Cris du Coeur: Lebanon’s Fortunes Eclipsed by Lost Opportunities

July 30, 2015

Ferid Belhaj

Ferid Belhaj is the World Bank’s Director for the Middle East.

This article was first published in Daily Star.

Lebanon is blessed with vast human and natural resources, unmatched in countries of similar size in the region and even beyond. The country boasts a well-educated population, marvelous geographic features, a diverse, rich culture and geostrategic importance that has attracted strong international empathy and upheld its past glory as the bridge between the East and West. In short, the country has all the ingredients to prosper, and its unique characteristics have underpinned its resilience to internal and external shocks over the years.

But today, Lebanon is grappling with an existential threat stemming from the unprecedented flows of Syrian refugees, and an astounding dysfunctional decision-making process on the domestic scene.

Spillovers of more than four years of bloody regional conflicts, especially the war in Syria, have left their mark on all aspects of life in the absence of functional institutions capable of shielding the country from danger. The country is challenged, rather threatened, by inadequate economic strategies and approaches to development. Without hesitance, the motto that reigns is “what needs to be done today is better left to an uncertain, and always distant, tomorrow.”

This “muddling through” approach that the Lebanese have relied on for so long is no longer sustainable. State institutions are virtually dysfunctional, the economy is stagnating and vital development issues are on the back burner. Why? Because politics is always in the way. The only way out of this impasse is a selfless approach that separates the economic and development objectives from petty politics. 

The muddling through approach has proven detrimental. Most of Lebanon’s splendor has been eclipsed by years of disregard for a much-needed vigorous development drive. The infrastructure is in an abysmal – an understatement – condition. To name but a few, sanitation, water, energy, telecommunications and transport, are pivotal services the state ought to provide for its citizens. Alas, not in 21st century Lebanon.

This July, Lebanon literally was buried under a mountain of uncollected solid waste. Citizens were left to take matters into their own hands, burning the garbage on street corners without thought for the health hazards this creates. Foul odors and black smoke filled the air country wide. Rivers were fouled by garbage dumps, further depleting the environment and water resources. Politicians scrambled to find a solution after citizens south of Beirut forcibly closed the Naameh landfill on July 17. That unhygienic dump had been at the center of a sanitation controversy for more than two decades, but was totally ignored by politicians despite the outcry from Lebanese citizens. The political wrangling that ensued underlined the absence of a well-defined policy for waste management by successive governments. 

Turning to water, Lebanon is endowed with a wealth of hydric resources. But the abundant rainfall and snowmelt flow, wastefully, into the Mediterranean, because of the absence of reliable catchment and storage systems. Lebanon can easily sell water to less advantaged countries. Instead, the woefully inadequate facilities deprive citizens of a basic need with supplies in the dry summer and autumn months reduced to an occasional, and useless, trickle. 

The water strategy, the centerpiece of which is the construction of the Bisri Dam to collect water  resources in winter and spring and provide year round, round-the-clock supply to 1.6 million citizens, has been strongly supported by politicians and stakeholders of all affiliations. The project was approved relatively quickly by the Cabinet and has made its way to a dysfunctional Parliament, where confessional-political horse-trading seems to be more important than the welfare of a nation. The fate of the much-needed dam is now linked to seemingly intractable issues, totally unrelated to the economy or development. The World Bank has agreed to extend the deadline of the US$474 million financial package until the end of the year. But whether Parliament would actually convene after its summer recess to ratify the project, and many other urgent financing packages from doors across the world, is anyone’s guess.

Power rationing is a burden on citizens who have to supplement the cuts with costly private generators. It is an equal drain on the Government, whose subsidies to the sector have passed the US$2 billion mark. And finally it is driving away potential private investors. There are no shortages of studies and recommendations for the energy, transport and telecommunications sectors. The sad reality is that there is wide political consensus on the needed development priorities. But walking the walk is proving difficult. 

Adding to the home-generated gridlocks is the influx of 1.5 million Syrian refugees, who Lebanon has so generously welcomed. These refugees now make up more than 25 percent of the population – that’s a serious threat to the country’s fragile social fabric and an enormous drain on the country’s limited infrastructure capacity. Indeed, Lebanon is offering the world a “public good.” And yes, it is insufficiently compensated by the international community. The Syrian conflict is estimated to have cost the Lebanese economy US$ 7.5 billion in foregone output, including US$2.6 billion in lost fiscal revenue. The financial assistance offered directly to the Lebanese State and to its citizens so far is little more than a drop in the ocean. Sadly, and even with the very little that’s been placed on the table, state institutions have been unable to find ways to absorb and turn these financial flows into actual projects to mitigate the stress caused by the Syrian crisis. Donors and partners are looking, sometimes in dismay, at the slow processes governing a situation of worsening emergency. 

The consequences of this stalemate are crippling. Hundreds of millions of dollars earmarked for Lebanon by the international community are sitting idle awaiting political accords that never seem to materialize. Development project drafts are gathering dust in Parliament or in the Cabinet while politicians haggle and squabble.

Lebanon is sending all the wrong signals to the international community, undermining its credibility and reinforcing skepticism of its ability to function with credible institutions. It is a sad case of a country brought to its knees because of missed opportunities, because sectarian politics plagues every aspect of life. Only an urgent decision to separate politics and the economic and developmental agenda will reverse the country’s descent into despair, and recover credibility with Lebanon’s partners who are ready, willing and able to help. 

A World Bank report released earlier this year focused on the country’s waning economic, political and social cohesion, exposing two intrinsic and intertwined ills in the existing system of governance: confessionalism and corrupt practices, which are preventing the healthy functioning of state institutions. The Systematic Country Diagnostic posits that behind the veil of protecting an antiquated power-sharing system among Lebanon’s 18 communities, the country has slid into a “governance trap,” where the state’s duty to evenhandedly serve its citizens all its citizens – and offer them equal opportunities, seems to have been eroded. An “elite-capture” phenomenon reigns, and the associated patronage politics have paralyzed every state institution. 

During his visit to Lebanon a year ago, President of the World Bank Group Jim Yong Kim signaled the institution’s strong and unwavering support to Lebanon – Government and people. He lauded the country for its immense resilience in the face of daunting challenges and promised to help in any way. He told the youth to take matters into their own hands, break the deadlocks and build the country they deserve. There too, he promised to help in any way possible. These promises and that commitment still stand. But Lebanon needs to play its part and help its friends and partners to help it weather the storm.