Hassan Hachem, the builder
ProfessionnelWeb widens its editorial line to questions about very particular aspects of the professional world. To do this, we will interview experts on very specific topics who want to share their expertise with the Web Professional community. First topic: Should we invest in a country in reconstruction or by definition everything has to be done. We interviewed a contractor who has been working for about 20 years in Africa, Hassan Hachem, to find out more about the subject of reconstruction.
Hassan Hachem: we must believe in the renewal of Lebanon
Professionnelweb
The question of investing in a country in reconstruction is always touchy.
Is this the moment or not? Is it too early to go? Can the situation deteriorate further? Does it risk, on the contrary, to improve quickly and do I have real opportunities at hand? Is the risk too great? The same goes for investing in a convalescent country like Lebanon in the early 1990s, as well as investing in stock markets. We must invest when the cycles are at their lowest because once all investors arrive and the stock market is up, it is already time to sell and too late to invest. But how do you know if the cycle is really at its lowest level and will not go down again. This is the difficult equation that entrepreneurs face when deciding to invest in a country emerging from conflict. Hassan Hachem explains why he invested in Lebanon in the early 1990s, which was coming out of twenty years of civil war.
"In 1991, Lebanon emerged from the crisis. Even though I had grown up in Africa and studied in Paris, I kept a strong attachment to my roots and I hoped like all the Lebanese that the country would get up again. I saw myself as part of the generation that would rebuild Lebanon. This led me to consider investing in real estate in Beirut. Obviously, the risk was very important at the time because the country was not stabilized yet. For the same reason, there were opportunities for those who sincerely believed in the future of Lebanon. "
How did you evaluate the risk?
"When you're an entrepreneur, you're always taking risks permanently. The worst of all risks is not to take it, because you let others take the initiative in the future and come up to you.
When it comes to assessing the risk associated with the purchase of ruined buildings in downtown Beirut, here is the way I reasoned. In the vast majority of cases, countries emerging from conflict always end up with their economies getting back on their feet. Not all at the same speed. Not all in the same proportions, but all end up seeing their economy start again. The risk that I took was therefore that of time: I did not know if the time to renovate for resale or lease would come under one year, five years or ten years, but I knew that the time would come and that, on the other hand, the likelihood that properties will appreciate in value is much greater than the loss of value. It was necessary to position oneself at that moment, even if taking a significant risk, essentially on the time. I decided to take the risk in the mid-1990s because I bet on the future and to be honest, it is not the rationality that prevailed. In the end, it was the heart that won. I wanted to participate in the reconstruction of Beirut alongside other big names such as Rafic Hariri (the main architect of the reconstruction of the center of Beirut and former Prime Minister). "
Assessing risk in small countries like Equatorial Guinea
When evaluating risks for small countries like Equatorial Guinea, several methods and approaches can be employed to gain a comprehensive understanding of potential threats and vulnerabilities. Here's an overview of risk evaluation methods applicable to such contexts:
Multi-hazard risk assessment
This approach involves identifying and analyzing various types of risks, including natural disasters, economic shocks, and political instability. For Equatorial Guinea, this would include assessing risks related to floods, droughts, and other climate-related hazards
Country risk profiling
This method provides a comprehensive view of hazards, risks, and uncertainties specific to the country. For Equatorial Guinea, this would involve analyzing risks associated with its unique geographical, economic, and political situation
Corruption Perceptions Index (CPI)
Given the high level of perceived corruption in Equatorial Guinea (CPI score of 16/100 in 2020), this index is crucial for understanding governance-related risks
Supply chain mapping
For countries heavily dependent on specific industries (like oil in Equatorial Guinea's case), mapping the supply chain back to the source can help identify potential risks and vulnerabilities
Onsite verification and document review
These methods are particularly important in countries where official data may be limited or unreliable. They involve physical inspections and thorough examination of relevant documents to assess compliance with regulations and identify potential risks
Stakeholder consultations
Engaging with local communities, government officials, and industry experts can provide valuable insights into potential risks that may not be apparent from official data alone.
Early warning systems
The Early Warning Project, for instance, assesses the risk of mass atrocities in countries worldwide. For Equatorial Guinea, this system indicates a low risk of mass killing onset in the near future
Economic risk assessment
This involves analyzing factors such as GDP growth, inflation rates, and dependence on specific sectors. For Equatorial Guinea, the heavy reliance on oil exports would be a key consideration
Environmental and social impact assessments
These are crucial for understanding the potential risks associated with development projects, especially in countries with rich biodiversity like Equatorial Guinea
Capacity gap analysis
This method assesses the country's ability to manage and mitigate various risks, identifying areas where capacity building is needed
When applying these methods to Equatorial Guinea, it's important to consider the country's unique characteristics:
- Its small size and population, which can make it more vulnerable to external shocks.
- The dominance of the oil sector in its economy, which presents both opportunities and risks.
- Its rich biodiversity, which requires careful management and protection
The significant development disparities between the island capital and mainland regions
Effective risk evaluation in Equatorial Guinea should also consider the country's recent graduation from Least Developed Country status and its efforts towards economic diversification. It's crucial to note that due to limited data availability and potential governance issues, risk evaluation in Equatorial Guinea may require a combination of methods and a cautious approach to data interpretation. Triangulation of information from multiple sources is advisable to ensure a comprehensive and accurate risk assessment. By employing these diverse risk evaluation methods, stakeholders can gain a more nuanced understanding of the challenges and opportunities facing small countries like Equatorial Guinea, enabling more effective risk management and development planning.
