Beirut has reclaimed reputation as Playground of the Arab World

Financial Times (London, England)
February 5, 2005 Saturday

The last fling Beirut appears to have reclaimed its reputation as the
playground of the Arab world, but a glittering lifestyle belies a
darker reality:Lebanon is deeply in debt and caught up in a looming
confrontation between its neighbour and controller, Syria, and the


It is midnight on Saturday in downtown Beirut and the Buddha Bar is
heaving. A cavernous copy of its Parisian namesake, with a 20ft- high
Buddha statue as its presiding spirit, the bar is just the latest
incarnation of the Lebanese craving for novelty and gift for fun.

The son of a Maronite Christian warlord assassinated, allegedly by
the Syrians, during the 1975-90 civil war, thrusts his way through
the throng to the bar with the help of a bodyguard out of central
casting: black T-shirt, tailored leather jacket, wrap-around shades
and designer stubble.

A vast Johnnie Walker whisky icon towers over the bar itself, causing
one regular patron to observe that, “almost everything that takes
place in this city happens under the eyes of Johnnie Walker”.

Beirut, it would appear, is back in business, restored to its pre-
war position as the playground of the Arab world.

The city’s downtown area, reduced to rubble by 16 years of inter-
communal warfare, has been rebuilt. Though a few shell-shattered
hulks, such as the old Holiday Inn, still scar the skyline, the core
of the city is now resplendent with restored or faux-Ottoman
buildings, gleaming sandstone, limestone and marble, recreated
churches and mosques, and streets of bars, cafes and restaurants, the
sweet smoke of hubble-bubble pipes wafting between them.

Blocks of Dollars 5m apartments stand back from a shoreline
re-sculpted by landfill to accommodate their owners’ yachts. The
hotels are still full at the end of a record year for tourism, with
tanned guests eagerly discussing the prospects for a good skiing
season in the nearby mountains that rise dramatically from the
Levantine littoral.

The wine-producers of the fertile valley that lies between Mount
Lebanon and the Anti-Lebanon range that dips down to Syria – the
Bekaa hitherto best known for the quality of its hashish and as a
stronghold of the militant Shia Islamist movement Hizbollah – are
struggling to meet demand. In few cities of the world will you see so
many trophy cars, not just top-of-the range Mercedes, BMWs and
Porsches, but Lamborghinis, Maseratis and Ferraris, racing
homicidally on the cramped highways, as though their owners had hit
on a novel means to continue the civil war.

For the first time since before the war, Europeans can be seen in
numbers. The international music festivals at Baalbeck, Byblos and
Beiteddine, set in Roman, Greek and Lebanese Ottoman splendour, play
to full houses. For the Gulf Arabs who make up the bulk of Lebanon’s
visitors the city has other allures. One hotel, punctilious in its
service even by Lebanon’s exacting standards, allows a catalogue of
call-girls to circulate for its clients’ convenience. Even a senior
minister cannot resist remarking to a visitor that Beirut will always
have an edge on rival destinations in the region because of the famed
beauty of its women.

The Lebanese themselves party hard. At Crystal, another over-the- top
bar currently in vogue, conspicuously consuming socialites and scions
of the political elite vie with each other in nightly auctions of
Champagne costing thousands of dollars. At 1975, a bizarre addition
to Beiruti nightlife, a bar with sandbags, newly bullet-pocked walls
and waiters in designer fatigues offers the amnesiac Lebanese a
tasteless time-capsule of the year war broke out.

“It’s like Wall Street at its most excessive in the late 1980s and
90s, but here they do it harder,” says one keen observer of local
social mores. “But it’s the same crowd of people, definitely not more
than 50,000 or so, that keep all this spinning; it’s really just a
revolving door.”

Behind this splendid facade, however, a politically unreconstructed
Lebanon is lurching towards crisis, weighed down by huge debts and
trapped in a looming confrontation between western powers and Syria,
which has not just dominated but micro-managed the country’s affairs
since the war it helped bring to an end. Nor has Beirut anything like
recaptured its pre-war pre-eminence.

Before the fighting started in 1975, Beirut had been the region’s
unchallenged entrepot. Reaching back almost into pre-history, to the
Phoenicians and beyond, the coastal settlements of the Levant were an
entrepreneurial bridge between the civilisations emerging along the
Nile and between the banks of the Tigris and the Euphrates. It has
been well said that the flag of modern Lebanon should contain a
dollar sign instead of a cedar tree, for it is by vocation a merchant

Before its descent into tribal war, its gifted bankers recycled
petrodollars seeking a remunerative home in the west and its canny
middlemen reeled in westerners seeking to sell anything from
technology to arms to the east. Beyond the cliches about the “lost
Paris of the Orient” or the “Switzerland of the Middle East”, it was
an authentic, east-west interface, facilitated by a mixed
Muslim-Christian culture, laid out in an intricate Byzantine mosaic
of its 18 different religious sects.

As well as being the financial and services hub of the region, it was
its media and publishing capital, as well as an education centre. It
was freewheeling, more or less democratic and thus a magnet for the
emigres and exiles spat out by the Arab autocracies surrounding it –
and for the Israeli state to its south that needed to monitor them.
These elements also combined to make it a den of regional intrigue,
listening post as well as playground for hundreds of international
journalists and spies – somewhere between Bogart’s Casablanca and
Batista’s Havana by way of Noriega’s Panama.

In a delightful memoir of the celebrated St George Hotel’s bar* –
“the centre of the centre of the Middle East” – the Palestinian
writer Said Aburish recaptures how notorious spies such as Kim Philby
and Archie and Kermit Roosevelt sat drinking cheek-by-jowl with
regional potentates, oilmen, arms-dealers and reporters (from one of
whom, New York Times correspondent Sam Pope Brewer, Philby stole his
wife Eleanor), while plots were hatched and coups planned. The Buddha
Bar, not to mention Crystal and 1975, has a long way to catch up.

Glittering though Beirut Redux now looks, it is in substance a shadow
of its former self. Then, the city and its preoccupations were
regional and international. Now, even though its people speak several
languages and are well-travelled, it is pretentious and provincial –
international mostly in the sense that it risks being the meat in the
sandwich between a seemingly unreformable Ba’athist regime in Syria
and a regionally aggressive US, which on this occasion is being egged
on by France, the main holdout against President George W. Bush’s war
of choice against Saddam Hussein’s Ba’athist tyranny in Iraq.

The Lebanese emerged from the long years of bloodletting somewhat
surprised to find they still had a country. Despite the destruction
of cities and villages, the 145,000 dead and perhaps double that
number wounded, 17,400 “disappeared”, 3,614 car-bombs and the retreat
into homogeneous sectarian communities, there was a palpable will
among ordinary Lebanese of nearly all persuasions to try to find a
new way forward. Alas, they have yet to find it.

One of the reasons for that is Syria, and what one Lebanese political
leader characterises as its creeping Anschluss to absorb a country no
pan-Syrian or pan-Arab nationalist has ever really accepted as a
stand-alone entity. Another, equally important, reason is the craven
corruption of much of the Lebanese political class, who interlock as
clients with the Syrian nomenklatura in their shared pillage of what
should be a much more vibrant economy.

Lebanon is, indeed, a geopolitical oddity, something that has a lot
to do with its topography. In a region that abounds with religious
sects spawned by millennia of doctrinal controversy, Mount Lebanon
has for centuries offered a secure fastness for the most heterodox
among them. The Maronite Christians, aligned with the Catholic Church
and originally from Syria’s Orontes valley, fled to the mountains to
escape Byzantine (Christian) persecution – not, as their subsequent
myth-making had it, Muslim oppression. The Druze – whose precise
religious beliefs are known only to their elders and initiates but
who appear to derive from the heterodox Shi’ism associated with the
Fatimid Muslim dynasty a millennium ago – also found refuge in Mount
Lebanon. These were the original core communities of the Lebanon, to
be joined by Sunni and Shia Muslims in the coastal plains and the
valleys, as well as by Greek Christians, Orthodox and Catholic,
Armenians (Catholic and Orthodox), Chaldeans et al.

The Sunni prospered under the Ottomans who, nevertheless, ruled by
proxy through a mountain emirate of almost interchangeable Maronite
and Druze notables. The Shia, originally inhabitants of the mountain
as well as the valley, were gradually driven south.

The Maronites and the Druze, however, were structurally tribal and
highly fissiparous. The earliest known document referring to the
Maronites is a papal bull from 1216 absolving the losers in a civil
war provoked by the allegiance of part of the community to the
Franks, or Crusaders. The Druze were also known to hedge their bets.
In the mid-13th century, the Druze Buhturid dynasty had forces
fighting on both sides when the Mamluks drove the Mongols out of
Syria at the battle of Ayn Jalut near Lake Tiberias.**

The pivotal modern change came as a result of the Maronite-Druze
civil war of the mid-19th century. That sucked in European powers led
by the French who, in 1920, carved out “Greater Lebanon” from
post-Ottoman Syria. An ostensibly “Christian” triumph, this added to
Mount Lebanon territory and peoples who were not Christian. That, in
turn, necessitated the National Pact of 1943 to launch Lebanon’s
independence. This prescribed an inter-communal power structure
extrapolated from the last ever census taken in 1932, which gave a
proportional majority and political predominance to the Christians on
the arithmetically assisted assumption of a 6-5 population balance in
their favour.

It was a bluff, but a magnificent bluff, that enabled the Lebanese to
revel in their heterogeneity for three golden decades. What brought
it to an end is as much disputed as the fanciful history each sect
has manufactured to embellish its own antecedents. The seeds of
conflict – within as well as between each community – were visibly
there long before a shot was fired.

In the then-ruling Maronites’ view, the arrival of the Palestine
Liberation Organisation – ejected from Jordan after losing the
1970-71 Black September war against the late King Hussein – tipped
the delicate confessional balance unacceptably in favour of the
Muslims. The PLO did indeed behave with all the arrogance of a
state-within-the (extremely fragile)-state, and invited Israel’s
retribution by using south Lebanon as a base to confront its enemy.
But Muslims, and especially the Shia, had long been pressing for a
fairer share of power, and the PLO only joined the Muslim-Druze
alliance after Maronite militias had launched their attempt to
reaffirm Christian hegemony.

Syria entered the fray as a result, to prevent Christian defeat,
abort the emergence of a Palestinian stronghold on its border, and
reassert its pan-Arab (as well as pan-Syrian) credentials.

The conflict moved from the cities to the mountains, from the hotel
towers to the refugee camps. The lethal kaleidoscope of sectarian
alliances kept shifting and re-combining, amid fathomless sub-plots
of intra-sect vendettas – the Maronites were especially prone to
slaughtering each other. Saudis and Syrians, Iraqis and Libyans,
Iranians and Israelis used Beirut as the address to communicate with
each other by car-bomb and as the arena for proxy war, as western
powers including the US and France blundered in only to be
truck-bombed out. The idea of Lebanon went up in smoke. The long war
and Israel’s invasion in 1982 – when the then defence minister Ariel
Sharon almost destroyed West Beirut as he sought to crush the PLO –
shattered the country into cantonised fragments. When the shooting
eventually stopped, Syria was left holding most of the pieces.

The Lebanese republic was supposed to be relaunched by a new national
entente – the 1989 Taif Accord. This rearranged the confessional
balance to give Muslims and Christians parity in parliament, where a
Shia speaker presides, and to transfer executive power from a
presidency still held by the Maronites to a Sunni Muslim prime
minister. Most militias were disbanded and partly folded into a new
national army, while Syria was to redeploy its troops to its border
and eventually leave. In practice, Israel’s continuing occupation of
south Lebanon gave Syria an alibi to stay. Damascus licensed
Hizbollah, arguably the most effective guerrilla movement in the
world, as the spearhead of resistance to the Israelis. It then set
about recreating Lebanon in its own image, the better to loot it.

Far from withdrawing, Damascus reconsecrated the pre-war sectarian
system in a way designed to highlight its own role as indispensable
arbiter and bulwark against a relapse into conflict. It cultivated
political clients, including warlords and rival forces within each
community, using lucrative patronage and divide-and-rule tactics to
prevent the emergence of a cross-confessional national force. Samir
Franjieh, a left-of-centre opposition leader from a leading Maronite
clan, puts it this way: “The state should be based on all rights for
individuals and all guarantees for (the 18) communities. What we have
now is all rights vested in the communities but usurped by their

The arrival of Rafiq Hariri, a billionaire construction magnate who
has spread into banking and media, raised hopes that at last a
Lebanese champion would articulate a national project to revive the
country. Hariri, a Sunni who made his money in Saudi Arabia and
helped negotiate an end to the war, has been prime minister for 12 of
the past 14 years. He resigned in October after Syria forced him, his
cabinet and parliament to change the constitution so that the
ineffectual but pliant President Emile Lahoud could stay on another
three years.

But Hariri’s advent in 1992 raised great expectations. The currency
stabilised, Lebanon’s credit was restored, and the prime minister
mobilised his network of international contacts, not only in the Gulf
but among European leaders such as Jacques Chirac and Silvio
Berlusconi. During the war, “infrastructure” meant little more than
holding the high ground, a few power generators and each militia
having its own port. Now there was a plan to recreate central Beirut,
and Solidere, a company part-owned by Hariri, would do it. The core
idea was to make the city the region’s uncontested capital market.

But, while Hariri has rebuilt much of Lebanon, he has left it
politically unreconstructed. He and his friends complain that Syria
meddled from the first, leaving them little margin for manoeuvre. The
prime minister’s critics are harsher. Michel Moawad, son of Rene
Moawad, the president assassinated in a bombing widely attributed to
Syria as the war drew to an end in 1989, says: “The Syrians employ
Hariri as a marketing director. He’s good, but the problem is their
system is no longer marketable.”

The cost of reconstruction was huge, and has saddled Lebanon with a
debt of nearly Dollars 35bn, almost twice its gross domestic product.
The lifeblood of remittances repatriated by the Lebanese diaspora,
perhaps four times as numerous as the roughly 4m who live in the
country, has started to dry up. Current prosperity depends heavily on
Beirut as an alternative destination for Gulf Arabs seeking to avoid
visa problems in the west after 9/11.

With its banks, mostly smallish family affairs, growing fat and lazy
on government borrowing, Beirut is losing ground to rival financial
centres such as Dubai and Bahrain. Its stock market remains tiny,
dominated by the banks and Solidere. The regional media business is
also heading for Dubai and Qatar, and Lebanon could even start losing
its niche in areas such as education and health to these city states,
whose dynamism, ironically, is partly powered by an inflow of
Lebanese emigres. A lot of energy pulsing through Beirut, by
contrast, is the energy of dissipation. Lebanon’s descent into a
miasma of corruption and clientilism under Syrian tutelage, the
parcelling out of post-war institutions as booty for the warlords,
and the paralysis of government caused by the president, prime
minister and speaker vying together as though they were Roman
triumvirs, are all part of the reason.

“Twelve years after the start of reconstruction you come to the
realisation you’ve rebuilt some of the infrastructure – by no means
all and by no means in all regions – at a very high cost,” says
Nasser Saidi, a former economy minister. “Very little effort went
into the building of institutions or into learning the lessons of the
war and making people accountable for what they did. Maybe there were
too many people to punish, but that doesn’t mean you should reward
them by putting them in power. It’s obvious we could have built
something better without them. It’s not just the high debt and so on,
it’s that there’s no participation in political life.”

Each community, by contrast, has carved out a share of the state. The
Council of the South to develop southern Lebanon and the national
electricity company, for instance, are fiefs of Amal, the Shia
militia-turned-party led by Nabih Berri, Syrian ally and speaker of
parliament. The ministry of the displaced is the preserve of the
Druze, the main reconstruction council of the Sunnis. One party
levies surtaxes of up to Dollars 200 for each container coming
through the port of Beirut, a racket worth an estimated Dollars 350m
it shares with its patrons in Syria’s intelligence services and their
sorcerer’s apprentices in the Lebanese security services. Since
Bashar al-Assad succeeded his father Hafez al-Assad as Syria’s
president four years ago, those in charge in Damascus – including
Ghazi Kenaan, the military intelligence chief who ran Lebanon for 20
years – appear most interested in the economics of Lebanon.

“This is no more than a giant racket,” says one opposition leader.
“Under Hafez al-Assad Syria saw Lebanon as political patrimony to be
used in the larger Middle East game. But these people are no longer
even interested in the politics.”

There is a certain whiff of class animus in all this, of patrician
scorn towards new money grubbily acquired and contempt towards
ostentation because, although the civil war had no decisive outcome,
it certainly engendered social mobility.

“One reading of the war is that it was a social revolution,” says
Samir Franjieh. “It was not strictly speaking about poverty, but
about relative poverty and relative wealth – it was an attempt to
settle the question of rank and standing in society. The problem is
that these people know they lack legitimacy and the Syrians know that
and find it easy to play on their sense of insecurity.”

Such is their greed that Lebanon does worse than Syria in the
Transparency International Corruption Perceptions Index, where last
year it dropped 19 positions to rank 97th among 146 countries, tied
with Algeria, Nicaragua and Serbia. “There is no normal economic
relationship between Syria and Lebanon,” says Walid Jumblatt, the
hitherto Syrian-allied leader of the Druze and of the opposition.
“It’s their mafias and local clients overmilking our cow.” Jumblatt
was speaking at Mukhtara, his ancestral palace in the Chouf
mountains, transformed into an armed camp after the October car- bomb
attack on his close ally Marwan Hamade, another former economy
minister who pulled out of the government in protest at Syria’s
decision to extend President Lahoud’s mandate. Jumblatt’s father,
Kamal, leader of the Muslim-Left alliance in the war, was
assassinated in 1976 just as the Syrian army was beginning its push
into Lebanon. The son, by denouncing the Syria-Lebanon set-up as
police states run by clans and mafias, risks a similar fate.

Damascus accuses him and Hariri of inciting France to ally with the
US in pushing Resolution 1559 through the UN Security Council last
September. This calls on Syria to end its meddling in Lebanese
politics, withdraw its remaining troops, and for the disarmament of
remaining militias, meaning Hizbollah.

Jumblatt says: “I originally proposed they keep their troops here as
long as Israel occupied any of the country but that they stop
interfering in Lebanese affairs. But they just can’t do it. Now
they’re accusing me of colluding with Hariri to provoke the French
into 1559. According to them, Marwan Hamade actually wrote (the
resolution) in Sardinia (Hariri’s holiday retreat). I appear to be
Public Enemy Number One and we have gone backwards 28 years (to his
father’s murder). Now they’re like Bush – you’re either with us or
against us.”

Jumblatt and Hamade’s real crime, however, has been to foster
cross-communal unity. Three years ago the Druze leader received the
Maronite Patriarch, Cardinal Nasrallah Sfeir, in a historic
reconciliation between the two communities that devolved into an
alliance between Jumblatt’s parliamentary bloc and the mainstream
Christian opposition. That was bad enough from the Syrians’ point of
view, but they got really spooked once Hamade became the link- man in
the emerging alliance between Hariri’s powerful Sunni bloc and the
opposition. As Nayla Moawad, widow of the president who died for
doing much the same thing, puts it: “The great taboo for the Syrians
is to have any bridge between the communities.”

Four different government and opposition sources, moreover, confirm
that the Syrian leadership reacted implacably to Lebanese hostility
to its enforced extension of President Lahoud’s mandate. It said it
would burn Beirut rather than leave it: “We destroyed the country
once and we can do it again – we will never allow ourselves to be
pushed out,” was the precise threat.

While Syria’s methods in Lebanon are crude, its diplomacy has been a
fiasco. In late 2002, after giving its assent to the first UN
Security Council Resolution 1441 on Saddam Hussein’s regime, Damascus
had the opportunity to build bridges to the Americans and reinforce
links with the Europeans, preparing what Beirut newspaper publisher
Jamil Mroue calls “a soft landing for its political system”. Instead,
it stands accused by Washington – rightly or wrongly – of allowing
Saddam loyalists to foment insurgency in Iraq from Syrian territory.
The neo-conservative cabals in Washington that helped crank up
support for the Iraq war are now baying for Bashar al-Assad’s blood.

“They can’t see the American train coming down the track; they think
it’s like in the desert, a mirage,” says one Beirut politician. “They
are walking down the same track as Saddam Hussein.”

But what ranks as an almost gratuitous act of political vandalism was
the way Syria burnt its bridges with France and Jacques Chirac. This
relationship, facilitated by Hariri, was Damascus’s only real window
on the world. Yet the Ba’athist leadership not only rebuffed
insistent French suggestions it withdraw from Lebanon, Assad simply
ignored letters from Chirac, including one lobbying for a Dollars
700m gas contract that instead went to a little known consortium with
ties to the nomenklatura. “This is the inebriation of corruption,”
says one person familiar with the details.

“They did nothing to prevent (Resolution) 1559,” says an indignant
former Syrian ally. “What the extremist Christians failed to do in
two decades, to internationalise the Lebanese situation, these people
managed to do in two days.” Trapped in its time warp, Syria has
floated the idea of reviving peace talks with Israel. This, after
all, had worked in the past. As long as it was negotiating with
Israel during the 1990s, no one but the Lebanese raised the question
of the Syrian occupation. Some keen observers of Syria now suspect
Damascus may withdraw its remaining roughly 14,000 troops – and then
foment unrest to demonstrate how indispensable Syria’s stabilising
presence was. Sheikh Naim Qassem, number two in the leadership of
Syria-aligned Hizbollah, alludes rhetorically to this scenario. “Are
they (the Americans) ready for the consequences of (a Syrian)
withdrawal? If they corner Syria, maybe it will make them a present
(by leaving Lebanon).” Brave words. But Syria has managed the
improbable diplomatic feat of pushing France and the US together.
That makes Syria more “doable” than Iran, much the greater
preoccupation in Washington but a much harder nut to crack.

Whatever happens, this looks like a turning point for a still
ambitious and hopeful Beirut and a fearful if reckless Damascus. As
Mroue puts it: “The situation is a bit like a huge boil: it’s ugly
and it’s livid but it’s only when it bursts that you’ll know whether
it’s benign or malignant. Either way, this is the end of an era.”

David Gardner is an FT leader writer.

* “The St George Hotel Bar: International Intrigue in Old Beirut” by
Said K. Aburish (Bloomsbury 1989);

** “A House of Many Mansions: The History of Lebanon Reconsidered” by
Kamal Salibi (I.B. Tauris 1988).