The Ongoing Legacy of Bhopal: Injustice and Anti-corporate Resistance

by Paul Cochrane in Bhopal
November 5th, 2010 - dissidentvoice.org

The Sambhavna Trust Clinic (STC) receives over 180 victims of the Union Carbide gas leak everyday. It has to turn away patients as it lacks the resources to treat them all. The STC refuses to take corporate donations, not wanting to play into the PR propaganda machine, and is wary of the motivations of NGOs. “We think there is a need for space free from corporate manipulation,” said Satinath Sarangi, managing trustee of the STC.

The clinic is just 400 meters away from where 40 metric tonnes of lethal Methyl Iso-Cynate (MIC) gas billowed from the Dow Chemical subsidiary Union Carbide factory in 1984, exposing over 500,000 people, instantly killing some 8,000, and causing 25,000 deaths in the past 26 years. Today, some 120,000 to 150,000 people are chronically ill from exposure to MIC, approximately 10% of Bhopal’s population.

The MIC factory is visible from the second floor of the clinic, which was purposely built in the vicinity to treat the worst affected in a highly impoverished area of the city, with 24,000 Bhopalis registered with STC for long-term care.

The list of medical conditions is long, from respiratory problems, nerve disorders, blindness, chronic obstructive pulmonary disorder, brain damage, paralysis and gastric issues, to reproductive problems and stunted growth in children. According to a 2010 paper by the American Journal of Industrial Medicine, titled “Effects of Exposure of Parents to Toxic Gases in Bhopal on the Offspring,” of women pregnant at the time of exposure, 43.86% lost their child.

“Our data are suggestive of delayed growth of the male until puberty and some slowing of growth of the female after attaining puberty,” the report further states.

Gas exposure also weakened immune systems, which has resulted in survivors more prone to die of disease, whether malaria, tuberculosis (TB), typhoid or dengue fever.

“TB is four times higher here than elsewhere in the country as the immune system is weakened, according to studies by London School of Hygiene & Tropical Medicine,” said Sarangi. “The researcher, Dr Neil Andersson, said Bhopal was like chemical aids.”

A woman waits for an appointment at the Sambhavna clinic

A festering wound

The MIC gas leak in Bhopal ranks as one of the world’s worst industrial accidents, and is a glaring case of justice denied. It is a tragedy, and one that has been made far worse than it ever should have been by the criminal negligence of Union Carbide/Dow Chemical (UC/DC) and the Indian authorities. Both parties (the Indian government and Indian stakeholders had a 49.1% stake) have downplayed the number of deaths, the number of victims and withheld information on what happened that fateful night at the factory, as well as locking survivors into decades of legal battles in their quest for compensation. UC/DC absconded from its legal charges in India and the CEO at the time, Warren Anderson, has not been extradited from the US to India to face charges brought against him – an effigy of him is burned every year on the anniversary of the tragedy in Bhopal. On top of all of this, there has not been a thorough clean up of the MIC’s factory, its surroundings and the ponds full of toxic sludge.

A toxic pond in the MIC compound

A boy sifts through rubbish inside the MIC factory compound

When compensation has come, it has been woefully inadequate. UC/DC paid out just $470 million in compensation, which the Indian government then sat on for years earning interest before reluctantly doling out the money in 2004. Survivors got just 25,000 Rupees ($555) each, of which many had already spent significant amounts on doctors, lawyers, transportation and bribery to get their cases to court. Compare that to the amount the US government forced BP earlier this year to stump up for the Gulf oil spill – $20 billion.

“There is clear double standards and racism. Dow Chemical has accepted the charges against Union Carbide in the US, whereas in Bhopal they say they are not liable. And there are many parallels with the BP oil spill. Information was similarly suppressed there,” said Sarangi. “What has happened here in Bhopal is a guidebook for how to escape corporate liability,” he added.

As Sanjay Verma, a baby at the time of the leak who survived due to his sister wrapping him tightly in blankets (the other 8 members of his family died of gas exposure), said: “Wounds heal over time, but in Bhopal the wounds get worse.”

It is also a lingering wound for Dow Chemical’s “brand name” through its refusal to deal honestly with the tragedy. The disaster, which has become synonymous with Bhopal, is forever a black mark against Dow. You can run, but you can’t hide.

Bhopal has become a clarion call for activists and the anti-globalization movement, a poster of the “true face of globalization” and the dark side of the “new world economy” where a multi-billion dollar company can get away with murder in a country where 80% of the population lives on less than $0.50 a day and through connivance with a government ready to pander to foreign companies in the ceaseless desire for capital. It is as crystal clear a case as you can get of profit before people.

Yet while Bhopal shows that while a crime can be committed and go essentially unpunished, it won’t be forgotten. It is a simmering issue with Indians and many around the world. Indeed, Verma, a local fixer, said he assists on average two journalists every month and dozens during the lead up to the anniversary. Bhopal is that rare thing, a continuous, ongoing media story.

“The Bhopal issue is still very potent, that even after so many years Bhopal is still a crack in the system, and lays bare corporations and government lackeys for what they truly are,” said Sarangi.

Slogans on the outside wall of the MIC factory on Union Carbide Road

A blow to US-India relations?

Bhopal is complicating US-India relations. In August, Delhi passed a law that could make nuclear power companies liable for damages in the advent of an accident, which has become a concern for US nuclear players eager to get in on India’s 123 Nuclear Agreement with the US that was signed in 2008 to develop civilian nuclear power.

Indian politicians, including the right wing BJP party, want the Bhopal tragedy to be raised with Barrack Obama when he visits India this coming week. Even if it is not broached, Bhopal will be a cloud over the president’s first visit to India. Four leftist political parties, activists and survivors of the gas leak will descend on the capital to picket Obama, and have called for a “a countrywide day of protest” on Nov. 8, for “justice for the victims of the Bhopal Gas accident” along with withdrawing troops from Afghanistan and ending funding to Israel. “We are going to Delhi to be heard at Obama’s visit,” said Sarangi.

But while issues of terrorism, strengthening bilateral ties and the usual mumbo-jumbo will be on the table when Obama visits, business will of course get a top billing.

“Obama is coming with the largest ever entourage of business representatives to get deals in India, but there has not been a single step to ensure that companies should abide by the law of the land or listen to the courts,” said Sarangi. He added that the United States-India Business Council (USIBC) will do what it can to prevent such laws being applied to US companies and for Anderson to not be extradited. “The USIBC has played a prominent role in the continued injustice of Bhopal,” he said.

A flier in Hindi from a demonstration during George W. Bush's visit to India, on the right is Warren Anderson

Getting Anderson into an Indian dock seems unlikely. He is 89 and retired, and with no Mossad-like agency to track him down like members of the SS guilty of Holocaust atrocities and crimes against humanity, Anderson can continue his pampered existence in the Hamptons. Moreover, it would set a bad precedent if the US handed him over. It would mean that could happen again, opening a Pandora’s Box for corporations and management wanted for breaking laws around the world. Moreover, as the financial pundits say, it would discourage US and foreign investment in India.

“No Hiroshima, No Bhopal, We Want to Live” is carved under a sculpture to the victims of the gas leak outside the UC factory. Let us hope not, but while pressure will continue to be put on the US government and Dow Chemical, the system is still operating to the mantra “business as usual” and India is keen to strengthen its ties with Washington. But the momentum is still there and the Bhopal tragedy refuses to go away.

Although there are very few positives in the aftermath of the Bhopal gas tragedy, lately there have been some developments. In June, a court sentenced seven former Union Carbide employees, all Indian, to two years in prison and fined 100,000 Rps ($2,100) each. The former Indian arm of Union Carbide was convicted of negligence and fined 500,000 Rps ($10,600). Some 26 years later, it is a case of very overdue justice, even if not severe enough, as activists rightly point out.

The authorities also decided to provide further compensation to those that lost a relative in the tragedy – although not to survivors – of 1 million Rps ($22,000). The issue now is whether people will get that amount, and what they are due.

Bring back the dead

Shamshad Begum lives in a one-room house down a small alleyway off Union Carbide Road, which flanks the MIC factory. When the gas escaped from the factory at five past midnight on December 2, 1984, Begum ran with her husband and two daughters, leaving her mother in law and young son behind as they weren’t able to move. “Bodies filled the roads. The gas was a blue colour, my throat felt bitter and we were all choking. I felt like I wasn’t going to survive, I was going to die, and I thought it better to die than breathe. My daughter’s eyes turned red, like a flame,” she said.

Her mother-in-law died that night, her son the next day. In the following years, she lost three children during pregnancy. A second son died in 1988, her eldest, married daughter is sick all the time, and her 15 year old daughter suffers from lung problems – yet she doesn’t want her to know – while her husband died three years ago from gas related side effects. “I’ve lost half of my family due to the disaster,” she said. “My husband got 25,000 Rps for the death of his mother. But in the end, when he was dying, he suffered a lot; what is 25,000 Rps?”

Without a husband or son to earn money, Begum struggles to survive on a widow’s pension of 150 Rps ($3.33) a month and renting out the next door room to migrant labourers for 400 Rps ($8.88) a month. Begum is hopeful that she will be given the 1 million Rps in compensation for her husband’s death and be entitled to a further million for the death of her mother in law so she can move away from Bhopal to live in “a clean and healthy place.” But Indian bureaucracy is not helping matters. “We submitted original death certificates and documents years ago, and now they want the originals again, but they have them, so there’s more paper work to do to get them back. They are delaying everything,” she said.

“I want to give a message, that corporations shouldn’t be allowed to operate that kill people and make them sleep forever,” said Begum. “I would tell them [UC/DC], give us the people back who died from our families, not compensation, give them back to us.”

Low income housing next to one of the toxic ponds, the disintegrating plastic visible in the foreground

A poisoned soil waste dump

For visitors and the press to enter the abandoned Union Carbide factory they need to get permission from the Deputy Collector (Gas Relief) in Bhopal, which typically takes 24 hours. This must be presented to the policemen at the entrance to the factory who then guide visitors around the site. Locals however do not need such paperwork, they can simply walk into the compound from the slums that surround the factory to scavenge for wood, graze their livestock or relax in the shade of the vegetation. The crumbling factory, offices and buildings aside, it is green and lush place, full of trees and tall grass. Chipmunks scurry about and birds twitter in the tree tops. It resembles a park in the middle of a city. But as a stencil on the outside wall of the factory states under a skull and cross bones, this is a “poisoned soil waste dump”.

One of the laboratories is totally open, the windows smashed and no locks on the doors, while bottles of chemicals are stacked up covered in cobwebs. A photojournalist last year moved one of the bottles for a shot of the label; he was later hospitalized for coming into contact with a dangerous chemical.

Cobweb covered bottles of chemicals at an abandoned lab in the MIC complex

The tank from which 40 metric tonnes of MIC gas escaped on that deadly night in December, 1984

The control room at the MIC factory. The sign says: Emergency Message I on Toxic Gas Emission.

Visitors are warned not to touch anything and immediately after the tour wash their clothes and footwear. There is plenty of toxic waste and dust around, and the steel structure of the factory is slowly disintegrating along with the vats and containers that held lethal chemicals.

At one end of the complex is a “serious contaminated zone,” which still reeks of chemicals. Only now is a wall being built to ostensibly keep people out, but there are plenty of gaps for locals to enter. And despite the wall, there are toxic ponds outside of the complex where people take livestock to drink, wash clothes and around which children play. The mud is also dug up to use as flooring for dwellings.

On the sides of the ponds, the black plastic lining used to contain the sludge is visible, UC having used a process of solar evaporation for the waste. In the dry season, the earth is covered in a thick white coating. This waste has entered the ground water and polluted the drinking water. Most water pumps have been turned off, but some remain and the government has been lax about getting piped clean drinking water to residents that live on what is a huge toxic dump.

One building inside the complex houses 350 metric tonnes of chemicals rotting away, locked but not sealed from the elements. What the impact is of storing these chemicals in the compound is not known. But the whole area, the vegetation included, is contaminated, according to research by Greenpeace. The site should be torn down and the waste safely disposed of, and not in the way the authorities did in the past when it transported 40 tonnes of waste to an incinerator in a nearby town without telling the residents. Not designating the area a contaminated zone is akin to the Ukrainian government letting people continue to live right beside the Chernobyl nuclear power plant.

Nearly 26 years after the disaster, there is still no justice and no environmental clean up, while victims continue to die from exposure and children continue to suffer. Bhopal is an issue that won’t go away until justice is finally achieved.

ALL PHOTOGRAPHS BY PAUL COCHRANE

The Delhi belly games

By Paul Cochrane in New Delhi - Executive magazine

India is left red-faced after the Commonwealth Games

Hosting a global sporting event can do wonders for a country's image, proving it's a sophisticated, advanced nation able to meet demanding international standards and put on a good show. Think of China hosting the 2008 Beijing Olympics or the World Cup in South Africa this year.

But if the organizers are floundering just weeks before an event starts and negative publicity starts kicking in, a country's reputation can be dragged through the gutter. India’s mismanagement of the Commonwealth Games (CWG) in New Delhi last month is such a case.

Qatar, which is bidding for the 2020 Olympics and the 2022 World Cup, would do well to learn from India’s mistakes if it is not to fall into the same trap.

Whether a country likes it or not, dirty laundry will be aired as every minute detail of the event falls under the microscope of the global media.

India spent some $9 billion on the CWG. Stories abound in the press about corruption, the working conditions of the 100,000 construction workers, the estimated 1,000 work-related deaths, and the 400,000 Indians that had their homes demolished to make space for the venues.

Some of India's largest construction companies have also had their names tarnished for flouting numerous work-related laws, among them the United Arab Emirates-India joint venture Emaar MGF. At the end of October India ordered the confiscation of the companies’ $41.3 million bank guarantee and brought legal action after “irregularities” and deficiencies were found in the CWG village.

Many Indians are embarrassed by the way the CWG has been handled, and rightfully so. A country cannot just paste over the cracks and hope no one notices. Ironically, India knows this only too well as it struggles to promote itself as an attractive investment and tourist destination. After all, India has spent millions of dollars on the very professionally done “Incredible India” ad campaign, but your potential tourist is invariably put off by the stereotype image of poverty and bad hygiene. It is perhaps no surprise then that India only receives a paltry 5 million foreign tourists a year; Egypt by comparison gets 13 million.

Indeed, security and hygiene were major concerns for CWG athletes, with several stars pulling out early and more threatening to do so in the week up to the event with facilities unfinished, a footbridge collapsing and a cobra found in an athlete’s room.

Things did not go much better once the event started. On the second day there was a bomb scare hoax and then the infamous Delhi belly started setting in, particularly among swimmers, attributed to pools' dubious water quality. English sprinter Mark Lewis-Francis chose not to bite on his (silver) medal on the podium, as is customary. “I don't really want to bite it because I don't want to get Delhi belly,” he told reporters.

India has not exactly helped itself either when trying to justify the sub-standard facilities at the Athletes’ Village, with an off-the-cuff remark by Organizing Committee General Secretary Lalit Bhanot causing much mirth: “Everyone has a different standard of hygiene. The rooms of the Games Village may be clean according to you and me, but they [the West] have some different standard of cleanliness.”

If Qatar gets either bid for the world's biggest sporting events, it will be a colossal undertaking for Doha. Qatar certainly has oodles of cash to play with and could pull off a great show if the planning is right. Despite early doubts, the Gulf state pulled off the Doha Asian Games in 2006.

The Asian Games were very much a trial run for something bigger, and Qatar has embarked on an ambitious marketing campaign to convince the world it has what it takes. The Middle East has never hosted an event of such global proportions, which lends weight to Qatar’s bid. Where else in the region could pull this off, particularly taking into account security concerns? Only the UAE springs to mind; Bahrain has enough on its plate with Formula 1. If it learns from India’s mistakes, Qatar may just have a sporting chance.

Interview about Khat with Paul Cochrane

All Treatment

http://www.alltreatment.com/general-drug-rehab-information/interview-about-khat-with-paul-cochrane 



The following interview about Khat with Paul Cochrane discusses various issues surrounding Khat consumption and culture. Paul Cochrane is a journalist based in Beirut, Lebanon, covering the Middle East and the Horn of Africa. Paul encountered and experienced Khat cultures first-hand through his travel in the Middle East. Paul's opinion and testimony do not endorse any particular treatment center.
Thank you for allowing me to interview you today. Can tell me a little bit about yourself? How do you first come to learn of Khat?

I first came across khat when reading Yemen: Travels in Dictionary Land by Tim Mackintosh-Smith. An avid khat chewer, Mackintosh-Smith brings up khat and its popularity in Yemen. I further encountered khat when studying for my Masters in Middle Eastern Studies at the American University of Beirut. Khat is a significant problem in Yemen, having a major impact on the economy, with an estimated 50% of Yemenis income going to acquire khat. Yemen is exceedingly poor, the poorest country in the Middle East and North Africa, so khat addiction clearly has an impact on spending, on children, nutrition and so on. Furthermore, it is putting immense stress on water resources. Khat is very water intensive to cultivate, and Yemen has water shortages, while cultivating khat means that other crops are not grown.

2. How and at what point during the course of your traveling did you first come to encounter Khat?

I first encountered and tried khat in Addis Ababa, Ethiopia in 2008. I had met some young Ethiopians at a coffee shop, and they invited me to a small room above the cafe to chew khat. I was interested to do so as I wanted to write an article about khat in Ethiopia (see http://backinbeirut.blogspot.com/2008/05/high-in-harar-on-khat.html). During my travels there, I went to Harar, a major khat centre 10 hours drive from the capital, where I went to khat markets, visited khat farms, met dealers, distributors and rode delivery trucks.

3. As an organic drug, how is it generally produced and consumed?
Khat is a unique drug in that it has to be consumed within 24 hrs. It consists of cathinone and cathine, and it is the cathinone that produces stimulatory effects, 10 times more potent than cathine. As khat only has its effect within that time frame, it is a highly organized process from picking to sorting to delivering it in time to users - who want it as fresh as it can be. Apparently a pharmaceutical company in Kenya is working on trying to turn khat into a pill that would essentially freeze the khat's stimulatory properties. If this was developed, it would revolutionize the khat trade.
Khat is grown in fields, needing plenty of water, and the bushes grow pretty high, above head height. It is harvested very early in the morning, taken to a market where it is sorted - usually by women - into bundles according to its quality. Good khat is very expensive. It is then transported to markets in towns for people to buy, or placed on Isuzi flat bed trucks that drive at breakneck speed - hence the nickname "Al Qaeda trucks," as in the suicidal recklessness of the drivers - to airports or ports where it is then transported to neighbouring countries: Djibouti, Yemen, Uganda in particular, while also to Europe where it is not illegal and there is a sizeable East Africa/Yemeni expatriate populace, such as in London. In terms of consumption, it is a very sociable practice. Around midday, men - although women do take it - gather together, in rooms, on the street, in houses etc. and sit around plucking the leaves, a few millimetres under the stem. The leaves are then rolled into a ball in the hand, then put under the cheek and chewed. In Ethiopia, the khat is swallowed. In Yemen they spit it out. As it is quite bitter, people take it with peanuts and a soft drink. As khat sets in, after about 20 minutes, you get what is called in Amharic (the Ethiopian language) "merkhana" - high - and then you start talking avidly, music gets more intense. After a few hours you start getting introspective, which is when the group usually breaks up and people go their separate ways. It is a stimulant though, so some take it to study, read, write. It is hard to get to sleep though, so some people drink alcohol or smoke hashish to put them to sleep.

4. Khat is popular amongst many Middle Eastern and East African countries such as Ethiopia, and Yemen, from your personal traveling experience can you tell us about the general Ethiopian perception of Khat?
Khat, or chat as they call it in Ethiopia, is very widely consumed and has been done so for hundreds of years. Less though in the capital where it is not grown. It is popular with people from the north, and around Harar and Dire Dawar, in the east near the Somali border. In these areas there is no religious disapproval, certainly in Harar which is a very Muslim town - I saw a imam in a mosque sprawled on the carpet happily chewing away. It is even taken in the local prison. But in the capital I found some people disapproved, and the more religious Christians very much against it. Politicians also take it and there are stories of lavish khat chewing sessions among the elite.

5. Can you tell us of one memorable experience or encounter with Khat and/or Khat users?
I had lots of curious experiences with khat and khat users, from chewing on buses, in bars, on the street, to lying on the floor in a hotel lobby in the mid-afternoon with a group of men all indulging in khat, to chewing fresh khat with a farmer in his field - it is very addictive, and people chew it all the time. The strangest though was going with a wealthy Ethiopian friend to his house in the capital. Inside the compound they had a private mosque, with a sheikh reciting verses from the Quran. My friend, who works in Saudi Arabia, had told me not to talk about women or anything haram (sinful), yet here we were in a mosque drinking Ethiopian coffee and chewing khat amid a lot of frankincense burning away. Then a woman came up, and told my friend how a sheikh had cured her of breast cancer, then showing us the result; then a dwarf - a servant - came in bringing refreshments. It was all quite surreal, with or without chewing khat!

6. As a journalist, can you tell us about some of your observations concerning the noticeable perks and (social as well as personal) downsides of chewing Khat? Based on your opinion and experience, how is Khat different from other recreational drugs and products that are out there in the U.S. such as alcohol, coffee, marijuana, and opiates?
First, the pros. It is a stimulant, in fact used before coffee (which was discovered in Ethiopia) and similar to cocoa leaves. Students often take it to help them concentrate and study for long periods. It certainly had that affect on me, as I slept very little during my trip there, and on several occasions I didn't notice that I was reading for a straight three odd hours, only realizing when I looked at the clock and it was 2am. Athletes also take it, and you do walk faster during the initial few hours. Khat is a very sociable activity, triggering debate and making people very talkative.
On the downsides, it is very addictive. People spend a good amount of time everyday getting buying and then taking their fix. I noticed how addictive it was, as by midday the day after chewing khat, I could taste it inside my cheek, I wanted it. Curiously, as you take it into your digestive system in Ethiopia, I found my skin, certainly my arm pits, smelt of khat and my bodily deposits were green.
But while the sociable side is positive in many respects, the introspection is less so, as it turns people inward - which could be used constructively, like reading or writing, but in most cases is not. And this is the time when men would usually return home to their family.
Khat is ruining many people's lives and families because so much income goes towards khat, easily 50% or more if you are poor - so less money for food, clothes, education etc. and takes up a good portion of a person's day, with work usually confined to before lunch. Good khat is very expensive, at $10 to even $50 for a bushel. In Ethiopia to get good khat where they produce it costs around $6, poorer quality a few dollars. But most people in Ethiopia only earn a few dollars a day. Another downside is that people eat less, as the chewing makes the body feel it is eating, and as a stimulant it represses the appetite, so people can be undernourished as a result, able to go for long periods of time without eating. Addiction, like addiction to all drugs and alcohol, can also result in losing one's job, house etc. In Harar I saw many men living on the street that were khat users. One man had lost his teeth, so was using a mortar and pestel to crush the khat as he couldn't chew it. I did not hear of Ethiopians turning to crime though to fund their habit.
As I said earlier, khat cultivation means that other crops are not grown as it is much more lucrative for farmers to grow khat. It is water intensive, so it has negative effects on the environment, especially as this part of the world often lacks abundant rainfall (although less the case in northern Ethiopia). In Yemen this is a very pressing issue.
Ethiopians told me khat was not harmful, with users praising it, and did not result in sexual problems such as impotency, organ failure or memory loss, although medical research has shown otherwise, particularly in long term users. However, not enough medical research has been done on the medium to long term effects of khat usage.

Go India, Go! A Referendum for Kashmir Is Needed

by Paul Cochrane in New Delhi, October 15 - dissidentvoice.org

I was sitting with some Kashmiri friends in their apartment in the New Delhi area of Lajpat Nagar, just a stone’s throw away from the Nehru Stadium, one of the sports complexes India has shelled out $9 billion to host the Commonwealth Games (CWG). The CWG, which brings together the 71 countries and territories of the former British Empire, was about to launch, and on a national TV channel the slogan was “Go India Go.”

Sprawled out on Kashmiri carpets, we were discussing the grave situation in Kashmir over the past four months. Since June 11, when the Indian army shot at unarmed demonstrators, over 100 Kashmiris have been killed, including women and children, and the Kashmir Valley has been under total curfew. Half a million Indian soldiers carry out patrols, raise check points and bunkers, ID anyone out and about, and shoot to kill without any hindrance or worry about being hauled up in front of a military tribunal – the diabolical Armed Forces Special Powers Act (AFSPA) has seen to that, letting soldiers, quite literally, get away with murder.

The conversation turned to how different this summer had been from the violence, protests and strikes of previous years. “It’s the worst it’s been in 20 years,” said Hamid, who is in his early 50s. “People are totally fed up with being stuck inside, the schools closed, and food supplies running out. Kashmiris have had enough.”

In 1989, a popular rebellion – a Kashmiri intifada – against Indian misrule began, further stoked by militant Islamic groups funded and supported by Pakistan’s notorious Inter-Services Intelligence Directorate (ISI) in the wake of the end of the Soviet occupation of Afghanistan, sending scores of Afghan veterans and Azad Kashmiris across the Line of Control (LoC) that separates Indian Jammu and Kashmir, and the Pakistani Azad (free) Kashmir (China has the remaining 20%, Aksai Chin, claimed by India). This proxy war between Pakistan and India, that remnant of Partition in 1947, put the Kashmiri populace in the middle. Intifada after intifada has occurred since 1989 and the Indian army has cracked down hard, notably in 2001, when over 1,000 civilians were killed. Over 45,000 Kashmiris have been killed over that 20 year period. Last year 72 civilians died at the hands of the Indian armed forces.

One major difference this year from former crises, when feelings simmered to a boiling point and Kashmiris took to the streets, is that this time there has been minimal militancy – apart from of the stone throwing kind and rioting. Sympathy with the militants has waned – particularly for Pakistani-backed groups – but anger with New Delhi’s political dillydallying and iron fist policy in tackling the “Kashmir issue” has spiked. The youth are not interested anymore in siding with New Delhi or Islamabad. The youth want independence, or, at worst, autonomy from India. The slogan at the huge protests that filled the streets of the summer capital, Srinagar, was “Go India Go,” particularly by the Quit Kashmir Movement and All Parties Hurriyat Conference. As we talked of this, the slogan flashed up on Times News channel as part of its CWG coverage. We all spotted the irony and started laughing: “GO India, GO!”

My friends are like many Kashmiris, forced to leave the valley for New Delhi some 1,000 kilometers away or even further afield in search of employment, selling carpets and other Kashmiri handicrafts, that major money earner that disappeared as the tourists stayed away. Indeed, the situation has been so precarious over the past decade that numerous guidebooks on India don’t even have a section on Kashmir anymore. It was a place once called the Switzerland of Asia due to its mountains, rivers and forests, giving the inspiration to that great Led Zeppelin song, Kashmir, in the 1970s when rock stars rented palatial boats on Dal Lake in Srinagar and Bollywood filmed dance numbers on the Alpine slopes. Now it is paradise lost.

So instead of investing billions of dollars on improving the infrastructure and livelihood of Kashmiris, or for the other 830 million Indians that live on less than 20 Rupees a day ($0.45), Delhi spent – and officials pocketed – $9 billion on the CWG. An event that – other than negative coverage by the international media in the lead up when a bridge collapsed, a cobra was found in an athlete’s room and so on – has garnered minimal attention worldwide. The Indians themselves seem far more focused on watching cricket matches.

While people starve, the healthcare system privatized, and people forced off their land for new real estate projects, mines and special economic zones, more is being spent on India’s military industrial complex. And Kashmiris, along with other “insurgents”, the Maoists, the Naxalites, keep getting killed by trigger happy soldiers with a licence to kill.¹

In terms of global media coverage, Kashmir is a largely unheard of conflict, especially when placed next to neighbouring Pakistan and Afghanistan. The bleeding wound that is Kashmir is very much tied into Bush’s and now Obama’s war on Afghanistan, which is spilling over into Pakistan.

Kashmir is part of a regional game, a victim of its geography and religious make up – a mix of Sunni and Shia, the one million Hindu Pandits that lived there forced out over the years due to religious extremism and the perception that the Pandits were overwhelming with the predominantly Hindu national government rather than with Kashmir per se (a controversial government paper has shown that Muslims are under-represented politically and socially disadvantaged in India).

Kashmir has played directly into the ISI’s hands and to countries such as Saudi Arabia keen to export its brand of Islam (Kashmir had a large Sufi following while its Buddhist past also played its part in Kashmiri Islam). The religious dimension is the proverbial spanner in the works to a solution, the hatred so deeply ingrained over the past 63 years between the Islamic Republic of Pakistan and Hindu majority India. Pakistan is against an independent Kashmir that unites both sides, losing as it would its border and access to China, not to mention a major dent to its pride and the all powerful military that forms the backbone of the Pakistani nation. India’s Hindu populace – which has become far more radical and militant over the past 20 years – would equally be against losing a major part of the Northern provinces, especially to Muslim rule.

Srinagar during curfew

While international observers are calling on the LoC to become an international border, joint institutions to be developed and for the United States to partake in ‘quiet diplomacy’ and utilize its relations with Islamabad and growing alliance – particularly militarily and on nuclear power – with New Delhi, a far more radical solution is called for. One fitting with what India champions itself as, “the world’s largest democracy” – a referendum on what the Kashmiri people want, not Delhi, its puppets or the Kashmiri dynasties that have ruled the valley: independence or autonomy? This is in line with a 1948 UN resolution which called for a plebiscite to determine the wishes of the people of Jammu and Kashmir, but Delhi has repeatedly rejected the idea. In the meantime, the extrajudicial killings have to stop, and the AFSPA totally abolished.

As for Pakistan, that Frankenstein country propped up financially by the unlikely trio of China, Saudi Arabia and the US, it must end its 30 year funding of Kashmir-driven militant groups. Indeed, former Pakistani President Pervez Musharraf admitted earlier this month in London, that the ISI – before his rule, he made clear to point out – set up such groups in the 1980s and early 1990s to attack India. Evidence has also surfaced that the Kashmir-linked, ISI funded militant group Lashkar-e-Toiba was behind the November, 2008 attacks on Mumbai. Pakistan’s support for such groups has fuelled Islamic resistance in the Valley and provides a pretext for the Indian army to shoot unarmed protestors, labelling them terrorists and eyeing all Kashmiris as potential militants. Such an attitude was starkly conveyed to me a few years ago when trekking up in Gulmarg in the Kashmir Valley. I was talking to an Indian soldier, alone at his post overlooking the small town, and he pointed down and said: “All terrorists.”

It is time for the Kashmiris to decide if they want India to stay or to go. The same applies for Azad Kashmir. The Kashmiris should no longer be stuck between the Indian hammer and the Pakistani anvil.

-----

For an excellent analysis on the state of India’s ‘democracy’ and corporate takeover see Arundhati Roy’s The Trickledown Revolution, Outlook, 20 September, 2010.

Photographs courtesy of Sarwar Bazaz

Dark days for the Gulf

Commentary - Executive magazine

It’s been a long hot summer. Temperatures hit all-time highs and Ramadan demand put power grids under serious strain across the Middle East. Few countries were spared as power outages hit Kuwait, Saudi Arabia, Bahrain, Sharjah, Yemen, Iraq, Lebanon, Syria and Egypt. But in those places suffering from power cuts, people seemed largely unaware of the rest of the region's electricity woes.

While Lebanese carried out their daily litany of complaints about blackouts, damning and blasting the government, many were surprised when I told them that Sharjah had such an electricity deficiency that residents were sleeping in air conditioned cars to avoid baking in concrete apartment blocks. It was so hot in the emirate that hospitals were inundated with cases of heat stroke and a construction worker died from heat exhaustion.

In Damascus, residents hot under the collar due to a lack of air conditioning knew of Lebanon's long-term electricity conundrum, but were unaware that Saudi Arabia and Kuwait — those rich Gulf countries where many Syrians seek work — were also having blackouts. With an 8 percent annual deficit, the situation was so bad in Saudi Arabia that school children were passing out while taking exams and airplanes were grounded. Kuwait's network hit 99 percent of capacity.

Power shortages in the region's poorer, more corrupt and war ravaged countries — Iraq, Yemen, Lebanon — are daily occurrences and are not unexpected, but why are they happening in the energy-rich Gulf?

The problem is that peak demand occurs every summer at the same time across the region. Populations growing in size and affluence means more air-conditioners — and industrial activity is increasing. All of this, coupled with exceedingly low electricity tariffs and an incredible lack of forward-planning has resulted in a major shortage of megawatts (MW). And without the modern day wonder of air conditioning, the region, particularly the Gulf, is not a place conducive to working or living as the mercury rises.

Thomas Edison, one of the inventors of the light bulb, once said: “I shall make electricity so cheap that only the rich can afford to burn candles.” In much of the Middle East, Edison's saying has been translated as: “We shall make electricity so cheap everyone uses too much of it, and only the rich can afford to run generators.” Lebanon is a case in point, with power “provider” Electricité du Liban to generate $800 million in bills this year, while the Lebanese will spend $1.76 billion on running generators.

But there is hope that such electricity shortages will be abated, with the cuts prompting such furor among the people that governments have been forced to invest in more power production. The Gulf countries are to spend an estimated $200 billion on power plants, Lebanon some $4.7 billion, Iraq up to $10 billion. Everywhere else there are plans for upgrades and new plants. Renewable energy and nuclear power are also in the pipeline, as is the $560 billion Desertec solar power project in North Africa. And if other solar power initiatives get underway in the rest of the Middle East and North Africa, the region will be able to produce up to 470,000 MW of sustainable electricity by 2050, according to research by the German Aerospace Center.

While such initiatives are laudable, practical solutions to the current shortages need to be implemented. It takes around three years to build a conventional power plant, and once output is increased, there is usually a corresponding rise in demand as people use more electricity. It's a vicious cycle.

Before these projects get underway, thinking about how to lower overall consumption across the region should be part of every national power plan. Can we really call a ski slope in a mall in the desert an efficient use of electricity? Do empty office blocks have to be lit up like Christmas trees in the middle of the night? And when the whole of Lebanon lacks electricity, did the Maronite Church have to erect the world’s largest illuminated cross at Qanat Bekish in Mount Lebanon, a 240 foot high construction lit by a staggering 1,800 spotlights?

If temperatures are as high again next year and such wanton waste of electricity continues, power cuts are likely to be worse. In the meantime, higher tariffs to encourage people to use power more wisely would help to ensure more people are sleeping in their houses rather than their cars this time next year.

PAUL COCHRANE is the Middle East correspondent for International News Services

Turkey's clothing and textile sector rebounds

By Paul Cochrane for just-style.com

Turkey's clothing and textile sector has rebounded this year on the back of strong sales to Europe and emerging markets, with clothing exports up 11% to US$9.5bn as of August 2010, and textile exports reaching US$4.1bn, up 23% on 2009.

"Last year was a disastrous year, with clothing exports down 23%. This year we're recovering, exports are up, but 17% below 2008 and 10% below 2007," said Mehmet Kumbaraci, director general of the Turkish Clothing Manufacturers Association (TGSD).

Current export figures suggest the TGSD's forecasts for 2010 were relatively solid, with ready-to-wear exports projected at around US$14bn and textile exports at US$6bn. Their predictions, however, had looked rather rose-tinted in the spring.

"We were rather pessimistic at the beginning of the year, but textile exports in August were US$480m, up 10% on the previous month, and US$1.1bn in clothing exports, up 6% on July. I expect for the end of the year exports will be more than US$14bn for clothing, and about US$6bn for textiles.

"All plants are fully occupied, including high quality orders from suppliers in Pakistan, Bangladesh and China," said Kumbaraci. Demand ranges across the industry for all types of garments, he added, with no notably higher demand for any specific items.

Turkey was the only 'top 20' exporter to the European Union (EU) to record gains in the first five months of 2010, up 18.5% in Euro earnings between January and May. The other 19 main exporting countries - including China and India - have seen exports fall, stressed Zafer Çaglayan, Turkey's state minister for foreign commerce, at the launch of Istanbul Fashion Week 2010 in late August.

"Fashion-fast-flexible"

Despite overall textile and garment purchases by the EU falling this year, Turkish manufacturers have increased exports due to what Kumbaraci called the sector's principle of "fashion-fast-flexible."

Lead times have gradually dropped from two months to under four weeks, while the sector's highly skilled workforce, technology and design capabilities have retained Turkey's value-added edge with retailers who are not keen on having too high an inventory in the current economic climate.

This was reflected, for example, in Hugo Boss's decision to enlarge its men's wear factory in Izmir this year, while German men's wear brand Roy Robson has opened a men's wear factory nearby, said Kumbaraci.

"Since we have demand we are urging our members, which are congested with expected and un-expected demand from all over the EU, to invest in more technology and nano-technology, as well as make their own designs," he said.

"We are also encouraging young designers to go to Europe, and for manufacturers to hire young stylish designers that know about the European and American markets."

While the EU accounts for 80% of Turkey's exports, according to the TGSD, domestic clothing sales are also up this year - having fallen 15% in 2009 - and exports to emerging markets are faring well, particularly for Turkish-made brands in Tunisia, Iran, Iraq, Syria, Azerbaijan and China.

"The Chinese are now wearing more, so local demand is going up there and people want to have goods from abroad. 'Made in Turkey' products are in high demand and we are urging retail chains to open in China, and some are going," said Kumbaraci.

US recovery slow

Exports to the United States, however, have not recovered because import has primarily been for lower-cost garments and textiles than offered by Turkey. Exports are currently valued at US$300m a year compared to US$1.5bn a few years ago.

The TGSD is urging the government to push for Qualified Industrial Zones (QIZs) to be established in Turkey which would exempt products from US import taxes, as is the case for QIZs in Egypt and Jordan.

But while the sector is buoyant, it is facing global problems such as the record high cotton prices, and the TGSD is pushing the government to be more flexible with the minimum wage in poorer parts of Turkey to enable the sector to better compete internationally price-wise.

The TGMA's long-term goal is for Turkey to account for 5% of global clothing exports - as in 2005 - at some US$22.5bn to US$25.3bn by 2014, and US$60bn by 2023.

"Next year looks brighter, yet I am not sure if the crisis is 100% over everywhere. We have to be optimistic on one hand and cautious on the other," said Kumbaraci.

Sushi: Lebanon's traditional food?

Royal Wings, the inflight magazine of Royal Jordanian Airlines

By Paul Cochrane in Beirut

There is a growing craze for raw fish in Beirut. Not for the catch of the day fresh from the Mediterranean Sea, but for tuna from Japan and salmon from Scotland. The rising popularity of sushi, Japanese cuisine's most famous export, has taken a firm hold on Beirut's culinary scene, with the number of sushi restaurants going from two a decade ago to around 20 today.

“It's a new trend. Lebanese are curious and going for healthier food. Before sushi was only available in Beirut, but now sushi restaurants are opening outside of the capital,” said Avedis Bonyakrabian, manager of Yabani, one of Beirut's oldest sushi restaurants.

Sushi, patties of vinegared rice topped with varieties of raw fish, and sashimi, slices of raw fish eaten with soy sauce or wasabi (green horseradish), have become so popular that t-shirts are on sale with the slogan “ Sushi: Lebanese traditional food.”

It did not take long for sushi to be culinary accepted following the opening of the country's first sushi restaurant, Le Sushi Bar in 1997. “Raw fish is not unusual in Lebanon like in some places, as people eat raw meat, such as kebbe nayye,” said Charbel Nader, manager of Le Sushi Bar.

The extensive variety of sushi and its offshoots – Yabani and Sushi Bar offer over 60 types of sushi, sashimi and maki – gives diners such a selection it is impossible to try everything at one sitting.

With growing competition as more sushi restaurants open and the market fragments into price segments – ranging from $60 a head to as low as $20 – the higher end establishments are offering a wider range of Japanese cuisine, such as teppanyaki (grilled steak), noodles and gyoza (dumplings).

“In Lebanon the stereotype is that Japanese food is sushi and sashimi, but now more people are familiar with other Japanese foods,” said Bonyakrabian.

With the fish distributed by just two main dealers in Lebanon, what differentiates restaurants is the quality of the cuts. “The attention to detail makes all the difference, in how you slice say a salmon,” said Nader. “And every restaurant is different from the other – it's not like hummus.”

The majority of ingredients are imported from Japan, from the sushi rice to seaweed with the aim of offering genuine Japanese cuisine.

While there has been a degree of “Californication” in the sushi menu to cater to local tastes, it has not gone as far as in the United States where sushi is made sweeter and even cream cheese has become an ingredient. But one core ingredient of Japanese cuisine that is not used is the alcohol sake.

“The Japanese cook nearly everything in sake, but we have to consider people's beliefs here in the Middle East, so warn customers in advance if we do,” said Nader.

Sushi's popularity is set to continue. “When you see 10 year olds asking their parents for sushi, you know the market will become bigger than now,” said Bonyakrabian.

If the craze for sushi develops even further, Nader joked that in the future, “maybe we will eat [Lebanese salad] tabbouleh with chopsticks.”

Photos of Yabani by George Haddad

Immortality - the upcoming Marc Quinn exhibit

Aishti magazine

In the 1990s an art movement developed in Britain that was fresh, unpretentious and accessible to all, a “democratization” of art spearheaded by the Young British Artists, or YBAs. This avant-garde pushed boundaries and the art market, gaining international acclaim. But the YBAs' work has been conspicuously absent from the Middle East. There have been no exhibitions on the work of the likes of Damien Hirst, Tracy Emin or Marc Quinn.

Curators Francesca Amfitheatrof and Charles-Henri Lobkowicz came to Beirut in June to scout out a location to exhibit contemporary British art, one YBA at a time. “We are open to the idea of bringing an artist every six months, and for it to be unexpected; not a 9-11pm show, then goodbye. But a really alive exhibit, with crazy parties and musicians,” said Amfitheatrof, who has been the curator for other YBA leaders like Hirst and Emin, as well as Japanese artist Yayoi Kusama.
The first artist to come to Beirut will be Marc Quinn, best known internationally for his painted bronze and gold sculptures of model Kate Moss in various yoga poses.

“We always wanted to bring something here to Beirut, to show contemporary art and to start with one of the greatest English artists,” said Lobkowicz. “We will bring around 15 pieces, of new work, his Flower Paintings and sculptures. I also want the gold Kate Moss, but the work has not been decided upon yet.”

One of Britain's most successful artists, Quinn's work has endured the financial turmoil, going up in value by some 20 percent. Of the three solid gold Kate Moss sculptures produced, two have been sold for $2 million a piece, while the third could be on sale in Beirut in late September. The sculptures of Moss, described by Quinn as a “mirror of ourselves, a knotted Venus of our age,” are now extremely limited, with the curator duo having the last bronze sculpture available of the model in a yoga position with her legs behind her head.

“Marc is the right artist to show, he is cool, sexy, and fun. Not ultra conceptual, dry or abstract, his work is a bit visceral, that hit's you in the tummy. We want the show to be happy and a little sexy, while being overall rather sensual,” said Amfitheatrof.

Quinn's flower paintings are bright, luscious still-life depictions of hand-picked flowers frozen in ice to capture a perfect bloom's temporal beauty, a romanticism in stopping time. Hyper-realistic, the paintings exude joy. “Everyone that owns a flower painting is happy, it gives them energy, and we want to bring that here,” added Amfitheatrof.

Quinn's other artistic expression in stopping time are his large, round iris canvases that portray the extraordinary colors of the human eye, the only part of the body that doesn't age and the window to the soul. Quinn will bring with him to Beirut a special NASA-designed camera to capture the irises of the exhibition's first 10 customers, which will then be turned into paintings.

“All Quinn's work is about immortality; it is this perfect, idealist world,” said Lobkowicz.

Lebanon's agricultural meltdown

Executive magazine

Mohamad Ajami's 65 bee hives overlook the Litani River Valley, with Jebel el Sheikh looming in the distance and to their immediate right, one of the south's historic landmarks, Beaufort Castle. Last year, Ajami had a bumper honey harvest, generating 650 kilos. He was optimistic that this year would be even better, purchasing extra hives and equipment in anticipation of producing one ton of honey. At $25 for a 900 gram jar, Ajami should have netted over $25,000.

But three months ago he started realizing all was not well. The winds had been continuously blowing from the east, dry, desert winds instead of the westerly winds that provide the right moisture and dew for flora to thrive, and for the bees to pollinate and produce nectar. Ajami also noticed that the bees were not multiplying, meaning he could not artificially swarm the bees and build up the number of colonies to have more hives.

“That was when I realized something wasn't right,” he said. “And while the summer flowers did come there were no forager bees in the hives. Something did not encourage them to generate honey, something – beyond my understanding – that is beyond normal events.”

When it came to harvesting, Ajami's suspicions about a poor harvest were worse than he thought.

“I only generated 50 kilos. It was not a harvest, it is solely for family consumption this year,” he said.

Ajami's experience is not a solitary one. Beekeepers throughout Lebanon have had a bad season, with rough estimates – in lieu of official statistics - of a 50 percent decline in production from an annual average of 200 tons. For Wadih Yazbek, a beekeeper and equipment distributor in Beirut, hardware sales are down 60 to 70 percent, indicative of the overall decline in the honey sector. “Beekeepers aren't needing the extra hives and secondly, with not a lot of honey, keepers are not keen on purchasing new extractors or filters,” said Yazbek.

It is not just honey production that has been affected by the unusual weather patterns Lebanon has witnessed over the past year, of abnormal precipitation in the winter and spring – on average the same quantity but occurring over half the number of days - and a heat wave smack bang in prime harvesting time.

Leaner times

Wheat production is down from 60,000 tons in 2009 to an estimated 35,000 tons this year, according to the Syndicate of Agrifood Traders. The United States Department of Agriculture's Foreign Africulture Service estimates, on the other hand, that Lebanon will produce 100,000 tons of wheat this year, a 23 percent drop from 130,000 tons grown in 2009. Green leafed vegetables have been frazzled by the sun, and fruits are ripening earlier than usual.

“We've a lot of problems this year, particularly with grapes, olives, vegetables, apples, and potatoes,” said Elia Choueiri, head of department of plant protection at the Agriculture Ministry's Lebanese Agricultural Research Institute (LARI) in Tal Amara Station in the Bekaa valley.

In some areas, the olive harvest is down 50 percent, in other regions 30 percent, particularly in areas where olives trees were not irrigated or had supplemental irrigation. At two vineyards in the Bekaa, around 70 percent of the grapes were lost while vineyards at higher elevations have been affected, particularly white grapes.

“The heat wave had an impact on the physiological status of the vine: a rapid increase of alcohol content because of the increased sugar content in grapes over a very short period,” said Carlos Adem, president of the Syndicate of Wines and Spirits. “In general, the year 2010 will not be one of the great vintages, like 2003 for example.”

In the north, trees have brought forth fruit but not enough leaves due to it not getting cold enough over the winter. Japanese plums are down 40 percent. Forest fires have also wrought damage.

“Each plant has a life cycle, but are flowering before time, so the life-cycle is shorter. It's because of climatic change,” said Roula Faris, Middle East representative of the Research Institute of Organic Agriculture (FiBL). “Leafed vegetables and herbs have flowered early due to the temperature, and they are unmarketable.”

While the Bekaa has had temperatures this summer of up to 45 degrees, it is the country's mountainous regions – where a significant amount of produce is grown, whether fruit trees or in greenhouses – that have not been as cool as normal.

“For the first time in Lebanon, even the mountains are hotter than the coast,” added Faris.

On top of all this, phytoplasma diseases have affected stone fruits such as peaches and almonds, killing over 100,000 trees within three years. “This year we noted a new diffusion because of an insect vector. We have tested over 100 insects to find the pathogen, but don't know what kind of insect is spreading the disease,” said Choueiri. “Also, due to the hot weather, the activity of these insects is higher, and we've seen large infections of peach trees in the south and the Bekaa. The diffusion is getting higher year after year.” This year, LARI noted that a further 40,000 trees in the south have been affected by the phytoplasma which, curiously, is only affecting Lebanon and Iran in the region.

Give them bread

The extent of losses in the agricultural sector will not be fully known until harvesting is finished and the data collated. While early indications imply it has been a bad year, it has not been a total disaster, with some regions affected far more than others.

Furthermore, Lebanon has not experienced the drought that neighboring Syria has gone through over the past five years, which has hit agricultural output hard and affected the livelihoods of over one million people. But the reduced yields have come at a time of lower agricultural yields globally, particularly in fire-ravaged Russia, which has driven up global wheat prices, and the disastrous flooding in Pakistan, which has reduced rice cultivation.

Food prices are on an upward curve and Lebanon will be affected, being food import dependent to the tune of some 70 percent of total food consumption, according to the United Nations' Food and Agricultural Organization (FAO). Indeed, with wheat production in Lebanon down 42 percent, the government banned exports at the beginning of August, preventing a ship being loaded with 4,000 tons at the Beirut port from setting sail.

As Lebanon imports some 400,000 tons of wheat per year, the government has had to go to the international markets to purchase an immediate 50,000 tons, whether for strategic reserves or to regulate domestic wheat and flour prices.

“With wheat prices at today's level, around $320 for a ton, flour should be around $450 per ton or more while the ceiling for bread prices was set [by the government] at a maximum of $320 for a ton of bread,” said Arslan Sinno of Dora Flour Mills and president of the the Syndicate of Agrifood Traders. “Someone must pay the difference, certainly not the millers nor the bakers, so either the consumer by liberalizing the price of bread - which may increase the pack price from LL 1500 ($1) to maybe LL1800 ($1.20) or LL2000 ($1.33) - or the state by subsidizing the wheat by about $200 per ton.”

If the government does up the wheat subsidy it will come at a heavy cost to the state's coffers. The alternative however is higher costs for the Lebanese populace and the chance of rioting, as happened in Beirut in January 2008, when rumors spread that bread prices were to spike.

The new agricultural plan

The agricultural sector as a whole in Lebanon is under invested, which has only compounded the losses due to the topsy-turvy weather this year. According to the Lebanese Farmers Syndicate, agriculture generated some $1.5 billion in gross revenues in 2009, but could generate $3.5 billion if there was sufficient infrastructure investment. Employing 20 to 25 percent of the workforce, according to research at the American University of Beirut, some 50 percent of rural families rely on agro-food production.

Climatic change clearly poses a threat to agriculture's potential and a good swathe of the populace for income generation. But agriculture's importance has finally come to the forefront in politics, with Agriculture Minister Hussein Hajj Hassan releasing this year a four-year plan to address the sector's core problems.

“As of this year, the agriculture ministry has started to be more active,” said Choueiri, adding that LARI has taken on a further 70 staff to improve research. “If you compared 10 years ago to today, our work has improved incredibly.”

Data on the agricultural sector is also being updated, with the last census on the sector released in 1988. FAO is carrying out a new census for the whole country, slated for release in October. “We've a horizontal project for synergy between all the ministries for efficiently developing the agricultural sector to help realize its potential,” said Ali Moumen, FAO representative in Lebanon.

Meanwhile, LARI and the Ministry of Agriculture have implemented a strategy to boost and retain production levels. “We are working on new varieties that support dry climatic conditions, such as introducing new apple varieties at an altitude of 700 meters instead of the old varieties of the Bekaa,” said Choueiri.

Farmers are being given codes for identification purposes in the event of disease, nurseries are being monitored, workshops are being held on growing and pesticide use, and a forecast service by LARI kicked off this year that sends text messages to farmers about disease and climatic change.

Organic agriculture, although very much in its nascence, is also improving, with the number of hectares rising from 250 to 2,465, and organic farmers from 17 to 331 since 2000. “Organic agriculture can reduce global warming as there is lower water usage, it increases biodiversity and improves soil fertility,” said Faris.

Improvements in the sector will certainly help offset climatic change, but for the immediate year ahead, much will depend on future temperatures and whether precipitation is better spread and rainwater retained. “If this year there is again hot weather over the winter period, it will be a big problem,” said Choueiri.

While the outlook is relatively upbeat – yet very much weather dependent – it is agriculturalists that will be feeling the bite this winter. For beekeeper Mohamad Ajami, the income he planned to live off has disappeared. “I'm really concerned about saving the bees for a harvest next year. Adding insult to injury, my whole land was burned as it was so dry and someone must have flicked a lit cigarette,” he said. “My focus was this line of work, but I'll have to do something else to survive the rest of the year.”

BOX - Check the label

Due to the poor harvest, the price of honey is to rise by $6 to $7 on a 900 gram jar, and there will be an increase in imports, said Rami Ollaik, professor of beekeeping at the American University of Beirut. An up-tick in fraud is already underway, with beekeepers buying cheap Chinese or Eastern European honey to pass off as local produce. Indeed, this is a widespread practice in Saudi Arabia, with brands purchasing second country honey and merely bottling it in the kingdom – real Saudi honey sells for $100 a kilo. Beekeepers may also dilute the honey with apple juice or fructose to keep price tags lower.

“If anybody is selling honey at regular prices, there is a big question mark,” said beekeeper Mohamad Ajami. “At an agriculture store here in the south, I told the owner about my poor harvest and he said he could take me somewhere to buy honey to offset my losses, saying many beekeepers are buying from China or elsewhere.”

Such fraud will not work though when it comes to the country's distinctive honey types and the major producers. “Consumers are picky about honey,” said Ollaik. “There are only four big honey producers and they have established consumer confidence for oak, citrus and cedar honey. It has a characteristic taste, so to keep confidence they cannot mess with the quality.”

While climatic conditions have affected honey production, Ollaik said that it has only aggravated an already bad situation, with colony collapse disorder (CCD) present in Lebanon and no financial assistance from the government. “The production process in Lebanon is way below standards. If this was improved, we would increase competitiveness, lower costs and the hives would be less susceptible to changes in the weather,” he said. “But I don't know what's next, it's a challenge.”

What lies beneath

Despite the recent catastrophe in the Gulf of Mexico, the MENA looks to deep water drilling

Executive magazine - Commentary

The Middle East and North Africa (MENA) region is fortunate to be able to tap the majority of its oil onshore and in shallow coastal waters. That's meant a minimal need for deepwater drilling and its associated risks, exemplified by the disastrous BP oil spill in the Gulf of Mexico that saw some five million barrels of crude spew out of the Macondo well over the course of three months.

But with oil fields maturing in North Africa, oil companies are exploring for black gold at ever-deeper depths in the Mediterranean Sea. In Libya, for example, the colossal Gulf of Sirte basin extends to depths 2,000 meters below sea level — that's some 500 meters deeper than the Macondo well. Deepwater drilling is already underway in the territorial waters of Tunisia, Libya and Egypt.

Yet it was only when the tarnished British oil company BP announced in the wake of the Gulf of Mexico spill that it is to start exploration off the Libyan coast that Mediterranean states and environmental groups took note of the potential dangers, calling for a moratorium on deepwater drilling. Italy has been the most vocal in calling for a unified strategy for the Mediterranean, what with the Sirte basin only some 500 kilometers from its territory. The Italian foreign minister suggested deepwater drilling should be referred to the Union for the Mediterranean, but this body of European Union and littoral states has essentially been a white elephant thus far, initially beset by problems within the EU and stymied by the Israeli-Arab conflict. The need for a common front on deepwater drilling is a pressing one. An oil spill in the Mediterranean would be a disaster on par if not more calamitous than in the Gulf of Mexico, given the size of the sea and the 21 countries it borders. As the recent BP spill has shown, oil companies and governments are not prepared for when accidents occur.

Libya, according to the United Nations, does not yet have a national contingency plan for an oil spill, while Italian budget cuts have hampered the country's response effectiveness. The rest of the Med is equally ill-equipped to cope with a major oil spill. With so many countries involved a unified front is unlikely, but pressure could be brought to bear on oil companies with deepwater drilling operations to hold off until the BP spill in the Gulf of Mexico has been fully investigated, as the United States and Norway have done. Indeed, BP appears to have caved to pressure, delaying the launch of deepwater operations in Libya.

But deepwater drilling is also in the cards for the Red Sea, and over in the Persian Gulf more than 1,600 offshore wells — albeit in much shallower waters — have been drilled in the past decade, according to Energyfiles. A consolidated stance on offshore drilling for the whole MENA region is clearly needed, which could be spearheaded by the Arab League and then developed in coordination with the EU and other neighbors.

While many want deepwater drilling banned outright, as long as the planet relies on oil-powered economies, we arguably have little choice but to take the oil wherever it may be found. Indeed, over the past 15 years, deepwater drilling has sourced some 60 billion barrels of oil, according to Deutsche Bank, and will account for 10 percent of global oil production between 2008 and 2015.

Deepwater drilling should be viewed in light of the pros and cons. Sure, income is generated, but an oil spill would cost billions to clean up and have untold costs on the fishing industry and the Mediterranean's top earner, tourism. Ten percent of global oil production coming from deepwater drilling is significant, but alternative energies could offset this, such as the solar power projects underway in Morocco.

Countries embarking on offshore drilling, particularly in deep waters, need to weigh up these upsides and downsides. In any event, energy producing states and oil companies should set up a multi-billion dollar contingency fund for any potential spill in the MENA region. With so much money being made off energy, protecting the environment should be considered an operational cost. This makes even more sense when you consider that demands on MENA oil production are set to increase to offset lost output in the oil-drenched Gulf of Mexico.

PAUL COCHRANE is the Middle East correspondent for International News Services

LEBANESE BANKING: It pays to shop around

Lebanese Lira deposit rates 101
Executive magazine

With more than 60 of them jostling for market share, one would expect Lebanese banks to use every trick in the book to lure in customers — including attractive interest rates. Curiously, however, the banks don’t advertise their rates. Instead, offers are made on services, specialized cards, mortgages and loans — the more usual fare that banks provide globally, rather than getting clients into the bank by touting high interest rates.

The lack of publicity is due to clients’ ability to negotiate interest rates based on their financial clout, the competition between banks and the possibility that a bank might change its rates at anytime. “The market is very competitive and banks don’t want to commit to or disclose rates. This is the number one weapon in market share building,” said Freddie Baz, chief financial officer at Bank Audi. “It is about credibility, so if I put interest rates on the door of the branch or in the newspaper — like many European banks do — I am committed to those rates and cannot increase or decrease. The market is very mature when you reach those levels of disclosure.”

Rates hit a new low

Competition is so cut throat that many banks resort to “mystery shopper” techniques, dropping in on other banks posing as potential clients to gauge the interest rates on offer. For actual potential clients, finding out the different interest rates offered requires physically contacting each and every bank.

The most recently released central bank data, from June, puts the weighted average on deposits of Lebanese lira at 5.83 percent, the lowest it has been in 30 years. Interest rates for checking and current accounts have always been much lower, sitting in the low single digits for the past decade, and at 1.24 percent as of June.

Interest on United States dollars has never been historically as high as on the lira, due to government loans being in lira and the perceived safety of the greenback, but has correspondingly dropped from over 4 percent in 2008 when the crisis kicked in, to an all time low of 2.74 percent as of June. Indeed, deposits in dollars have fallen to the lowest level in a decade, to 62.5 percent of total deposits, while the increase in lira deposits accounted for 80 percent of growth this year, according to Bank Audi data.

Banks, however, can offer a rate of their choice: it’s a free market. A rate may be agreed upon with a bank manager, duly paid after a month, but could then drop — without notice to the client — the month after, as the bank alters its interest rates. Other banks may keep that rate for a fixed period of time. In general, the higher the deposit and the less readily accessible an account — blocked versus non-blocked — the greater the interest rate paid out.

As of August the average interest paid was 4 percent for LL5 million ($3,325) to LL10 million ($6,651) at banks sampled by Executive’s secret shopper (chart published but too small to re-publish here).

Few banks offer an attractive interest rate on a non-blocked, readily accessible lira account, with Société Générale de Banque au Liban (SGBL) offering one of the highest at 5 percent. However, with the account costing $12 a month, it is only viable over a certain amount or else the interest earned is offset by paying off the user fee.

With interest rates at the lowest they have been in decades and banks not keen to attract further Lebanese lira deposits, rates offered at the banks are typically less than the rate set by the central bank. They are also correlated with the amount of money a bank has tied up with the state as treasury bonds and the like; the higher the amount loaned to the government, typically the higher the interest rate offered to a client. This is not a fixed rule, as banks also want to raise deposits for lending purposes other than to the government, but is a general guideline.

Preferential rates

At over LL10 million, rates rise, although not always in line with a bank’s lending to the government. For instance, Byblos Bank is a major lender to the government, yet it only offers 3.5 percent on amounts above LL10 million.

BankMed, another leading lender to the state, offers 5 percent on the same amount, while the Bank of Beirut and the Arab Countries (BBAC), which is not a major government lender, offers 4.75 on deposits up to LL30 million.

Fransabank, which holds considerably less of the government debt than Bank Audi, Byblos Bank or BLOM Bank, offers 5.85 percent on deposits ranging from LL1 million to LL10 million.

Over the LL15 million mark ($9,976), rates in certain cases average the central bank’s average rate of deposit, at approximately 6 percent.

Ultimately, it pays to read the small print and do the leg work to get the best rates.

LEBANON BANKING: Goodbye to great rates

The sun sets on the golden age for Lebanese lira deposits

Executive magazine

The high interest historically paid out by Lebanese banks on deposits in Lebanese lira (LL) made the country an attractive location for stashing cash. At its peak, near the end of the civil war in February 1988, the average rate on lira deposits was 20.55 percent, according to data from Banque du Liban (BDL), Lebanon’s central bank. Such double-digit interest was the norm when Lebanon needed as much capital as possible to reconstruct the country. Come the Paris II donor conference in November 2002, lira interest rates dropped below 10 percent, never to return to such highs, as perceived risk was lower. They’ve been more or less in a gradual decline ever since, hitting a three-decade low in June this year when the weighted average interest rate on deposits hit 5.83 percent, according to data provided by BDL.

The cost of competition

As the global financial crisis set in, Lebanon was once again an attractive depositors' haven, with $55 billion flowing into the country from 2007 to the first half of 2010, according to Bank Audi data. Such an abundance of liquidity, combined with the lower rates offered internationally and the heightened confidence in the Lebanese financial system meant interest rates had to tumble. As a result, the Central Bank and the Ministry of Finance were in a position to demand lower returns on treasury bills (TBs) and certificates of deposit (CDs).

But this represented a challenge for the banks in managing their spreads, particularly when the three-year and five-year TBs and CDs in lira matured, as it would no longer be advantageous to pay out high interest to clients when the banks themselves were no longer receiving such returns.

“On government paper for lira, [interest] was 11.25 percent for [the last] five years, but now it is 6.18 percent, so a huge drop in just a year and a half,” said Walid Raphael, general manager of Banque Libano-Francaise. “If you look at the three-year paper — what most banks are holding with the government — it was at 9.3 percent and is now just below 6 percent, so a 3.30 percent drop. It is the banks that are bearing this reduction in interest. If the market was really efficient the banks would not pay more than they are getting on TBs but much less, yet this is not the case.”

Earlier this year, the Association of Banks in Lebanon decided that the rates banks offered should be lowered, as paying out their current interest was no longer sustainable. But in a free market it is the prerogative of banks as to what rate they offer, even if this costs the institution to do so. “If you are getting 5.3 percent on three-year local treasury bills, why are you paying depositors 5.5 percent?” said Freddie Baz, chief financial officer at Bank Audi. “It is because of idiotic competition to attract clients. Banks are shooting themselves in the foot.”

The banks have to tread carefully though, as a rapid reduction in interest rates on the lira could trigger conversions back to US dollars and threaten the currency’s stability. As Baz remarked, the Lebanese “are not mentally prepared for this,” as depositors have become used to the high rates on the lira. He does, however, advocate a drop of 1 percent on lira interest in 2011.

Decline prompts diversity

Najib Semaan, assistant general manager at the Bank of Beirut, considers the lower interest rates as a boon for the government, the economy and the banks. “Banks are happy to see rates go lower in foreign currency and the lira. Why? Because it will give a boost to the lending on the retail and corporate side, and servicing the debt of the republic will cost less,” he said. “But while it is beneficial to the government to have lower interest rates, I insist we reach a level acceptable to the government and the banks.”

The decline in the interest rates has clearly affected bank’s strategies, placing a greater emphasis on services to attract and retain clients; before it was a case of shopping for the best interest rate on offer. That said, interest rates are still a primary tool to expand the depositor base, hence some rates on offer are on par and even above the returns banks get on TBs and CDs.

For instance, Bank of Beirut is offering an account to new clients that pays 7.20 percent over 15 months. “We want to diversify and increase our client base, and have cross selling, such as to small investors,” said Semaan. “We are not accepting deposits over LL 60 million as we want to diversify and have longer term maturities. The interest rate is a welcome gift to new clientele because otherwise, on a small amount, whatever you pay doesn’t make sense.”

Such a rate is increasingly rare, and overall interest rates are likely to drop in years to come. This could prompt a change in mindset among Lebanese that have lived off the high interest.

“We are coming to normal times, not the extraordinary times of high interest and premiums, which could not last forever,” said Baz. “This could trigger a quicker development of the domestic capital markets as people will be forced to look at other alternatives. Today it is a rentier economy; if I can still get 6 to 8 percent interest, why should I understand the stock market?”