11 families, 11 banks

According to Information International’s The Monthly publication, the 11 families owning 11 out of 63 banks, control 80% of the total desposits in Lebanon (al-akhbar, Arabic link). They cash in 85% of all profits, a total of $641.7 million a year. The banks are Awdah, BLOM, Byblos, Fransabank, Société générale, Credit Libanais, Bank MED, Bank of Beirut, Bank of Beirut and Arab Countries, Lebanese Canadian Bank, and Banque Libano-Française. The families are Awdah, Azhari, Basil, Qassar, Sahnaoui, Hariri, Assaf, Rufayil, Zard, Abu Jawdah, and Sfayr.

Some have blamed the public debt on crude Niqula-Fattoush-style corruption, others on bad management and exorbitant rebuilding costs. Neither, however, are half as dangerous as the legislated modes of enrichment made possible only by the political-familial-capitalist tripod which stands at the heart of our system. This reached its peak under Rafiq Hariri where government bonds were issued with abnormally high returns – once reaching so much as 37%! The banks gorged themselves – and are still doing so – at the expense of the public pocket.

That this particular, if not unique, blend of capitalism and familialism which is older than Grand Liban itself has its tentacles deep in the political system is evinced by the number of politicians hailing from those families – the latest welcome having just been extended to Awdah, minister of Foreign Affairs and Emigrants. It is further evinced by the fact that almost half the public debt ($17.8 billion) we owe to these 11 families.

The banking system in Lebanon, that miraculous basis of our service economy, is said to have amazed Paul van Zeeland, the Belgian economist and advisor to the Lebanese government around 1950: “I don’t know what makes the economy work, but it’s doing very well and I wouldn’t advise you to touch it” (quote, possibly apocryphal, from Carolyn Gates’ The Merchant Republic of Lebanon, xv). Others have dubbed it “the Lebanese miracle.” The only miracle about Lebanon is that with such short-sighted and narrow-minded management, it still holds together… just.

 

more good for the people

To follow up on yesterday’s post, here is more on the role of private security companies in recruiting and arming Future followers from the north. To the non-initiated, $350 may sound like peanuts, but the minimum wage in Lebanon is $200, soon to be increased to $233.33333.

 

for the good of the people

The economic policies of successive governments in Lebanon have focused on developing the centers at the expense of the peripheries, therefore weakening the central authority’s presence and strengthening the role that sectarian parties play in regions like Akkar, the South, and the Hermel. The latest events show, once again, how these conditions create pockets of poverty and misery prone to sectarian mobilization in times of crisis.

Benefiting from the high rate of unemployment in the mostly Sunni north, the Sunni Future Movement has managed to lure young men to the capital with the promise of work for security companies. I would not trust al-Manar’s reporting on this, but there are other sources. Ras Beirut residents have also witnessed how a large building on Sidani Street, between Shamali Stores and the ex-location of the Ministry of Economy, turned over the past few months into housing for young men from the north. This building was one of the flash points during the recent clashes around Hamra.

In a similar vein, Shiite Hizballah feeds on the economic situation to draw swathes of historically marginalized Shiites into its folds. It is no secret either that the party rides the bandwagon of labor demands to serve its own ends, often at the expense of sabotaging a good cause, as it did with the demonstration of May 7th.

When Hizballah first entered parliamentary politics in the 1990’s, some believed they had found an alley in the fight against the sectarian system and a champion for the Shia. Indeed, economic redistribution and the abolishment of political sectarianism were focal points in the party’s electoral program of 1996.

Hizballah, however, has done nothing by way of achieving these goals, for despite the rhetoric of “justice and equality,” the party is just as invested in the sectarian, clientelist system as the others. In his press conference of May 8th, Hassan Nasrallah “places the dots on the letters” regarding this point:

We do not propose any change in the makeup of the Lebanese system, in the makeup of authority, and some people accuse us because of this position. We are with the Taef agreement and with the implementation of the Taef agreement (…) If there is a general Lebanese will towards modification [of the political system], in the end this belongs to a general Lebanese will. But we, as a group, do we have propositions for adjustment or want to impose adjustments [to the political system] on the Lebanese? No. Thus, we do not have any suggestion whatsoever for change in the positions of authority, not with regards to the position of president, prime minister, or any other positions.

نحن بالنسبة لنا لا نطرح اي تغيير في تركيبة النظام في لبنان، في تركيبة السلطة، وبعض الناس بيتهمونا لان نحن موقفنا هيك، ونحن مع اتفاق الطائف، تنفيذ اتفاق الطائف (…) اذا في ارادة لبنانية عامة بدها تعدل، بالنهاية هيدا صار تابع لارادة لبنانية عامة. لكن نحن كفريق انو عنا طرح تعديل وبدنا نفرض تعديلات علی اللبنانيين، لا. بالتالي نحن ما عنا اي تغيير او طرح يرتبط بمواقع السلطة علی الاطلاق، لا برئاسة الجمهورية، ولا برئاسة الحكومة ولا ببقية المواقع

Myth has it that Nasrallah is a clear and honest man. That, then, should put any doubts to rest.