Alumni in focus: Patrick Mardini

Daniel Anthony, Atlas Network’s Vice President of Marketing and Communications, first met Patrick Mardini, founder and president of the Lebanese Institute for Market Studies (LIMS), while he was teaching a class on messaging to Mardini's Think Tank Leadership Training group prior to Liberty Forum 2016 in Miami. "I was incredibly impressed by his idea about ‘legalizing’ electricity in Lebanon; however, what’s been more impressive is how far he has been able to take that idea from concept to reality in less than a year since we’ve met," said Anthony. He recently spoke with Patrick to get an update on some of his latest progress and challenges. This was first published in the Freedom’s Champion Fall 2017 edition.

Daniel Anthony: Is it true that Lebanon frequently suffers from blackouts?

Patrick Mardini: People in Lebanon suffer from an average of 12 hours of rolling blackouts every day. Power outages are very damaging to a wide variety of sectors in the country. And many households and businesses have to acquire electricity on the expensive black-market of private generators. Furthermore, the few hours of electricity provided are subsidized and the government’s losses from managing the sector represent around 50 percent of the nation’s fiscal deficit.

LIMS has been working toward three reforms in the electricity market: (1) abolish electricity subsides, (2) stop further government spending on the sector, and (3) allow private companies to produce and sell electricity.

In December 2016, LIMS started an advocacy campaign under the title of “Legalize Electricity” to push for those reforms. The campaign obtained wide newspaper coverage, TV reports during the prime-time news of major TV channels, and interviews on political talk shows.

Using this momentum, LIMS started supplying ideas and arguments to major political parties in Lebanon and triggered a debate on the electricity problem. Shortly afterwards, the government decided to cut electricity subsidies.

Our second objective was to stop government spending on the sector as the ministry of energy was planning to rent “power ships.” LIMS provided arguments to repeal such a decision, and the ministry’s plan was pushed back twice. LIMS is arguing for opening up the sector to competition as an alternative to government spending, which would save the government investment costs, reduce the current inefficiencies of the sector, raise the quality of the service, and allow households to save on their overall electricity bill.

What are some real stories of real people struggling with this issue in Lebanon?

During the campaign, LIMS produced and published informational videos reaching around half a million viewers on Facebook. The videos helped build the LIMS brand by reaching new audiences and grow the base of free market supporters by engaging new people in the campaign.

We received many messages from people telling us their story with electricity cuts: Elie was stuck in an elevator for four hours with his two-year-old daughter; Mohammad suffers from water shortages when electricity goes off; and Marie almost lost her dad when machines stopped in the intensive care unit.

An interesting input came from Abdullah, the owner of an electricity generator who provides backup solutions for subscribers when outages occur. Generator owners are widespread in Lebanon and they offer solutions to 70 percent of Lebanese households, although their job is illegal since only the government company has the monopoly over electricity production and distribution.

Abdullah stated: “I am currently using cheap generators that are noisy, polluting and not very efficient. I would like to build more efficient power plants. I can handle all the logistics, and I already have a good client base … Once it’s legal, I would be able to borrow funds from the bank or attract investors to grow my business, which I cannot do right now … LIMS is taking a great initiative! It’s not reasonable to make illegal the production of a service that people need.”

What are the biggest obstacles to economic freedom in Lebanon?

Today, Lebanon is on the brink of a disaster. Debt is at 147 percent of its GDP, making it the third most indebted country in the world. Taxes and government borrowing are being increased and spent on inefficient public administration. The first challenge of Lebanon is to downsize government.

The second challenge is to repeal government-protected monopolies. Competition is needed in Lebanon in many fields. Because of these monopolies, the Lebanese people pay the highest telecom bills in the world.

Economic growth dropped sharply from eight percent before the Syrian war in 2010 to around one percent today. The economic spillover from Syria came through four channels: trade routes going through Syria were interrupted; Arab tourists couldn’t travel through Syria; security tensions increased; and the number of Syrian refugees has reached a third of the population of Lebanon. Therefore, the country’s third challenge is to liberalize the economy. Lebanon should diversify trade, attract tourists from other destinations, and allow Syrian refugees to open businesses and work freely.

How will LIMS bring a brighter future to Lebanon?

LIMS prepares staff and activists of political parties to become free-market champions in their own surroundings. In March 2017, the LIMS Leadership Academy hosted 85 staff and activists from six different political parties. During the two-day workshop, participants acquired the needed skills that would enable them to suggest solutions to the country’s problems – focused on downsizing the government and allowing more competition.

In addition to capacity building programs, the Institute produces policy recommendations, engages in raising public awareness, and offers technical support to decision makers. The electricity campaign is an illustration – the country has been suffering from electricity blackouts for decades, and solving it will show that downsizing government and allowing competition can solve the most challenging problems of Lebanon.

What drew you to get involved in advocating for increased economic freedom?

In the summer of 2014, while visiting the Johns Hopkins University to work on a research paper, I shared with Dr. Kurt Schuler the idea to create a free market research center in Lebanon. Dr. Schuler connected me to Atlas Network.

In December 2014, I attended Averroes Academy, an event sponsored by Atlas Network, and drafted a policy propos- al, which won the prize of best policy idea in the Middle East North Africa (MENA) region. At the same time, I started working on building an impactful institute able to advocate for the policy reforms. The Lebanese Institute for Market Studies was founded in the summer of 2015 with its mission being to restore economic freedom in Lebanon through working with policy makers and opinion leaders. We then took Atlas Network’s MENA Think Tank Start Up Training in Morocco in 2015. LIMS was also awarded the best think tank project within the MENA region at the first Arab Liberty Festival in 2015.

LIMS has since attended Atlas Network’s Think Tank Leadership Training and launched “Legalize Electricity,” which was developed in part during the Unconference session of Atlas Network’s 2016 Liberty Forum in Miami. In 2017, LIMS hosted Dr. Tom G. Palmer to a round table with Lebanese ministers, MPs, and economic advisors of key political parties.

What other projects of LIMS are you excited about?

LIMS is currently empowering Lebanese students to create freedom clubs in their universities. We offer interested students the needed training and support to strengthen their knowledge of freedom and to establish a club on campus. We expect to have three clubs established in three different Lebanese universities within a year.

Since founding LIMS in 2015, Mardini has participated in Atlas Network’s MENA Think Tank Start Up Training (2015), Think Tank Navigator (2016), Think Tank Leadership Training (2016), multiple webinars, and Unconference at Liberty Forum 2016.