Lebanon after the Civil War Three Decades of Stalled Progress
- 1. Lebanon after the Civil War Three Decades of Stalled Progress Sam Bourgi Master of Arts (M.A.), Public Policy McMaster University Ottawa, Canada
- 2. About the Author Sam is an economic analyst specializing in economic research, public policy and the financial markets. As a published author, he covered topics including geopolitics,finance and macroeconomics. Sam’s work is cited or covered by several government, industry and online publications Summary Since the civil war, Lebanon’s lofty development goals have failed to translate into meaningful results. Overwhelmed by political divisions, weak institutions, and more recently a devastating war in neighbouring Syria, Lebanon appears no closer to achieving the development targets set out both internally and by the United Nations Millennium Development Declaration. This is true when we assess the state’s progress against both traditional and evolving human developmentmodels. Although Lebanon’s struggles are unique, they also reflect the myriad of challenges mostdeveloping countries face in meeting human development goals. The peace accord that ended the Lebanese civil war in 1990 was heralded as a major achievementfor the tiny Mediterranean country. The newfound peace broughtwith it greathope ofsocial and economic progress that would pave the way for a new Lebanon. However, in the decades that followed, ambitions for a more prosperous state have largely eluded policymakers and international donors. Instead, Lebanon finds itselfin the throes of regional ambitions and on the cusp of a major domestic revolt. With the exception of rebuilding Beirut downtown core and improvementin the tourism sector, Lebanon’s socioeconomic challenges have remained mostly the same since the end of the civil war. Degraded utilities (power and telecom) infrastructure, weak judicial and state institutions and a lack of national unity continue to define daily life. Although modestprogress was made after the war, Lebanon has largely failed to achieve various development initiatives set forth both internally and by the United Nations (U.N.). This becomes apparent when one considers the state’s inability to effectively alleviate poverty or address poor social conditions in rural and displaced areas. In recentyears, the spillover from the Syrian conflicthas largely paralyzed the Lebanese state and its ability to set reasonable targets for achieving growth and stability. Without political stability, Lebanon will continue to struggle converging on the development process. Lebanon’s Track Record with the United Nations Millennium Development Goals The United Nations' developmentframework evolved atthe turn ofthe century, moving away from traditional models that focused on rapid economic growth to those that promote human developmentand qualitative progress. In 1997, the U.N. Development Programme in Lebanon submitted a proposal for sustainable human development that expanded on the new framework, which promoted economic growth that was tied to human well-being, environmental sustainability and civic engagement. As this concept was being introduced, Lebanon lacked even basic policies to combat poverty. Without a legislative orregulatory backbone,the state was largely ineffective in promoting economicgrowthin so-called peripheral regions like Baalbeck-Hermel. Despite receiving supportfrom various U.N. agencies and other international organizations, the Lebanese government was unable to encourage feasible development in
- 3. these regions after the war. Instead, poor planning contributed to unsustainable land development, which further exacerbated environmental degradation.1 Faced with these challenges, the state began exploring alternative growth strategies focused on human development and poverty alleviation, and was keen to cooperate with the U.N. to achieve more comprehensive results. This came to a head in 2000 when Lebanon became a signatory to the Millennium DevelopmentGoals,an eight-pointstrategy that builton the conceptofsustainable human development.The goals ranged from eradicating extreme poverty to promoting gender equality under the guidance ofa global partnership for development. Signatories also committed to enhancing environmental sustainability, combating HIV/AIDS and child mortality and promoting universal primary education. Since these proposals were introduced, Lebanon has made tepid progress toward achieving broad socioeconomic developmentsetout both by the Millennium framework and the 1997 human development model. While Lebanon achieved several objectives in health, primary education and gender equality, the country lags on the scale ofpoverty reductionand environmentalsustainability. The nation has also struggled to achieve many of the soft targets set out by the human developmentmodel, including the promotion of equal opportunities, cohesive social relations and individual responsibility within the broader context of economic development.2 In recentyears,efforts to realize this developmentmodelhave beenfurther degradedby aworsening security situation, which undermined Beirut’s ability to strategically plan for the U.N.’s 2015 deadline for achieving the Millennium Goals.3 Recently, Lebanon’s primary concern has been reestablishing political order and instilling a functional government in the wake of a prolonged presidential vacuum. Lebanon’s inability to achieve the goals pledged in 2000 is not just a symptom ofits internal divisions, buta reflection of the unrealistic targets set out by the Millennial Declaration. This point was raised before the U.N.’s General Assembly in 2005 by India’s former External Affairs Minister Natwar Singh, who acknowledged that unrealistically high expectations had led to underwhelming results throughout much of the developing world. Those concerns were echoed by other leaders who complained that the Millennium Declaration lacked a clear vision for developing regions.4 Horizon 2000 and the Challenges of Development Planning Lebanon’s post-war reconstruction effort began long before it became a signatory to the U.N. Millennium DevelopmentGoals. Under the guidance of the late Prime Minister Rafic Hariri, Lebanon began a two-fold economic restructuring plan rooted in macroeconomic policy and infrastructure spending. The plan, known as “Horizon 2000,” consisted ofsecuring $18 billion in public investments and $42 billion in private funding over a 12-year period beginning in 1995. Those investments, the plan assumed, would generate an average annual growth rate of 8% in the economy. This would immediately springboard Lebanon’s gross domestic product (GDP) to the upper limit of middle-income nations.5 Economists at the World Bank swiftly criticized the program for its unrealistic targets, claiming that such an aggressive stimulus plan would endanger Lebanon’s macroeconomic stability.
- 4. The Role of Information and Communication Technology (ICT) in Socioeconomic Development In the last century, the global economy has evolved from an agricultural model to one driven increasingly by industrialization. This transition eventually paved the way to the digital economy, which has relied on advances ininformation and communications technology (ICT). The growth and widespread adoptionofICTs has given birth to a knowledge economy that values advanced skills, digital literacy and innovation. Technology has not only reshaped the world we live in but has redefined how nations compete for growth, foreign investments and export revenues During this period, various development proposals, were presented to Lebanon’s Ministry of Economy, including innovative approaches that sought to redefine economic progress. One such model, centered on Gross National Development (GND), was presented to the government in 1998 by the Management & Technology Consulting Group (MTCG). The GND modelprovides astrategy decision-making framework and econometric measurement system that can be used to supplement or replace traditional growth models focused on Gross National Product (GNP). The GND tool also relied on the adoption of new advances in information and communications technology (ICT) as a means ofstrengthening socioeconomic development and government management.6 A 2001 strategy proposed by Dr. Nasser Saidi, former Minister of Economy and Vice Chairman of Central Bank of Lebanon, also prioritized the widespread adoption ofinformation technology, butwithin the context of a more liberal economic regime that focused on deregulation. Under this model, information technology would not only promote a more efficient government, butraise transparency and accountability in a political environment that has often lacked both.7 In recent years, Lebanon’s ICT sector has experienced significant progress in terms of developmentand expansion,8 butthe country continues to struggle with one ofthe world’s slowest and mostexpensive internet speeds.9 Access to internet is increasingly viewed as necessary for socioeconomic development, with the U.N. declaring it a human right in 2016.10 Hariri’s reconstruction program during the 1990s succeeded in rehabilitating Beirut’s city centre, building a new airport and developing a coastal highway, but relied on a growing budgetdeficitto achieve its results. While this was partially offsetby multi-billion-dollar capital inflows from foreign investors,the programpushed Lebanon’s debt-to-GDP ratio to 140% by 2000. That figure reached as high as 169% in 2007.11 Lebanon’s economy experienced double-digit percentage growth during the height of the financial crisis, fueled by a construction boomand large remittances from its globaldiaspora.The economy has since slowed to a crawl, with GDP expanding less than 3% annually since 2011. Slowing growth and an escalating refugee crisis have compelled policymakers to prioritize revenue-generating policies over much-needed reforms, leading to highly controversial tax hikes that have been met with large protests.12 Lebanon’s Development Conundrum Lebanon’s stalled progress on the developmentfrontis rooted in decades ofpolitical discord thathas left the country exposed to foreign meddling, security risks, and internal sectarian divisions. These forces have left policymakers unable to govern a territory two-and-a-half times the size ofRhode Island. This becomes more apparent the farther from Beirut one travels. Regions beyond the capital suffer the mostfrom poverty and a lack of state-run institutions. For example, poverty levels are three times higher in the northern regions of
- 5. Akkar and Tripoli than in Beirut.13 In these areas, a lack of basic infrastructure has deprived many families of reliable access to electricity and clean water. As Lebanon puts out sectarian fires, socioeconomic developmenthas taken a lower rung on the priority list. Although the governmentremains committed to achieving its developmentobjectives, sky-high debt, political instability and the presence ofnearly two million Syrian refugees make itnearly impossible to meetsome of the more salient objectives set out by the U.N. The prevailing economic and political reality suggests Lebanon’s quest for a comprehensive human development model will remain elusive for the foreseeable future. Conclusion Lebanon’s developmentambitions cannotbe realized withoutmajor political reforms thatensure government stability and participation from all segments ofsociety. Absent this stability, the likelihood ofachieving broad socioeconomic developmentis limited. This is especially true in a historically divided country with political and sectarian fault lines. Sweeping reforms that address the nation’s longstanding sectarian electoral law must be strongly considered to build unity and cohesion across the whole of society. This would also encourage politicalformations that rally around a commonsocioeconomic platformas opposed to asectarian one. Unless there is fundamental change to the political process, Lebanon will continue to underachieve its vast potential.
- 6. References 1 United Nations (April 1, 1997). Social Aspects ofSustainable Developmentin Lebanon. 2 United Nations DevelopmentProgramme in Lebanon. Chapter One: Sustainable Human Developmentin the Lebanese Context. A Profile of Sustainable Human Development in Lebanon. 3 UNDP in Lebanon. EightGoals for 2015: Overview. 4 United Nations (September 19, 2015). Most Developing Countries Unable to Achieve Millennium Goals, Given Current Levels ofEconomic Growth, International Support, General Assembly Told. 5 Kari Norkonmaa (June 19-22, 1995). “The reconstruction of Lebanon.” The third Nordic conference on Middle Eastern Studies: Ethnic encounter and cultural change (Joensuu, Finland). 6 Yones, M (10-2-1998). Gross National Development(GND): A New Economic and E-GovernmentTool. Management& Technology Consulting Group. 7 Dr. Nasser Saidi (March 1, 2001). A New Dawn for Lebanon The Challenges ofRebuilding a Modern, Competitive Economy,Policy & Society. Nasser Saidi & Associates. 8 Bank Med (April 2014). Analysis ofLebanon’s ICT Sector. 9 Mohamed Alaa El-Din (April 26, 2016). “Who’s fast and who’s last? MENA’s internet speed ranking.” Albawaba. 10 Tim Sandle (July 22, 2016). “UN thinks internet access is a human right.” Business Insider. 11 Trading Economics. Lebanon GovernmentDebtto GDP 2000-2017. 12 Mona Alami (March 31, 2017). “Lebanon’s complacentpoliticians choose more taxes over reforms.” Al- Monitor. 13 MDG Monitor (September 4, 2016). Fact sheeton current MDG progress ofLebanon (Arab States).