Rebuilding Lebanon: funds flow in, political roadblocks remain
As President Amin Gemayel works to reestablish law and order and to reunify this war-battered country, the Lebanese private sector is gearing up to do its part in the rebuilding.Skip to next paragraph
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Bankers report that a flood of dollars already has flowed back into Lebanon over the past month and has been converted back to Lebanese pounds. The return of foreign invested funds and renewed interest in holding Lebanese pounds is an indication of Lebanese confidence in the new government's ability to stop the fighting once and for all, according to bankers and financial observers here.
It is also an indication of continued Lebanese optimism and initiative despite eight years of battles and warfare.
''Just give Lebanon peace - we don't need anything else,'' says a Lebanese banker, paraphrasing Pierre Gemayel, the founder of the Christian Phalange Party and father of the President. It is a phrase frequently repeated in the business community.
''The confidence was always here, it was only waiting to express itself. It was only waiting for a better political environment,'' says Andre Chaib, director of economic studies at Lebanon's central bank, Banque du Liban.
The rush of returning funds was apparently triggered in part by the election of Bashir Gemayel in late August. His subsequent assassination in mid-September caused a near panic as weary Lebanese scrambled to convert back to dollars.
A panic was avoided in part because banks closed to mourn the death of the President-elect and in part because the banks stayed closed as the Israelis moved into west Beirut. Then the speedy election to the presidency of Amin Gemayel, Bashir's elder brother, convinced many Lebanese that there was still hope.
Since then, the funds have continued to flow in, causing the pound-to-dollar exchange rate to drop from 5.20 pounds per dollar in August to below 4.20 pounds per dollar Oct. 1. And bankers here expect still more funds to flow into the country from Lebanese who fled the fighting and moved to the Gulf countries, Europe, and the United States.
One banker estimates that during the eight years of conflict in Lebanon, 25, 000 Lebanese have become millionaires by working in the wealthy Arab states in the Gulf.
Lebanese bankers say they do not expect the Lebanese economy to sustain much of a shock as a result of the relocation of the Palestine Liberation Organization and its related businesses and organizations from Beirut. They assert that the estimated $1 million to $2 million per day in PLO expenditures here were mostly cash transactions and that most were not being channeled into constructive projects.
Political observers, however, are more cautious in assessing Amin Gemayel's ability to reunify the country. The new President's declaration Sept. 30 that Beirut was the united capital of Lebanon has been characterized as more hope than fact. Nonetheless, an Italian diplomat noted after the speech, ''The current situation on the ground in Beirut today was unthinkable a year ago.''
The opening the same day of the Fuad Chehab elevated highway, which had been closed for four years due to snipers and the fighting between Christian east and Muslim west Beirut, was called a good beginning.
But other observers say Beirut will need more than the opening of roads to accomplish real unification. The barriers that must be shattered in order to unite Muslim and Christian, leftist and rightist, under the Lebanese flag involve political concessions and a tolerance that have been in short supply here in the past.