It is often heard that there is no poverty in Lebanon. Absent are the homeless who seem to populate the streets of the United States, South America, and Western Europe in ever increasing numbers. Absent are those who sift through trash cans in the middle of the day for their next meal. Even the beggars who haunt Beirut street intersections are not Lebanese most of the time. This view is surprisingly widespread, and simplistic. In a country whose most crucial historical developments were affected to a great extent by poverty and famine, there is today a lack of appreciation of the negative impact of social and economic conditions on political stability.
In a recent article in the French-language monthly Le Monde diplomatique, Ignacio Ramonet reflected on just one of the major impacts of poverty worldwide, namely the negative consequences of uncontrolled urbanization.[1] Noting that at the turn of the 21st century more than 50% of the world population will be urbanized - as opposed to just 3% at the beginning of the 20th century - Ramonet concluded that "it is the cities which have the virtue of augmenting tensions. It is probably from them, from the millions [of their inhabitants] outside [social] classes, the excluded and the poor, that will emerge, in the South as in the North, dissidence, contestation, and revolt."
There are an estimated one million poor in Lebanon today, 750,000 of whom are urbanized. This means that the poor make up between 25% and 30% of the population, depending on the estimates one uses, and that the urban poor make up over 20% of the population. To ignore this phenomenon is to underestimate the destabilizing effects of urbanization which is not accompanied by effective social integration. Lest we forget, the war in 1975 took place in the midst of a period of rapid urbanization which heightened the contradictions of Lebanese society, and made more likely the decline into armed conflict. Beirut today is a city of extremes in terms of wealth and poverty, and its suburbs may continue to remain sources of instability for as long as they are poorly integrated into the social and economic fabric of the capital.
The two studies in this section, one by Antoine Haddad, the other by Adib Na`meh, reveal the extent to which the fight against poverty has been given a low priority by the government, whether in the national reconstruction effort, or through state-sponsored social activities. The Hariri government has never hidden its preference for limited state intervention in economic affairs, and has argued that the best way to alleviate and eradicate poverty is through the trickle-down effects of economic growth. At the same time, the existing social nets provided by the state have proven inadequate: they cover a relatively limited portion of the population, have been plagued by mismanagement, and are often manipulated for political ends.
The poor were largely forgotten in the $13bn Horizon 2000 reconstruction plan outlined by the Council for Development and Reconstruction in 1993, under the guidance of the prime minister, Rafiq al-Hariri. The unrealistic assumptions of the plan, namely that GDP growth rates would be in the 10% to 15% range until budget surpluses could be generated, offered little more than a mirage to those who complained that productive social spending had been given a relatively low priority in the plan's initial stages when compared to infrastructure rehabilitation. Now, almost four years after Horizon 2000 was presented, the government has implicitly acknowledged that its initial spending projections were too high, and that only an estimated $7bn may ultimately be spent on reconstruction. The fear, however, is that by cutting spending the government will be encouraged to avoid arriving at a national policy on social affairs, and will fail to address related issues such as education and vocational training.
As Antoine Haddad argues, the government has also avoided developing sectors which can employ an increasing number of poor. Agriculture and industry, which are estimated to contribute in the order of 31% to GDP,[2] still receive a far lower proportion of total bank credits than their GDP share, to the benefit of the services sector. Moreover, both were given low priority in the Horizon 2000 plan. The services sector, in turn, is virtually saturated in terms of creating new job opportunities, a situation which will likely be exacerbated further by the uncertain regional political situation. This, and the government's continued insistence on expanding services, has raised long-term doubts as to whether the numbers of poor Lebanese can be cut down sizably in the coming years.
The Hariri government has also closed the doors to any progress in the ongoing debate over social conditions. It has pursued a tight monetary policy and has been exceptionally reluctant to raise salaries in both the public and private sectors. At the same time, the government has gained only very limited control over the public debt, and, in consequence, has raised indirect taxes to reduce the budget deficit. To spur investment, it has insisted on maintaining a flat corporate tax of 10% on profits across the board. The result has been that while investment has remained limited, the fiscal burden has fallen squarely on the shoulders of salary earners, particularly the poor. Meanwhile, the government has repeatedly taken political measures to weaken and discredit the main independent labor union, the General Confederation of Lebanese Workers (GCLW), which has been backing improved conditions for salary earners.
If the government has been relatively unconcerned by the fate of the poor, the same cannot be said of certain political organizations who realize that those on the margins of society often make particularly good supporters. Hizballah, for example, has been most effective in presenting itself as a champion of the Shi`a underclass and in using this as an instrument of political mobilization. If Mr. Hariri's reconstruction efforts are to be genuinely successful, then the state will have to replace all parties as the main provider of social services. Otherwise, communally-based parties and organizations will gain the upper hand, and Mr. Hariri's reconstruction efforts will ultimately be built on sand.
The combination of a large number of urbanized poor and confessional parties ready to recruit among them in times of crisis is potentially dangerous for the Lebanese state. The ills of exclusion have already affected far more modern and cohesive societies than the Lebanese. To assume that Lebanon is somehow immune from social unrest is to misread the past. The government will not always be able to rely on force and a collective fear of anarchy to put off addressing a central feature of stability in Lebanon.
Notes
1. Ignacio Ramonet, "Mégavilles," Le Monde diplomatique, June 1996, p. 1.
2. See the Economist Intelligence Unit country reports, Lebanon, 2nd quarter, 1996.