Lebanese bank workers let go as currency crash bites

Lebanese bank workers let go as currency crash bites
A man walks past the Central Bank of Lebanon, Kantari Street, Beirut, Lebanon, Nov. 12, 2020. (Reuters)
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Updated 09 November 2021

Lebanese bank workers let go as currency crash bites

Lebanese bank workers let go as currency crash bites
  • Union president: ‘2021 very hard for employees in Lebanon’
  • Almost 5,000 quietly dismissed, firms offering incentives to quit

BEIRUT: Lebanese banks are quietly letting employees go as they seek to close branches and reduce operational costs amid the collapse of the local currency, the Lebanese pound.

The moves come after the country’s central bank tightened the exchange rate used to withdraw cash in Lebanese pounds from US dollar accounts from domestic banks in the absence of a comprehensive plan to boost the economy, which has been in crisis since 2019.

Since autumn 2019, the central bank has imposed currency restrictions, which currently mean that savers with dollar accounts have only been able to make withdrawals in Lebanese pounds at an exchange rate of 3,900 pounds to the dollar.

However, the dollar is trading at around four times that on the black market.

The Lebanese pound has been pegged to the dollar since 1997.

While some banks are downsizing domestically, others are opting to sell assets abroad.

The number of branches estimated to have closed ranges between 300 and 400 out of a total of 1,100 in the country. Employees and contractors have been the first to feel the effects of the decisions.

George Al-Hajj, president of the Federation of Syndicates of Bank Employees, said that 2021 has been “very hard” for bank employees in Lebanon, adding: “Although no statistics have been conducted to show the exact number of laid-off employees, their number does not exceed 4,500.”

But more bank workers are expected to be dismissed shortly.

“We are in the middle of the storm, and the crisis will persist until Lebanon reaches an agreement with the International Monetary Fund on the restructuring process of the banking sector,” said Al-Hajj.

The number of employees of the banking sector in 2018 was estimated to be about 26,000, working for 61 banks. Since 2019, the sector has lost more than 17 percent of its workforce.

Dr Jassem Ajaka, an economic and strategic expert, warned that “up to 50 percent of bank employees will be laid off.”

He told Arab News: “After the deterioration of the economic situation and the suspension of banking activities due to the decision to block financial transfers, the banking sector is no longer making profits.

“Banks are not charities, and the reality is hard for everyone.”

“The banking sector’s employees constitute a very important share of the middle class in Lebanon and eradicating this group from the economy will further harm Lebanese society.”

Al-Hajj said: “In 2019, the federation saw this crisis coming and urged banks seeking to fire employees to inform the Ministry of Labor of their intentions. Some banks did, but others did not, and thus we do not know the exact number of laid-off employees.”

He added: “The banks’ excuses for mass lay-offs were many. Sometimes it was because the bank was applying an early retirement system, sometimes it was a resignation at a request from the administration, and other times it was the termination of contracts due to economic reasons.”

Many domestic banks are also offering a set of incentives for employees to voluntarily quit.

The average salary of a regular bank employee ranges between 2,000,000 and 2,500,000 Lebanese pounds — equivalent to $100 today but $1,500 before the economic crisis and collapse of the currency.

This year, the Lebanese Federation of Syndicates of Bank Employees issued new protocols on the financial rights of laid-off employees, but Al-Hajj warned that “banks have not been very receptive so far.”

The new rules state that “laid-off employees shall receive 18 monthly salaries as well as a bonus of two months’ salary for every year of employment up until six years; a one-and-a-half-month salary for every year of employment for those who served between six and 12 years; and a one-month salary for every year of employment for those who served more than 12 years and up until 44 years of employment.”

The previous dismissal protocol meant that laid-off employees only received 16 months’ salary in compensation for arbitrary dismissal.

However, some banks have chosen to compensate their employees with 24 months of salary in addition to other incentives, to avoid clashes with laid-off staff.

Al-Hajj said: “In addition to the mass layoffs, another problem that is as serious as the first one has emerged: The devaluation of employee salaries and its tragic repercussions on the living conditions of the Lebanese.

“This problem is only getting worse as the crisis continues and thus, the number of voluntary resignations by highly qualified employees is increasing.

“This will affect the future of the banking sector. Unfortunately, the migration of these people cannot be prevented unless by reconsidering their salaries, which have become worthless.”

Bechara Al-Asmar, head of the General Labor Union, estimated that the number of laid-off employees in Lebanon “since the economic crisis and the beginning of the coronavirus pandemic numbers more than 500,000 people.”

The Lebanese Observatory for Workers and Employees Rights has also said that between 500,000 and 800,000 workers have lost their jobs, forcing the country’s unemployment rate to surge above 50 percent.

It said that of the public sector, military and security employees who have kept their jobs, most have lost about 90 percent of the value of their salaries.

The observatory said that “325 institutions submitted requests to the Ministry of Labor to dismiss employees at the start of 2020.”

It noted the first wave of mass layoffs mainly targeted workers in the tourism sector.

The crisis then extended to small enterprises and the country’s sizable black market.

“The second wave hit the education sector, where more than 2,000 teachers were laid off in 2020, according to the Teachers Syndicate in Private Schools, and their salaries were cut by 40 percent as many students left private education and were enrolled in public schools.”

The observatory said that the mass layoffs also affected “major businesses and institutions that were supposedly solid enough to bear the effects of the crisis, such as the American University of Beirut, which fired more than 1,200 workers, The Coca-Cola Company, which fired 350, and Adidas, which fired 250.”

The multinational retail franchise operator Al-Shaya Group also shut most of its companies in Lebanon and fired employees, the observatory said.

The layoffs also affected “domestic workers and non-Lebanese workers from Asia and Africa, as employers were no longer able to pay them in US dollars.

Vulnerable groups were also affected, such as day laborers and Palestinian refugees, whose numbers are hard to estimate as they are not registered within the social security fund or at the Ministry of Labor,” the observatory added.


Saudi Arabia's King Abdullah port tops CPPI list of 370 global ports

Saudi Arabia's King Abdullah port tops CPPI list of 370 global ports
Updated 27 May 2022

Saudi Arabia's King Abdullah port tops CPPI list of 370 global ports

Saudi Arabia's King Abdullah port tops CPPI list of 370 global ports

RIYADH: Saudi ports are on top of global indicators with three of them leading the second edition of the Container Port Performance Index 2021.

The King Abdullah Port ranks 1st on the list of 370 global ports, while Jeddah Islamic Port ranks 8th, and King Abdulaziz Port placed at 14th, a statement showed.

Strategically located on the Red Sea coast in King Abdullah Economic City, King Abdullah Port is the region’s first port to be fully owned, developed and operated by the private sector.

It enjoys close proximity to the key Saudi cities of Jeddah, Makkah, Madinah and Yanbu.

Saudi ports' performance in April (Source: Mawani)

The CPPI 2021 is an indicator produced by the Transport Global Practice of the World Bank in collaboration with the Maritime, Trade and Supply Chain division of S&P Global Market Intelligence, to serve as a reference point for improvement for key stakeholders in the global economy.

President of the Kingdom's ports authority — Mawani — Omar Hariri said that the Saudi ports’ achievements on the CPPI 2021, which outdone the results of 2020, came as result of Mawani’s efforts of enabling operations, enhancing customers’ experience, and ensuring an effective, reliable commercial and regulatory environment.

The three Saudi ports recorded exceptional scores that indicate ports’ performance efficiency, despite challenges in 2021 that affected the world, according to the CPPI.

King Abdullah Ports rank increased from the 2nd position to the 1st , Jeddah Islamic Port from 55th position to the 8th, and King Abdulaziz Port which jumped to the 14th, surpassing 88 ranks from last year’s report.

Minister of Transport and Logistics Services and the Chairman of Mawani, Saleh bin Nasser Al-Jasser emphasized that the ports and maritime transport sectors are on a clear path towards achieving the objectives of the National Transport and Logistics Strategy, in line with Saudi Vision 2030.

 

 


Investment firm Amanat wants to revolutionize education in the Middle East

Investment firm Amanat wants to revolutionize education in the Middle East
Updated 27 May 2022

Investment firm Amanat wants to revolutionize education in the Middle East

Investment firm Amanat wants to revolutionize education in the Middle East
  • Investment firm Amanat aims to integrate video gaming with education to make learning more attractive
  • People are more likely to retain information acquired visually and experientially, says CEO Mohamad Ali Hamade

LONDON: The UAE-based healthcare and education investment company Amanat aims to revolutionize education in the Middle East by integrating experiential learning and virtual reality into the curriculum, its CEO told Arab News.

Speaking during the World Economic Forum, Dr. Mohamad Ali Hamade outlined how virtual reality would take “center stage” in how education was provided to children across the region.

“As a leading investor in the education space, Amanat is looking at what the future would look like in the education sector,” Dr. Hamade said. “We believe that experiential learning and virtual reality are going to take center stage in the future of how we provide education services to our kids.”

According to Dr. Hamade, Saudi Arabia is a promising market for this kind of investment as the Kingdom has recently opened up to foreign branch campuses across the country and is increasingly open to international curricula.

“I think if a product comes in and promises to have a more progressive curriculum, but also a technology aspect attached to it, I think we have a very good opportunity to prove a concept in Saudi Arabia,” Dr. Hamade said.

Targeting mainly stable markets in the region, Dr. Hamade explained that investment would focus in the interim on Saudi Arabia, UAE and other Gulf countries.

“Historically, we have been trying to solve a problem of access to education and quality of education while keeping the costs acceptable,” he said. “And I think this is what Web 3.0 would do, and what the technology aspect will allow us to achieve.”

Founded in 2014, Amanat Holdings is a listed investment firm in Dubai that seeks to make investments within the education and health care sectors in the MENA region.

In 2021, the company witnessed a twenty-eightfold increase in net profit to 280.8 million dirhams ($76.4 million). Additionally, the company saw a 2,680 percent increase in net profit on strong health unit performance.

Explaining how the new model of education would work, Dr. Hamade said that the company’s main idea was to integrate gaming with education, as gaming is usually very attractive to young people.

“Instead of channeling gamification to wasteful and non-productive time, we’re actually channeling it into a very productive thing, which is education and learning,” Dr. Hamade said.

He explained that people were more likely to retain and remember information that had been acquired visually and experientially. As such, integrating virtual reality in the curriculum would produce more positive outcomes than textbook-based learning.

CEO of Amanat since 2020, Dr. Hamade joined the company in 2017 as chief investment officer. He holds an MD and a BSc in biology from the American University of Beirut and an MBA from Cornell University in the US.

While it is a highly innovative idea, Dr. Hamade anticipates that there will not be much resistance from the region given how far countries in the Middle East have come in terms of modernization.

“I think we’ve come a long way in our region where policymakers are willing to listen, to accept, to ask the right questions, to push us, and together to put a solution that allows us to improve the quality of education in the region,” he said.

 


Inspired by Vision 2030, Taj Holding focuses on retail expansion

Inspired by Vision 2030, Taj Holding focuses on retail expansion
Updated 27 May 2022

Inspired by Vision 2030, Taj Holding focuses on retail expansion

Inspired by Vision 2030, Taj Holding focuses on retail expansion
  • CEO wants company to be a hub utilized by talented entrepreneurs and and international investors

RIYADH: Independent thinker Omar Henaidy — an engineer by qualification but an entrepreneur at heart — was able to create and grow Taj Holding into a vast business across the Middle East.

Today, the group encompasses brand names such as fashion retailer Beside, medical center Amaly, specialized transportation solutions M, and Mac Aerospace, to name a few.

After studying engineering and obtaining a master’s degree in supply chain management from the University of Missouri in the US, Henaidy spent several years working with international companies and managing a local business in Saudi Arabia.

However, he realized that his passion and aspirations were building something for himself with the assistance of individuals who shared his ideals and the DNA for success.

That is how Taj Holding was born.

“I have always aspired for Taj Holding to be a hub utilized by talented entrepreneurs and international investors to fulfill their dreams and be used as a platform to develop and build for their next step forward,” Henaidy told Arab News.

Expansion plan

Taj Holding currently operates across five main verticals — retail, healthcare, manufacturing, IT and defense.

“Over the past decade, we have put a lot of effort into growing our portfolio in a robust manner, which resulted in an ecosystem of companies that can work together as one unit,” he said.

Given the recent developments in Saudi Arabia, along with Vision 2030, the company is now focused primarily on retail expansion within the fashion and hospitality sectors.

Taj Holding continues to grow its large portfolio by focusing on the sustainability of the firm’s ongoing businesses in addition to starting new joint ventures.

“In Q1 2022, we signed a nine-digit-contract in the defense sector. We are signing a similar contract in Q2. In the healthcare business, we recently partnered with Priory; together, we will be opening our first clinic in Q2 of 2022,” Henaidy revealed.

The holding also has an industrial complex under construction, including three factories. In addition, it has a maintenance, repair and operations hub, known as MRO, for helicopters, which will open in 2023.

With its fashion arm Beside, the company looks to meet the desire for iconic brands and tap into the Kingdom’s massive youth demographics, with a 35-million-plus population and a median age of 32 years, observed Henaidy.

“The youth are leading the most extensive social transformation the country has ever witnessed. Beside and through its exciting brand portfolio will be able to cater to a large part of this segment’s massive potential,” he added.

The company is expanding swiftly across the Middle East. It is focused on strengthening its presence throughout the region through existing operations across Egypt, Kuwait, Qatar and Bahrain. It also plans to enter Oman for the first time in 2022, but it will continue to strengthen its presence in Saudi Arabia and the UAE.

These efforts have seen Taj triple in size over the past three years. The company has achieved this rapid growth organically through new investment opportunities. “There is immense potential for investments across several industries to the point where it is becoming a challenge to identify a specific industry, considering the strong growth our nation is experiencing,” Henaidy pointed out.

He underscored that the company’s emphasis is on the long-term potential of its investments and the contribution they provide in support of vision 2030. “Beside is a perfect example of such a model; investing in the retail sector has sustainable growth potential and thus compliments our vision.” Another testament to this strategy, Henaidy said, is the fact that “we have not made a single exit from any of our acquisitions over the past decade.”

Accelerated growth

Initiatives undertaken for Vision 2030 accelerated the growth in sectors such as tourism, culture, logistics, retail and entertainment — all of which greatly benefited from the recent social and economic evolution, he remarked.

Henaidy said the Kingdom, under the leadership of Crown Prince Mohammed bin Salman, has been on a path of exponential growth over the past few years, and “we are proud that Taj Holding was able to contribute significantly to that growth.”

The entrepreneur believes that his family and the Kingdom were also significant contributors to his success.

“I attribute my career and successful journey to my father being a role model and greatest supporter; also, I cannot leave out the vast opportunities our nation has offered me as a young Saudi entrepreneur,” said the CEO.

Henaidy’s father was an Air Force Lt. Gen. and a fighter pilot. As a leader to many young Saudi patriots, he provided his son with a significant support system and mentored him to pursue his dreams.

“I would also like to point out that success to any businessman doesn’t come without having a person who supports you and encourages you during challenging times; my beloved wife Reem is this person. We have four children, three boys and a beautiful daughter,” added Henaidy.

The CEO explained that what motivates him every day is working alongside a fantastic and energetic team.

His business slogan is tantamount to his extraordinary career: “Trusting your gut is the best business tool you’ve got,” he concluded.


ENVI Lodges, Al Rasim Hotels to build ecolodge on the Red Sea coast

ENVI Lodges, Al Rasim Hotels to build ecolodge on the Red Sea coast
Updated 27 May 2022

ENVI Lodges, Al Rasim Hotels to build ecolodge on the Red Sea coast

ENVI Lodges, Al Rasim Hotels to build ecolodge on the Red Sea coast
  • The project will adhere to ENVI’s thorough sustainability standards vetted by Beyond Green

RIYADH: Dubai-based ecolodge brand ENVI Lodges and Al Rasim Hotels & Resorts announced plans to develop a waterfront ecolodge project on the Red Sea coast of Saudi Arabia.

Speaking on the sidelines of the Future Hospitality Summit, ENVI co-founder Noelle Homsy told Arab News that the project was focused on operating luxury ecolodges in remote destinations that would allow guests to disconnect from their daily lives back in the cities.

The lodge will be made of approximately 40 modular pods, prefabricated and transported to the site. They will be installed on individual decks, lowering the impact on the environment and minimizing any disturbance on the site.

“We specialize in eco pods and tents and follow very high sustainability standards,” said Homsy.

The agreement was signed between Aiad Mushaikh, managing director of Al Rasim Hotels & Resorts, and Chris Nader and Noelle Homsy, co-founders of ENVI, in the presence of Jonathan Worsley, chairman of The Bench, the organizer of FHS.

“We are very excited to bring the ENVI Lodges brand to the booming market of Saudi Arabia,” said Mushaikh upon signing the agreement.

“We want to invest in unique hospitality projects and develop immersive lodges that offer both domestic travelers and international tourists the opportunity to discover the natural beauty of the Kingdom. As a Saudi company, we want to contribute to the implementation of the Saudi tourism strategy through investing in high-end tourism project. ENVI’s proposition and approach to hospitality is exactly what we were looking for, and this project will become a reference forexperiential lodging on the shores of the Red Sea.”

The project will adhere to ENVI’s thorough sustainability standards vetted by Beyond Green, the sustainability alliance that ENVI follows.

Saudi Arabia is stepping up its efforts to become the vanguard of a UN pledge to develop a sustainable model of tourism after the sector’s levels of resilience were pushed to breaking point by the pandemic and new dire warnings of tourism’s environmental footprint emerged.

Scientists have said CO2 emissions from tourism will increase by 25 percent by 2030 compared to 2016 levels, which if left unaddressed could be a bullet for the sector as visitors begin to factor in the impact, and morality, of climate change on their destination choices.

The lodge facilities will include a restaurant, a beach club, private pools, an experience hub, a wellness sanctuary and a kids club. The lodging is expected to open by mid-2023.

“The property will be on the Red Sea with 40 keys and will offer a memorable guest experience,” she added.

The company is also looking at a few other projects in the Kingdom and will announce them soon.


Training Saudi women for the workforce will net a $400bn return

Training Saudi women for the workforce will net a $400bn return
Updated 27 May 2022

Training Saudi women for the workforce will net a $400bn return

Training Saudi women for the workforce will net a $400bn return
  • Vision 2030 plan aims to boost female labor force participation from 22% to 30% by the end of the decade

RIYADH: Saudi Arabia’s tourism industry is one of the sectors through which the Kingdom plans to diversify the economy with its Vision 2030 program and is an area where women can play a huge role, according to the head of one female empowerment group.

In an exclusive interview with Arab News, Mae Al-Mozaini, founder and CEO of the Arab Institute for Women’s Empowerment, said that this industry already employs many women. She was speaking at the Future Hospitality Summit in Riyadh.

Al-Mozaini said: “Investing in targeted training for Saudi women will have a return on investment of $400 billion by 2030. So that’s a big number of women participating to improve the economic prosperity of the Kingdom and for themselves.”

Saudi Arabia has been a pioneer in investing in women’s education.

Mae Al-Mozaini

The Kingdom’s Vision 2030 plan aims to boost female participation in the workforce from 22 percent to 30 percent by the end of the decade.

Despite the disproportionate impact of the COVID-19 pandemic on the distaff side globally, women in Saudi Arabia have made rapid social and professional strides on the back of the above-stated reforms.

According to the General Authority for Statistics, female participation in the Kingdom’s workforce rose to 33 percent at the end of 2020, up from 19 percent in 2016.

The growing numbers of women joining the workforce has helped the Kingdom achieve its target of female labor force participation 10 years ahead of time and lifted its international rankings in women’s economic inclusion and empowerment indices.

In the World Economic Forum’s Global Gender Gap Report 2021, Saudi Arabia was ranked 147 out of 156 countries.

Al-Mozaini added that Saudi women are ranked the most educated females in the Middle East and North Africa and investing in them to work in the tourism industry is a good move.

She added: “Saudi Arabia has been a pioneer in investing in women’s education. I don’t know any country where you go to college for free, and the government will give you money to stay in college. This means you don’t need a job to help your family while studying.

“The government wants you to graduate from school, so you can get a better job after college. I don’t know any country that does that. So, the Kingdom is a pioneer in investing in women.”

The Alkhobar-based Arab Institute for Women’s Empowerment was founded by Al-Mozaini in 2018 to “promote women’s empowerment and cultivate sustainable economic development.”

It aims to “raise the percentage of women in leadership by providing both emerging and accomplished female leaders with the knowledge, skills and networks needed to expand their impact on their individual organizations as well as their wider communities.”

Nusf aims to deliver programs that provide the necessary tools for Arab and Saudi women to succeed in professional and leadership roles.

Nusf in Arabic means “half,” and the institute aims to engage half the Kingdom’s population through empowerment and highlight the importance of investing in women.

For 2018-2022, the UN Economic and Social Council elected Saudi Arabia to the UN Commission on the Status of Women, and in the World Bank’s 2021 Women, Business and the Law Index, Saudi Arabia scored 80 out of 100, well ahead of the global average.