Not Just Another Recession
Why the Global Economy May Never Be the Same
Writing in these pages in 1952, Lebanese diplomat Charles Malik urged the United States to protect the security of a free and independent Lebanon. He described Lebanon's unique position-and predicament-of standing between East and West, looking toward the culture and markets of the Arab world and toward the sophistication and political liberties of the West. He made an eloquent appeal: "The Lebanon could not be true to East and West alike unless she stood for existential freedom. In the end is this alone her justification . . . . Whoever is about to suffocate must be able to breathe freely in the Lebanon."1
The intervening 31 years have mostly been disastrous ones for Lebanese politics. Mr. Malik's vision of democracy and tolerance collapsed, as the country fought two civil wars and almost non-stop skirmishes. Instead of being a neutral bridge between the Arabs and Europe, Lebanon became a battleground for Arab-Israeli and inter-Arab conflict. The country that had looked East and West found itself betrayed on both fronts: by the manipulation of its Arab and Israeli neighbors and by the indifference of the West.
Last summer's Israeli invasion gave Lebanon a chance to break out of this vicious spiral. The war destroyed the Palestinian armed presence in Beirut and South Lebanon, which had exacerbated the country's internal problems. Just as important, the war forced the United States and its NATO allies to intervene decisively on behalf of the frail Lebanese government. But the war also raised the fundamental question of whether a permanent restoration of the nation of Lebanon is possible, or even desirable.
The answer is certainly yes. But the outlook is hopeful only if certain conditions are met. The first is a firm American commitment to help reestablish the sovereignty of the Lebanese state, through use of U.S. peacekeeping troops and military advisors. In making this commitment the United States must be prepared for a long and probably bloody war of subversion by factions that oppose the American presence; this could mean substantial American casualties. The United States must also be ready to support Lebanon's interests when they conflict, in the short run, with those of America's principal Mideast ally, Israel. This sort of commitment will require a patience and resolve in American diplomacy that has been little evident in recent years. It will also require political support in the United States for the idea that Lebanon-a country that has looked to America as a friend for more than 100 years-is worth saving.
The second condition necessary for the restoration of Lebanon is a basic reform of the country's political system. The attempt to maintain cohesion through an artificial confessional balance-symbolized by the 1943 National Pact, which allocated six Christian seats in Parliament for every five Muslim seats-simply hasn't worked. The census figures on which that formula was based are now hopelessly out of date. Moreover, the system itself is inherently unstable, and it has served as a cover for the manipulation of power by a series of near-feudal warlords. The age of the warlords has passed, and it is time for Lebanon to make a clean break with confessional politics.
The final condition is that Lebanon maintain a measure of sanity in its relations with both Israel and the Arabs. Lebanon needs, for economic and cultural reasons, to keep its ties with the Arab world. Above all, it must coexist with the hard-line regime in Syria. But Lebanon, which was nearly destroyed during the past decade by the rhetoric of "Arabism," also needs to break free from the nonsense aspects of Arab politics. Thus a restored Lebanon should, over time, follow Egypt on the road toward political maturity by recognizing Israel and signing a peace treaty with it.
Like most countries in the Middle East, the nation of Lebanon is a relatively modern invention. Its current borders date to 1920, when the French, as mandatory power, proclaimed the state of Greater Lebanon. Regaining sovereignty over this territory is the first-and potentially most difficult-task in rebuilding Lebanon.
Kamal Salibi, the leading Lebanese historian, has remarked that because Lebanon's borders are so recent and its population is so diverse, "it would be difficult for a historian to speak of a Lebanese people without reserve." The cohesion of Greater Lebanon is certainly open to question. It welded together areas that, until the collapse of the Ottoman Empire in 1918, had been part of different Ottoman administrative districts. The coastal regions, dominated by Sunni Muslims, were part of the vilayets of Sidon and Tripoli (later merged into a single vilayet of Beirut); the Mount Lebanon region, home of the Maronite Christians and Druze Muslims, was a semi-autonomous district reporting directly to Istanbul; and the Bekaa Valley, populated largely by Shi'ite Muslims and Greek Catholics, was part of the vilayet of Damascus.
The 1982 war returned Lebanon to the ragged patchwork of Ottoman times. The sovereignty of the Lebanese government was limited to the tiny area of "Greater Beirut," and even here, order was maintained only with the help of 5,000 U.S. and European troops. The rest of Lebanon was parcelled out: the Israeli Army controlled South Lebanon and half of Mount Lebanon; the Christian "Lebanese Forces" militia controlled the other half of Mount Lebanon; pro-Syrian warlords and Palestinian guerrillas controlled North Lebanon; and the Syrian Army controlled the Bekaa.
Behind the occupying armies were strong political pressures for a partition of Lebanon. Syria claims that control of the Bekaa is vital to its security, and Israel makes a similar claim about South Lebanon. Some ardent nationalists in the two countries go further, arguing respectively that the Bekaa is part of Greater Syria and South Lebanon is part of Greater Israel. These claims find some support within Lebanon itself. The National Syrian Socialist Party of Lebanon has long favored a merger with Syria, while some Christian militia leaders would be happy if Israel took the South and left the Christians free to run Mount Lebanon and Beirut. These centrifugal forces, weakening the central government's hold on the country, won't be resolved simply by the withdrawal of the Syrian and Israeli armies.
The core of Lebanon-both geographically and politically-is the region of Mount Lebanon. This is the name given to the string of peaks that runs down the center of the country like a spine, stretching from Jbail and Kesrouan in the north to the Chouf in the south. The Maronites and Druze withdrew into these mountains nearly 1,000 years ago to avoid religious persecution. To this day, the two sects exhibit the fierce, clannish traits that are characteristic of montagnards around the world.
Mount Lebanon has been a tinderbox for over 300 years. Druze and Christian warlords have periodically tried to conquer the area, often with help from scheming foreign powers. The Ottomans tried to impose peace by partitioning the region in 1843 into separate Maronite and Druze enclaves; the partition only led to worse violence. The Ottomans then imposed an elaborate formula for confessional balance; it had better success. But the outbreak of fighting in Mount Lebanon this year-as the Christian and Druze militias prepared to fill the vacuum left by the departing Israeli Army-demonstrates that coexistence in the mountains won't be easy.
The weakness of the Ottoman Empire encouraged another worrisome Lebanese tradition: meddling by foreign powers. In their eagerness to intrigue in Lebanon, various European countries sought to establish themselves as protectors of the confessional groups. The French adopted the Maronites; the British looked after the Druze; the Austrians took care of the Greek Catholics; and Tsarist Russia protected the Greek Orthodox. Today there is similar intrigue, as the intelligence services of Syria and Israel compete for the loyalty of Druze, Sunni, Shi'ite and Christian leaders.
The Americans also came to Lebanon long ago, though in a more benign role than the Europeans. The first Protestant missionaries, known in Lebanon as the "Bible Men," arrived in the 1820s. After several decades of earnest proselytizing (and rivalry with the French Jesuits) the American missionaries founded the Syrian Protestant College in 1866. The college, later renamed the American University of Beirut, soon became the leading educational institution in the Arab world. Even Arab radicals credit it as the birthplace of "Arab nationalism."
The idealistic mission of the Americans in Lebanon was summed up in the AUB motto, carved in stone above the main gate: "That they may have life and have it more abundantly." After some early battles, including a strike by Muslim students who refused to sing hymns in chapel, the AUB gradually gave up its religious role and became an evangelist for American democracy. Saeb Sallam, a former Lebanese prime minister, recalled that at the AUB, "we were breast-fed the milk of freedom. It was at this American institution that we learned of this freedom which urged us to oppose imperialism and imperialists." There was even support for the United States to become the mandatory power in Lebanon and Syria after the collapse of the Ottoman Empire in 1918. The report of the King-Crane Commission in 1919 noted: "From the point of view of the desires of the 'people concerned,' the mandate should clearly go to America."
Lebanese politics were set on a wobbly course by the National Pact of 1943. Since it provided the framework for Lebanese democracy and independence from France, this agreement has achieved the status of a constitution. But its power-sharing formula reads more like a back-room political deal.
In the Greater Lebanon created by the French, the Maronites were the largest population group, followed by the Sunni Muslims. The National Pact was, in essence, a Maronite-Sunni alliance, with concessions thrown in for the other religious groups. The Maronites claimed the Presidency; the Sunnis took the post of Prime Minister; the Shi'ites and Greek Orthodox were given the positions of Speaker and Deputy Speaker of the Parliament. The Parliament itself was established in multiples of 11, to accommodate the six-to-five Christian-Moslem ratio, and each religious sub-group was allocated a fixed number of seats. Cabinet and civil service positions were also distributed along confessional lines.
This balancing act was inevitably unstable. Moreover, by focusing on religious groups, it reinforced the feudal tendencies in Lebanese politics. The satraps of the various confessional groups could wield enormous power, and government administration was largely a spoils system. The election of the Lebanese President every six years by the Parliament became a colorful exercise in corruption.
The National Pact fuzzed the delicate issue of Lebanon's relations with East and West. It said that while Lebanon would have an "Arab countenance," it would be independent of pressures from either side. In effect, this meant that the Maronites would limit their dealings with the French, while the Sunnis would give up their dream of a merger with Syria. This was a pragmatic compromise, but it added to the confusion of identity expressed by the historian Albert Hourani: "To be a Levantine is to live in two worlds or more at once, without belonging to either."
The Americans, during the cold war years of the 1950s, were eager to steer Lebanon firmly into the Western camp. Radical nationalism, backed by the Soviet Union, was sweeping the Arab world, and Lebanon was in turmoil. The United States (which was plotting a coup of its own in Syria at the time) pushed hard for an amendment of the Lebanese constitution that would allow the pro-American President, Camille Chamoun, to win a second term in 1958. The American intrigues, as described in the recent memoir of Wilbur Crane Eveland, then a CIA man in Beirut, were almost comical: he recalls delivering briefcases full of money to President Chamoun to pay bribes during the 1957 Parliamentary election, and later safeguarding the family jewels of Mrs. Chamoun.2
By 1958, Lebanese politics were unravelling. Muslim opposition to President Chamoun's bid for a second term helped provoke a civil war, and on July 15 (one day after the overthrow of the pro-Western monarchy in Iraq) U.S. Marines landed in Beirut. Mr. Chamoun, largely discredited in Muslim eyes, was replaced as President by the commander of the Lebanese Army. The 1958 civil war ended with a slogan that conveyed Lebanon's fragile balance: "No Victor, No Vanquished."
The polarization of Lebanese politics was partly a response to the Arab-nationalist crusade of Gamal Abdel Nasser. Lebanese Christians had once welcomed the movement as an alternative to Islam for uniting the Arabs. But by the 1960s, it threatened Lebanon's dual East-West identity. Some Maronites, afraid of being overwhelmed by pan-Arabism, began to look toward Israel as a model for a militant, non-Muslim state in the Middle East. Lebanese Muslims, frightened by the growing militance of the Christians, deepened their attachments to Egypt and Syria.
This explosive mix was finally detonated by the Palestinians, who emerged as an independent political force after the 1967 Arab-Israeli war. Young Palestinians rushed to join guerrilla groups, and the weak Lebanese state was powerless to stop their commando raids into Israel. There was a lame attempt to regulate this Palestinian presence in the 1969 Cairo agreement, but it collapsed when the guerrilla groups moved en masse into Lebanon after their expulsion from Jordan in 1970 and 1971. The Palestinian armed presence fostered a further radicalization of the Lebanese Christians and the growth of Christian militias-setting the stage for the 1975-76 civil war.
What is remarkable about the civil war is how little the United States and its European allies did to stop it, or to prevent the de facto partition that followed. Henry Kissinger, then U.S. Secretary of State, had a mix of other objectives: he was wooing the Syrians away from Moscow toward closer relations with the United States; he was courting the Saudis, who would have been offended by any U.S. alliance with the Lebanese Christians; and he had a useful back-channel link with the Palestinians, thanks to a covert relationship between the Central Intelligence Agency and the intelligence chief of Yassir Arafat's "Fatah" guerrilla group. It was almost as if the United States had decided that, given these other priorities, the mess of Lebanon was best left to Syria and Israel. As the United States would later discover, this was like asking two hungry alley cats to guard a canary.
The Syrians and Israelis, though bitter rhetorical enemies, shared a common set of goals in Lebanon: they wanted to protect their own borders by establishing "spheres of influence" in Lebanon; they wanted to rebuff the troublesome Palestine Liberation Organization; and they wanted to maintain a pliant, Christian-led government. It was the Syrians who actually saved the Christians, when they intervened in the civil war in June 1976 with 4,000 troops and 250 tanks. This move drew praise from the United States, sharp criticism from the Soviet Union, and a telling silence from Israel.3
The Syrians were at first welcomed by most Lebanese. But their occupation brought a wave of brutality and corruption. The Druze leader Kamal Jumblatt was assassinated in 1977 near a Syrian roadblock; a prominent Lebanese journalist who had dared to criticize the Syrians, Selim al-Lowzi, was kidnapped and brutally murdered; theft of automobiles became so widespread that many Beirutis refused to drive their best cars. Among worldly Lebanese, the sentiment against occupation by an army composed partly of poor Syrian farmboys was expressed in a phrase muttered after crossing Syrian checkpoints: "From a donkey to a tank."4
The dismemberment of Lebanon continued in March 1978, when Israel invaded South Lebanon up to the Litani River. The Israeli operation was largely a failure, because it left the Palestinians within rocket range of the northern Galilee. But it did solidify the power of Israel's quixotic ally, Major Saad Haddad, and establish Israel's claim to intervene in South Lebanon. Despite pleas from the PLO, the Syrians stayed out of the Litani fighting and respected an informal boundary between Israeli and Syrian zones of influence. To many Lebanese, it seemed that partition of the country was now a reality.
Lebanon's present difficulties stem partly from the fact that the man who had the best chance of putting the country back together-the Phalangist militia leader Bashir Gemayel-was murdered nine days before he was to take office as President in September 1982. Bashir combined two essential qualities for a Lebanese leader: ruthlessness and political vision. His older brother Amin, who was elected in his place, has other useful qualities, but he lacks the same dynamism.
Bashir was often dismissed in the West as a simple tool of Israeli policy. But the story is more complicated than that. In the years after 1976, as the Lebanese Christians became disenchanted with their Syrian protectors, Bashir developed an extensive client relationship with Israel. But it was a bit like that between Israel and the United States: Israel provided the Phalangists with arms, military training and advice that was often ignored. The Phalangists reciprocated with a mix of loyalty and resentment.
At times, the Phalangist tail tried to wag the Israeli dog. On two occasions-in the 1978 assassination of the pro-Syrian militia leader Tony Franjieh and in the 1981 attempt to install Phalangist militiamen in the town of Zahle in the Bekaa Valley-Bashir provoked confrontations with Syria. He apparently hoped that he could thereby force Israel to intervene on his behalf. But the Israelis, apart from symbolic gestures, did little to help him.
By 1982, the Begin government was prepared to risk war with Syria to alter the political geography of Lebanon. Senior Israeli military officials met with Bashir in January 1982 to plot strategy. But this time it was Bashir who had other priorities. When the Israelis invaded in June, he took his cues more from U.S. diplomats (who saw him as President of a reunified Lebanon) than from the Israeli commanders. The Phalangist militia stood mostly on the sidelines, leaving to the Israelis a frustrating-and politically costly-two-month siege of West Beirut. The United States, by negotiating a peaceful evacuation of the PLO, saved the Israelis from what would have been a bloody final battle.
The ironic outcome of the 1982 war was that the United States replaced Israel as the chief political ally of the Lebanese Christians. The Israelis, having done the dirty work, quickly became an embarrassment. The transformation became clear in early September when Bashir, acting partly on American advice, refused to sign a quick peace treaty with Israel. This infuriated the Israelis, but it won Bashir new respect among Lebanese Muslims and boosted his chances of unifying the country. (One perverse sign of Bashir's growing popularity among Lebanese Muslims was their conviction, after he was assassinated on September 14, that the Israelis must have done it. Instead, the evidence points more toward pro-Syrian Lebanese.)
Bashir's death left the Phalangists in the position of a headless horseman. The immediate reaction was a frenzy of killing by a team of "Lebanese Forces" militiamen delegated by the Israelis to secure the Sabra and Shatila refugee camps. In the uproar that followed the massacre, Amin Gemayel was quickly elected President. But he had trouble controlling the wayward "Lebanese Forces" militia created by his brother, let alone governing Lebanon.
The Phalangists, as the inheritors of political power in Lebanon, are torn between their desire to rebuild the country and their desire to protect Maronite interests. The Phalange Party itself was born with a similar ambivalence. It was founded by Pierre Gemayel in 1936 after a visit to Nazi Germany, and its political roots were somewhat similar to those of the mass right-wing parties of Europe. The Party attracted uprooted Maronite peasants from Mount Lebanon who had come to the urban coastal areas and become middle-class merchants, clerks and shopkeepers. (Pierre Gemayel, for example, was a pharmacist). The radicalism of the party stemmed from its desire to purge Lebanon of the oligarchy and corruption of the great Maronite, Sunni, Greek Orthodox and Greek Catholic families who dominated economic and political life in Beirut.
The Phalangist ideology evolved during the 1970s toward a simpler crusade to defend the Maronites against the Palestinians and their Muslim allies. This led to establishment of a Maronite enclave in East Beirut and Mount Lebanon during the 1975-76 civil war. The Phalangists were relatively efficient governors: they collected the garbage, policed the streets, established municipal parking lots, and imposed local taxes. But, as the Maronite enclave prospered, it became increasingly unclear-even to many Phalangists-whether it was a launching pad for the restoration of Lebanese sovereignty, or simply one of the cantons of a partitioned Lebanon.
Lebanon in 1983 remains a nation of villages, without a strong sense of statehood or citizenship. Social ties spread outward-from family, village, religious group and political party-and by the time they reach the abstract level of the Lebanese state, they are weak indeed.5
Consider the example of Dibbiye, a small Maronite village in the Chouf area of Mount Lebanon. The Lebanese government is nearly invisible here: there are no public schools, no sewers, no municipal water system, no road maintenance, no police, and no fire department. There is nothing, in short, to command loyalty to the state. The villagers have learned the hard way that they must solve problems for themselves. Thus, when Palestinian guerrillas occupied Dibbiye during and after the 1975-76 civil war, it fell to a village leader, Dr. Naaman Boustany, to negotiate an agreement with the guerrillas that would save the village from destruction. Later, when Christian villagers were kidnapped by Palestinian gunmen, village elders negotiated their release. In 1983, the main threat facing Dibbiye is the conflict between the Christian "Lebanese Forces" militia, which has occupied the village, and the nearby Druze militia. Here again, the Lebanese government is nearly powerless. Dr. Boustany has instead appealed to lieutenants of the traditional Maronite warlords-Pierre Gemayel and Camille Chamoun-to restrain the Christian militia and protect Dibbiye from Druze shelling.
The same pattern, of strong local loyalties and an irrelevant central government, can be found throughout Lebanon. Though the feebleness of the government has obviously increased during the past eight years of civil strife, it is rooted in the quasi-feudal political structure of the country.
The warlords still dominate their fiefdoms. Suleiman Franjieh, a 73-year-old former Lebanese president, controls the mountains of North Lebanon from his place in Zgharta; Rashid Karameh, a 61-year-old former prime minister, speaks for the Sunni population of the Tripoli area; Pierre Gemayel, the 78-year-old Phalangist leader, dominates the Kesrouan region from his home in Bikfaya; Saeb Sallam, a 78-year-old former prime minister, heads the traditional Sunni establishment of Beirut; and Walid Jumblatt, the 34-year-old son of Kamal Jumblatt, leads the Druze of the Chouf mountains.
Young Walid Jumblatt illustrates that the days of the warlords are passing. Thin as a scarecrow, dressed in a leather jacket and tight blue jeans, he looks more like a French graduate student than a Lebanese feudal chief. Friends say he is uncomfortable as leader of the Progressive Socialist Party founded by his father-probably the only hereditary socialist position in the world-and that he would gladly give it up.
The problem is that because Lebanese politics are frozen in a now-outdated pattern of feudal relationships, it is difficult for someone like Walid Jumblatt to simply retire from the fray. If he did so, who would negotiate the release of those who are kidnapped? Who would guarantee ceasefires between the Druze and Christian militia? Who would prevent anarchy within the Druze community itself? There is a phrase that sums up the pragmatic Lebanese acceptance of feudal politics: "It is good to be a vassal in the house of the Bey."
The solution, of course, is the development of a genuinely "national" politics, in which officials of the central government-rather than feudal leaders-are able to provide security and services for the people. Many Lebanese have been dreaming of such a breakthrough for 30 years, but their schemes have often been wishful thinking. President Gemayel, for example, has recently encouraged study of "the computerization of Lebanon." The idea is to install a computer terminal in every Lebanese village, linked to a mainframe at the presidential palace in Baabda. This data link would allow the villages to instantly express their needs and the central government to communicate its orders. Such futuristic schemes might someday be instruments of national consensus, but they can't of themselves create it.
What is needed is a fundamental shift from confessional politics-which guarantees the role of sectarian power brokers-to national politics. The blockage begins in Parliament. There hasn't been a parliamentary election since 1972, but if one were held today, voters in the Chouf would be required to select three Maronites, two Sunnis, two Druzes and one Greek Catholic. Voters in Zahle would elect one Maronite, one Sunni, one Shi'ite, one Greek Catholic and one Greek Orthodox. The absurdity of this system is suggested by the fact that the breakdown of seats is based largely on 1932 census data. It has been deemed politically impossible to update this census for the past 50 years.
The key to political reform is the revolutionary idea of conducting a new census. To make the census less threatening to the various religious groups, it should be accompanied by modification or abolition of the 1943 formula for allocating parliamentary seats along confessional lines.6 The goal should be to break out of the confessional straightjacket of the 1943 National Pact. To assure a measure of stability, the 1943 formula for allocating the top jobs should be retained, at least temporarily. The President should remain a Maronite; the Prime Minister should remain a Sunni; the Parliamentary Speaker should remain a Shi'ite.
A new census will confirm what most Lebanese already know: that the Shi'ite Muslims-the most impoverished and politically powerless group in the country-are now the largest Muslim sect and possibly the largest group overall. A 1971 study found that the birth rate among Shi'ite women was 58 percent higher than among Christian women; some analysts now guess that of every two babies born in Lebanon today, one is a Shi'ite. The enormous growth in the Shi'ite population almost certainly means that Muslims now outnumber Christians. A 1975 study estimated the Muslim population at roughly 60 percent and the Christian at about 40 percent. While Christian leaders dispute these figures, many Christians privately concede that the statistical basis of the 1943 National Pact has now disappeared.7
Fear of recognizing these demographic facts, and of giving the Shi'ite Muslims a larger share of political power, has united the other religious groups in opposing a new census. But it is a cynical and ultimately doomed strategy, for the Shi'ites can't be suppressed forever. Lebanese history suggests that by the year 2000 a new deal must be struck: just as a Maronite-Druze alliance in 1861 helped stabilize Mount Lebanon and a Maronite-Sunni alliance in 1943 established the modern Lebanese state, an eventual Maronite-Shi'ite alliance will stabilize a future Lebanon.
The Maronites can protect their traditional role of political leadership best by leading the reform movement-by steering Lebanon away from the confessional system in which the Christians, because of their dwindling share of the population, will ultimately be the losers.
In addition to seizing the opportunity for political reform, President Gemayel can foster a national politics by establishing a strong, non-confessional army. The disintegration of the Lebanese Army in 1975 led to eight years of anarchy; the revival of the Army is necessary for restoration of order. Anyone who has known Lebanon during the years of chaos can appreciate the pleasure Lebanese feel as they look into the sky over Beirut and see Lebanese Air Force jets on training missions. More planes, tanks and cohesive fighting units will make Lebanon more secure.
General Ibrahim Tannous, the new Army commander, has made the right start. He immediately replaced 140 top officers who were judged incompetent, corrupt or too closely linked with confessional politics. He sought to develop a cadre of noncommissioned officers, the backbone of any army, by promoting youngsters who seemed to have leadership skills. He instituted rigorous physical training and the beginnings of military discipline. The real test for General Tannous will come as the Lebanese Army begins to incorporate former members of the various militias. These armed men, veterans of many bloody battles, are needed within the ranks of the Lebanese state. But if they aren't assimilated carefully, the Army could disintegrate again along sectarian lines.
The United States can make a major contribution to rebuilding Lebanon by offering training and assistance for the Lebanese military. This isn't a project for the faint-hearted. Creating a Lebanese Army of 60,000 men that can defend the country's territory is likely to take two to five years. In the meantime, American military advisors will be exposed to the same dangers as the Lebanese themselves.
Rebuilding the Lebanese economy may be as delicate as political reconstruction. For, despite the entrepreneurial talents of the Lebanese, and the optimism in the West about a postwar revival, there are strong factors working against any quick economic boom in Lebanon.
The cost of economic reconstruction will be substantial. Muhammed Atallah, the President of Lebanon's Council for Development and Reconstruction, estimates that government spending will total more than $15 billion over the next decade, and that the private-sector reconstruction bill could be as high. He said last fall that he was hopeful that 75 percent of the public-sector total could be raised from Arab and international lenders, but many other analysts are skeptical about such largesse. They note, for example, that Arab states have paid only a fraction of the $2 billion they promised Lebanon in 1979.
The paradox of the Lebanese economy is that although the past eight years ravaged the country's physical infrastructure, they saw a large increase in the capital of the Lebanese banking sector. From 1976 to June 1982, private deposits in Lebanese commercial banks increased more than 600 percent, according to the Banque du Liban, Lebanon's Central Bank.
This apparent health was actually a product of Lebanon's decay. The banks were flush with cash because of remittances from Lebanese who had fled the country to work abroad. Between 1977 and 1981, these remittances totalled $7.75 billion, or an average of nearly $130 million per month, according to the Beirut Chamber of Commerce and Industry. By 1981, remittances accounted for about 45 percent of Lebanon's national income, compared to about 25 percent in the years before the 1975-76 civil war, the Chamber says. This inflow of cash allowed Lebanon to transform a regular balance-of-trade deficit into a substantial balance-of-payments surplus.
The flow of remittances, in turn, generated a real-estate boom. Property values typically rose between 500 percent and 1,000 percent during the past eight years. In some instances, the increase was even greater: a piece of property purchased in Jounie, north of Beirut, for 180,000 Lebanese pounds in 1970 was sold for three million pounds in 1978 and resold for six million pounds last year; a plot in Broumannah, in the hills east of Beirut, was purchased for 350,000 pounds in 1977 and sold for four million pounds last year; prime commercial real estate in Sidon rose approximately 1,500 percent from 1975 to 1982. These skyrocketing prices testified to the Lebanese love of their land, and to the lack of alternative investments.
The war years also brought a flood of covert payments into Lebanon from the Arab governments that were supporting factions of the Palestine Liberation Organization and the various other armed militias. Saudi Arabia sent millions of dollars each year to "Fatah" and to the Lebanese Sunni groups; Iraq sent millions to the Arab Liberation Front; Libya lavishly financed the Popular Front for the Liberation of Palestine-General Command; Iran supported factions of the Shi'ite militia, Amal; and so it went. Though these subsidies helped turn Lebanon into a jungle, they also provided income and employment for thousands of Lebanese teenagers. The starting salary for part-time militiamen was 1,000 Lebanese pounds, or roughly $250, per month.
The high standard of living maintained during the past eight years masked the near-collapse of Lebanese industry. The Beirut Chamber of Commerce and Industry calculates that, since 1975, 150 manufacturing plants have been completely destroyed and another 331 have been severely damaged. The Chamber also estimates that 800 of Lebanon's 1,200 textile plants and 350 of its 500 furniture plants have closed since 1975. The result, according to Adnan Kassar, the director of the Beirut Chamber, is that service industries now account for roughly two-thirds of Lebanon's gross national product.
Just as the years of anarchy brought some unlikely dividends, a durable peace would create some economic problems. First, by encouraging Lebanese expatriates to return home, it would reduce the tide of remittances that has kept the Lebanese economy afloat. Second, it would require a massive increase in public-sector spending to pay for a strong national defense and rebuilding the country's infrastructure. One Lebanese economist estimates, for example, that it will cost Lebanon at least $6 billion through 1990 to establish a strong 60,000-man army. Financing this public-sector spending will mean a sharp increase in tax collection and the possibility-at least according to supply-side economic theory-of a corresponding decline in Lebanese entrepreneurship.
Since peace is likely to be accompanied by some normalization of relations with Israel, it could also cost Lebanon much of its trade with the skittish Arab world. An Arab trade boycott would have significant effects: in 1980, according to the Banque de l'Industrie et du Travail, Arab countries absorbed 92 percent of Lebanon's exports. Three countries-Saudi Arabia, Iraq and Syria-absorbed nearly half the total.
There are some economists, in Lebanon and abroad, who believe that a revived Lebanon can easily revert to the economic pattern that prevailed before 1975. This is probably wishful thinking. Lebanon's prosperity in the pre-war days stemmed partly from its role as a way station for newly prosperous Arabs, who had money to spend but felt uncomfortable in London, Paris and New York. These Arabs went by the thousands to Lebanon for vacations, medical treatment, gambling and night life, and banking and investment services. Today, after eight years of increasing affluence and sophistication, the same Arabs have learned to enjoy life in Western capitals. They now have homes and investments in the West, and it isn't clear that they need Lebanon in the same way they once did.
A sensible plan for rebuilding the Lebanese economy will look forward rather than backward, and to the West as much as to the East. Declining oil revenues make the Arab world less attractive both as an export market and as a source of tourist income. Future export and tourist revenues may come increasingly from Europe and America. Western companies doing business in the Middle East-which moved to Cairo, Athens, Cyprus and Amman after 1975-may return to Beirut in large numbers. Finally, clever Lebanese bankers should be able to channel part of their enormous liquidity into productive investments in Lebanese industry and agriculture.8
"A small country is rarely involved in an international conflict to its advantage," wrote the Lebanese historian Kamal Salibi. Recent Lebanese history certainly supports this view. But short of a new détente between the United States and the Soviet Union and a joint effort to stabilize the Middle East, Lebanon is likely to remain a cockpit for regional and superpower rivalry.
Any optimistic belief that it would be easy to rebuild Lebanon has been shattered by the events of the year since Israel's June 1982 invasion. Israel dragged its feet for months in troop-withdrawal negotiations, and Syria, at this writing, shows no sign at all that it is prepared to quit the country. The situation is further complicated by the growing Soviet commitment to Syria, and by Moscow's desire to block the United States from establishing a stable client state in Lebanon. The Soviet-Syrian strategy seems to be to keep Lebanon in a state of hypertension-through military skirmishes and threats of all-out war-in the hope that the United States and Israel will eventually give up and withdraw, leaving behind a neutered and partitioned Lebanon.
Most Lebanese seem eager for American assistance. Even in villages behind Syrian lines, in the mountains east of Beirut, people say they hope to see American Marines on patrol soon, accompanying the Lebanese Army. What frightens the Lebanese is the possibility that the United States will prove as cynical about Lebanon as have its other would-be protectors. A top Lebanese Cabinet official, during a recent gloomy discussion about Lebanon's predicament, explained: "Lebanon is a very small, very fragile democracy. This little democracy has been kidnapped by so many S.O.B.s-the Palestinians, the Syrians, the Israelis-that it has to be very careful."
In the end, an alliance with the United States is Lebanon's only real option. The Syrians tried to control the country from 1976 to 1982 and they failed. The moderate Arabs, led by Saudi Arabia, tried to stabilize Lebanon and they also failed. The Israelis failed in their bid to make Lebanon a new client state. The Russians would love to continue meddling in Lebanon, but they have neither the desire nor the ability to create a pro-Soviet Lebanese consensus. So it falls to the United States either to help rebuild the Lebanese state or condone its partition.
The United States should proceed deeper into Lebanon only with its eyes wide open to the risks and potential costs. What is needed is a long-term commitment to save a state that might otherwise crumble, similar to the aid extended to Greece and Turkey in 1947. Lebanon's plight is nearly as serious: the country has been hostage for eight years to foreign armies and tribal militias; it is prey to terrorism supported, at least indirectly, by the Soviet Union; its economy has survived largely because of remittances from Lebanese who have fled the country; its political institutions are crippled.
The dangers of American involvement in Lebanon are offset by significant benefits. On the international level, it would demonstrate America's determination and ability to assist an ally. On the regional level, it might break the deadlock of Arab politics by providing a model for Arab countries-such as Syria and Iraq-that are now hobbled by insecure police-state regimes. In addition, a strong and stable Lebanon would provide a measure of security for Israel that Israeli military power alone cannot impose. But establishing such a Lebanon will require years of patient effort, with the danger of another Mideast war and of superpower confrontation. If the United States isn't prepared to take these risks, it should probably leave Lebanon to fend for itself.
There is an Islamic text that has some relevance to Lebanon's situation. A wandering Arab asks the Prophet Mohammed, "Should I let my camel loose and trust in God?" "No," says the Prophet, "You should tie up your camel and trust in God."
1 Charles Malik, "The Near East: The Search for Truth," Foreign Affairs, January 1952, p. 239.
3 Syria later shifted its support from the Christians to the Palestinians and Lebanase Muslims after Egyptian President Anwar Sadat visited Jerusalem in November 1977. Lebanese analysts argue that Sadat's unilateral diplomacy cut Syria out of the U.S.-led peace process and forced Syria to consolidate Arab support by ending its embarrassing alliance with the Lebanese Christians.
4 The Syrian occupation has produced a rich lore of anti-Syrian humor in Lebanon, often focused on the allegedly backward city of Homs. Example: "Five Syrians from Homs decided to play hide-and-seek. They all got lost."
5 Dr. Samir Khalaf, a sociologist at the American University of Beirut, is currently studying the attitudes of 1,000 middle-class professionals in three Beirut neighborhoods. He says the preliminary results show strong sectarian loyalties and a "sharp polarization" of attitudes.
6 There are various reform proposals: President Suleiman Franjieh proposed a new "Constitutional Document" in 1976 that would divide Parliament on a 50-50 basis between Christians and Muslims; Lebanon's former Ambassador to the United Nations, Ghassan Tuéni, proposed in the Fall 1982 issue of Foreign Affairs the creation of a second chamber of Parliament that would be elected on a nonsectarian basis; the Druze leadership has urged creation of a second confessionally balanced house with a Druze Speaker; others have argued that all parliamentary seats should be elected on an at-large basis, with each voter allowed one Christian and one Muslim candidate.
7 The Christian "Lebanese Front," in an effort to provide statistical support for continued Christian Control of Parliament, argues that population totals should include Lebanese emigrants, even those who left the country decades ago.
8 Sammi Maroun, the head of Lebanon's new Council for Foreign Economic Relations, has proposed some ambitious schemes including: creation of "off-shore" companies to finance investment; low-cost government insurance protecting new investors against noncommercial risks; and creation of a regional securities and commodities market in Beirut.