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.