issue 258 - August 1994
CHRIS STOWERS / PANOS PICTURES
shame about the coat
There were high hopes of billionaire Prime Minister Rafic Hariri when he was elected in 1992.
Kamal Hamdan analyses a balance sheet that’s already gone into the red.
You can only go on patching a mended coat for so long before it comes apart at the seams. Lebanon is like that coat. Four years have passed since the end of the war and the gaping holes reveal the old clothes underneath. The families of the 125,000 dead and 250,000 wounded during the war are still mourning their loss; 75,000 people have permanent disabilities; half-a-million people left the country during the fighting. The economic damage amounted to $30 to $40 billion.
The Government of billionaire Prime Minister Hariri raised people’s hopes for a new start. But improvements on the economic front prioritized mega-reconstruction plans and neglected social concerns. Patching up the coat that is Lebanon with sumptuous brocades only stretches the tears.
For the first two years after the war ended security was the main objective. The armed forces needed to be reunified and redeployed, the militias dissolved and reintegrated into the State apparatus and the Palestinians – especially their armed presence – brought under the Government’s thumb. The arm of the State, for so long non-existent, began to exert rigorous control, which also extended to the political arena. For the first time in 20 years there were Parliamentary elections; new electoral laws were introduced and the Council of Ministers was given extended powers which made it the most important institution in the political system.
But it was not until Rafic Hariri’s Government took over in October 1992 that things seemed to improve. Within a few weeks of the arrival of the Hariri Government the plummeting Lebanese pound gained 30 per cent in value, ending almost ten years of deterioration. The hopes of the Lebanese people for their economic and political future rose almost as sharply. An optimistic spirit rapidly replaced earlier feelings of disorientation, confusion and despair.
Hariri re-opened the file on reconstruction, which had been dormant since the war ended. A three-year plan – the NERP, or ‘National Emergency and Recovery Programme’ – was unveiled requiring a total budget of $2.3 billion. The Government contracted $1.5 billion of foreign credit. Reconstruction projects for electricity, telecommunications, Beirut’s port, road systems and the suburbs of Beirut got underway. A ten-year plan envisaged an accelerated development process and a doubling of per capita income.
The Hariri Government seemed at first sight to have inaugurated a new era characterized by a long-missed economic rationality and grandiose projects. The emphasis was on external markets, capital assets and international firms specializing in public works. But many people have major criticisms of the Government’s programmes. Despite early economic successes, the Hariri Government is attempting to conjure away fundamental, unresolved political problems.
CHRIS STOWERS / PANOS PICTURES
The most significant of these is the issue of reconciliation. So far the process of re-conciliation between the different groups who fought each other during the war has been limited to the élites. There has been no attempt to reconcile ordinary citizens so they can live side by side once more.
Other equally serious political problems remain as well. The Government must guarantee the representation of the Christians, once the dominant group in Lebanon and now effectively marginalized. Recent attempts by Hariri to do this have not been successful because he is only allowed by the Syrians to operate within certain margins.
Then there are the possible effects of the increasing pressure being put by the Government on democratic freedoms: on the media, the trade unions and the right to peaceful demonstrations. And finally there is the inherent contradiction at the heart of the ‘marriage’ between the rule of Hariri on the one hand and that of the still-feudal (and ‘confessional’) ‘warlords’ on the other...
Hoping that these problems will just go away, or trying to minimize their importance, will not change their reality one iota. On the contrary, it will ensure that they surface at some point in the future and thus become a source of instability.
The reconstruction programmes adopted by the Hariri Government favour an ostentatious public investment policy far beyond the capacity of either the State administ-ration or internal finance systems. The social side of reconstruction – housing for ordinary people, schools, hospitals, etc – and also the support needed for the private sector, are largely being sacrificed in favour of a few grandiose projects: the Palais de Congrès, the Sports City, road and railway systems, the disproportionate enlargement of the airport... There is in-sufficient national reflection on the alternatives, nor on the major choices being made.
There is also the issue of Lebanon’s role in the Arab world. In the past this role was an important one. But the productive capacity of the country has changed radically during the civil war. So has the country’s Arab hinterland. The flow of goods and services, human resources and relations with the rest of the world is no longer the same as it was.
The Middle East as a whole is undergoing profound changes with the arrival of Arab-Israeli peace. The majority of the reconstruction plans for Lebanon were fixed before the Madrid summit in 1993. It is therefore legitimate to ask whether these plans are still relevant. For example, will Beirut still be able to serve as a focal point for trade along the eastern Mediterranean coast if Tel Aviv is opened up to Arab customers?
There is not even agreement about the immediate objectives realized by the Hariri Government. It is true that certain indices have improved – the balance of payments, Central Bank reserves, the budgetary deficit, transfers of capital, the value of the Lebanese pound.
But the last months have been marked by an increasingly-severe economic recession. Public investment projects have been planned but not implemented. There has been a massive influx of manual labourers from abroad – Syrian construction workers and Sri Lankan domestic workers – who send their money back home. Taxes on interest have been kept at an inflated level. All these factors together have created a feeling of economic crisis without recent parallel.
Even the middle classes have become poorer. Their salaries have failed miserably to keep up with the cost of living. Inflation between 1992 and 1993 reached more than 150 per cent, but during this time there was only one official salary increase of 45 per cent. The Government’s attitude to the price of goods and public services has hit everyone hard. In two years the cost of phone calls has increased eight-fold and electricity bills are twenty times higher than they were.
As a result a process of social marginalization, which had already begun before the war, is accelerating. The poor are getting poorer. There is little in the way of social protection or welfare except that provided by private ‘confessional’ groups.
Finally, the crucial questions still remain and there’s no convincing response on the horizon. Towards what kind of society is Lebanon heading? Will it be a welfare state? Or will we see a small segment of society improve itself at the expense of the middle classes and the poor? If so, what will be the consequences for civil society, democratic freedoms and more generally for the quality of life? Only a secular and democratic alternative will resolve the country’s complex web of problems. Otherwise the coat that is Lebanon could be torn to shreds once again.
Kamal Hamdan is Director of the Consultation and Research Institute in Beirut.
It is hard to imagine, standing amid the devastation of Beirut’s old city centre, that the gutted buildings and filthy overgrown streets were once its commercial and cultural heartland. Today, the same area has become the focus of a reconstruction scheme that has sparked a controversy over the identity and future of post-war Lebanon.
This scheme is called Horizon 2000. It is the brainchild of Prime Minister Hariri, and it envisages the effective privatization of the whole area. Massive capital is being raised by offering shares to Lebanese and Arab investors and the district will be turned into the new business capital of the Middle East.
Opposition to the plan has been fierce. Some have argued that the creation of a global financial metropolis in Leb-anon is entirely inappropriate at a time when social amenities such as housing, education and health services are in such appalling condition. Others have accused Solidere, the company set up to oversee the project, of being Hariri’s profit-making puppet, criticizing its plans to build Manhattan-style skyscrapers as ‘vulgar’ and expressing concern about the preservation of archaeological sites in the area.
Two years from its outset, criticisms remain. But it is also poss-ible to detect voices of optimism. At Solidere’s offices, officials claim the $600 million raised is evidence of Lebanese confidence in the scheme. A more independent source of optimism is Professor Samir Khalaf, a sociologist at the American University of Beirut, who accepts that the project is based on profit but argues that Solidere have shown a genuine sensitivity to public concern. ‘Over the last year the plans have changed six times,’ he says. ‘The archaeological sites are now treated like sacred cows and the vulgar aspects of the initial plans have been dropped. Residential planning has increased and the provision for public space is higher than anywhere else in Beirut.’ He sees the main task of the project as creating areas within the city where civil society can re-emerge; places ‘which we can begin to see as shared, and where we can begin to heal the brutalized and fragmented tendencies brought on us by the war.’
Those like Khalaf are adamant that the decision to concentrate on the area is both valid and symbolically important: ‘I appreciate the many problems in the country,’ he told me, ‘but that area is special to Lebanon. It is the symbol of our collective pride and our shame, and we must reclaim it as a matter of urgency. If we ignore it we run the constant risk of slipping back into the abyss.’
Refreshing though such enthusiasm is, there are still strong grounds for caution. None of the building work has actually begun. No-one knows quite how it will be evaluated when it does. And even then, it is expected to take 20 years to complete
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