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Letter from Beirut

Published by The Straits Times, Singapore on 2004-04-15

There's much about Beirut that readily recalls Singapore: the greenery, the ambition of its people, the lively urban lifestyle, the proliferation of good eating places, the variety of entertainment, good schools, fine museums, the busy port, safe streets, low crime, the virtually pollution-free environment, and the low-key political climate.

Perhaps that's why, whenever Beirut's leaders talk of sustainable economic development and strategic growth - which is every now and then - they cite the example of Singapore, a country with whom they want to do more business. One would think that a more accessible model of modernity would be that of Dubai, which is a mere three hours, flying distance away from this Mediterranean city, on the eastern side of the Arabian Peninsula; it takes 10 hours to reach Singapore by plane. But Dubai, one of the seven states of the United Arab Emirates, is viewed as a rival - indeed as a relentless rival that has overtaken Beirut by stealth as the Middle East's most sophisticated and cosmopolitan city. Beirutis do not speak well of the people of Dubai: they are still people with sand between their toes, say Beirutis, they are a nation of camel jockeys. Worse, they are arrivistes.

Those unkind characterizations are employed more out of jealousy than dislike, however, because, of course, Beirutis also marvel at the way that Dubai has grown. While the Lebanese were engaged in a terrible civil war from the mid 1970s until 1990 that claimed nearly 300,000 lives, Dubai built a massive infrastructure to enable it to arguably claim the position of the region,s leading banking center. There are those who claim that Dubai has even pushed past Bahrain; like Beirut before it, Bahrain has enjoyed the fruits of offshore banking as international financial institutions anchored here, drawn by Bahrain,s liberal financial regulations and generous tax incentives for foreign companies. Beirut,s port, once the busiest in the entire Middle East, has been overtaken by nearby Jeddah in Saudi Arabia. Beirut,s political establishment still fondly refers to its city as the ,gateway to the Middle East, but not too many other Arabs would include that term in their vocabulary. Beirut's time in the sun seems to have passed.

It has passed not only because of the social and economic destruction of the 16-year civil war, which raged largely between Lebanon's minority Christians and majority Muslims until the Syrians and Saudis stepped in to broker a truce in 1990. Long years have gone by since, but the Syrians remain - some million of them in a nation of barely four million native Lebanese. They work mostly as laborers in the booming construction industry, or as house help. They can be seen in the streets, sometimes begging for alms. Syrians have been installed in Lebanon,s intelligence service, and they help monitor the movements of foreigners, particularly those from the West. There are also 30,000 Syrian troops in Lebanon, manning roadblocks and sometimes collecting illegal gratuities from drivers. The Lebanese despise them, frequently making jokes about them. (Here's one: How many Syrians does it take to change a light bulb? Six. One to install the bulb, five to steal it from the Lebanese.)

But Lebanon's political leaders make a big show of making nice to Damascus. President Emile Lahoud, a Christian, said not long ago that Syria was welcome to stay as long as it wished because it ensured political security in Lebanon. That,s as if Malaysia had occupied Singapore and the latter's prime minister invited it to stay on in perpetuity. (Lebanon and Syria were once joined as part of the French Mandate established after the Sykes-Picot Agreement in 1916, which broke up the old Turkish Ottoman Empire and parceled it out to the French and British. The Ottomans, of course, were among the losers in World War I, having recklessly allied themselves with the Germans.)

Now Mr Lahoud wants a second six-year term, which is prohibited by the Constitution. (Under a National Covenant agreed to in 1943, the country's president is always a Maronite Christian, the prime minister is a Sunni Muslim, and the speaker of parliament is a Shia Muslim. This tradition dates back to a 1941 census that showed Christians constituted 52 percent of Lebanon,s population, with the Sunnis next and the Shias third. No one believes these figures any more, not the least because the population growth of Muslims has been much higher than that of the Christians, many of whom fled Lebanon during the civil war.)

He has been making frequent visits to curry favor in Damascus, and is said to be in the good books of Syrian's president, Bashar Assad. Whether Mr Assad will help Mr Lahoud change Lebanon's Constitution in time for the Lebanese elections later this year, remains to be seen. In the meantime, local newspapers continue their craven coverage of everything he says - even if it's about the weather - and any attempt at a more balanced view of Syria is discouraged by the Lebanese authorities.

The unceasingly laudatory media coverage may not necessarily influence the Syrian president's decisions about Lebanon. Mr Assad may be young - he's not yet quite 40 - but he clearly understands his political calculus: Lebanon's strategic location on the eastern shores of the Mediterranean is important to Syria's own status as an anti-American Arab leader in a region of 300 million people and 24 countries; he cannot afford to antagonize Lebanon's majority Muslims, particularly the Shias of Lebanon's Hezbollah party, whose radical programmes the Syrians support through money and armaments. At the same time, Mr Assad is known to fear that if he pulls out Syrian troops from Lebanon, its ethnic communities will once again start tearing one another apart, perhaps rekindling the conditions that led to the civil war. Conflict in Lebanon will certainly spill over into Syria, where Mr Assad's secular-minded - but authoritarian - government is facing mounting opposition from fundamentalist Muslims.

Mr Assad also sees the value in having the Hezbollah constantly nip at neighboring Israel from its heavily militarized bases in southern Lebanon. Indeed, the Hezbollah claims to be the only Arab force that's defeated Israel: the Israeli pullout from southern Lebanon in 2000 was attributed by many to result from Jerusalem's inability to contain the Hezbollah's guerrilla warfare against Jewish settlements in northern Israel. In Mr Assad's calculation, it's financially worthwhile for Syria to fund the Hezbollah because it keeps Israel from military excursions into his country.

With the infitada still raging in Palestine, the Israelis may not have a Syrian assault in mind just yet. But try telling that to the people of southern Lebanon. A visit to the Bekaa Valley, the cradle of Islamic fundamentalism in the region, shows how much anti-Israeli propaganda the Hezbollah undertakes. Judging from posters and fundraising in the streets of the Bekaa's towns and villages, one would think that the Israelis are about to invade Lebanon. The invasion and occupation of Iraq by the U.S. in 2003 is also cited by Hezbollah street literature as having been prompted by the Israelis.

The Hezbollah is doing more than mouthing anti-Israeli mantras, however. It has acquired political legitimacy in Lebanon by transforming itself from a guerrilla movement into a full-fledged party; it holds 12 seats - out of 128 - in Lebanon's unicameral parliament. Its leader, Ali Nasrullah, has said that although the Hezbollah doesn't currently wish to see Lebanon transformed into an Islamic theocracy, he wouldn't mind if it does. His comments send shivers through Lebanon's Maronite Christians and even Sunni Muslims, who don't share Nasrullah's enthusiasm for outlawing alcohol, gambling and Western lifestyles that have long contributed to Lebanon's reputation as the playground of the Middle East.

That reputation, which was put on hold during the 16 years of the civil war, is blossoming again. Since September 11, Gulf Arabs who would travel to Europe and the United States for leisure and pleasure, are increasingly coming to indulge themselves in free-spirited Lebanon. They are buying valuable real-estate. They are acquiring hotels and resorts. They are channeling funds into local newspapers and television outlets. If Lebanon were to become an Islamic state, it's a sure bet that the Arab traffic, and the revenues it generates for this country, will dry up.

It,s a situation that vastly worries the prime minister, Rafik Hariri, a self-made billionaire who doesn't get along with Mr Lahoud, a former army general, nor with Lebanon,s patron, Mr Assad. At the root of his worry is that the Syrian presence and the incipient threat from the Hezbollah are persuading Western investors not to put their money in Lebanon. Mr Hariri made his fortune in Saudi Arabia in the construction business, and is widely considered to be the main force behind the post-war reconstruction of Beirut. He frequently makes pleas to international investors - and, increasingly, investors from Singapore and Southeast Asia - to help develop Lebanon's tourism industry, which is the country's main foreign-exchange earner after remittances from an estimated 20 million people of Lebanese extraction who live overseas.

The response has been discouraging. In addition to the political uncertainties within Lebanon, investors are frightened by the country's staggering $32 billion foreign debt, or nearly 200 percent of the gross national product. They see little being done to streamline Lebanon's traditionally lethargic bureaucracy. They view Lebanon's economy as hopelessly encumbered by a bewildering body of regulations. And they are disheartened by the unending corruption and administrative paralysis.

No one accuses Mr Hariri of corruption - he's too rich for that - although some of his Cabinet colleagues are not immune from bitter criticism among the elite. The prime minister fears that the main cause of Lebanon's economic deterioration is that, unlike Singapore - a country he hugely admires - it doesn't enjoy good governance. This, of course, is an indictment of his own management. But it also suggests that Mr Hariri's room to maneuver politically and policy-wise is limited by President Lahoud's opposition to any Hariri initiative. Sometimes their rivalry can be comical: Mr Lahoud opposes Mr Hariri on something or the other; when Mr Hariri switches position on that issue, Mr Lahoud takes the opposite view, in effect agreeing with the prime minister's initial contention.

As a result of poor governance and the political standoff between its president and prime minister, Lebanon is in an economic freefall. A recent agreement with foreign governmental lenders - known as Paris II - to reschedule Lebanon's debt repayments has already faltered, and the country's friends - in both the public and private sectors - are unwilling to lend more. More and more young people in a country where some 75 percent of the population is below 30 years of age, are leaving for abroad because there simply aren't enough jobs here. Economists in Beirut say that every month some 3,000 young Lebanese emigrate. Prices are rising, and incomes are falling. The Israelis, determined to tweak Syria's nose whenever possible, frequently send their military jets soaring over Beirut, breaking the sound barrier and making it impossible to have conversations even in the streets. All this is terribly scary for everyday Lebanese as well as their well-wishers.

Their fears are being reinforced by uncertainties over the possible repercussions of legislation passed recently by the United States Congress. Under this legislation, the Syrian Accountability Act and the Lebanon Sovereignty Act, U.S. investors are forbidden to put their money into Syria - and, therefore, into Lebanon - and American companies are barred from doing business with Damascus. Although American investment in Syria and Lebanon is less than $10 million annually, Lebanese officials believe that the legislation could influence international financial institutions such as the World Bank and other development banks - not to mention international banks - to stay away from Lebanon in its time of need.

Will it matter if Lebanon,s economy collapses? For one thing, such a situation will certainly embolden the Islamic fundamentalists to rush into the political fray and perhaps seize power. Already, the deteriorating economy has resulted in the enlistment of scores of new recruits to Hezbollah's cause. In the poor Palestinian communities of Shabra and Shatila, not far from Beirut's gleaming new international airport, it's the radicals who are cheered during their frequent appearances; Lebanon's conventional politicians seldom visit these precincts. The 400,000-strong Palestinian community, after all, is both dispossessed and disenfranchised - no votes there for Lebanese pols. In preparation for the April 2004 municipal elections, few local politicians turned up in the Palestinian areas. Even Beirut's energetic mayor, Abdel Monem Aris, who's known for his action-oriented concern about economically backward constituencies, stayed away.

Lebanon,s collapse would also constitute a severe setback to American efforts at stabilizing the Middle East and promoting the free market as well as a more transparent style of government. Granted that Lebanon has only a limited form of democracy and is in the choke-hold of Syria; but it is a relatively free society with no major restrictions of free speech. The Lebanese, regardless of their ethnic or confessional affiliation, have traditionally been known for their exuberant and secular lifestyle. Urban, middle-class society in the country is Western in its sensibility and yet Lebanese in its practices. There's a real danger of a unique contemporary society going the way of failed states such as Iran and Afghanistan, its secular popular culture hijacked by the missionaries of fundamentalist Islam.

Finally, Lebanon's economic collapse would especially punish its young people. They are among the most literate and intelligent in the Middle East. Lebanon has been producing fashion designers of international repute, along with graphic artists, playwrights, filmmakers, authors, academicians, haute cuisine purveyors, and, of course, entrepreneurs. Not only would they not have much of a future here, they wouldn't even have a country that they could call their own.

The current economic situation can only be resolved by a combination of steps, all difficult and all unlikely, according to most economists and bankers based in Beirut. One would be for the International Monetary Fund to step in and arrange for short-term financial relief for Lebanon. The country's longtime donors, such as the European Union, could make a determined commitment for more resources for sustainable development. International banks could lend more for major tourism projects and for infrastructure growth.

But the most important step to prevent Lebanon from spiraling into total chaos would be for its politicians to clean up the country's politics and administrative morass. It's not just a question of deciding if President Lahoud gets an unprecedented second term as president; it's not even a matter of settling his political disputes with Prime Minister Hariri. The endemic corruption has to end. It's impossible in today's Lebanon to get anything done without money exchanging hands surreptitiously. The resulting drain on the economy is horrific, mostly because such corruption adds to the cost of doing business in Lebanon.

So it's all very well for Beirutis to wish their country were more like Singapore. It's nice that Mr Hariri is a big fan of Prime Minister Goh Chok Tong and of Senior Minister Lee Kuan Yew. But the Lebanese tend to overlook the fact that the very name Singapore is synonymous with a corruption-free society that's able to devote its unfettered resources to sustainable economic development. They want a clean society without paying the necessary price in civic discipline, another Singaporean lesson that the Lebanese haven't learned. And a corruption-free society assumes the existence of a strong leadership that's unbending when it comes to moral values and societal vision for sustained economic growth.

By these standards, Lebanon is much farther away from Singapore than what the geography suggests.

(Pranay Gupte, an editorial consultant at The Straits Times, was editorial director of the Lebanon edition of The Daily Star in Beirut until recently. Earlier, as a foreign correspondent for the New York Times, he covered the Lebanese civil war in the late 1970s and early 1980s.)

Pranay Gupte,
Senior Writer and Global-Affairs Columnist

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