The Quiet Corner of the Mideast (Surprise)

June 16, 2011 by · Leave a Comment 

By Helene Cooper

Washington — In the Arab democracy movement, there is a dog that has not yet barked. And whether or not it does — and how loudly — is causing a lot of heartburn among American policy makers.

Egyptians, Tunisians, Libyans and Syrians gathered in their respective city squares and neighborhood streets to demand democratic rights, and the Western world cheered, if with varying degrees of diplomatic or military support. But by and large, so far, the Palestinians in the West Bank, who see Israel as the source of their grievances, have not.

Yet.

In part, this is because the Palestinians’ own leaders — elected, but weak — have another timetable in place, for a diplomatic campaign against Israel in the fall that turmoil on the ground could complicate. But some other prominent Palestinians are beginning to say that the moment of the Arab Spring offers a more urgent opportunity to join fellow Arabs in the streets. And that worries policy makers and experts here, as well as the political leaders in Hamas and Fatah, whose own authority could be undermined.

“If you’re looking for a game-changer, that would be it,” says Robert Malley, the program director for the Middle East and North Africa at the International Crisis Group. “At a time when the entire world, including President Obama, is applauding nonviolent popular protests from Cairo to Tehran, it would put Israel in an acute dilemma about how to react if tens of thousands of Palestinians started organizing protests in the West Bank, or marching on Israeli settlements or on Jerusalem demanding an end to the Israeli military occupation.”

Even more significantly, Mr. Malley said, “it would put the United States in an equally acute dilemma about how to react to Israel’s reaction.”

And it would box President Obama into a corner, penned in by his own words: on one side, that the democratic aspirations of people in the region must be heeded and that Palestinians deserve their own state, and on the other side, 44 years of American national policy that strongly sides with Israel on issues involving its security.

The biggest worry for Mr. Obama is that Israel would react with violence toward nonviolent Palestinian protesters in the West Bank. Last Sunday, Israeli forces fired at pro-Palestinian protesters on the Syrian frontier as they tried to breach the border for the second time in three weeks. The Syrian news agency SANA reported that 22 protesters were killed and more than 350 wounded; Israeli officials said that they had no information on casualties, but suggested that the Syrian figures were exaggerated.

Israeli and American officials both said those protests were instigated by Syria, in a move to draw attention away from the violent crackdown on its own democracy movement. By and large, there was not a huge outcry over Israel’s decision to fire on the protests, in part because of the role that Syria is believed to have played, and partly because the march on the border was viewed as a hostile and provocative action on a sovereign country with which Syria is still legally at war.But the West Bank is a whole different ballgame. This is the disputed territory captured in 1967, the land occupied by Israel after its three southern and eastern Arab neighbors united to fight it 44 years ago. It is the land that Israeli settlement blocks have since sprouted throughout, in an ever-growing reminder that the longer a peace deal remains elusive, the more the facts change on the ground. And now, Palestinians there have started to draw a direct line between the Arab Spring movement and their own push for an end to the Israeli occupation.

“You will see waves,” Mustafa Barghouti, a former Palestinian Authority presidential candidate and independent member of Parliament who has been critical in the past of the Fatah leadership, said in a telephone interview. “It’s already happening. We, the Palestinians, have inspired Arabs many times in the past, and now we’re getting inspired by them.”

On Sunday, a few hundred Palestinians in the West Bank tried to organize marches around the territory, but were stymied by the forces of both the Palestinian Authority and Hamas, neither of which are eager to see widespread Palestinian democracy protests. That is in part because leaders of both Hamas, the militant Islamist organization that controls Gaza, and Fatah, the party that controls the Palestinian Authority, fear that a popular Palestinian uprising could upend their own authority in the West Bank and Gaza.

“We have been talking to the youth movement in Tunisia,” said a Palestinian activist in Ramallah who asked to be identified only by his initials, F. A., because he said he has been threatened by both the Palestinian Authority and by Israeli officials. “They are telling us how they did it, and when we tell them our situation, they say, ‘Wow, your situation is much more complicated.” ’ He said his house, in Ramallah, had had no running water this month, but he could see Israeli settlers in a nearby settlement enjoying the summer in their swimming pool. Because of such daily indignities, he said: “We will do this. Our time will come.”

In Israel, the political discourse in the past two weeks has centered on the increased fear that the Palestinians in the West Bank will join the Arab Spring movement. On Sunday, Aluf Benn, the influential Israeli editor at large for Haaretz wrote: “The nightmare scenario Israel has feared since its inception became real — that Palestinian refugees would simply start walking from their camps toward the border and would try to exercise their ‘right of return.’ ” Mr. Benn was referring to the Syrian border episodes, but many Middle East experts say that a West Bank uprising would actually be more seismic, for both Israel and the United States.

In Washington, Obama administration officials have been fretting about how the United States would respond. In many ways, Mr. Obama’s decision to come out in favor of Palestinian statehood based on Israel’s pre-1967 lines, with land swaps, stemmed from a desire at the White House to give both Palestinians and the world at large a place to park their grievances. That, they felt, might help forestall both a United Nations resolution in September recognizing a state of Palestine within the 1967 boundaries, and a popular uprising among Palestinians in the West Bank.

That such an uprising hasn’t happened yet, Mr. Barghouti and other Palestinians say, goes beyond the simple Hamas-and-Fatah-won’t-allow-it reasons. Palestinians in different West Bank cities are disconnected from each other, separated by Israeli checkpoints that don’t allow freedom of movement even within the territory. Israel’s security fence also inhibits movement among Palestinians.
Beyond that, Palestinians may be exhausted from the two intifadas — the second one, in the last decade, extremely violent — that ended with the Israeli construction of the security fence and the imposition of increasingly strict restrictions on movement throughout the West Bank.

But exhaustion from the violence may feed more nonviolent uprisings. “There is now a growing belief,” Mr. Barghouti said, “that nonviolence is the only form of struggle we should use. Or, at least, that it is the most effective form of struggle we should use.”

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Gulf Islamic Banks Eye Conversion of Conventional Peers

May 3, 2010 by · Leave a Comment 

By Frederik Richter and Shaheen Pasha

MANAMA/DUBAI (Reuters) – More banks in the Gulf Arab region may convert to Islamic finance in a bid to tap rising demand for sharia-compliant products and to avoid the heavy investment required to launch new banks.

A source told Reuters this month that Qatari investors are planning to buy a 25 percent stake in Ahli United Bank <AUBB.BH> <AUBK.KW> from Kuwaiti investors and have plans to convert Bahrain’s largest retail bank, which itself plans to take its Kuwaiti unit Islamic.

“Converting to Islamic is compelling in the region. In Kuwait Islamic banks have rapidly won market share from conventional ones,” said Sayd Farook, senior consultant at Dar Al Istithmar.

Converting conventional banks would help the industry expand its retail footprint — for instance in countries where no new licenses are given out but conversions are allowed –, which experts say the industry needs to develop a more sustainable business model.

The Islamic banking industry in the Gulf Arab region has mostly relied on channeling the region’s oil wealth into real estate and private equity, and was badly hit by a regional property correction late in 2008.

“I would say between 70 to 80 pct of the Muslim market (in the region) would bank with an Islamic bank….if you are an Islamic bank you get to capture that market,” said Sameer Abdi, head of Islamic finance at Ernst & Young.

Scholars have said they do not oppose converting conventional banks as long as their investments and debt levels are brought in line with sharia, which bans investments in certain sectors such as alcohol, over a grace period.

“There is usually a two-year conversion gap from the moment you convert….during which you need to give away to charity any income from conventional instruments,” said Farook.

Experts say that converting a bank comes cheaper than launching a green-field retail bank, but costs associated with revamping the bank’s work-flow, accounting and core banking IT systems are still high.

“Depending on the scale of the bank and the market in which it operates, it could take two or three years before the investment pays off,” said Hatim El Tahir, a Bahrain-based director at Deloitte & Touche.

Abdi said he estimated that up to 15 percent of existing customers could leave a converted bank, not necessarily because they disapprove of the switch to sharia, but because the bank might struggle to maintain its service level during a difficult transition period.

Bahrain’s Al Salam Bank <SALAM.BH> is converting Bahraini Saudi Bank <BSBB.BH>, which it bought last year, as is Egypt’s National Bank for Development <DEVE.CA> after Abu Dhabi Islamic Bank <ADIB.AD> partially bought the lender in 2007.

But the Gulf Arab region is rarely seeing mergers and acquisitions due to cultural sensitivities and opaque ownership structures, which could be the biggest obstacle to the conversion of conventional assets.

Bahrain’s Ithmaar Bank <ITHMR.BH> this month concluded the transformation from an investment house to an Islamic retail bank to improve its funding base, but could do so because it fully owned Islamic retail bank Shamil.

But Kuwaiti banks and merchant families have been badly hit by the financial crisis and are trying to sell down their international assets, which could be a way in.

Their ownership in many banks in the off-shore banking center Bahrain, both Islamic and conventional, could migrate to Qatari investors and banks that are awash with cash, bankers and analysts say.

“Qatar is a small economy…the bigger banks are looking at other markets,” said Janany Vamadeva, banking analyst at HC Brokerage, adding that Qatari companies would also be best positioned to raise money in current capital markets.

(Reporting by Frederik Richter and Shaheen Pasha; Editing by Dinesh Nair and Louise Heavens)

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Oldest Swiss Bank Tells Clients to Sell U.S. Assets or Leave

January 14, 2010 by · Leave a Comment 

Sept. 2 (Bloomberg) — Wegelin & Co.,Switzerland’s oldest bank, is telling wealthy clients to sell their U.S. assets, or switch banks, because of concerns new rules will saddle investors with tax obligations in the world’s biggest economy.

U.S. proposals to extend reporting requirements for banks whose clients buy American stocks and bonds coupled with estate tax liabilities that may be inherited by the heirs of people who have such holdings prompted the advice from the St. Gallen, Switzerland-based bank, said Managing Partner Konrad Hummler.

“We came to the conclusion that it’s a threat to our clients,” Hummler, who is also president of the Swiss Private Bankers Association, said in an interview yesterday during a conference in Zurich. “It’s also a threat to us as a bank because as a custodian we are an executor to the estate. We find this aspect discomforting, so we recommend selling all American securities whatsoever.”

Hummler said he plans to raise the subject today at a meeting of the Private Bankers Association, which counts Pictet & Cie., Lombard Odier & Cie. and Mirabaud & Cie. among its members. Swiss banks, which manage $2 trillion, or 27 percent, of the world’s privately held offshore wealth, are struggling to protect bank secrecy after the government agreed to hand over the names of 4,450 UBS AG clients to U.S. tax authorities.

Hummler said he wouldn’t ask other association members to follow Wegelin’s lead. Wegelin, founded in 1741, manages more than 20 billion Swiss francs ($18.7 billion) in client assets.

“Every member is free to decide and act on their own,” he said.

HSBC Studies Alexandre Zeller,head of HSBC Holdings Plc’s private bank in Switzerland, said his company is still studying the new rules for qualified intermediaries and will do everything it can to comply with them.

“Often in these agreements you have to understand how this will be applied, and it would be premature, especially for an international bank, to take such a decision,” he said today, referring to Wegelin’s position. “It’s not on the agenda for the moment.”

The U.S. has proposed increasing reporting and oversight requirements for so-called qualified intermediaries — foreign banks that withhold taxes on behalf of the Internal Revenue Service. In addition, new rules may mean that people who spend limited periods oftime in the U.S. acquire tax obligations, including estate taxes,creating an unacceptable risk for Wegelin’s clients, Hummler said.

If a client decides to keep his U.S. investments, “then finally he has to change banks,” Hummler said.

“We’re talking about probabilities,” Hummler said. “My responsibility toward clients has to include any kind of probability,and if I see a real threat then we have to act.”

Wegelin is finding alternative ways of investing in the U.S. that won’t impose reporting requirements on the bank or tax liabilities on clients, Hummler said.

“The good thing is that in today’s world you can build up U.S.exposure in equities and as well in bonds through derivatives and index funds and so on, so we are switching to a European-made American exposure.”

Germany and France have also sought to weaken Swiss secrecy laws as they crack down on tax evaders.

The French government, which signed a double-taxation treaty with Switzerland on Aug. 27, obtained the names of 3,000 people suspected of tax fraud and holding accounts at three Swiss banks, French Budget Minister Eric Woerth, said Aug. 30 in an interview with the newspaper Journal du Dimanche.

“It’s not credible,” Hummler said. “The U.S. had a hard time getting these 4,450 names, then the French come and say we have 3,000? I cannot believe it, but they’re trying it on.”

To contact the reporter on this story: Warren Giles in Zurich at wgiles@bloomberg.net

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Community News (V11-I52)

December 17, 2009 by · Leave a Comment 

Muslim women celebrated in new calendar

EDMONTON, Canada–A Grade 3 teacher with a passion for kickboxing is one of 13 Edmontonians featured in a new calendar celebrating local Muslim women.

Noreen Bashir will be seen in the calendar wearing boxing gloves and a sports hijab at the gym where she works out almost everyday. The martial arts champion first took up the sport as a way to exercise while recovering from a car accident.

“I’ve … never been part of any kind of project like that before especially in our community and I’m actually very proud to represent the Muslim women of Edmonton,” said Bashir.

The calendar is the brainchild of local photographer and filmmaker Shazia Javed. The women featured in the calendar were nominated by the local Muslim community and include medical students at the University of Alberta, a local youth worker and a pizzeria owner who raised triplets on her own. Some, but not all, wear head coverings.

“I chose the women which represented a wide spectrum,” Javed said. “To me, it’s all about what they do, rather than for what they wear, and whatever they choose to wear doesn’t hinder them from doing anything.”

Having Bashir in the calendar was important to the project, Javed said.

“This is a very, very important image and a very strong image to send out there, that Muslim women are active. They are fit and you know they’re into sports and they’re strong.

“So I think it’s inspiring to a lot of us in ways if we want to go in sports that yes, we can do it. It’s not against our religion or anything.”

Javed produced the calendar in collaboration with Islamic Family and Social Services Association (IFSSA), with the help of a grant from the Edmonton Arts Council. She hopes the stories of the women in the calendar will inspire Muslim girls.

“I hope it works for the youth in boosting their self esteem in seeing, you know, other Muslim women on (a) calendar for their contributions and also I hope to create some role models for them to say, ok, you know, this woman, she’s a boxer, you know, or this woman, she’s a scholar … so I can be too,” she said.

The calendar will be launched on Dec. 18th. Proceeds will go to the IFSSA food bank.

Support for Naperville Muslim Center

NAPERVILLE, IL–The development committee of unincorporated Naperville on Tuesday reaffirmed its support for a conditional use permit for the Irshad Learning Center. The plan as submitted by the center will go as it is to the Dupage Country Board, the Naperville Sun reported.

The committee heard from both supporters and opponents of the proposal. Neighbors of the property expressed concerns about noise, intensity of use and extending the usage of hours.

Dr. Mojtaba Noursalehi, a Naperville resident, Irshad trustee and one of five applicants on the zoning petition, said he and his fellow board members have complied with the county’s requests and urged the committee to consider the petition solely on its own merits.

The request will go before the County Board at its next meeting Jan. 12

Crescent Bancshares to raise $15m for bank acquisition in Chicago

Crescent Bancshares Inc. announces the kick-off for its capital raise process. The bank focused on the needs of minority communities in the Chicago-land area, plans to open doors for operation in 2010. “ We hope to operate our first branch in the City of Chicago in early to mid 2010” said Fawad Butt, the Managing Partner of Zeus Capital Advisers. Mr. Butt’s company is tasked with the overall project management for the Crescent bank initiative.

“The recent economic slowdown and the resulting financial crises created significant asset quality problems for many community banks in Chicagoland and across the country. The Money Center banks (such as) BOA and Citi are riddled with asset quality concerns” said Rohail Khan, an initial contributor in Crescent Bancshares. “This represents an opportunity for locally connected, locally owned community banks, to gain market share, and to differentiate themselves from the larger banks.”

Crescent bank shareholders, board of directors and the management team, will service all customers and carry a specific focus to develop products and services for the South Asian, South Eastern European and Muslim Communities.

The acquisition of the bank asset is underway. The group plans to finalize the acquisition after the end of the capital raise process.

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The Arab Bailout

October 30, 2008 by · Leave a Comment 

By Sumayyah Meehan, MMNS

bank-op

Vans line up at Gulf Bank to deliver money to the bank branches.

Photo Courtesy www.248am.com.

When news of the U.S. bailout hit the Middle East newswire, the snickering could most likely have been heard halfway around the World. There is no love lost between the U.S. and most Gulf States as the mass majority of Gulf residents view the U.S. as an aggressor and not the liberator they claim to be. However, no one is laughing now as the very first casualty of the World economic crisis, stemming directly from the U.S. bailout, has fallen right in the State of Kuwait, which is sure to send shockwaves to neighboring GCC nations.

One of the most prestigious and trusted financial institutions in Kuwait, Gulf Bank, had to be bailed out by the Kuwaiti government this past week. As Kuwait’s second largest lender, Gulf Bank suffered losses as a result of trading in oil derivatives and its’ own investors refused to help settle those losses. The Central Bank of Kuwait (CBK) has stepped in and is quoted as saying it, “backs the bank and fully guarantees its deposits.” The CBK also halted trading by Gulf Bank in the Kuwait Stock Exchange and sent its’ own surpervisors to deal with risk management. Bank records will be closely scrutinized to determine the scale of the risks the bank took without the knowledge of the CBK.

From the moment the news broke in this tiny Gulf nation, jittery Gulf Bank customers raced to the nearest ATM’s, local branches and even online to immediately withdraw the full balances from their accounts. All of the branches were swarmed with panic-stricken customers and rioting nearly broke out at one of those branches. By the mid-morning of the first day it is estimated that over $100 million US dollars was withdrawn. By the second day, rumors were rife that the all the Gulf Bank branches were under lockdown and customers were being limited as to how much they could withdraw from the ATM machines.

However, to hear Gulf Banks version of the events over the past few days, one might feel like they’ve entered the ‘Twilight Zone’. According to General Manager for Board Affairs Fawzy Al-Thunayan the reason for so many customers descending on the branches of the bank is because, “It’s the time of salaries … It’s the end of the month.” Al-Thunayan also denied that money from CBK is being pumped into his bank despite reports of several armored vehicles being spotted lined up at many of the main branches. 

Weighing in on the turmoil facing Gulf Bank, an employee of one of their main rivals National Bank of Kuwait (NBK) had this to say, “Our bank has been in business since 1952 and we know how to handle our client’s money. If Gulf Bank is having problems, small investors have the right to withdraw their money and look for other banking options.” As the largest lender, by assets, its not surprising that former Gulf Bank customers have been flooding NBK to open up new accounts.

So far Gulf Bank is the first ever Kuwaiti bank to buckle under the pressure of an increasingly uncertain global economy. Other banks in Kuwait are discussing ways to safeguard themselves from falling into a similar situation. A local Arabic daily newspaper has reported that at least four proposals for mergers between Kuwaiti banks have been received by the CBK. By merging into a larger entity, banks can best weather the current economic firestorm.

While Kuwait is the first country to see the demise of one of its’ banks up close and personal, it is not the first country to guarantee bank deposits. The UAE took the preventative measure of calming down its’ investors and clients by guaranteeing all deposits in the first quarter of October 2008.

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