Can Lebanon's New Leaders Rebuild the Economy?

This week's electoral victory of a Western-leaning coalition in Lebanon was met with joy in Washington, as it delivered a sharp rebuke to the country's vocal opposition, led by Hizbullah and backed by Syria and Iran. Could a new and improved Lebanese economy be in the works? Karim Makdisi has his doubts. NEWSWEEK's Katie Paul spoke to the Tufts-educated political scientist, now a professor at the American University of Beirut. Excerpts:

What kind of economic agenda has been on the back burner that could now come into play?
Most of the people who were elected are the same people who have been in government for the last 10 to 15 years. The government has been paralyzed these past few years, but now we're likely to go back to the same kind of policymaking that took place in the 1990s.

What would that consist of?
There will be a lot of conferences, lots of shaking hands, lots of television and PR about how this is going to solve the problem.

So these are many of the same people who started the whole process of applying for WTO membership more than a decade ago?
Exactly the same cast of characters. Fouad Siniora was finance minister for a decade in the 1990s. He and Rafik Hariri fought very hard for entry into the WTO, in part for political reasons—it's like entry into the club. But the evidence isn't really there to show that joining the WTO will have an economic benefit for a country, especially in a complicated region like here.

Do you think they're on track to keep plugging away at it?
As the neoliberal discourse has gone down globally, in particular because of the financial crisis these past couple of years, everything in Lebanon has been on pause. So there's been very little public policy discussion beyond whether you're pro-American or anti-American, for the resistance or against the resistance.

If they manage to form this government, then, could that present an opportunity to change that discussion?
It would be an opportunity if we had a proper policy framework that could take foreign investment and direct it into productive sectors. We've become dependent on the oil economies of the Gulf. There's been no investment in productive sectors for 15 years. We don't know what we're good at. People say services, but they come at big expense. In light of these elections, I don't see a government that's going to change that direction at all.

Could you give an example of what that status quo looks like?
One recently hatched plan is for Cedar Island, which would be built off the coast south of Beirut. You'd be able to see it from space, just like in Dubai, the idea being that we need to bring investment in from the Gulf by selling real estate. You can do that, but it's going to destroy the environment off the coast—there have already been studies here at the university showing that.

This is what's associated with the Hariri regime: very big grandiose Gulf-style construction projects which create big glamour but have detrimental effects both on the environment and, consequently, on other sectors like fishing and agriculture.

What about the wrenches opposition groups could throw into the plans?
Hizbullah doesn't oppose privatization—or even joining the WTO. Ten years ago, there were debates about opening up the economy. In a sense, the ideological struggle is over.

So is there another alternative vision to replace those old competing ideologies?
No. There's been no serious work done in trying to figure out what Lebanon can do productively. So rather than joining agreements for the sake of joining agreements, we need to come up with a logical development plan. But even the opposition has not come up with a proper plan. In the absence of that, like in the current climate, when just a small group of leaders sign international agreements without studying their impacts, this exacerbates social tensions. And in this country, when you have increased tensions and inequalities between rich and the poor, it will get translated into sectarian violence. That's the equation we always have.

Can Lebanon's New Leaders Rebuild the Economy? | World