Lebanon’s elite responsible for hollowing out of the state

Zaid M. Belbagi

Demonstrators wave Lebanese flags during a protest in Tripoli, Lebanon. (Reuters)

Sentiments on the streets of Lebanon could not be more different from 30 years ago, when the country’s leaders inspired a sense of optimism in choosing peace and prosperity over bitter civil war. However, one thing from the Taif Agreement remains — the country’s leaders are, by and large, almost identical. Having organized the Lebanese state in a way that protects their interests and systems of patronage, they have grown exorbitantly wealthy. The popular anger on display in Lebanon in recent weeks is not a symptom of sectarianism or the machinations of regional powers, it is a reaction to mismanagement and negligence. Lebanon’s leaders have failed their people.

At the heart of the Lebanese protests is the country’s disastrous financial situation. With the third-highest debt-to-gross domestic product ratio in the world, it has been running huge budget and current account deficits for years. Poverty is endemic, unemployment is high and economic growth has stalled. Within this context, the country’s billionaire politicians planned to impose a $6 monthly fee on the use of WhatsApp, the popular messaging service owned by Facebook. Whereas Lebanese politicians have grown accustomed to communities falling in line according to confessional loyalties, recent demonstrations have cut across sectarian divides — a rare phenomenon since the country’s devastating civil war ended. The public, long suffering from the chronic fatigue of the Lebanese pseudo-state, are angry.

The government barely supplies basic services, so electricity is sporadic, garbage is not collected, the tap water is unhealthy and its telephony costs are among the highest in the Arab world. The government’s pitiful response to recent wildfires exposed how serious socioeconomic woes have become, culminating in dollar shortages, devaluation of the currency and a months-long bread and fuel crisis, raising alarm bells among the wider population. Where Lebanon’s leaders could previously quell popular discontent with revolutionary slogans and the stoking up of resistance of Israel, recent attempts by political leaders to contain citizens’ frustration have proved futile, amid disillusionment and disgust at the litany of broken promises and the backdrop of rickety state institutions and the largesse of politicians.

For years, Lebanon kept itself afloat with aid from the Gulf and money deposited in local banks by wealthy expats. Those who ran the banks were often figures from within the ruling elite, more concerned with accruing interest and investing in bogus real estate developments as opposed to using the capital windfall to get the country moving. Members of this oligarchy had little issue using their political clout to further indebt the state while growing wealthier themselves. Exercising a stranglehold over economic and political power, the top 10 percent of the adult population receives approximately 55 percent of total national income, with the top 1 percent hoarding 25 percent. This places Lebanon among the countries with the highest levels of income inequality in the world, alongside Brazil, Colombia, Russia and South Africa. However, even generous interest rates of as much as 20 percent are no longer bringing in foreign money and the economy is in such deep distress that, this time, only Lebanon can solve its own problems.

Lebanon is not a failed state, it is a hollow one. The people in power, who created the crisis, have too much invested in the system to abandon it in the face of mass protests. Though Lebanon maintains the facade of a democracy, it isn’t in the sense that there is never any real change in power. Leaders who have enjoyed near immunity have adeptly leveraged the “confessional system” that awards government offices and the spoils according to religious affiliation.

Recent attempts by political leaders to contain citizens’ frustration have proved futile, amid disillusionment and disgust. Zaid M. Belbagi

Though there is not a complete failure in the delivery of public goods and the standard edifices of governance persist, the system is heavily corrupted and in thrall to monied elites. By effectively maintaining a weak state, the country’s elites, which have been in power since 1989, are able to continue to profit from smuggling and the luxury real estate developments that are a mainstay of the economy. They control the banks and profit from financing the government’s deficits, and they make money by providing the electricity the state monopoly can’t. The Lebanese citizen, priced out of basic public goods and services, is left to pick up the tab.

If the system were less dysfunctional, the elite would be better able to act. The system is clearly unsustainable, but each entrenched leader of the confessional system has veto power. With the prospect of reform invariably threatening to create winners and losers, the decayed system in its present form is unable to cleanse itself. Within the context of the maintenance of private militias (from which state security services cower), illegal flows of income, gross displays of nepotism and deep-seated corruption, the state will only grow weaker. The longer this state of affairs persists, the more difficult it is to eradicate.

Lebanon does not need a revolution or a return to civil war, and least of all a lifeline of foreign aid. What it needs is a complete recalibration of its government that empowers the state and limits the opportunities of political leaders to enrich themselves through the racketeering and shoddy management that has brought the country to its knees.

Zaid M. Belbagi is a political commentator, and an adviser to private clients between London and the Gulf Cooperation Council (GCC). Twitter: @Moulay_Zaid

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