ABUNDANCE VS SCARCITY Strategic Thinking for Lebanon’s Emergence in this Century. By Tracy Chamoun.

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Notwithstanding the fact that Lebanon is going through one of its most perilous crises in its history, one cannot remain idle waiting for solutions to fall from the sky. The fiscal and financial sector struggles are matters which need to be resolved through very precise policies in conformity with international regulations and standards.

But it is important to counterbalance these negative trends with governance that is more positive, and proactive to paint an exit strategy for Lebanon ensuring its emergence from its present economic woes and state of impoverishment.

Unfortunately, rather than focus actively on solutions, many of the people in power are still bickering over the dried out old crumbs scattered in the empty pie dish. Therefore, I have taken the liberty of articulating some important factors and trends which need to be taken into consideration when trying to rebirth Lebanon in this century.

This exercise might be deemed premature, but planning is the key to success, and it is never too soon to think ahead, because before you know it, it becomes too late. In the light of such planning, it is important to highlight both the strengths and the weakness of Lebanon, and despite the fact that it is a small country, it is fair to say that what it does not possess in land mass, it certainly makes up for in ingenuity, flair and entrepreneurship. In addition to the quality of its people, Lebanon’s geographical position has always made it a vibrant intersection for cultures, trade, migration, and excellence through diversity.

Today however, looking at the state of affairs in the country, it would seem that all has been lost and that Lebanon is confronting a very serious breakdown. Nevertheless, breakdowns and even death are part of the process of rebirth and therefore this time of chaos and dissolution must be transformed into a breakthrough, for the sake of the population’s survival.

In order to do this, I am presenting the basic elements of a vision for the country which will pave the way for Lebanon in the future, to allow it to effectively navigate the forthcoming big trends forecasted this century which will be shaping the world.

Certainly, every sector of the economy must be treated in the same way with careful analysis and projections, but in this paper, I will be focusing only on a couple of sectors, which are very strategic for Lebanon

In the Government Recovery Plan, which was mostly centered around resolving the financial crisis, they also relied on what they called two pillars of the economy to present a recovery model, and one of these was tourism. I would just like to say that for too long, Lebanon has relied on a model of existence which originated in the 50’s and 60’s that placed tourism as the main driving force for an economy that has been lodged for more than half a century in a permanent war zone. Lebanon has also been burdened by the continuous large presence of radicalized refugees, and it is a country that is extensively polluted. On top of everything else, it is now having to deal with the fallout of the new post-Covid-19 world order, where travel and tourism will become less profitable – at least in the short term.

Because of these challenges, tourism is to be placed on the backburner. Lebanon needs solutions and does not have the luxury of time, to wait for anything which is outside of its control.

The other image of Lebanon which no longer holds validity, is its description as the Switzerland of the Middle East, based on the touting of a fiscal haven, driven by a thriving secrecy-bound banking sector. Today, the financial sector is in ruins and it will not recover in the short term and therefor can no longer be considered a pillar of the Lebanese economy.

This old model of Lebanon’s economy built on tourism and the banking sector is now defunct. For a new economic model to arise, it needs to be driven by local, regional and global imperatives. Therefore, any understanding of the future positioning of Lebanon will need to take into account four major trends that are going to shape this century and which need to be taken seriously and dovetailed into any future strategic positioning for Lebanon, in order to ensure its economic and societal survival on a global scale.

These are:

1- The move away from fossil fuels. It is believed that in the decades to come oil receipts will contract amid the inevitable global clean energy transition that will accompany climate control action and drive transition towards clean energy.

2- The increasing dependence on technology and innovation. These are creating immense transformations in the way companies and nations organize production, trade goods, invest capital, and develop new products and processes. In addition, the increase in the rate of innovation means that comparative advantage is short-lived and threatens nationalistic concerns about competitiveness.

3- The inevitable advent of climate change by 2050 (which is only 30 years away). If left unregulated, this paints a bleak future in which it is projected that, across West Africa, tropical South America, the Middle East and Southeast Asia, there will be more than 100 days a year of deadly heat, leading to over 1 billion people being displaced and some of the world’s most populous cities being partially abandoned.

4. The shortage of food on the planet. As a result of climate change, and the over-population of the planet, it is estimated that food production will be insufficient, due to weather being too hot for humans to survive in significant food-growing areas, and due to chronic water shortages. With not enough food for the world’s population, prices will sky-rocket and social upheavals will ensue.

The first trend I want to discuss in relation to Lebanon is: The move away for fossil fuels.

Fossil fuels have recently undergone a severe devaluation, as a result of surpluses that cannot be stored and utilized. In the present economic model being touted for Lebanon, it is being projected that the nation will be saved by its energy resources. However, in the event that oil and gas are discovered in sufficient quantities to be of any value, there is still concern about the cost of extraction at the present rates (which exceed the price of the sale of the commodity, giving it a zero transactional value).

The expectation that Lebanon will be saved by its energy output is dangerous because it is putting all of Lebanon’s eggs in one basket. The energy industry has very volatile price points which are, and will remain essentially, out of Lebanon’s control and which risk placing Lebanon at the mercy of the fluctuations of world markets.

Therefore, the oil and gas sector in Lebanon should be viewed as a silver lining on top of an otherwise robust economy. It should be valued, if successful, as the wellspring of security, for the Lebanese people, to be managed through the Sovereign Fund that will be set up.

Lebanon needs to build its economy not just on the future promise of oil and gas but on the substantive development of other sectors which have been left lagging in the previous century. Among them is the agricultural sector which is a natural source of wealth for Lebanon.

The world is presently witnessing an agricultural revolution. While technological innovation is not new to agriculture, emergent technologies, such as the Internet of Things, Cloud Computing, robotics, and Artificial Intelligence (AI), have the potential to change farming beyond recognition.

Lebanon’s resurgence means that it needs to see how to place itself at the forefront of this agricultural revolution because of: its ideal geographic location at the doorway between the East and the West, its diverse climate, the fact that almost one-fourth of Lebanon’s land is cultivable (the highest proportion in the Arab world) and that most of these 240,000 hectares are rain fed.

This sector is a natural growth sector for Lebanon to exploit, and the advent of new technology and innovation can transform this small country into a haven for agricultural prosperity through the maximization of its natural assets. To do this we need to identify the sectors for greatest growth and proceed to captivate niche markets that can offer competitive advantages. These matters will all be discussed below, but first I want to elaborate on the next global trend in relation to the economic positioning of Lebanon.

The second trend is: The increasing global dependence on technology, innovation and integration.

Lebanon is ill-positioned today to take advantage of all the innovations that are accessible through modern technology because the infrastructure is outdated and the way that the industry has been parceled, is symptomatic of the monopolistic mentality of ownership of the ruling class, which does not yield a platform for open-ended access and usage. Therefore, new anti-protectionist laws need to be introduced and the sector rendered more competitive.

The first priority of course, is to supply uninterrupted affordable electricity, to power such connectivity. This sector has been the most damaged over the years as a result of bad management, political interventionism and illegal profiteering.

The second priority is to make such connectivity a priority through improved optic fiber connections and cloud usage in the shortest time possible. Without this infrastructure in place Lebanon will remain a mendicant nation stuck in the stone age of brick and mortar.

As for innovation, Lebanon has the education system and the know-how, as well as, the intellectual capital to excel in this field, provided that, the government prioritizes, creates and subsidizes the incubators for such development and allocates resources to the sector.

However, it is not enough to just talk about technology as a broad umbrella term, when discussing Lebanon’s strategic positioning on the world stage. It is important to identify the sectors where Lebanon can excel as a function of its strategic geographic position.

Lebanon as I mentioned above is a bridge between Europe, Asia and Africa. It possesses intrinsic advantages based on its resources including the quality and fertility of its soil, its moderate climate which also benefits from mini micro-climate zones, and of course there is the inherent advantage of a relatively well-educated population.

This brings me to the two next world trends that I want to discuss and in which Lebanon can play a strategic role, and possibly impact many generations to come.

The third trend is: The inevitable advent of climate change by 2050 which is only 30 years away. In the twentieth century, climate was dominated by near universal warming. Almost all parts of the globe had temperatures at the end of the century, that were significantly higher than when it began, due in part to the increased levels of greenhouse gases.

Global warming is predicted to affect the Middle East very badly and evidence abounds that it will be one of the regions, where climate change will hit hardest. For instance, summer temperatures across the region are expected to increase more than twice the global average. Prolonged heat waves, desertification, and droughts will make parts of the Middle East and North Africa uninhabitable, fueling violent competition over diminishing resources and provoking internal and external conflicts, even rendering governments in direct competition for resources with their neighbors, specifically, with regard to climate-induced water shortages (as witnessed in the existing water wars between Jordan, Syria, Lebanon and Israel. These Middle Eastern neighbors are already wrangling over water needed for irrigation, drinking, and hydropower production).

In Lebanon, the water situation is not as good as it should be, and varying degrees of water shortages have been experienced in the last decade. These were aggravated by the rapid population growth, urbanization, industry and irrigation developments. As a result, ground water levels have fallen, springs and wetland areas have dried up, and important rivers, such as the Litany, no longer flow in the dry season. In addition, reduced vegetation cover, due to deforestation, overgrazing, and poor surface management of cultivated lands, have led to reduced infiltration rate, increased runoff, soil erosion, and a decline in groundwater recharge. This deterioration in water retention places an immediate restraint on the economic growth of the agricultural sector. Added to this degradation, is also the changes in rainfall.

The question of water is therefore a crucially strategic issue for Lebanon and needs to be prioritized in any future development plan for the country. Water must be considered a vital resource not just for Lebanon’s internal use but for its survival.

Lebanon should therefore plan to double its efforts on innovation with a specific focus on deploying technologies that would alleviate resource scarcities before they arise. It should focus on technologies which will harness water extraction, and storage and become a model nation in terms of its commitment to clean energy research, specifically with regard to water and the invention of related technologies, such as: Reduced water-intensive agricultural practices, the reuse of wastewater through green bio-technology, the use of meteorological data, which can be transmitted in real or near time to national and regional databases to facilitate the dissemination of vital weather-related information to safeguard crops and livelihoods.

The bottom line is that when confronting the inevitable and inextricable trend of global warming, Lebanon should already be positioning itself to become a major reservoir of water supply to the region and an expert in the matter.

This brings me to the fourth global trend which should be at the forefront of Lebanon’s strategic thinking and positioning for the next half century, and this is: The matter of the forthcoming shortages of food on the planet.

The recent accumulation of disastrous events which have besieged Lebanon precipitated an impoverishment of the nation and revealed the weakest link in the sustainability of the country, namely, its over-reliance on the import of raw materials and goods to support and feed the Lebanese population.

Today, because of the catastrophic economic collapse, more than half the population will be pushed beneath the poverty line and the future outlook for a famine epidemic is looming dangerously on the horizon. Though these are very real considerations, I do not want to discuss what we can do to mitigate this present situation which, I have elaborated in previous papers, but instead, what I want to discuss what Lebanon can do to capitalize on the technological advances being made in the food and agricultural sector.

For Lebanon – which is not a big country in terms of landmass – to adapt to the future demands of food, an agricultural revolution is needed to distinguish its output in the arena of trade and contribute a sizeable source of income to the bottom line of its GDP.

These changes in agricultural policy must conform to the advantages offered by the indigenous topography of Lebanon, its climate, soil, and water access. Land use must be optimized for crops that are high yielding per square meter and are competitive in terms of the nature of the goods sold and their price points worldwide.

At present Lebanon’s Agriculture sector accounts for 6 percent of its GDP, In 2019, agricultural exports reached USD 193.1 million, growing at a CAGR of 2% during the 2010-2019 period, while the decline between 2014 and 2017 was due to the closure of the border areas with Syria.

But Lebanon has fallen behind dramatically due to its lack of innovation and its use of old models of production and distribution that have not advanced with the food innovation sector, nor evolved with the changes in taste and behavior, nor competed with the competitiveness caused by the broad and easy access of goods due to globalization.

Lebanon’s agricultural model needs to be completely revamped and adapted to future needs and made to benefit from the huge technological leaps in the sector.

Lebanon is an exporter of fruit and vegetables, it is self-sufficient in poultry and produces 45% of its pulses, only 15% of its wheat and 10% of its sugar needs. Coffee grasped the largest share of total crop exports with 11.7% of the total, followed by fresh or dried grapes (7.6%) and fresh or chilled potatoes (7.6%).

The agricultural sector connects the country with the Arab region and the world, opening business opportunities in many competitive markets though Arab countries remain Lebanon’s main export markets for agricultural products, accounting for 77.8% of total exports in 2019, including KSA (22%), Qatar (17%) and Syria (12%).

However, the problem is that Lebanon is also highly dependent on the import of agricultural products, with imports amounting to USD 1.47 billion in 2019. The private agri‑business companies import most of their goods, including seeds, fertilizers, plant protection materials and feed ingredients. Lebanon imports 78 percent of its dairy and meat products and its domestic cereal production only covers, on average, less than 20 percent of its consumption needs.

Looking down the road with regard to the issues of climate change and food shortages, Lebanon needs to be thinking very seriously about how these changes are going to impact its agriculture and food security, and one of the ways that it can do this is to become a jewel in the constellation of the vegetable and food chain of the world, distinguishing itself by the introduction of green practices and technological innovation to improve efficiency and resilience and to survive in an increasingly globally competitive world where the need for constant innovation is essential.

The land of Lebanon itself, is a fruit and vegetable paradise, and this should become the trademark of the new Lebanon. To achieve this, Lebanon, must engage in a determined approach to clean up its environment and to rehabilitate the soil which has been destroyed by decades of chemical use. This effort can be led by a move towards developing a credible organic nationwide farming policy that can become a special feature for exports.

The choice to move towards becoming a world supplier of organic produce is driven by the fact that it is a rapidly growing market -The organic food and grocery retail market size was recently valued globally at USD 11.7 trillion in 2019, and is expected to grow at a compound annual growth rate (CAGR) of 5.0% from 2020 to 2027. This important shift towards natural and organic food for health reasons, is because people are realizing that the risk of many diseases can be decreased, and health can be preserved by adopting a correct diet and lifestyle.

For this to happen we need to create the “Grow Organic Agriculture in Lebanon” (GOAL) directive and make local sustainable organic agriculture a prime policy for future economic growth.

Under this high standards and quality umbrella, we can utilize the inherent assets of Lebanon in terms of its climate, topography and water access to promote new trending crops which have increasing market value, such as, medicinal plants (including cannabis) as well as, what is now being termed « Superfoods », which is an umbrella term used to refer to various varieties of food with high nutritional benefits.

The Global « Superfoods » market size is expected to reach $209.1 billion by 2026, rising at a market growth of 7.3% CAGR during the forecast period.

Increasing healthcare costs, growing geriatric population, food innovations, changing lifestyle, and medical discoveries have benefitted the demand for superfoods and consequently the overall market growth. Ascending demand for natural, nutrient-rich food containing vitamins and essential minerals is further boosting the market for superfoods. Furthermore, extensive R&D activities and the advent of new monitoring technologies are expected to drive the market for superfoods.

The superfood market has both horizontal and vertical applications and derivatives. It is segmented into fruits, herbs, roots, grains, cereals, and vegetables and its derivatives are segmented into the categories of supplements, bakery confectionery, snacks, beverages, cosmetics and medicinal formulations.

The soil in Lebanon is ideal for capitalizing on this promising market. Globally, the fruits and vegetables segment of the “superfood” classification is set to experience favorable growth driven by factors such as rising middle-class population, upsurge in disposable income, rapid urbanization, changing consumer lifestyle, and the rising popularity of veganism. statistics state that almost one out five consumers in the West consider themselves “plant-forward”, meaning that they follow a diet not necessarily vegan or vegetarian, yet they prefer approximately 70% of their meals to contain plant-based, 100% clean ingredients.

As consumer needs rapidly evolve, food companies must re-imagine the way fresh, plant-based foods are grown, prepared, delivered and ultimately brought to the table. Plant-based, non-dairy alternatives are driving big change in the sector. Plant-based is a long-term format shift that will dramatically change the choices that consumers make, and Lebanon is ideally placed to supply and become a leader in the field.

Some examples of superfoods that would be ideal for development in Lebanon are: Flax for protein and fabric, chia seeds, peas for protein production, beetroot, pomegranate, mulberries, blueberries, grape seeds, grapefruit seeds for their antioxidant properties, oregano oil, watermelon seeds, avocados and avocado oil and walnuts for oil, food and cosmetics, hemp for protein and fabric production as well as, construction materials, soy for food and protein supplements, aloe vera for cosmetics, agave cactus for its sugar and alcohol in the fabrication of tequila, Juniper berries for the manufacturing of Gin and more…

Finally, consumers are becoming more responsible in their choice of foods, and taking into account elements such as pollution deriving from production plants, the quantity of energy used in production, a preference for recycled materials, the amount of pesticides, hormones, or antibiotics used in production, as well as, the effects of Genetically Modified Crops (GMO) on their overall health. They want to know and understand what ingredients are going into their food and they are reading labels. These educated consumers are a change-maker for the industry ranging from the field to the shelf.

Therefore, the Lebanese agricultural sector has the potential to expand widely to global markets if local suppliers adopt international standards and follow export requirements. To do this, Lebanon has to improve its regulatory environment in the food and agricultural sector by establishing laws, creating green policies and providing incentives to guide Lebanon down this unique path by insuring the enforcement of international standards for safety and organic certification.

The government must empower and enhance the function of existing laboratories and facilities pertinent to the Ministry of Agriculture, and it must fund and grow, the Food and Drug Administration Division to monitor quality, health hazards, as well as, the over-use of pesticides. (Presently produce from the Bekaa Valley is registering dangerously high levels of nitrates at 200mg/100 as opposed to 50/100, which is the International maximum norm).

Not only can Lebanon capitalize on its agricultural bounty, but it can also position itself as a technological innovator in this field. There are technologies that should be adapted and developed today which could put Lebanon at the forefront of this field of agricultural innovation in the development of:

Mapping technology to determine the suitability of the land for farming models, automated irrigation, crop monitoring through the use of drones, climate monitoring, crop rotation to maximize growth, permaculture, biodiversity, bio-waste management, robotics, seed banks, urban and vertical planting, blockchain access to lists of information linking sourcing to end user management for global distribution and local consumption.. the list is endless.

I would like to conclude by saying that for Lebanon to be reborn all of its productive sectors need to be revitalized and the agricultural sector is chief among them. People may think when reading this paper that this matter is superfluous and that there are more pressing issues to deal with, but I insist that food and agriculture are at the forefront of the mechanism of salvation for Lebanon.

Form my position as ambassador in Jordan which is a key link in the distribution chain of Lebanese goods throughout the Middle East, even during the worst times of the Covid-19 crisis and lockdowns, Lebanese produce trucks continued to flow to the neighboring Arab countries. In Jordan alone, between 80 and 150 fruit and vegetable trucks delivered daily Lebanese produce locally and to the Gulf. Agriculture is Lebanon’s lifeblood.

We can just keep talking about deficits, loss, famine, and destitution, but on the other hand, we have to begin urgently to articulate short, and long term, solutions for the viability of the nation. In this vision for a viable future both water and agriculture which go hand in hand are deemed key resources for the future survival of Lebanon.

The cornucopia of Lebanon’s fresh fruit and vegetables have been part of its magic, and today we need that magic to help turn Lebanon’s fate around and to become its trademark of excellence worldwide.

Lebanon needs to transform itself into a high end “boutique nation” that excels in perfection, quality of service, ingenuity and craftsmanship in all its sectors, and once again strive to become the jewel in the crown of the Middle East.

Until then the future is unwritten.

Tracy Chamoun. June 2020

« LEBANON RISING » IMPERATIVES AND HOPES BY TRACY CHAMOUN MAY 2020

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Having read in depth the latest economic plan presented by the government, I have come to the conclusion that although it focuses mainly on financial and fiscal restructuring proposals, it needs to address in a more realistic manner the matter of a concise vision to lead Lebanon out of its present dilemma.

At this stage, it would have been more constructive for the government to also include a recovery timeline, outlining the different steps needed in a chronological progressive way so that people can understand what is being planned, and also what is required of them during this process. It is important to provide an idea of outcomes and deadlines which can also be markers for success and for the accountability of the government.

This document like many documents which have preceded it, is full of good suggestions and in principle if they could all be achieved, it would be tremendous. Many of the technical measures proposed are good and valid. The enactment of laws to ensure transparency, the creation of regulatory bodies to monitor different sector practices, the refinement of procedures regarding tax collection, border control and more, as well as, the introduction of incentives for environmentally friendly projects, and the financing and restructuring strategies for the banking sector, are all valid suggestions. These show a high level of technical knowledge at the Ministry of Finance to offer remedies to the complex administrative entanglements, inefficiencies and hurdles of the Lebanese public sector.

However, we cannot expect the Ministry of Finance alone to formulate a salvation strategy which encompasses far more that the fine tuning of the financial sector. It is like putting a small bandage on a hemorrhaging open wound.

These types of lists of reforms have come and gone many times before. It would be better therefore to set specific and realistic targets and once having attained these, increase the level of commitment to incorporate more and more reforms.

In addition to, not prioritizing the necessary steps that need to be taken, this particular document is qualitatively flawed, because the premises upon which it has been conceived are unfortunately outdated and unrealistic.

The 3 premises outlined by the government as essential pillars for the process of recovery are:

1. The Alleviation of Debt by Increased Taxation.

2. The CEDRE Aid Package.

3. The Dependence on Tourism

These pillars need to be rethought completely. Lebanon’s problems cannot be solved by regurgitating solutions which were defective from the outset, and which in the present context have become meaningless due to many constraining factors, including: Geopolitical pressures which are determining our access to international aid, economic and social emergency concerns related to the increased poverty levels in the country and the imminent threat of famine for a large portion of the population, and finally the whole global recession which has been catapulted, as a result of the impact of the Covid-19 pandemic, on both the micro and macro levels of every country on earth.

The first priority for Lebanon as far as I’m concerned is:

Giving access to fresh money in order to insure that basic goods are replenishing the shelves and existing business can continue to survive. For this reason, two things need to occur:

1. The stabilization of the Lebanese currency:

By exerting martial pressure on:

▪ Any illegal black-market sources by inflicting very large penalties on those who wish to take advantage of the situation.

▪ Any stores or vendors which inflate their prices beyond the legal markers.

2. The funding of essential commercial sectors to ensure access to transactional money for those industries, including:

Food

Pharmaceutical

Agriculture production

Industrial production

In the government proposal there are good recommendations to consolidate the banking sector and to establish new lines of credit, to facilitate the funding of new banks and also to license development banks. The idea being that they would supply the private sector with access to funds for business creation and development and give lines of credit for import and export. This is going to be crucial to kick start the economy. In addition, any recapitalization of the banks should result in the creation of a pool of liquidity or “fresh money” which would be utilized to boost productivity and trade.

Lebanon’s economy must avoid falling into the trap of allowing banks to be driven by their bottom line internal profitability factor – through the abuse of money engineering tactics – and instead, they should be require by law, in order to retain their licenses, to allocate a large part of their lending to the commercial sector.

The government’s emphasis should therefore be directed towards identifying the vital sectors which can yield inherent and rapid economic growth – inherent and rapid being key denominators in the choice. Many such sectors have been outlined in a recent study done by McKinsey which was paid for by the Lebanese government. However, the government should not take that document at face value since it was written under different economic pressures and timelines, but it should conduct a re-evaluation of its suggestions and identify the sectors for growth based on present needs and resulting from the complete collapse of the economy, and the effects of the pandemic.

Having re-analyzed the needs of the country and taken into consideration the short, medium, and long-term objectives, the government should allocate resources to the identified sectors and provide these with both, tax incentives and capital injections for business development and growth.

In other words, funding shouldn’t be allocated in an ad hoc manner, but should be part of an overall strategy for the country which, would focus by priority on the sectors that promise the highest yields and the most competitive edge for the reinvigoration of the economy and the re-creation of a prosperous middle class. In this way, a vision for Lebanon in the future, where it is going, and how it will get there would become the driving force behind any economic recovery plan.

This brings me to the first pillar in the document which is flawed, and which is the matter of increased taxation and the projections of supplementing GDP through aggressive tax strategies which is claimed would yield up to 3.7% of GDP by 2014.

Realistically, it is blatantly obvious that until a series of productive economic – not fiscal – policies are put in place, the proposed taxation measures presented in the government’s proposal are at best optimistic. As the saying goes: you cannot get blood from a stone.

Tax is a function of productivity and until it is raised to levels where there is surplus income, taxes just add insult to injury on a population that is drowning under the weight of the complete economic collapse of the economy and the volatility of the devaluation of the Lebanese pound. People are living in a world of hyperinflation and dealing everyday with the impossible rise of the cost of living. This has rapidly pushed the majority of them under the poverty line.

Therefore, when it comes to tax reform and taxation, there are two things that need to be taken into consideration. I do agree that the document addresses in a professional manner the technical matters of tax collection and reform, but it fails to contextualize these objectives in the present social dimension of great distress and hardship that the population is experiencing, and therefore, it will also fail in the corollary dimension of tax enforcement and collection.

Firstly, I propose as a priority, on a technical level, regarding the future effectiveness of the national tax system, that the government should obtain financing through PPP tenders, to engage immediately in the process of shifting towards a tailor-made, functional, nationwide, integrated electronic e-government project. This should be completed over the next year. It would incorporate all public transactions and would in essence, by its very nature, curtail petty government corruption.

Converting to e-government is a priority along with the improvement of fiber optic access and the bolstering of the telecom sector. These would make Lebanon more efficiently competitive in the international business arena, more administratively competent internally, and more able to professionally manage the logistics of future investments and the revenue generated from the taxation on such income.

Equally, rather than push for draconian tax measures in this very delicate phase which needs alleviating solutions rather than further obligations, the government should put a moratorium on tax increases for a year, and in the process implement the e-government transition which, would in itself engender future tax reforms in an effective, but delayed manner, and would give the economy time to recover as a result of other driving incentives.

In the meantime, as an alternative to income taxation, I propose that the government invoke special measures to levy a “Poverty Tax Contribution” and that they set up a national “Poverty Tax Fund”.

Whereas the government is proposing in the document to borrow more money from the World Bank and other international donors to fuel such a “Poverty Fund”, this is not optimal in the light of Lebanon’s existing large debt which as of December 2019, was at 175.6% of GDP or 90.2 Billion US$, and which we ultimately have to find a way of servicing.

This “Poverty Tax Contribution” I am suggesting, would be applicable to all depositors, and it would be based on the value of their capital assets in their frozen bank accounts. A fair pro-rated percentage amount would be taxed based on the wealth of the contributors. It would be a monthly contribution paid to the “Poverty Tax Fund”.

The amount of deposits held in the banks is valued today at more than US$ 67 Billion, (based on the old valuation of the Lebanese Pound at US$ 1,500). If one per cent of this sum was paid as a “Poverty Subsidy Tax” it would yield US$ 67 million Dollars for a population of 4.5 million.

As an incentive to encourage the payment of this tax, the capital control measures could be tailored to allow the matching of the monthly tax payment amounts with the granting of the equivalent access to the contributors of the amount taxed, either via direct access to their cash or the ability to make transfers in the equal amount of the taxed contribution.

This “Poverty Tax Contribution”, which resorts to an internal and sustainable solution would be a way for all Lebanese to pull together and help each other without putting Lebanon under further international obligations and indebting future generations.

This fund would provide for disbursements to cover temporary unemployment, health, and education and food for all Lebanese in need. It would be distributed by allocation through a form of decentralized administration by the municipalities, based on the size of their local populations in need. This “Poverty Tax Fund” could sustain the population through this very precarious period of transition, increased poverty and even starvation.

As we continue the analysis of the government financial recovery plan, I would like to discuss the second pillar in the document that is flawed, and that is the over-reliance on the CEDRE funding plan.

The entire proposal of the government relies pivotally on the implementation of the CEDRE loan/aid agreement which was concluded last year in France. The total contribution that the government is expecting to receive to jump start the economy are the 11 Billion Dollars that were pledged through CEDRE.

However, today, as a result of the impact of the pandemic on their economies, all the countries that promised to contribute to CEDRE are confronting huge economic hurdles in their own lands. It looks improbable that following the collapse of the global economy and the significant drop in oil prices that these donor countries will be able to spare any sizeable funds to support Lebanon, which, to-date, has failed to comply with any of the regulatory standards imposed by such aid. Therefore, the over-emphasized reliance on financial aid from those countries, in order to bolster the Lebanese economy, is unrealistic and optimistic.

In addition: the content of the CEDRE proposal which was submitted by the previous government is a reflection of the very dysfunctionality of that government. It is a reiteration of all the mistakes of the past, where a “contractor mentality” has governed the economic development of the country. This contractor mentality has also been the source-feeder for the practice of local clientelism, corruption and the funneling of funds into private pockets through fake subsidiaries and offshore shell companies.

The projects put forward in CEDRE are a regurgitation of shelved concepts by the CDR and appear to be completely disconnected from Lebanon’s present social and economic realities.

Although the idea behind them, is that they would create jobs which would alleviate short-term unemployment problems, they do not yield long term income generating solutions for the vulnerable income groups in the country.

If infrastructure development is to lead to economic growth, it has to be preceded by a development strategy that would give the guidelines for project selection based on improvements that target the basic standards of living and provide long-lasting economic growth.

The whole CEDRE proposal needs to be re-analyzed, and certainly not presented at face value! The elements within it, need to be re-prioritized based on actual necessities that have arisen from the collapse of the banking sector, the foreclosures, and the new world order imposed by the Covid-19 pandemic.

These new contextual criteria should drive the prioritization of infrastructure development and not the other way around. In its present form, The CEDRE proposal lists infrastructure development as a collection of big-ticket items that have been ranked first according to the completion of tender documents and their readiness for execution, and secondly according to “socio-economic impact” and their ability to “mitigate the effects of the Syrian refugee crisis”. These criteria in themselves do not offer a sustainable development program.

Therefore, to base the crux of the government recovery proposal on the outdated and mechanistic schematics of CEDER is unproductive.

After having reassessed the value of CEDRE, a selection of projects within the CEDRE proposal could be retained, such as for instance, the improvement of Lebanon’s access to optic fiber, which would be essential to the vision outlined above of the shift towards the establishment of a full e-government.

Finally, I would like to discuss the third pillar of recovery that the government is banking on to lift Lebanon out of its present misery, and this is Tourism. I have to say that I am tired of economic policies for Lebanon being driven by “Tourism”. Tourism should be the icing on the cake of any economic system.

Firstly, a country which is reliant on imports – 80% of all goods bought or manufactured are imported into Lebanon – is a country that is not sustainable from the point of view of productivity and employment.

We need to forget about tourism for a while. Covid-19 is only a confirmation of this since the mobility of the whole world has now come into question and the future of the services industry form travel to hotels, to restaurants, needs to be reconceived and refueled with confidence before it can recover, and nobody knows how long this will take. Therefore, to make tourism a cornerstone of recovery at a time when the country needs fast solutions for creating wealth is not logical.

In addition, the suggestion to hire an outside and no doubt expensive PR firm to market Lebanon’s image at this time is also not feasible, neither from the budgetary point of view nor from the realization aspect. Lebanon has extensive in-house talent and knowledge in this field and any government spending should be directed towards Lebanese citizens first.

The state of dilapidation of the nation, the endemic waste management problem, the objectionable pollution of the sea with wastewater overflow, the lack of health standards leading to contaminated food, the abuse of pesticides in agriculture, added to the capital control problems which are not likely to disappear for at least another year and which severely hamper the food supply chain, make tourism a dim prospect for prosperity.

The government should focus instead on three sectors. These are:

Agriculture

Industry

Technology and Innovation

Agriculture: Lebanon is blessed with fertile soil and with microclimates. It has a huge range of growing possibilities, including a very mature wine industry. All these should be redefined and leveraged to create a food supply chain that is both internally sustainable and internationally appealing and sought after.

However to achieve this, Lebanon needs to develop a nationwide policy regarding the modernization of its agriculture sector to service both, the internal needs of the population with an indigenous food supply source that would mitigate famine in times of hardship, and also to deliver produce that is derived from the evolving needs of export efficiencies to different countries.

Lebanon cannot continue to sell the same type of produce to countries that have developed their own production and no longer require what Lebanon has to offer. This is a grave problem for the balance of trade where the past income producing staple export products, such as potatoes, onions, apples are no longer competitive regionally or internationally. The updated contents of any export basket of Lebanese products needs to be at the basis of a new agricultural schematic for the country.

In additional, a national policy of improving the soil, of protecting it and treating it like a national heritage, is also vital to the sustainability of the agricultural sector for generations to come. A policy of moving towards environmentally sound practices like organic growing, permaculture, biodiversity, and fair trade have to become the trademark of the quality for future Lebanese goods to make Lebanon stand out and have a competitive edge.

Industry: Every dark cloud has a silver lining, and provided that the government makes available the funds necessary for the industrial sector to function in this capital restricted climate, so that companies can get access to raw materials from abroad, then the devaluation of the Lebanese currency should make Lebanese products more competitive on the international market.

However, international standards of production should be raised to improve the export potential of Lebanese goods. In addition, this sector needs to become more dovetailed to the regional opportunities offered through the different trade agreements that are already in place.

Boosting the industrial sector should also be part of the government’s strategy to formulate a sustainable vision for that sector and should be accompanied with the provision of policies to offer subsidies, tax cuts and incentives to promote such development and growth.

Technology and innovation: Lebanon has a very high level of education; however, it has remained stagnant and has not evolved to take into account the new skill sets required for this century. Beginning with the education system, policies and directives should be developed with leading universities to determine the future needs and directions of the world. Based on this, the government should set aside a development fund to help support technological research and startups.

Not that I like to make comparisons, especially with Israel, but it is necessary to be brutally direct in these matters. They have become a leading force in the field of technological innovation which is giving them a competitive advantage in the world today. This did not happen by chance. They have a dedicated Ministry of Science and Technology that is responsible for the state’s investment in scientific research with a direct link that connects academic research with industrial development.

The Ministry of Science and Technology has positioned Israel at the forefront of science and technology, and it has boosted Israel’s economic growth, and Israel’s international status. The percentage of Israelis engaged in scientific and technological inquiry, and the amount spent on research and development (R&D) in relation to gross domestic product (GDP), is among the highest in the world. In Israel 200 start-ups are created annually and more than 2500 start-up companies are operating throughout the country. Exports of Hi-tech products comprise about 50% of all Industrial Exports, and totalled 51.4B$ in 2018.

Israel ranked number 15 in this year’s Networked Readiness Index, published in the Global Information Technology Report by the World Economic Forum. By contrast, out of 148 listed in that index Lebanon was not even mentioned!

We need to wake up from our internal petty squabbles and find a way of putting Lebanon back on its feet. But to do this, Lebanon needs to return to the drawing board. The government should create an emergency think tank composed of a selection of the highest quality experts in each sector and together they should formulate a vision for “Lebanon Rising”. This responsibility cannot be left to the Ministry of Finance alone.

However, in the meantime the government must first formulate a strategy based on the timeliest of imperatives:

1-Helping the poor survive this very difficult period.

2-Boosting the productive sectors of the existing economy to start jobs again

3-Modernizing government to transition into the digital age

4-Prioritizing sectors with rapid yield and planning their funding and development based on long term vision and objectives.

My advice: success will be a function of taking the proper time to think things through, as well as, not being reactive but acting purposefully to rebuild something that will have meaning for future generations, and guide Lebanon out of these dark times.

We are confronting our destiny – Lebanon needs to rise better, stronger and above all wiser!

Tracy Chamoun

Tsunami Tsuennemi

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Many of you have mentioned to me that I have been rather silent lately. That is because I am literally speechless. There are things that are happening in the political arena which I find absolutely confounding, not to mention revolting.

Words don’t count, actions are for nothing, protests are wasted, reason doesn’t matter, common sense is ignored, foresight is neglected, decency eradicated and honor exists only among thieves.

Four years ago I returned with energy and hope to be part of a process of change for the better, only to find that during this period, things have changed dramatically for the worse. Of course the neighboring war in Syrian has contributed greatly to this decline, but mainly it has been due to the rigid behavior of the leading political figures and groups and their disrespect for the constitution and the exercise of their own responsibilities. All these elements have led to a failing state, a flat and dangerously declining economy and non-existent social welfare.

In addition, most of the institution are functioning on life support aside from some mitigated upward ticks of the functionality barometer, such as the recent municipal elections where voter turn out was only on average at 40%. This tells us that the majority of the results obtained are partial at best, and not representative of the whole population as some claim. In fact, the only thing that such a low turn-out represents is the overall disappointment and rejection of the population of the existing leadership whether Sunni, Christian, Chia or Druze, and though it was refreshing to see new movements of dissension arise, it was equally depressing to see them overcome everywhere by the habitual format of political outcomes.

The worst therefor is not what is happening but the sense of inability to change anything, and for the last four years we have witnessed this imposition of inertia dominate the political scene especially in the failure to elect a President. This inertia is the symptom of a greater cause which is the ruling classes’ entrenchment and reluctance to change anything, even when confronted with revolt, as during the summer of last year, when the waste management crisis was at its peak.

So not only is there no recourse but lately there has been a complete degradation of affairs with our leading political figures all dancing to the tune of their own drum and creating such a cacophony that nothing is worth hearing anymore.

I personally feel that we have descended to a new level of political and moral decrepitude. Politics is supposed to be built on convictions and the belief in a social perspective that shapes the visions and leadership of politicians.

Based on this definition can we call many of our leader figures politicians? Or are they just mavericks acting on their survival instincts with no regard for the nation nor the cohesiveness of our society as they make volatile choices based on their sense of opportunism?

How redeemable is the latest reconciliation among the Christian Juntas? How stable and lasting is it or can it be when it is wrapped up in the personas themselves? Has it helped matters? Or just muddied the waters?

It seems that what it has done is create a lot of confusion and disorientation embellished by the warm and fuzzy propaganda of reconciliation, which is like oil floating on the surface of a glass of dirty water.

In the municipal elections it was easy for Aoun and Geagea to appear to share the pie, and they made the battles appear to be about politics, when in fact, all they did was create more divisiveness even within families, and this has left a lot of negative sentiment towards both men on a very local level.

However, when it comes to Parliamentary elections where the seats are limited and confessionally specified, it remains to be seen how eager these two players will be to pander to each other and share those precious positions. After all, parliamentary blocs are not to be relinquished easily.

Samir Geagea will be forced to poach from the Christian independents in his own Future camp where the latest municipal elections have polarized his previous allies against him, and though weakened some, they have strengthened others.

As for the promised Christian Tsunami, it seems that the two concerned parties have conducted themselves in the community in such a way that their “tsunami” is everyone elses’ “tsunennemi” and they have disturbed the waters in the Lebanese pond, where many have now lost their moral and ideological compass.

The only thing that these individualistic leaders, will agree on today will be to proceed with Parliamentary elections based on the law of 1960 which guarantees that their hold will continue.

The danger therefore is not them, but the electoral law which will perpetuate them!

If Lebanon is ever allowed to emerge from the stagnation it is facing it will only be through the arrival to power of a new political class. I believe that are three ways to do this:

1-) Make elections mandatory for all Lebanese between the age of 18 and 80 in order to force people out of their lethargy and resignation.

2-) Bring back the number of deputies to 108 as specified in Taef and remove the 20 deputies added during the Syrian occupation which are not representative of their constituents.

3-) Enact an electoral law based on proportional representation with one large district to break the geographic and confessional hegemony of the za’ims and make the election nationals and not local, reflecting the more accurate role of legislators.

If the present rulers are allowed to proceed with the law of 1960 I guarantee you that the inertia will persist and there will be no recourse to bring about change. This means that the country itself will just deteriorate further, and with all the uncertainty around and the dangerous security matters we are confronting I do not recommend that this be allowed to happen.

The big battle ahead of us now is to say no to the majority law and to fight for the three solutions outlined above.

The State of the Dis-Union in Lebanon

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When ministers refuse to attend a cabinet meeting because they are pushing for their parochial issues at a time when the country is on its knees begging for help, the economy is tanking, unemployment is devastating, future prospects are bleak, virulent epidemics are clamoring and decisions are essential for survival – This is a state of disunion.

When the ministers cannot agree on how to handle the waste management crisis, first by refusing bids month ago for less than half the price that they were prepared to ship it out for, and also with different factions refusing to accept each other’s waste in their regions on confessional grounds, when modern incinerators are vindictively prevented from leaving the port at a time when the country is drowning in garbage and disease is spreading like wildfire – This as state of disunion.

When the leaders cannot agree amongst themselves on a President with allies turning against each other and uniting with their worst enemies to prevent others from occupying the presidential seat and the country is facing nearly a two year long vacuum in the Presidency – This is a state of disunion.

When an electoral law cannot be drafted because it has to serve many masters and guarantee a certain outcome for each and is therefor impossible and there cannot be fair elections without it – This is a state of disunion.

When disunion rules, stalemates prevail and neglect follows. Disunion means no change, no progress because these require consensus at the very least. They say that the only thing that does not change is change itself. We need to add to this adage in Lebanon that the only thing that does not change is the state of disunion. When the disunion becomes so great only the abyss remains. On the ledge of this abyss will there will be anything left to catch if the nation falls?

This is the state of the disunion address…

Analysis – The Lebanese Presidential Candidacy Confusion December 2015

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The recent nomination of the deputy Sleiman Frangieh took everyone by surprise because of the seeming ripple of movement that it generated in an otherwise stifled environment surrounding the election of a President in Lebanon.

Let us start in the beginning where suddenly out of nowhere, rumors began circulating about a secret visit between Frangieh and former Prime Minister Saad Harriri in Paris. As is the case in Lebanon, there is very rarely smoke without fire and the rumor finally emerged as being correct.

There has been much speculation about how this meeting came about; Whether the meeting was planned or spontaneous and whether Frangieh communicated the relevant information of this encounter to his strongest ally Hezbollah ahead of time is still debatable, but what is clear is that after the meeting he certainly informed them about the discussions that were held and the seriousness of Hariri’s proposal.

The talks between the men covered the details of his presidency including the matter of an electoral law which would be vital in the formulation of the overall package.

The news of the meeting triggered a flurry of reactions and the shock waves of this Parisian encounter spread out into the Lebanese political pond.

While some navigated the news eagerly, including the international community who saw an acceptable opportunity to resolve the political vacuum, others were rocked at their core by the implications of such a possibility.

The outcome of all the deliberations is that the only clear thing about Frangieh’s candidacy to-date is that it is unclear. It is unclear for many reasons including:

1- General Aoun firm rebuttal:

The validity of Frangieh’s candidacy is being rebuffed with the “silent treatment” by the General with the belief that if a candidate with Frangieh’s affiliations are acceptable then the preference goes to General Aoun.

2- Saad Hariri’s slowness to declare:

The delay in the Announcement by Hariri has fueled the belief by his contesters that he does not have the means of his politics. This remains to be seen.

This lack of any declaration by Saad Harirri to-date can lead to believe that he has not received the reassurances he needs, both financial or otherwise, to push this deal through at this time. The Prime Ministership would bring with it financial rewards and it is fair to note that with the change of leadership in Saudi Arabia, the question begs to be asked: How much favor does Hariri really carry today with the King and specifically with the Crown Prince?

On the other hand the postponement of Hariri’s visit to Lebanon seems to be linked to the larger implications surrounding the continuing matter of his security.

3- Hezbollah’s silence:

This is a reflection of their own conundrum confronted with one of their favored candidates becoming problematic. This dilemma was brought about because of their engagement with General Aoun and the fear of his retaliation and retrenchment into a Christian-only front if challenged by Frangieh’s accession to the presidency.

For Hezbollah, this would lead to their loss of a powerful ally on the ground and create a dangerous confessional polarization at a time when Lebanon can least afford such antagonistic stances. In Parliament this would also fragment their voting coalition and leave them without Christian representation. If they are to reconsider Frangieh’s candidacy it would certainly be tied into their insistence on a new electoral law which would not perpetuate the existing parliamentary balance of power.

3- Samir Geagea’s isolation:

Geagea is certainly not a proponent of Frangieh’s candidacy in light of their bloody history and they rivalry in the North of the country. Frangieh’s nomination has left Geagea publicly isolated from his own political bloc confronted with the uncoordinated nomination of a candidate from “the other side” by Saad Hariri, the leader of his block.

This attempt has also revealed tensions that had been suspected for some time between Geagea and Hariri. This has forced Geagea into a retaliatory stance where he is measuring the consequences of displeasing his Saudi sponsors and gambling with the option of nominating General Aoun to avoid Frangieh.

To sum up why things are so unclear, it is because the usual lines of identification have been crisscrossed. The leader of the March 14 movement proposed a March 8th candidate unilaterally, and the allies of each group lost their points of reference in the process. It would seem therefore that the hard sell for both Frangieh and Hariri is from their own camps as they are in fact being undermined mostly by their allies.

On the scale of Lebanon, Interestingly this latest attempt has placed the March duality into the mixer and whatever will come out now in the next week or so, will never be the same. Expectations have been shattered and feathers ruffled on all sides.

It will take some time for this dust to settle but if it does settle into nothing again then the matter of the election of a President will also turn to dust, which would be a lost opportunity for Lebanon to resolve the vacuum and safeguard the State’s institutions.

Tracy Chamoun

Baabda –

The politics of obstructionism – Lebanon forgotten

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The dissension among the ruling blocs has become personal to such a degree that they automatically veto each other’s proposals just as a matter of principle. The confrontations are no longer even expressed on sectarian or political lines but seem to be completely personality related with one leader hating another and obstructing him out of spite or spreading malicious rumors just to score points over each other.

On the other hand, there are extremely urgent matters at hand, which need consensus urgently, including most importantly the matter of the solution to the crisis of garbage collection, but also, the health dangers which this situation poses, the safety of the water, the lack of electricity, the lack of jobs, the collapse of the economy, the Syrian displaced, the matter of wages and salaries, the cost of living. These are some of the few essential survival issues confronting Lebanon and the population today.

And yet the bipartisanship is centering around the issue of giving Lebanese immigrants the Lebanese nationality, which by the way fails to address the major issue of Lebanese women giving their nationality to their children if married to a foreigner, and the elaboration of an electoral law which though important will not stop people from dying on the streets of the plague due to the rats and rotting waste everywhere.

You have to ask today: Why would the Lebanese abroad even want a Lebanese nationality? When the country is in such a shameful and disgusting mess.

As for a new electoral law? It is very important certainly, but the Zaims won’t even agree on the geography of landfills, how are they going to agree to a law that promises to weaken their hold on their regions.

These polemics are preventing the Parliament, as illegal as it is, as well as the Cabinet of Ministers from coalescing and taking any practical decisions. These deputies who had the audacity to extend their own mandates continue to add offense to injury by getting paid to do nothing. As for their salaries unlike the rest of the poor deprived population, it seems that the matter was solved with one wave of their magic self-serving wand – Yet again!

This is an untenable situation and the constant bickering and petty obstructionism is costing us our nation. The deputies have one essential job to do today: Elect a President! But there are no deadlines, no attendance requirements, no penalties for absenteeism, no consequences for ineptitude! The bottom line is that there is no leverage mechanism to force them to comply! So they do what they do best: Nothing.

This politics of obstructionism is shameful and betrays the concept of statesmanship, which is so lacking today: The idea that there is a moral obligation to overcome one’s ego for the greater good. As we are carried along on this fateful period of continuing and unabated internal discord and brinkmanship, we may as well dig two graves one for us and one for Lebanon…

Consensus versus competition in the formation of a Lebanese Government.

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In support of Minister Jumblatt’s efforts to coalesce the different Lebanese factions into agreeing on a formula to govern the country, I feel that it is important to engage in pro-active steps towards continuing the process to form a government of national representation.

The reasons for pushing for the formation of a legitimate government are obvious though presently being dismissed for the profit of political polemics.

Suffice to say that a “de facto” government which would not secure the confidence of parliament and which would bring about the resignation of more than half the representation of the country is a dangerous proposal since, in the absence of balanced opposition, it would usher in a period of uncontrolled reforms by one group only. This is why such an attempt has also been referred to as a “coup” and unconstitutional.

However, getting back to the only viable solution to save the country today which is the formation of government of national unity, if this is going to happen, it has become important to examine the form of the dialogue before we can even address the content.

So far, the process has been entirely reactive with one side reacting to the other, which has led nowhere. Therefore we need to move away from a situation of reactivity and create the proper conditions for affirmative action. In order to do this, we have to conceive of ways of elevating the level of the dialogue and the quality of interaction.

The first step in that direction is a willingness to engage. This threshold was crossed the minute that the modified 8-8-8 formula was accepted by all parties as a possible blueprint for a government.

The second step consisting of the distribution of power has been the source of the ensuing problems and the inability to reach any agreement.

For this level to work there has to be trust. However in the absence of trust there has to be a constitutional reference. Unfortunately the constitution is deliberately vague and has been amended so many times that it has also lost its preemptory powers.

Therefore, the question becomes how do you move from mistrust to consensus building? You do this by choosing to move beyond the elements that divide towards focusing on the elements that unite.

The main reason to do this is that the greater good must at some point supersede the egoistic good of the different parties concerned. The greater good in this case is not the generic concept of Lebanon but instead the greater good is the specific welfare and the safety of all Lebanese.

In order to move this dialogue forward for the formation of a new government some general rules must apply, namely:

  •  Ministries are National Institutions above partisan divides.
  • No man is greater than the institution he serves.
  • Power sharing must be understood as cooperation and not competition.
  • Dialogue should be geared towards consensus not discord.

A possible solution is that our “Leaders” should personally sit down all together at a round table and not be allowed to leave the room until an agreement is reached. A neutral and safe ground should be found were this meeting can take place. They must agree on a set of priorities for the country before they decide who gets what, because the present situation calls for altruism and sacrifice.

We are confronting the biggest political vacuum we have faced and in the present violent context surrounding us and contaminating us, this can only lead to disaster and chaos before long. As a Lebanese I will continue to say we want our country back and I will urge those in power for once to see how their fates are in fact all inter-connected.”

Reflections on the unintended consequences of the recent chaos in the Middle East

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In scientific thought, a main component of “Chaos Theory” is the idea that even very small events can cause very complex results. It also posits that these events can never be sufficiently articulated to allow for long-range predictions.

With that in mind, my return to Lebanon two years ago coincided with the escalation of the war in Syria and the subsequent chaos that has followed in both countries – Lebanon and Syria. Who could have imagined that the systematic destruction of a nation like Syria could lead to a series of such monumental unintended consequences, as we are witnessing today?

Some of these unintended consequences are:

  • The changing role of US foreign policy concerning Israel.
  • The dominance of Russian Diplomacy in the Middle East.
  • The rise of Persian and Shia influence in the area.
  • The breakdown of the decades long Saudi–US alliance.
  • The spread and organization of Al Qaeda and their affiliates in the region.
  • The destabilization of Lebanon with the unregulated influx of over a million refugees representing one fourth of the population.
  • The breakdown of the Lebanese political system.
  • The survival of President Bashar El-Assad against all odds.

To name but a few…

In hindsight, from the beginning I could see that things were not as they were portrayed, and that behind the Syrian crisis was the planned destruction of a nation led by extremists who’s foreign sponsors manipulated the world media to justify their actions.

This strategy formed the basis for a long-range directive to fragment the region into confessional enclaves. The latest Shia / Sunni divide is a by-product of such a man-made crisis in the region. The raging conflict and terrorist based strife that it has generated, has played into the “divide to rule” adage, which has systematically been at the forefront of Zionist tactics in the Arab world since Israel’s inception.

Naomi Klein describes these man-made crises in her book “The Shock Doctrine” as a strategies to facilitate the financial and political exploitation of war-torn, socially destroyed nations, in order to push through controversial change and exploitative policies, while citizens are too weak to create an effective resistance.

In any event, the western medias’ portrayal of the systematic breakdown of the traditional Arab leaderships in the Levantine world (Note I am not referring to the Arabian Peninsula where the most repressive regimes still exist impervious to popular uprisings) and their ensuing chaos has been from the outset propagandist distortions of the realities on the ground. The western media cleverly dubbed the fracturing of nations an Arab spring!

Neither in Libya, Egypt, or Tunisia can we call the outcomes spring-like at all. In Egypt we witnessed instead the planned takeover of the Moslem Brotherhood who had been preparing in hiding for this day, for decades. When finally, the opportunity came with Qatari backing to exert their power, what had been portrayed as a popular uprising, became an opportunity for these religious zealots to impose their rule. The Egyptian army subsequently overthrew them and quashed their ambitions with the acquiescence of the West, where ironically, the military intervention in a popular uprising was accepted for Egypt, but was not so for Syria.

In Jordan, interestingly the political thrust of the Moslem Brotherhood was contained. To an outsider, one could speculate that a line in the sand had been drawn as far as, toppling a monarchy with ancestral origins that linked them to Mecca and the Prophet. Maybe, the Saudis and Qataris could not risk setting a precedent by the toppling a historic monarchy for fear that it could ultimately happen to them. King Abdullah had a close call, but the attempt of the Moslem Brotherhood to topple him for was temporarily eliminated. However, Syria was not so lucky.

For whatever reason the problems escalated in Syria, including:

  • The initial mismanagement of the government forces’ use of violence to repress unrest.
  • The underestimation by the government of the scale of the problem at hand.
  • The initial miscalculation by the government of the degree of implication of foreign powers in the financing and arming of the rebellion.
  • The commitment of the West to continue to escalate the violence by sending foreign fighters and technology to Syria, in order to topple the Assad regime.
  • The tactical usurpation of the rebels’ cause by extremist factions funded by Qatar and Saudi Arabia to pursue their Jihad.
  • The reluctance of Saudi Arabia to concede defeat in the call for Assad’s resignation and their continued funding of the war.

All these elements have succeeded in ushering in a series of unintended outcomes that have completely overturned the balance of power on the world stage, and have introduced a new order that will have untold repercussions in the whole region.

The question becomes when do unintended consequences become an opportunity for positive change? And how does one take control of one’s destiny in the reshuffling of the deck?

Reflections On the Up-coming Lebanese Presidential Elections

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In a discussion with an eminent constitutionalist lawyer, he pointed out to me that a law cannot be introduced to alter the constitution, however, you can elaborate on existing constitutional laws to refine their interpretation. In other words, the constitution is sacrosanct.

However there is this strange matter in Lebanon of historical precedents. In common law, a precedent is a principle or rule established in a previous case that is either binding on or persuasive for a tribunal when deciding subsequent cases with similar issues.

In the short history of Lebanon there have been constitutional precedents that have become “tradition”. One could say that these traditions have come to resemble the allegory of Plato’s cave, as described in his opus “The Republic”. In other words, the unwritten traditions of Lebanese constitutional practice have become the shadows that most of us perceive as real.

These precedents include the extension of official mandates, and the naming of the head of the army as head of government in times of national distress. Both these matters are not permitted in the Taef version of the constitution, but they both represent constitutional practices that have precedent and therefore have reality. Especially, since the matter of mandate extensions has already been applied in violation of the written constitution.

In the spring of 2014 there is a presidential election scheduled. The question is therefore, will the application of the written law dictate our future, or will tradition prevail.

In the first instance of constitutional application, we are confronted with two choices:

1-    A weak president who would be a figurehead and not more. This would play into the theory of keeping Lebanon on the back-burner until the Syrian crisis is over.

2-    A strong president who could usher in parameters of safeguard for the nation and be a figurehead for the Christian community, which has become threatened by the radical presence of the jihadist wave in the region. However, a strong president would also activate all the areas of concern and reform that most politicians dread.

In the second instance of traditional precedence, we are also confronted with 2 choices:

1-    The extension of the mandate of the existing President which from all appearances, is not displeasing to the International community who would like to maintain the “Status Quo” in Lebanon regardless of the violation of the constitution. The excuse for this suspension of affairs in Lebanon is the need to distance Lebanon from “The Syria Effect”, and it also freezes the matter of the apportioning of the natural oil and gas resources, which has not yet been concluded.

2-    The naming of the Head of the Army as interim Prime Minister and head of the executive government, as happened in Egypt recently. In this case, the army is pushed forward as the guarantor of security in increasingly alarming conditions, until the business of running the country can resume favorably.

All in all, we are entering an interesting phase. The only thing I am sure of is that we do not have sovereignty over this quintessential matter. How the game will be played out regionally will determine the “a la carte” choice for the outcome of the presidential elections. My favorite option is of course, a strong nationalist president.

When will the incompetence end?

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I read this morning in Stratfor in an article entitled: “Are there Moderate Salafists and Jihadists”, that the United States is trying to recruit moderate Salafist-jihadist rebels in Syria for its fight against al Qaeda.

I don’t know what to think anymore. This an oxymoron, not to mention a moronic action. Have we become so blinded by the goals that the means, however abhorrent, are justified?

As I sit at my desk in Lebanon, I fear the repercussions of swath politics. More and more Lebanon is becoming like Iraq. Jihadists in Iraq experienced a great deal of success after the 2003 U.S. invasion of the country. In 2004, one of the largest of these groups — Jamaat al-Tawhid and Jihad, led by Abu Musab al-Zarqawi — became an al Qaeda franchise group and renamed itself al Qaeda in the Land of the Two Rivers (Iraq). In Syria, jihadist groups such as Jabhat al-Nusra, now perhaps the strongest jihadist group operating in Syria changed its name to the Islamic State of Iraq and the Levant. As far as I know Lebanon is part of the Levant, so this does not bode well for their future commitment to destroy the country.

I have to ask therefore why is the USA so blind to this threat? You cannot tame a terrorist. It is time that whatever distorted understanding the foreign intelligence services have about the games of mice and men that they play, they should stop and look at their track record in the Middle East.  When will the incompetence end?