for the future. Customers with high confidence are more likely to spend more, fostering economic activity.

The study showed that 2009 saw the highest yearly average of consumer confidence at 96.7 points propelled by the formation of the long-awaited Cabinet of former Prime Minister Saad Hariri, which at the time brought an end to a months-long political crisis.

The year 2009 saw relative stability bolstering consumers’ confidence said panelists at the launching event.

The index reached its peak in May 2008 at around 133.6 points after rival Lebanese political parties ratified the Doha Accord that ended bloody clashes between pro-government and opposition gunmen after the Cabinet decided to dismantle Hezbollah’s telecommunication network.

Philippe Zgheib, assistant professor at AUB, said “the Doha Accord had the biggest positive impact on [consumer]confidence between July 2007 and September 2011.

“Other political events that affected confidence materially include the parliamentary elections of 2009, the formation of the [former PM Fouad] Siniora and Hariri Cabinets in 2008 and 2009 respectively, the designation of Mr. Najib Mikati as Prime Minister in January 2011, and the formation of the Mikati Cabinet in June 2011.”

The index reached its lowest average value throughout the first nine months of 2011 when it hit an average of 55.3 points. It had reached its lowest point in August at just 46.4 points after the STL issued four arrest warrants and Syria’s political crisis escalated, the study showed.

The index also slid significantly in July and August 2010 under the influence of border clashes between the Lebanese Army and Israeli soldiers in Adaisseh and internal armed clashes in Burj Abi Haidar.

The study was based on 1,200 face-to-face interviews conducted across different Lebanese regions, a statement released by Byblos Bank said. The index is to be issued on a monthly basis. The field surveys are carried out by Statistics Lebanon, a polling firm hired to draw a random sample and conduct the interviews during the last 10 days of every month.

The index’s values are composed of adding-up two sub-indices, a Present Situation Index and an Expectations Index. The first covers the current economic and financial conditions of consumers, and the second addresses their expectations for the upcoming six-month period at the time of the survey.

Additionally, the index classifies consumer confidence data based on region, age, religious affiliation, gender, income and profession.

The average between 2007 and 2011 showed no disparity between consumer confidence across administrative districts (mohafaza); with the exception of the Bekaa, where consumer confidence was significantly lower scoring an overall average of just 56.1, significantly below the national average.

The study also showed Christian and Sunni consumers with identical levels of consumer confidence at around 80 points, while Druze consumers showed lower confidence at 76.3 points. Shiite consumers, however, displayed significant variance scoring a lower confidence level at 67.3.

[annie23]

Arab banks to pursue emergency economic plan November 17, 2011 01:10 AM By Elias Sakr The Daily Star

BEIRUT: The Arab world is in need of an emergency plan to boost inter-Arab banking and economic cooperation in a bid to diminish the impact of political crises sweeping the Middle East, Lebanese and Arab banking officials said Wednesday. “The Union of Arab Banks ... is in the process of putting in place an emergency Arab economic plan,” Union of Arab Banks Secretary-General Wissam Fattouh said in a news conference at the Phoenicia hotel in Beirut.

The emergency plan will see discussions on the “future of the Arab world in light of recent transitions” during a two-day forum starting Nov. 24 in cooperation with global and Arab institutions including the Arab League, the World Bank and tens of other economic institutions.

The popular uprisings and political crises that hit several Arab countries will see a decrease in Arab GDP growth from 4.84 percent in 2010 to 3.76 percent in 2011, head of the Lebanese Banking Association Joseph Torbey said.

However, Torbey added that the gloomy picture won’t last long before it is reversed in 2012 with an Arab GDP growth rate expected at 3.84 percent.

While Egypt’s GDP is forecasted to drop from 5.15 percent in 2010 to 1.22 in 2011, it is expected to rise back to 1.75 percent in 2012, Torbey said.

Similarly in Tunisia, the GDP growth rate will drop from 3.05 in 2010 to 0.01 in 2011 to jump back to 3.93 percent in 2012 while Syria is forecasted to see a downward trend with its GDP growth rate decreasing from 3.23 percent in 2010 to 2.02 in 2011 and 1.55 in 2012.

The Arab banking sector, which counts nearly 430 institutions that manage around $2.5 trillion in assets and more than $1.3 trillion in deposits with a capital base of $270 billion, will witness disparity in performance between oil producing countries and the rest of the Arab world.

While the banking sector in Gulf countries is expected to grow as oil-producing states benefit from a rise in prices due to political and economic uncertainty, most countries in turmoil will end 2011 on a negative note.

Torbey said UAE and Saudi banks recorded respectively a 4.14 and 6.54 percent increase in bank assets in the first nine months of 2011 compared to 5.78 and 3.28 in the entirety of 2010.

Qatari bank assets grew 22.94 percents in the first nine months of 2011 compared to 11.12 percent in the entirety of 2010 while Kuwaiti banks recorded a 6.03 percent in the first six months of 2011 compared to 1.84 percent in 2010.

In countries witnessing political turmoil, negative growth rates were recorded in Bahraini banks where asset growth rates of -10.84 percent were recorded in the first eight months of 2011 compared to 0.18 percent in entirety of 2010.

Egyptian banks also recorded a negative growth rate of -2.52 percent for the first eight months of 2011 compared to 16.19 percent in the entirety of 2010 while Syrian banks recorded a rate of 0.23 percent for the first four months of 2011 compared to 6.22 percent the entirety of 2010.

The recent development in Egypt, Libya, Yemen, Tunisia and Syria indirectly influenced non oil-producing Arab states like Lebanon, Jordan, Oman and Palestine.

In Lebanon, bank assets grew 7.08 percent for the first eight months of 2011 compared to 11.87 in the entirety of 2010 while Jordanian bank assets recorded a 6.19 percent growth in the first nine months compared to 10.85 in the entirety of 2010.

The slow growth caused by regional instability amid a global financial crisis requires Arab banks to kick off investment programs in cooperation with central banks and Arab governments, Torbey said, elaborating on a series of measures that need to be adopted.

Among those measures is the need to create Arab banking conglomerates and cooperation frameworks to confront any future crises, according to Torbey, who urged for further collaboration with legal organizations and international institutions to set international banking regulations.

Torbey added that efforts to encourage global investments in the Arab world and increased cooperation with the global and regional financial markets should feature on the agenda of Arab banks.

[annie23]

GLC rejects Nahhas wage increase package November 18, 2011 02:06 AM (Last updated: November 18, 2011 02:49 PM) By Mohamad El Amin The Daily Star

Beirut: The General Labor Confederation rejected Thursday a wage increase package proposed by Labor Minister Charbel Nahhas, insisting the Cabinet should revise its October decision to increase wages in compliance with the Shura Council’s verdict.

Nahhas suggested, at last Friday’s price-index committee meeting, a 16.4 percent wage hike in line with accumulated inflation numbers by the state-run Central Administration of Statistics.

Nahhas’ package also included transportation allowance to basic salaries and enacting universal health coverage for all Lebanese residents funded through taxation on real estate transactions.

Head of the GLC Ghassan Ghosn told The Daily Star that the GLC was unwilling to accept Nahhas’ proposal. He added that the plan would be hard to implement if not “misleading” to labor demands.

Representatives of the GLC, the private sector and high school teachers submitted Friday their comments on Nahhas’ plan.

“The government should respect its own decisions and the agreement made with the GLC. We also have to respect the promises we made to workers. We do not approve Nahhas’ proposals,” Ghosn said.

“We cannot approve phasing-out the National Social Security Fund which was a result of years of labor struggle. If the minister wants to provide health coverage for all Lebanese, let him do it through the ... NSSF,” he added.

“If the government turns away from [last October’s] wages increase decision, we will return to initiate a general strike,” he warned.

Nahhas had argued that universal health coverage funded through taxation on real estate transactions would phase-out NSSF fees which would spare employees and employers from paying 9 to 10 percent of salaries.

Unlike the GLC, the private sector expressed flexibility toward Nahhas’ bid. Private sector representatives said Thursday they approved in principle the 16.7 percent increase suggested by the minister but had strong reservations over other details of the bid.

Head of Beirut Traders Association Nicolas Chammas told The Daily Star that the private sector welcomed the minister’s bid, saying it had taken into account economic and financial consequences of the wage increase.

But Chammas added that the private sector tied its acceptance of the wage increase to the exclusion of salaries above a certain ceiling from the hike.

“We accept the 16.4 percent increase for ‘lower’ wage brackets” he said refusing to specify the exact ceiling the private sector was requesting.

Last month, the Shura Council rejected a Cabinet decision to increase wages in the private and public sectors, a move that brought negotiations between the government, the General Labor Confederation and the private sector back to square one.

The Cabinet had agreed to raise the minimum wage by LL200,000 for salaries under LL1 million and by LL300,000 for salaries between LL1 million and LL1.8 million.

The Shura Council said the exemption of salary hikes for wages above LL1.8 million was a violation of the law.

“The wage increase is not only about alleviating social conditions but should also take into consideration the situation of businesses and public treasury. We felt that Minister Nahhas has now recognized the deep economic difficulties faced by businesses,” Chammas added.

Chammas said the private sector had recognized, during deliberations with Nahhas, the authority of the Central Administration of Statistics in determining the level of the wage increase in line with its inflation statistics.

Chammas added that the private sector rejected the addition of transportation allowance to basic salaries:

“We do not approve adding the transportation allowance to the salary base because that will mean additional taxation and increasing NSSF fees. This adds a burden on the private sector and will reflect badly on the economy. An inflated minimum wage would frighten investors. It is a bad economic indicator,” he explained.

Full health coverage, Chammas thought, was “nearly impossible” to achieve as the government had failed before in implementing similar projects.

“The government failed at projects like the optional NSSF coverage. The government also has more than LL800 billion worth of NSSF arrears. Applying universal health coverage would require a total reform of the NSSF,” he said.

[annie23]

Sabounjian hails ISO 26000 implementation November 18, 2011 02:06 AM The Daily Star


BEIRUT: Industry Minister Vrej Sabounjian hailed Thursday the implementation of the International Standard for guidelines on social responsibility “ISO 26000” at a number of Lebanese institutions.

Sabounjian described the implementation of the ISO 26000 as a very important step in the promotion of sustainable development.

Two ISO 26000 certificates were awarded at the event to Unipak, a packaging manufacturer, and Al-Kawthar high school.

[annie23]

Lebanon, Italy to promote scientific cooperation November 18, 2011 02:06 AM The Daily Star


BEIRUT: Lebanon and Italy signed Thursday a memorandum of understanding to promote bilateral scientific cooperation. The Lebanese Agriculture Ministry and the National Scientific Research Center signed an MOU with the Italian league for fisherman (Lega Pesca) as part of the Qana Scientific Boat Project.

“This Memorandum is an important step toward sustainable development, resource management and scientific cooperation between Lebanon and Italy,” Italian Ambassador to Lebanon Giuseppe Morabito said.

Morabito added that cooperation in research and technology would help improve the wealth and quality of life for both the Italian and Lebanese people.

“Italy merged its efforts with Lebanon into the CANA research vessel allowing the Lebanese National Scientific Research Center to perform important marine studies and ensuring Lebanese policymakers and administrators with tools to protect and manage their share of the Mediterranean and of its resources,” he said.

[annie23]

Lebanon ranks 8th regionally in terms of ease of paying taxes November 19, 2011 01:39 AM The Daily Star


BEIRUT: The World Bank’s private sector arm, the International Finance Corporation, in conjunction with PricewaterHouseCoopers issued a report termed “Paying Taxes 2012: The Global Picture” in which it ranked Lebanon 41st out of 183 countries and eighth out of 16 Middle East and North African countries in terms of ease of paying taxes.

In order to rank countries based on the aforementioned criterion, the study involves recording the taxes and mandatory contributions that a medium-size company must pay in a given year, as well as measuring the administrative burden of paying taxes and other contributions.

A result overview shows Lebanon’s global ranking regressed from the 36th spot, while it retained its regional position from the previous survey.

This is in line with the performance of several regional jurisdictions which have fallen in this year’s report. According to the survey, in several locations, levied taxes are limited to social security contributions on national employees. That said, many of the jurisdictions in the MENA region are increasingly adopting other revenue raising measures to meet budgetary needs, thus impacting the cost of compliance of many businesses. These measures include increased fees and levies paid for licenses, permits and other government approvals necessary to operate a business. In addition to rising tariff rates, many businesses also need to employ an increasing numbers of back office staff to comply with these changes, which is resulting in higher overhead costs at a time when many businesses are struggling to survive.

The ease-of-paying-taxes rankings are compiled through three sub-indicators: the number of tax payments, the time afforded for compliance and the total tax rate. When it comes to tax payments, the study indicates that the standard case study in Lebanon paid a total of 19 taxes, 12 of which are labor tax payments, six are other miscellaneous tax payments and one is a corporate income tax payment. This compares to a regional average of 20 tax-related transactions, 12 of which are labor tax payments, seven are miscellaneous tax payments and one is a corporate income tax payment. Globally, Lebanon ranked 68th out of 183 countries in this indicator, while in the MENA region Lebanon came in ninth out of 16 countries.

The indicator for the time to comply assesses the number of hours per year the case study spends dealing with taxes. In Lebanon, the sample case study spends 100 hours dealing with labor taxes, 40 hours handling corporate income taxes and 40 hours dealing with consumption taxes. Therefore, it dedicates 180 hours each year to deal with taxes. It is worth noting that for this indicator, the longer time dedicated to handling taxes, the lower the rank. This compares to a regional average of 186 hours a year to deal with taxes, distributed into 76 hours to deal with labor taxes, 61 hours to deal with corporate income taxes and 49 hours to deal with consumption taxes. Lebanon ranked 62nd globally, and ninth regionally in this category.

Finally, when examining the indicator for tax rate, the case study in Lebanon appears to have a total tax rate of 30.2 percent of commercial profits, against a regional average of 32 percent. The labor tax rate was found to be at 24.1 percent of commercial profits, compared to a 17 percent average in the MENA region. The corporate tax rate was at 6.1 percent of total commercial profits compared to a regional average of 10 percent. Lastly, when it comes to miscellaneous tax rates as a percentage of commercial profits, the regional average was 4 percent, compared to 0 percent in Lebanon. For this indicator, the lower the rate is, the higher the ranking. Lebanon ranked 44nd globally and ninth regionally in this category.

[annie23]

Consumer prices rising but at rate below NGOs’ estimates: CAS November 22, 2011 01:33 AM The Daily Star
BEIRUT: The Central Administration of Statistics reported Monday that the price index continued to rise on a monthly basis although this surge remained well below the estimates of consumer groups and NGOs.

According to CAS, which is under the jurisdiction of the prime minister’s office, the consumer price index between October and September 2011 went up by 0.7 percent.

However, CAS noted that the accumulated increase in the prices of consumer products from December 2007 to October 2011 reached 17 percent.

It added that prices of commodities rose by 3.5 percent in less than a year.

CAS said that the prices of food stuffs and nonalcoholic beverages have jumped by 29.4 percent since the beginning of 2008.

Alcohol and tobacco rose by 9.3 percent in the same reporting period.

However, independent consumer groups and NGOs contradict these figures and claim that CAS is deliberately giving lower inflation figures to discourage labor unions and political parties from demanding higher wages that could be beyond the means of the government and private sector.

CAS insists that their calculations are scientific and transparent, adding that they constantly survey and assess the prices of the main items.

CAS includes prices of food, beverages, clothes, residential rents, water, electricity and gasoline in their price basket. It also adds the cost of health, transportation, telecommunication, leisure and education.

Consumer Lebanon for example said that prices of basic commodities have risen by more than 18 percent in the first seven months of this year.

The group, which issues its price index on a regular basis, earlier said that inflation is well above the 6 percent ceiling which was set by the Central Bank this year.

The prices of commodities have risen significantly in the past four months as news emerged that the Finance Ministry intends to increase the value added tax from 10 to 12 percent.

Consumer groups also believe that the Economy Ministry is not clamping down on merchants and traders who manipulate prices.

The surge in prices of basic commodities have induced the General Labor Confederation and other labor unions to demand raising the minimum wage from LL500,000 to LL950,000 per month.

The Labor Ministry is currently negotiating with both the GLC and the private sector to reach another agreement on the minimum wage.

The private sector insists that any wage increase should be based on the studies of CAS and not any other independent body while the GLC wants the government to include the studies by Consumer Lebanon and other NGOs.

[annie23]

IMF, GLC discuss economy as wage increase looms November 22, 2011 01:36 AM The Daily Star


BEIRUT: An International Monetary Fund delegation discussed the current economic situation with the General Labor Confederation, amid imminent wage increases.

A post-meeting statement, issued by the GLC, said the talks focused on the impact of the wage increase on the economic cycle.

It added that the GLC had criticized the taxation system, which they said was based on indirect taxes that prevent “any redistribution of wealth and achieving tax justice.”

The IMF delegation said the GLC’s observations would be taken into consideration when drafting the upcoming IMF report on Lebanon.

[annie23]

Gasoline prices down by LL400 November 23, 2011 10:48 AM The Daily Star
BEIRUT: Gasoline prices fell by LL400 Wednesday while the price of kerosene gas and fuel oil both rose by LL300, according to the weekly fuel price update by the Energy and Water Resources Ministry.

The 98-octane graded fuel is now priced at LL33,500 while the price of 95-octane graded fuel now stands at LL32,800. It now costs LL29,900 for kerosene gas, LL30,400 for fuel oil and LL31,000 for diesel oil.

All prices are per 20 liters.

[annie23]

Hajj-Hasan to regulate potato exports, quality November 22, 2011 01:36 AM The Daily Star

BEIRUT: Agricultural Minister Hussein Hajj-Hasan said Monday the ministry was taking steps to tighten measures on potato imports as well as assuring the quality of exports.

The minister said after meeting potato producers and exporters in Bekaa, that arrangements had been made to allow exporting a part of the potato produce to Syria.

Hajj-Hasan said the ministry is currently enforcing standards toward assuring that the potato produce is clear from bacteria and viruses.

Separately, Hajj-Hasan announced the ministry would soon initiate a project aiming to afforest 2,000 acres across Lebanon.

[annie23]

Lebanon’s bank deposit growth outpaces UAE November 23, 2011 01:25 PM By Peter T. Daou The Daily Star


BEIRUT: The Lebanese may be known for wasting golden opportunities but they are just as famous for their astonishing comebacks. After slipping in January, Lebanese commercial bank deposits regained momentum and rose 4.4 percent to $113.4 billion in the first nine months of 2011, according to data provider Economena Analytics.

The surprising ability of Lebanon’s banks to attract deposits despite internal political instability and regional turmoil stands in stark contrast to the dismal growth witnessed at banks in the United Arab Emirates, where deposit growth slowed considerably in recent months to finish the first nine months up only 1.7 percent to $290.6 billion.

The UAE has promoted itself as a regional hub for the financial sector and as a safe haven for investors and banks.

“What is happening in Syria is certainly playing a role but Egyptian and Libyan events, in addition to Europe’s crisis, are also contributing to deposit growth in Lebanon," said Simon Neaime, chair of the economics department at the American University of Beirut (AUB), in an interview with The Daily Star Tuesday.

Some argue that the consistent increase in deposits, which brought $6.2 billion in fresh private funds into the banking sector by September, is tainted by inflows from key Syrian figures escaping a worldwide asset freezes.

However, Lebanon’s Central Bank, along with a streak of industry pundits, have denied the claim and pointed to the sector’s strict fund deposit protocols and to the implementation of any U.N. decisions. The small size of the country’s non-resident deposits and the meager increase of less than $2 billion through September provide little support to the critics’ claims, although some doubts remain.



Loans are not being channeled into the real economy to stimulate economic growth


“It is true that many Syrians hold dual citizenships and it is possible that their money appears as resident deposits but I also think Beirut is becoming the financial sector hub for the region. When it started happening in 2008, I thought it was because of the financial crisis, but now it is clear that the trend is sustainable,” said Neaime.

In addition to its current stability relative to other Levant countries, Lebanon is benefiting from Europe’s vicious debt crisis and the world’s low interest rates. Lebanon’s overnight interbank rates are almost 10 times their UAE equivalents as the Central Bank relies on high interest rates to defend the dollar peg.

Interest from Europe cannot be underestimated. While Arab tourist numbers fell 39 percent in the first nine of 2011, tourists from European countries were down only 10 percent: a sign of confidence in the tiny Mediterranean country.

Nevertheless, in an interview with The Daily Star, Georges Nehme, chair of the business administration department at Antonine University, attributed the mismatch in deposit growth rates to UAE-related events.

“I think this is due to UAE factors because we haven’t seen in Lebanon any major change at the monetary policy level to attract additional deposits,” said Nehme.

Bankers in the Gulf country attribute the reversal in deposits to the deceleration of foreign fund inflows as a result of the “Arab Spring” and to less attractive interest rates while government officials claim the funds are being redirected to investment instruments with higher returns.

Yet deposits are just as good as their economic impact and in this regard Lebanon seems to be back to the old habit of wasting opportunities.

Deposit growth, albeit slower than in previous years, continues to exceed the increase in lending, starving the economy of needed funding for growth. Lebanese commercial bank claims rose by $1.3 billion in the first nine months of 2011, with only $800 million going to the private sector, while UAE’s banks gave out nearly $12 billion in loans.

“We have had this issue for a while now. Loans are not being channeled into the real economy to stimulate economic growth, but hopefully with more liquidity, things may improve,” said Neaime.

[annie23]

GLC and private sector fail to reach deal on salary packages November 26, 2011 01:47 AM By Mohammad el-Amin The Daily Star


BEIRUT: The General Labor Federation and the private sector failed again Friday to reach a common understanding on the ceilings of higher wages, prompting Labor Minister Charbel Nahhas to take his proposals to the Cabinet.

At the conclusion of the Price Index Committee meeting, Nahhas said deliberations at the committee failed to reach an agreement.

Citing an example of the deep differences between the two sides, Nahhas said that the private sector is not willing to increase the education and transportation allowances to the new salary package for employees.

Nahhas supported the position of the private sector concerning higher allowances, adding that the law apparently prohibits additional allowances.

The minister proposed instead to add these allowances to the basic salaries. Disagreements over how to implement Nahhas’ suggestion to enact a state-funded universal health-care coverage had also contributed to the committee’s inability to reach a compromise.

Nahhas had suggested, at a Price Index Committee meeting early November, a 16.4 percent wage hike, adding transportation and education allowances to basic salaries, and enacting a publically funded universal health care coverage for all Lebanese residents.

He said the plan would be funded through taxing real estate transaction profits and other similar taxes.

Despite the failure of the Price Index Committee deliberations, Nahhas said he would forward the committee’s comments to the Cabinet session.

He said he hoped the Cabinet would still adopt a comprehensive wage increase including the controversial universal health-care plan. Nahhas emphasized the issue would be a crucial subject at the Cabinet meeting.

“The economic and social destiny of four million citizens is more important than any other issue, including funding the Special Tribunal for Lebanon,” he said.

Nahhas made a point to slam the participants’ inability to endorse steps toward “building a welfare state.”

He stressed their refusal of the universal health care plan was rather aberrant and had exposed a deep lack in confidence in the ability of the Lebanese state to regenerate: “This is the first time in history employers as well as workers reject a publically funded health care coverage.

“Let us be clear that these deliberations exposed that all sides doubt the very ability of the state to revive. Different sides are only concerned about preserving their own benefits,” he added.

Lack of trust in the government was precisely cited by head of General Labor Confederation Ghassan Ghosn as the reason behind rejecting Nahhas’ health care bid: “We cannot become dependent on an untrustworthy government and a political system that does not take into account social conditions.”

Ghosn reiterated the union’s insistence on realizing the wage increase through redrafting the Cabinet’s last October decree to make it compliant with the Shura Council’s ruling.

Nicolas Chamas, head of Beirut Chamber of Commerce, said the private sector had been flexible, conceding to the 16.7 percent increase suggested by Nahhas.

He reiterated the percentage a fair wage increase that reflects accumulated inflation since 2008.

But Chamas said that alleviating social conditions and providing health care were the government’s responsibility and should not be linked to the wage increase issue.

Chamas called on Nahhas to take economic hardships facing the private sector into consideration when forwarding the committee’s recommendations to the Cabinet meeting.

Hanna Gharib, head of the Secondary Teachers Association, warned that the wage increase should not be lower than what had been purposed by the government earlier.

“We have initiated strikes and sit-ins to go forward not backward,” he said.

Gharib criticized the government’s taxation system which he said was biased against the lower-income sections of society.

A mid-October wage increase decree had averted the country’s arguably biggest labor strike. It increased by LL200,000 for salaries under LL1 million and by LL300,000 for salaries between LL1 million and LL1.8 million.

The decree was then rejected by the Shura Council over the illegality of the ceiling excluding those who earn above LL1.8 million from the raise.

This prompted additional deliberations within the framework of the Price Index Committee in the hope of reaching a settlement.

[annie23]

Safadi: Transitions need financial aid November 26, 2011 12:52 AM By Elias Sakr The Daily Star

BEIRUT: Arab countries that experienced drastic political changes need economic and financial support to weather the transition period to democracy, Economy Minister Mohammad Safadi said Friday at the 5th Annual Arab Banking conference in Beirut.

“Countries in turmoil need a full-blown financial and economic support on their way to growth and during the transition period to preserve stability and avoid falling prey to chaos,” Safadi told participants at the forum on its second and final day.

Safadi said Arab states suffered weakness in the productive sector, which slows growth and increases unemployment rates.

A solution to such crises requires large investments in the productive sector, according to Safadi.

“This requires a skilled and experienced labor force despite the fact that the educational systems in the Arab world have failed to graduate a qualified labor force,” Safadi added.

If oil revenues are excluded, Safadi said, the size of the economy of Arab states combined wouldn’t equal the economy of one European-Mediterranean state.

“To illustrate this fact, statistics say that unemployment rates in Arab countries exceeded 16 percent according to the Arab Labor Organization,” Safadi said.

Other speakers saw an opportunity to enlarge the size of the Arab economies in the aftermath of the Arab revolutions.

“Despite the current gloomy economic situation, the Arab world could benefit from change toward democracy to ameliorate free market systems,” secretary-general of the Union of Arab Banks Imad Amin Shehab said during one of the forum’s sessions on the economic future of the Arab world.

Speaking at an afternoon session on Mechanism and Opportunities for the Return of Arab and Foreign Investments to the Region, Shehab said the Arab world should capitalize on the spread of democracy to boost its productive and investment sectors.

The recent popular uprisings and political crises that swept the region triggered a drop in Arab GDP growth from 4.84 percent in 2010 to 3.76 percent in 2011.

“Although it is too early to predict the time needed for states that witnessed revolutions to restore stability, the developments will unveil many investment opportunities, particularly if attempts to limit corruption and financial squandering succeed,” Shehab said.

While Gulf countries are expected to grow as oil-producing states benefit from a rise in prices due to political and economic uncertainty, most countries in turmoil will see a decrease in investments by the private sector.

Egypt lost private investments worth $16 billion in early 2011, the Institute of International Finance said last June.

The IIF said foreigners withdrew around $16 billion in private capital from Egypt this year in the wake of the political turmoil that ended with the ouster of ex-President Hosni Mubarak.

Shehab said Arab banking sources estimated lost investment opportunities in four Arab countries comprising Egypt, Syria, Tunisia and Jordan to a total of $43 billion.

The estimated loss of $43 billion is divided between $9 billion in lost banking deposits, $17 billion in lost tourism revenues and $11 billion lost in foreign direct investments, according to Shehab.

Head of the Association of Lebanese Banks Joseph Torbey said Thursday foreign investments inflow to the region for 2011 decreased by about 83 percent from more than $20 billion to about $4.8 billion.

“The role of Arab Banks in Accommodating the Change” was the subject of discussions at an earlier session in the day.

BLOM Chairman Saad Azhari said Arab banks would cope with change in the Arab world by adopting certain procedures that would safeguard its assets and its mounting financial and developmental impact on the economy.

Azhari said the Arab banking sector, which comprises 430 institutions manages around $2.5 trillion in assets and more than $1.3 trillion in deposits with a capital base of $270 billion.

In Lebanon, the size of Lebanon’s banking sector amounts to triple that of the Lebanese economy with a growth rate of 7 percent in 2011, Prime Minister Najib Mikati said Thursday.

Azhari added that banks could play an important role in the financing of small to medium enterprises while seeking to reform laws regulating their work.

“Banks could play a role to develop reform programs by making the private sector the main driving engine of Arab economies with what it entails in the separation between politics and the economy as much as possible.”

[annie23]

Lebanon sees 14.5 percent drop in real-estate transactions November 28, 2011 01:41 AM The Daily Star


BEIRUT: Lebanon’s real-estate sector took a hit in 2011 as the number of real estate transactions tumbled by 14.5 percent year-on-year as of the end of October 2011 influenced by domestic political bickering and regional unrest, reported Credit Libanais Bank in its latest weekly market report.

The report said the real-estate sector demonstrated sluggish activity when compared to the same period last year with the number of real estate transactions dropping year-on-year to 66,143 from 77,360, Credit Libanais Economy Research Unit said.

The value of real estate transactions was no exception, shedding $830 million on a 12-month basis to $6.84 billion as of October 2011.

The share of sales to foreigners represented a shy 2.02 percent of total sales transactions during the first 10 months of 2011, down from 2.04 percent in 2010 and 2.53 percent in 2009. Average value per real-estate sales transaction, however, notched up by 4.35 percent on an annual basis to $103,460 up from $99,147 in the same period last year.

The average value per sales transaction in Beirut continued to decline owing to a shift in buyers’ appetite from the capital to the more affordable areas of Metn and Kesrouan, according to report.

Lebanon’s registered construction permits, which reflect the level of future supply in the real estate sector, fell to 1,012,777 square meters during October 2011, from 1,173,893 in October 2010, according to statistics released by Lebanon’s Order of Engineers.

On a cumulative basis, Lebanon’s construction permits eased by 7.63 percent on an annual basis to 11,526,242 square meters as of the end of October 2011 in comparison with 12,478,913 as of October 2010.

As for the geographical distribution of construction permits, Mount Lebanon topped the list with a total of 6,949,219 square meters (60.29 percent) as of October 2011, followed by South Lebanon with 1,346,875 (11.69 percent), Beirut with 1,105,327 (9.59 percent) and the Bekaa region with 1,070,845 square meters.

The report said the findings indicated a shift in developers’ appetite toward more affordable residential end-users.