Fouad M. Makhzoumi | Executive Chairman-CEO, Future Pipe Industries Group Limited, UAE & Lebanon

Case Study Outline

1. → Fouad Makhzoumi Video (above)
2. → Learning Objectives
3. → Main Category of Action
4. → Fouad Makhzoumi’s Story
5. → Summary of Case
6. → Acceptance speech by Fouad Makhzoumi
7. → Address by Fouad Makhzoumi
8. → Introduction to Lebanon
9.      – Demographics and Economy
10.      – Religious Demographics
11.      – Conflict and Violence related to Religion
12. → More About the Makhzoumi Foundation
13. → Discussion Questions
14. → Media and Added Resources

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Learning Objectives

Dr. Fouad Makhzoumi, a leading industrialist in Lebanon, the region and the world and an outspoken advocate for interfaith understanding, religious freedom and peace. He founded the Makhzoumi Foundation in 1997 motivated by his strong desire to help empower fellow citizens to achieve self-sufficient independence via improved career prospects, regardless of religion or creed. This was a significant step forward given that Lebanon was emerging from a 15-year civil war that fell along sectarian lines and left the country in a state of disrepair with a desperate need to rebuild and jumpstart its flailing economy and educational system.

The learning objectives for this case study include:

1. 1. Conflict and sectarian violence is bad for sustainable business; interfaith understanding, religious freedom and peace are good for business.
2. 2.Business leaders do not support just any cause, but causes that are close to home. The personal and professional lives of business leaders can be a source of inspiration for them to engage in philanthropy that advances interfaith understanding, religious freedom and peace.
3. 3. Philanthropy that is sustainable must focus on delivering service rather than just promoting a message.
4. 4. Business thinking can be a source of innovation in solving social problems because business is the crossroads of creativity, commerce and culture.
   

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   Main Category of Action

   Social investment and philanthropy

   Financial and in-kind contributions, and strategic social investment support for NGOs, UN and/or multilateral agencies or directly to affected communities and/or contribution of functional expertise through volunteering efforts.

Fouad Makhzoumi’s Story

Fouad Makhzoumi and his family experienced a terrible loss In 2011, his only son, Rami, then 33, died of a brain aneurism after working out.

The Makhzoumis were devastated. Adding to their pain was the necessity of dealing with the family business in this time of intense grief. Rami Makhzoumi had taken over the family business, Future Pipe Industries, from Fouad when the son was only 23 and in 10 years grew the Saudi Arabia-based manufacturer from a $100 million business to a $1 billion empire.

Fouad Makhzoumi, then 62, resumed the helm of Future Pipe Industries, but not before recommitting himself to his son’s legacy — a business philosophy of good governance, of thinking of others, of listening to subordinates and of respecting the potential in each individual, regardless of their religion.

“Rami had a vision,” the elder Makhzoumi said in a 2012 British radio interview. “He wanted to reposition the image of young Arab leaders. He believed there was goodwill in that world, it was just a matter of showing it.”

Rami, who had rededicated himself to Islam as a young man, “was committed to the idea that big business could be a force for social good,” his father said.

Since his son’s death, Makhzoumi, who is originally from Lebanon, has shared Rami’s philosophy around the world as a spokesman for religious tolerance and freedom. He also puts    that philosophy to work in the Makhzoumi Foundation, a private family foundation where Rami served as vice president. The foundation works to empower young Arabs through microcredit loans, vocational classes and health awareness programs.

“We had civil war for 15 years,” Makhzoumi has said of Lebanon, where the family foundation is based. “Over 250,000 people were killed in this small country of 4 million.” The family hopes its programs, which have reached over 300,000 beneficiaries, can provide young people with a more attractive option than extremism.

“We have to give them an alternative so they can think that life is not about carrying guns,” he said.

The entire Makhzoumi family is committed to religious tolerance and freedom. The parents, who are Muslims, encouraged their children to choose their own level of observance. After college, Rami made the hajj, the pilgrimage to Mecca required of all devout Muslims, and came home renewed in both his faith and his commitment to tolerance.

“Without religious freedom, the economy can never be developed, development can never be achieved,” Fouad Makhzoumi said. “Religious freedom is the pillar of development and economic growth.”

Makhzoumi made a leap of faith when he gave his son the top job at Future Pipe Industries, something he did, he has said, because he believed young people such as Rami had the tools to grow the business in the modern era. In his son’s memory, Makhzoumi now places his belief in other young people through the family foundation.

“My feeling is we all need to work together to give these young men and women alternatives,” he said in a speech in 2015. “Let us make them wake up.”

Summary of Case

During a 15 year civil war, many youth in Lebanon forewent their education as they became increasingly involved with religious fundamentalism, leading to unemployment and economic stagnation.

Fouad Makhzoumi, CEO of Future Pipes Industries Group Limited, witnessed how his late son’s youthful energy and cross-cultural savvy triggered exponential growth as his son provided a positive vision for productive and socially responsible business.

Makhzoumi and his foundation have helped empower thousands by harnessing this same youthful enthusiasm for entrepreneurship and religious freedom. His microcredit training for Lebanese people of all faiths has helped over 10,000 individuals set up sustainable businesses, and hundreds of thousands more are receiving vocational training.

Acceptance Speech by Fouad Makhzoumi

The following acceptance speech was delivered during the inaugural Global Business & Interfaith Peace Awards, which were held in Rio de Janeiro on Tuesday, Sept. 6, a day before the Opening Ceremony of the 2016 Paralympic Games.

The awards recognize business leaders – current or past CEOs – who have demonstrated leadership in championing interfaith understanding and peace. The Awards are a partnership initiative of the Religious Freedom & Business Foundation (RFBF), and the United Nations Global Compact Business for Peace (B4P) platform, with collaboration from the United Nations Alliance of Civilizations. The next awards will be given in Seoul, Korea, ahead of the 2018 PyeongChang Winter Paralympics.

Interview by Fouad Makhzoumi

Fouad Makhzoumi, CEO – Future Pipe Industries, explains why governments and peace keeping forces should change the way they deal with conflicts for a more peaceful world, at San Patrignano.

Introduction to Lebanon

Demographics and Economy*

In Lebanon, 95% of citizens identify as Arab, 4% represent as Armenian, and 1% represent as other. The official language is Arabic, while French, English and Armenian are also spoken. As of July 2015, the Lebanon’s estimated population was 6,184,701.

Nearly half of the Lebanese population are between the ages of 25-54 years old, at 44%. Children between the ages 14 and below account for 25%, while those between 15-24 account for 17% of the population. Those 55 and older account for 14% of the country’s population. The median age in Lebanon is 29, and the life expectancy is 77.

Lebanon’s GDP per 2015 was at $51 billion. Agriculture accounts for 5.6% of the GDP, Industry accounts for 24.7%, and finally nearly 70% accounts for services. As of 2004, 29 % of the Lebanese population were below the poverty line. Lebanon’s export partners include: Saudi Arabia 12.4%, UAE 10.5%, Iraq 7.8%, Syria 7.3%, South Africa 4.8%. The countries import partners include: China 12.7%, Italy 7.4%, US 6.2%, France 6.1%, Germany 5.6%, Greece 4.5%. Lebanese exports include: jewelry, base metals, chemicals, consumer goods, fruit and vegetables, tobacco, construction minerals, electric power machinery and switchgear, textile fibers, paper. The country’s imports include: petroleum products, cars, medicinal products, clothing, meat and live animals, consumer goods, paper, textile fabrics, tobacco, electrical machinery and equipment, chemicals.

Lebanon has a free-market economy and a strong laissez-faire commercial tradition. The government does not restrict foreign investment; however, the investment climate suffers from red tape, corruption, arbitrary licensing decisions, complex customs procedures, high taxes, tariffs, and fees, archaic legislation, and weak intellectual property rights. The Lebanese economy is service-oriented; main growth sectors include banking and tourism.

The 1975-90 civil war seriously damaged Lebanon’s economic infrastructure, cut national output by half, and derailed Lebanon’s position as a Middle Eastern entrepot and banking hub. Following the civil war, Lebanon rebuilt much of its war-torn physical and financial infrastructure by borrowing heavily, mostly from domestic banks, which saddled the government with a huge debt burden. Pledges of economic and financial reforms made at separate international donor conferences during the 2000s have mostly gone unfulfilled, including those made during the Paris III Donor Conference in 2007, following the July 2006 war.

Spillover from the Syrian conflict, including the influx of more than 1.1 million registered Syrian refugees, has increased internal tension and slowed economic growth to the 1-2% range in 2011-15, after four years of averaging 8% growth. Syrian refugees have increased the labor supply, but pushed more Lebanese into unemployment. Chronic fiscal deficits have increased Lebanon’s debt-to-GDP ratio, the fourth highest in the world; most of the debt is held internally by Lebanese banks. Weak economic growth limits tax revenues, while the largest government expenditures remain debt servicing, salaries for government workers, and transfers to the electricity sector. These limitations constrain other government spending and limit the government’s ability to invest in necessary infrastructure improvements, such as water, electricity, and transportation.

* CIA Factbook

Religious Demographics

Nearly two-in-three of Lebanon’s people identify as Muslim (61.3%), according to the Pew Research Center. Christians account for 38.3% of the population. Lebanon’s Muslim population is expected to grow from 2.590 million to 2.92 million in 2030. The country’s Christian population is expected to grow from 1.62 million to 1.83 million in 2030.

Conflict and Violence Related to Religion*

Following World War I, France acquired a mandate over the northern portion of the former Ottoman Empire province of Syria. The French demarcated the region of Lebanon in 1920 and granted this area independence in 1943. Since independence the country has been marked by periods of political turmoil interspersed with prosperity built on its position as a regional center for finance and trade.*

The country’s 1975-90 civil war that resulted in an estimated 120,000 fatalities, was followed by years of social and political instability. Sectarianism is a key element of Lebanese political life. Neighboring Syria has historically influenced Lebanon’s foreign policy and internal policies, and its military occupied Lebanon from 1976 until 2005. The Lebanon-based Hizballah militia and Israel continued attacks and counterattacks against each other after Syria’s withdrawal, and fought a brief war in 2006. Lebanon’s borders with Syria and Israel remain unresolved.*

According to the U.S. State Department, following 2015 terrorist attacks by Da’esh and al-Nusra in Lebanon, leaders of Sunni, Shia, and many Christian groups condemned extremism and violence perpetrated in the name of religion. On June 3, 2015, a special Islamic summit held in Beirut at the headquarters of Dar el-Fatwa, Sunni Islam’s main body, issued a press release condemning violent and discriminatory practices by extremists, condemning coercion in religious matters, calling for respect of private and public rights, and reiterating the principle of pluralism in Muslim-Christian relations and intra-Muslim relations.

As shown in the Pew Research chart, the global median social hostilities index score of countries is 2.4, and Lebanon scores 6.1, putting it in the high category.Lebanon has moderate governmental restriction on religious freedom. Globally, the median government index score is 3.1, and Lebanon ranks at 4.

More About Fouad Makhzoumi

Dr. Fouad Makhzoumi is a leading Arab industrialist, philanthropist, social activist, and politician who uses his influence in each of these areas to build inclusive societies where everyone has the opportunity to become an empowered and self-reliant citizen contributing to the common good. His foundation has provided employment and life skills to a sizable portion of the population of his home country, Lebanon — a country previously beset by sectarian conflict.

As a Sunni Muslim, Mr. Makhzoumi passionately argues that unless all faith groups rise together, there can be no peace. Accordingly, his foundation intentionally trains and provides services to all. He shows that when people have a shared stake in making society succeed, then faith becomes a source of cohesion and religion cannot be hijacked for destructive purposes. Through his business his pipes bring water needed for life and through his foundation he nurtures life by promoting interfaith collaboration on education, health and social engagement.

At home and abroad he advocates for the importance of freedom of religion or belief, and the opportunity the Arab world has to advance towards more open and stable societies. For instance, speaking at a major gathering in Rimini Italy, attracting 800,000 people from civil, business and government sectors, Mr. Makhzoumi put forward the case for how interfaith understanding and freedom of religion or belief is a powerful antidote to violent extremism.

Also participating with him was Antonio Tajani, Vice-President of the European Parliament; Lucio Battistotti, Director of the European Commission Representation in Italy; and Michele Valensise, Secretary General of the Ministry of Foreign Affairs and International Cooperation. The panel was introduced by Roberto Fontolan, Director of the International Center of Communion and Liberation, a global movement in the Catholic Church which has the purpose of forming its members in Christianity in order to make them coworkers in the Church’s mission in all areas of society. Mr. Makhzoumi is the Executive Chairman and CEO of the Future Pipe Industries Group Limited as well as the founder and Chairman of the National Dialogue Party (NDP) and the Forum for National Dialogue (FND) in Lebanon.

Dr. Makhzoumi has taken many initiatives to promote interfaith understanding and peace. To name but a few: Corporate Governance at Future Pipe Industries Group Limited (FPIGL) (2008), Corporate Social Responsibility at FPIGL (2009), at Makhzoumi Foundation (MF) (1997), which developed departments, programs and units to address the needs of the Lebanese community and that of its residents across all sectarian and faith traditions. It does that through reducing sources of tensions by improving their socio-economic status by extending loans, developing skills, through informal and formal vocational trainings, providing health awareness and supplying core relief items to the most vulnerable communities, making good value healthcare available, preserving and raising awareness on agro‐environmental issues, empowering youth potentials, and orienting them to achieve self‐sustainability and independence.

NDP aims at fair and just treatment and justice among all, through effective ways and procedures that will prevent the abuse of power and position. Sectarianism and confessionalism, in the political sense, have proved to be a tool for corruption leading to more political influences of sectarian leaders. NDP believes in multi-confessions and religious sects, for these are vital dements of a coherent nation; but, at the same time, political sectarianism has misled the true definition of multi-confessionalism. This distortion has adversely impacted the various religious sects.

It is with this in mind that the NDP aims at abolishing political sectarianism and its negative implications, as called for in Al-Taif Accord, in order to unify the Lebanese citizens and enhance nationalism. This will have the happy result of eliminating traditional misuse of power and leadership through religious affiliation. “Beirutiyat”, created in 2015 (Beirutiyat), is another NGO targeting and addressing Beirutis and their welfare. Our community aims to pay homage to the heart of this glorious country, this melting pot for cultures and religions, and a place that turns a heterogeneous population into a homogeneous one. Its career guidance, management and volunteering- function Civic and civil engagement another initiative of Rami Makhzoumi Chair on Corporate Governance (2011).

Dr. Makhzoumi earned his undergraduate and Master’s degrees in Chemical Engineering from Michigan Technological University. After working in the pipe manufacturing industry, he founded Future Pipe Industries and built it up to become the global leader in the large diameter fiberglass pipe industry. Mr. Makhzoumi has been a member of the International Board of the Council on Foreign Relations: US/Middle East Project since 1996.

From 1995 until 1998, he acted as Vice Chairman of the Institute for Social and Economic Policy in the Middle East at the Kennedy School of Government at Harvard University. Dr. Makhzoumi is a member of the Advisory Board of the CSIS, as well as a member of the IISS. He is also a long time member and former director of the International Desalination Association. In 1997, he founded MF, a private Lebanese non-profit organization that contributes, through its vocational training, health care and micro-credit programs to Lebanese civil society development.

Dr. Makhzoumi is also the founder and Chairman of the National Dialogue Party (NDP) and the Forum for National Dialogue (FND) in Lebanon. He was appointed a Commander of the Order of Merit of the Republic of Italy in 2013, and received the Socrates Oxford Annual Award for 2014 by the European Business Assembly (EBA) in Vienna. He has received as well many other awards and trophies.

Discussion Questions

1. 1. In what ways are conflict and sectarian violence bad for sustainable business? What about bullet and bomb makers (the defense industry)? In what ways are interfaith understanding, religious freedom and peace good for business?
2. 2. What are the best ways to engage business leaders in social causes? Are they likely to support just any cause?
3. 3. Is the Makhzoumi Foundation’s model of philanthropy sustainable? Does it do more than just promote a message?
4. 4. In what ways can business thinking be a source of innovation in solving social problems, including sectarian conflict?

Media and Added Resources

• – Official Rami Makhzoumi (memorial website)
• – Makhzoumi Foundation (website)
• – Fouad Makhzoumi (website)
• – Makhzoumi Foundation Youtube Channel

This case study was prepared by Melissa Grim, J.D., M.T.S., a senior research fellow with the Religious Freedom & Business Foundation, and Brian Grim, Ph.D., president of the foundation. It is made possible by a generous grant from the Templeton Religion Trust.