Le­banon in the age of po­lit­i­cal econ­omy

Executive Magazine - - Economics & Policy - By Thomas Schellen

In the past 25 years, and ar­guably in the 75 years since Le­banon’s in­de­pen­dence and (some­times self-de­ter­mined) state­hood, econ­omy was mostly pri­vate. Nei­ther po­lit­i­cal econ­omy, in the sense of the eco­nomic choices made by po­lit­i­cal groups and in­di­vid­ual lead­ers, nor the na­tion’s eco­nomic pol­icy as choices about tax­a­tion and the state’s eco­nomic di­rec­tion for the coun­try, was much of a topic in elec­tions or even be­tween elec­tions.

Pol­i­tics was made by lead­ers who per­son­i­fied iden­ti­ties and com­mu­ni­ties as de­fined by re­li­gious and sec­u­lar belief sys­tems. In the na­tional pol­icy dis­course in Par­lia­ment and other halls of pol­i­tics, these lead­ers did not need to of­fer much in terms of ex­pla­na­tions for the eco­nomics they ap­plied or choices of eco­nomic di­rec­tions that they and their par­ties would stand for. Dis­cus­sions of eco­nomic di­rec­tion—any­thing not man­age­able un­der a lais­sez faire pri­vate en­ter­prise par­a­digm—ap­peared al­most as un­to­ward, like mix­ing a prenup­tial con­tin­gency plan for dis­agree­ments and di­vorce along­side prepa­ra­tions for a “Ma­ronite mar­riage,” prover­bial for its doc­tri­nal and so­cial in­dis­sol­u­bil­ity.

MISS­ING PLAT­FORMS

Politi­cians dis­played ob­vi­ous eco­nomic be­hav­ior but were not called out on it in elec­tions while the idea of po­lit­i­cal par­ties hav­ing to come up with eco­nomic plat­forms or pro­grams in elec­tion bat­tles was con­sid­ered by many (av­er­age vot­ers, po­lit­i­cal strate­gists, and pro­fes­sional ob­servers of Le­banese pol­i­tics alike) as pa­tently ab­surd.

This is the ex­is­ten­tial as­pect of modern Le­banese re­al­ity for which the ar­ti­fi­cially long in­ter-elec­tion break be­tween 2009 and this month of May 2018 can be ar­gued to be a turn­ing point, or more ac­cu­rately a turn­ing pe- riod. In the past nine years, scru­tiny of the self-in­ter­ested eco­nomic be­hav­iors of politi­cians, or the po­lit­i­cal econ­omy of Le­banon, has be­come a cen­tral fo­cus of com­plaint and out­rage. Un­der the buzz term of cor­rup­tion and the com­bat­ing of cor­rup­tion, the po­lit­i­cal econ­omy is per­haps the big­gest topic in na­tional so­ci­ety and across all the com­mu­ni­ties that com­pose it—even as the un­der­ly­ing re­al­ity of pref­er­ence for pol­i­tics that brings ad­van­tages to “my” com­mu­nity, clan, and fam­ily/ per­son is by all mea­sures of hu­man self-in­ter­est nec­es­sar­ily preva­lent but hardly re­flected upon or ques­tioned.

MANY ARE THE BAR­RI­ERS

Eco­nomic pol­icy setting and the de­sign of a new path for the na­tional econ­omy is still not an easy quest in the Le­banese speci­ficity, partly be­cause the coun­try is hy­per-de­pen­dent on the ex­ter­nal forces that have so of­ten com-

pe­ted to and of­ten suc­ceeded in lord­ing over this area, which is lo­cated at the fault lines of not only civ­i­liza­tions but also of geopo­lit­i­cal in­ter­ests.

On one hand this location atop geopo­lit­i­cal fault lines ex­ac­er­bates the coun­try’s ex­po­sure to global fac­tors that un­fold with no lo­cal causal com­po­nent, such as in­ter­est rate de­ci­sions in the United States and Euro­pean Union, but that have clear ram­i­fi­ca­tions for the sen­si­tive lo­cal eco­nomic and po­lit­i­cal land­scape. On the other hand, Le­banon—be­cause of its po­si­tion at the in­ter­sec­tion of cul­tures, con­ti­nents, and eco­nomic spheres—was his­tor­i­cally in­te­grated by colo­nial and neo­colo­nial in­ter­ests in po­lit­i­cal de­fense lines and used as a bul­wark against threats by for­eign pow­ers that oc­cu­pied this ter­ri­tory ever since the first crusade at var­i­ous times dur­ing the past 1000 years just as, some would ar­gue, they are do­ing to­day.

It was a Ro­man poet, Vir­gil, who two mil­len­nia ago sub­sumed the sen­ti­ment of self-in­ter­ested in­ten­tions and their risks through the line of Tro­jan seer Lao­coön about the Tro­jan horse and the fear of such gifts, “Quidqui­didest, timeō Danaōset dō­nafer­en­tīs,” lit­er­ally trans­lated as, “What­ever it is, I fear the Danaans (Greeks), even when bring­ing gifts.” The line rings true with the po­lit­i­cal in­ten­tions of state do­na­tions even to­day. In the con­text of the so-called Con­férence économique pour le développe­ment par les ré­formes et avec les en­ter­prises, or CEDRE con­fer­ence, it could be in­ter­preted as, “What­ever they pledge, I fear the mul­ti­lat­eral agen­cies and Euro­pean gov­ern­ments, even when of­fer­ing con­ces­sional loans or grants.”

A sec­ond in­trin­sic bar­rier to for­mu­la­tion and de­bate of eco­nomic pol­icy in the Le­banese conso­ci­a­tional po­lit­i­cal land­scape is ar­guably the need to forge elec­toral al­liances on list level even be­fore politi­cians of dif­fer­ent ide­o­log­i­cal per­sua­sions come to present their pro­pos­als in the con- test at the vot­ing booth. Al­liances and coali­tions have to be formed pre­emp­tively, not af­ter the group or in­di­vid­ual has re­ceived a man­date to pur­sue his, her, or their pol­icy plat­form.

It seems that this en­cour­ages or even ne­ces­si­tates, un­der the 2018 elec­tion law, the for­ma­tion of lists that do not al­ways re­flect clearly the po­si­tions of the can­di­dates or or­ga­ni­za­tions that join forces in the con­test for power. This ap­pears to be on one hand a case for anti-es­tab­lish­ment lists where groups close ranks with one an­other that, in words of their own ex­po­nents, do not agree on any­thing ex­cept on chal­leng­ing the ex­ist­ing power dis­tri­bu­tion but also for lists where es­tab­lished par­ties team up with groups that dif­fer in po­si­tions on en­vi­ron­men­tal pri­or­i­ties or eco­nomic goals.

THE ANTI-COALI­TION

Ex­ec­u­tive has sought to track the for­ma­tion of anti-es­tab­lish­ment coali­tions and plat­forms since the 2018 elec­tion date was con­firmed in the mid­dle of last year. In the camps that can broadly be sub­sumed un­der the anti-es­tab­lish­ment la­bel of ex­pressed op­po­si­tion and chal­lenge to the en­trenched power groups and po­lit­i­cal fam­i­lies, there has since been progress in reach­ing com­mon po­si­tions on can­di­da­cies, with a mit­i­ga­tion of the per­son­al­ity com­pe­ti­tions and ego is­sues that many quoted as the anti-es­tab­lish­ment forces’ defin­ing, al­beit hid­den, char­ac­ter­is­tic and weak­ness.

How­ever, the groups are still in a pre-pro­gram­matic phase of their de­vel­op­ment, and their as­so­ci­a­tions can­not at this point be tested on their eco­nomic plat­forms or even their pre­pared­ness to chal­lenge and coun­ter­pro­pose or concur and co-im­ple­ment the eco­nomic plat­form that the es­tab­lished gov­ern­ment, with its var­i­ous stake­hold­ers from the tra­di­tional po­lit­i­cal camps, has pro­duced over the course of the past eight to 12 months.

The nov­elty in the gov­ern­ment plan, pre­sented by ad­vo­cate-cum-stake­hold­ers such as the Hariri gov­ern­ment’s se­nior eco­nomic ad­viser Nadim Munla with great fre­quency and high vigor in the few weeks af­ter the plan was re­leased in March, ap­pears to be the ad­mis­sion that the di­ag­no­sis for the Le­banese eco­nomic health is in­dis­putably “dis­mal” (which it had ac­tu­ally been for many years, but with­out ac­knowl­edge­ment by gov­ern­ment lead­ers) in con­junc­tion with the in­sight that the pub­lic sec­tor in Le­banon “needs to as­sume the lead­er­ship role in jump­start­ing the econ­omy.”

Both ad­mis­sions, made by Munla in dis­cus­sions, such as an April 19 fo­rum or­ga­nized by busi­ness magazine Le­banon Op­por­tu­ni­ties at the Le Grey Ho­tel, con­sti­tute the back­drop of new eco­nomic pol­icy pur­sued by the Le­banese gov­ern­ment. This eco­nomic pol­icy is sub­sumed in the CEDRE con­cept with its four pil­lars of (1) fis­cal con­sol­i­da­tion and the re­duc­tion of the deficit by 5 per­cent­age points of GDP, (2) sweep­ing re­forms, (3) large in­fras­truc­ture in­vest­ments, and (4) a par­tially out­sourced eco­nomic vi­sion and strat­egy that is un­der de­vel­op­ment by global con­sult­ing firm McKin­sey (for more on the CEDRE plan com­po­nents as known to­day, see page 18).

The other fo­cus of the 2018 elec­tions is, of course, the re­bal­anc­ing of po­lit­i­cal rep­re­sen­ta­tion, where Ex­ec­u­tive has fol­lowed the is­sue of fe­male par­tic­i­pa­tion and is ded­i­cated to monitoring the change on this front. How­ever, the eco­nomic pol­icy theme is the magazine’s pri­mary con­cern. On this front, the first ob­ser­vance of 2018 when com­pared to the pre­vi­ous elec­tions is that po­lit­i­cal po­si­tions are

Anti-es­tab­lish­ment groups are still in the pre-gram­matic phase of their de­vel­op­ment.

more ar­tic­u­lated when com­par­ing the party po­si­tions of now and then. Pre­vi­ously, clear views on for­eign trade poli­cies, pro­mo­tion of in­dus­try, re­dis­tri­bu­tion via di­rect and in­di­rect tax­a­tion, and oth­ers sim­ply did not seem to ex­ist in a fully developed pro­gram in any es­tab­lished party, never mind whom Ex­ec­u­tive asked about these is­sues.

In an in­ves­ti­ga­tion that Ex­ec­u­tive con­ducted dur­ing the 2005 elec­tion prepa­ra­tions, on one end of the spectrum stood the an­swer of Hezbol­lah, which re­sponded that it did not have to ex­ert po­si­tions on the econ­omy. There ap­pears to be no shift from Hezbol­lah’s po­si­tion as far as the or­ga­ni­za­tion’s elec­tion pro­gram of seek­ing to act as “voice for the hon­or­able re­sis­tance and pro­tec­tor of the sac­ri­fices of its peo­ple and mu­ja­hedeen” for the next four years as the or­ga­ni­za­tion’s Sec­re­tary Gen­eral Has­san Nas­ral­lah said when he an­nounced the elec­tion pro­gram of the Loy­alty and Re­sis­tance bloc this spring. He fo­cused his eco­nomic pol­icy re­marks on calls for the re­duc­tion of “waste and cor­rup­tion” and on the cre­ation of a “min­istry of plan­ning,” with­out go­ing into spe­cific de­tails on an eco­nomic pol­icy pro­gram points per se. Ac­cord­ing to state­ments which Nas­ral­lah made in late April dur­ing the 2018 race, the party is still not as­pir­ing to in­volve­ment in eco­nomic pol­i­cy­mak­ing.

On the other end of the scale, many par­ties his­tor­i­cally have of­fered par­ti­san views on sin­gle line items in the eco­nomic con­text, but noth­ing that de­served to be called an eco­nomic pol­icy plat­form or pro­gram. The best any party of­fered was some brochure-length ex­cuse for an eco­nomic pol­icy. Com­pared to that, the gov­ern­ing “coali­tion’s” CEDRE lineup of eco­nomic pol­icy in­no­va­tions is a big step for­ward. How­ever, this is not enough for a real de­bate on eco­nomic pol­icy in the pub­lic square.

POL­ICY THROUGH DE­BATE

This CEDRE sce­nario of a sin­gle plan with­out any well-developed coun- ter­pro­pos­als is at the very least coun­ter­in­tu­itive to the idea, un­der which a par­lia­ment is the “de­lib­er­a­tive assem­bly of one na­tion,” to quote Ed­mund Burke as a his­toric pi­o­neer of democratic prac­tice. It is not an idea whose cer­tainty has been es­tab­lished that in the Le­banese Na­tional Cham­ber gov­ern­ment and leg­is­la­tion have ever been, as Burke pos­tu­lated, “mat­ters of rea­son and judg­ment” as op­posed to the type where “the de­ter­mi­na­tion pre­cedes the dis­cus­sion.” This not­with­stand­ing, if one be­lieves that de­lib­er­a­tion is in­te­gral to rep­re­sen­ta­tive democ­racy, one is likely to think that the best pol­icy is the out­come of de­bate be­tween com­pet­ing poli­cies or so­lu­tions.

LACK­ING AL­TER­NA­TIVES

There is no sim­ple an­swer to the de­fi­ciency of al­ter­na­tive eco­nomic pol­icy plat­forms for Le­banon, though, given that such plat­forms of the anti-es­tab­lish­ment in 2018, as men­tioned be­fore, ap­pear yet to be in pre-for­ma­tion stage, and that the CEDRE plat­form has co­a­lesced into what can be called the gov­ern­ment stake­hold­ers’ united eco­nomic sur­vival strat­egy. De­spite the con­cept’s many as­pects that have yet to see the light of day such as the Eco­nomic Vi­sion, and the many that ap­pear wor­thy of much care­ful scru­tiny, buy-in of gov­ern­ment par­ties into CEDRE seems far-flung, even to the point that ex­po­nents of es­tab­lish­ment pol­i­tics in Le­banon have even re­sorted, in the in­tense month of cam­paign­ing be­tween the CEDRE meet in April and the pre­sumed elec­tions on May 6, to the same specter of gloom, doom, and bankruptcy in their rhetoric about the Le­banese econ­omy. It is ironic that these are the same or­a­tors who should have pre­vi­ously as­sumed re­spon­si­bil­ity for im­prov­ing the econ­omy and its po­lit­i­cal en­vi­ron­ment.

That does not mean, how­ever, that there can­not be hope for con­trast­ing the gov­ern­ment’s plat­form with anti­estab­lish­ment plat­forms or even po­si­tions voiced by stake­hold­ers in the po­lit­i­cal es­tab­lish­ment in the course of the com­ing Par­lia­ment. One sign for such a pos­si­bil­ity—how­ever con­trar­ian to the group’s past po­lit­i­cal iden­ti­ties it may ap­pear to some skep­ti­cal Le­banese—is that the Kataeb Party has pro­duced a di­verse 131-point pro­gram, which en­tails over 30 eco­nomic pol­icy points. While it pre­sented the pro­gram this spring with tar­gets that may not in them­selves spell out rad­i­cally new eco­nomics, the ef­fort in­vested in the pro­gram has enough rev­o­lu­tion­ary feel in the con­text of Le­banese es­tab­lish­ment pol­i­tics.

It cer­tainly is cu­ri­ous that one of the most en­trenched po­lit­i­cal or­ga­ni­za­tions in Le­banon, which had been rep­re­sented in ev­ery Par­lia­ment be­tween 1951 and the last pre-war elec­tions in 1972, that was the party of as­sas­si­nated Pres­i­dent-elect Bachir Ge­mayel and Pres­i­dent Amine Ge­mayel, and that re­gained par­lia­men­tary seats in 2000, 2005, and 2009, is of­fer­ing a plat­form of eco­nomic pol­icy po­si­tions from an op­po­si­tion an­gle. How­ever, as the po­lit­i­cal de­bate of eco­nomic poli­cies ap­pears to be a dire need—a con­sen­sus across party lines and in­ter­nal com­mu­nity bor­ders that the coun­try is in a state of ab­ject eco­nomic and fi­nan­cial de­spon­dency and threat­ened by eco­nomic de­fault is per­haps able to pro­vide peo­ple with a cer­tain per­verse sat­is­fac­tion of as­sured de­pres­sion—it ap­pears as a ray of hope that mem­bers of the po­lit­i­cal es­tab­lish­ment in the coun­try are ready to pick up the gaunt­let of se­ri­ous eco­nomic pol­icy dis­course.

The best any party of­fered was some brochure-length ex­cuse for an eco­nomic pol­icy.

The ten­ta­tive mak­ings of an eco­nomic vi­sion

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