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Prime Minister Alwaleed bin Talal? For what?
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Is Prince Alwaleed bin Talal gearing up to become Lebanon’s next prime minister?

The possibility does not seem so far-fetched. In fact, there are those who believe it is imminent, especially since Alwaleed has apparently gained the support of current Prime Minister Rafik Hariri’s most bitter rivals ­ men like President Emile Lahoud, Deputy Prime Minister Issam Fares, and even perhaps some influential Syrian officials.

Should the Saudi-born prince decide to run for prime minister, such a development would not come as a great shock.

For one thing, Alwaleed holds Lebanese citizenship (his mother is Lebanese). His maternal grandfather, Riad Solh, was one of the founders of the modern Lebanese state.

Compared to Hariri (who, by the way, also holds dual Saudi-Lebanese nationality), in fact, Alwaleed might be even more suitable to enter Lebanese politics from a position of strength. While Hariri entered domestic Lebanese politics back in 1983 as a political adviser to (Saudi) Prince Bandar bin Sultan, Alwaleed can use his Saudi royal connections to much greater effect.

Historically, there have been several influential Saudis who played prominent roles in Lebanese public life. The first Saudi-Lebanese to become prime minister was Hajj Hussein Oweini, a business agent for the Saudi royals between 1923 and 1947. Oweini continued playing this role even while he served as prime minister.

It has always been an open secret that the keys to the Lebanese premiership (a position earmarked for Sunni Muslims under Lebanon’s confessional power-sharing system) are to be found in Saudi Arabia and sometimes in Egypt. Perhaps this has been one of the secrets of the peculiar structure of Lebanese politics. The Lebanese state resembles a condominium between a major Arab Sunni state that sees itself as representing Lebanon’s Muslims, and the West that defends the interests of the country’s Christians.

Alwaleed chose a reception inaugurating his latest $140 million business venture in Beirut, the new Movenpick Hotel and Resort, to publicly criticize Hariri. In a speech, he said he had a plan designed to rescue Lebanon from its crippling debt crisis and appalling economic stagnation.

Alwaleed’s words sent shivers down Hariri’s spine. The prime minister knew how powerful the young Saudi prince is financially (he is, after all, one of the world’s richest men). He also knew that Alwaleed has more influence in the Saudi royal family than he does.

All that might be true, but what really matters are the solutions each of the two men propose to extract

Lebanon from its economic doldrums. Unfortunately, it must be said that the “solutions” espoused by both Hariri and Alwaleed are no solutions at all.

Alwaleed, for example, despite his ambitious five- or 10-year plan to rescue the Lebanese economy, has totally ignored technology and industrialization as means of revival. Instead, he concentrates on tourism, services and consumerism.

This direction is underlined by the fact that Alwaleed’s investments in Lebanon are concentrated in hotels.

This is not to say that Hariri fares any better. His Solidere conglomerate has concentrated its efforts into building the city center, its marketplaces and the roads and communications infrastructure to serve them.

There is a major flaw in both men’s thinking, however. Both Hariri and Alwaleed chose to overlook the fact that Lebanon has lost the competitive advantage it enjoyed in the past. It is no longer the banking, educational, medical and journalistic heart of the Arab world.

In fact, Lebanon has no choice but to direct its human resources toward both the new economy (IT, biotechnology, and communications) and the old (labor-intensive agro industry).

That, at least, has been the conclusion of most Lebanese economists.

Former Finance Minister George Corm, for example, says that: “When an engine stops running, it must be overhauled. Merely adding more oil and fuel will not do, and will in fact make

the process of repair even more difficult.”

“The Lebanese economy,” Corm continues, “is like an engine that has conked out: The economy is suffering from a structural problem that has nothing to do with market conditions. The country’s ruling elite, however, still wants to restore Lebanon’s role as the preeminent provider of services to the region, despite the profound changes that have taken place in most Arab economies.”

“This,” the former finance minister says, “is impossible. The only solution is to concentrate on Lebanon’s human, agricultural and hydrological resources.”

Charbel Nahhas, another Lebanese economist renowned for his acute analysis of the nature of the country’s economic problems, says: “The economic crisis affecting Lebanon is peculiar in nature. There is no symmetry in the use of resources and labor in the various sectors of the economy. While some sectors suffer from deficits in resources, others have surpluses. In the financial sector for example, vast sums of money have been sunk in empty buildings in the hope that new construction will automatically generate demand. Solidere is as guilty of this practice as other constructors. But the crisis, unfortunately, goes much deeper than that.”

For his part, economist Elie Yachoui says: “The economic policy currently pursued by the government is designed to rebuild an import-based economy. Only countries that enjoy huge natural resources such as oil, however, can sustain such an economy. Lebanon, however, has very limited natural resources ­ and a very difficult financial situation. What Lebanon needs is a radical shakeup of its economic structure. Consumerism must be replaced by production.”

Taking what these eminent economists say into consideration, it transpires that the prescriptions Hariri and Alwaleed advocate might alleviate some of the immediate symptoms, but they will never cure the underlying illness. It is no longer suitable for Lebanon to concentrate on the service and import sectors, especially since the country is suffering from a loss of competitiveness, weak finances, a lack of job opportunities and a massive brain drain.

It has to be said, however, that Hariri represents not only himself by following such defective policies; he has turned into an upshot of the Lebanese ruling elite that is steeped in the “services ideology.” The Lebanese elite is living in a time warp, believing that banks and commerce are the engines of the country’s economy in the 21st century ­ just like they were in the 1950s.

The danger lurks in the umbilical relationship that exists between the ruling elite and Lebanon’s confessional system. A service-based economy consolidates sectarianism, since (unlike an economy based on production) it does not require social integration. A service-based economy, therefore, enhances the influence of warlords on politics and of wheeler-dealers on the economy. In other words, the service-based economy is as much an outgrowth of politics as it is of economics.

Alwaleed bin Talal might well succeed in replacing Rafik Hariri. But so long as his solution to Lebanon’s economic woes remains similar to Hariri’s, Lebanon will never be able to emerge from its historical economic crisis. Alwaleed will eventually find himself facing a dead end. The danger lies in the fact that economic crises often trigger social upheaval and sectarian civil war.

Saad Mehio is a Lebanese journalist and writer

 
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