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Like the mythical phoenix, Beirut rises from ashes

Insight on the News, Oct 16, 1995 by Colin Barraclough

A jewel of the eastern Mediterranean before 16 years of civil war reduced it to rubble, Beirut has embarked on an ambitious campaign to regain its former position as the Middle East's financial center.

The bullet-scarred buildings of West Beirut may be a long way from the Rio Grande, but the newly opened Lone Star Cafe in the city's Hamra neighborhood is as Texan as they come. Tucked down an alleyway where Muslim militias patrolled during Lebanon's long civil war, the newly opened Tex-Mex bar -- complete with a jukebox full of country hits -- is just one of many late-night hangouts opening in the city. In the heady atmosphere of postwar Beirut, the tequila is flowing once again.

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"Nobody wants to think about the war any more," shouts Peter, a 20-year-old computer-science student propping up the bar at the Lone Star. "The Lebanese have realized what's inside them and it's too frightening. It's better just to have fun."

Postwar Beirut has an energy matched by few other cities in the world. Every day, it seems, a new luxury-apartment block is completed or a new television station comes on the air. Already, more than 100 radio stations broadcast a range of music from classical Arabic to Western pop.

"The Lebanese like to complain that their wages are too low and that everything's too expensive, but everyone's got money," says twenty-something banker Sani Hibri as he threads his air-conditioned BMW through Beirut's potholed streets. For many young Lebanese, saving for the last thing on their minds. "Restaurants charge $50 a meal, and some bars charge $10 a drink, but they are all full," says Hibri. "During the war, people got used to the idea that they could die tomorrow. We still have this attitude."

In Christian-dominated East Beirut, glitzy cabarets and shopping malls have sprung up to cater to the wealthy. The Casino du Liban, once a magnet for the international jet set, soon will break open fresh packs of cards after a thorough renovation.

Lebanon's economy always has been driven by the private s the government is subsidizing the country's massive makeover. The Council for Development and Reconstruction, or CDR, a superministry answering directly to Prime Minister Rafik Hariri, has raised $3 billion for reconstruction projects and plans to spend a further $15 billion during the next 13 years. By concentrating on physical and social infrastructure -- loads, electricity, telecommunications and technical and vocational training -- the CDR intends to establish a climate in which the private sector can flourish.

"The companies which remained here during the war have lagged behind in terms of technology, human resources and implementation skills," Nouhad Baroudi, secretary-general of the CDR and former economist with the United Nations economic commission in New York, tells Insight.

"Not only did our GDP [gross domestic product] fall, but other economies around us grew. We have a lot of ground to cover."

Lebanon's central bank estimates that the economy shrank by 4 percent during each year of the 16-year civil war, which began in 1975 with Muslims and Christians tussling for political control of the country but quickly descended into a bitter sectarian melee among the country's 17 religious groups. With massive reconstruction now under way, the government is forecasting annual economic growth averaging almost 8 percent over the next 13 years; its aim is to double GDP per capita by 2007.

Given the low base from which resurgent Lebanon is starting -- much of the economy is running at less than two-thirds of capacity -- Western bankers say optimism is partly justified. In the 25 years preceding the war, Lebanon's economy grew an average 5.6 percent, easily outstripping population growth of 2.9 percent.

One of the CDR's first tasks was the creation of Solidere, a private company charged with rebuilding the business center of Beirut. Solidere quickly raised $650 million from Lebanese and Arab sources in a heavily oversubscribed share issue and spent its first year tearing down the bomb-damaged ancient souks, art-deco cinemas, coffee shops and bordellos that made the Lebanese capital the Middle East's most glamorous playground. In their place will go modern offices, state-of-the-art telephone networks and luxury-apartment blocks. By starting from scratch, company officials emphasize, they can introduce the latest technology and turn Beirut into the most modern city in the region.

"This really is a huge project and an excellent asset for Lebanon," says Ramez Maluf, international manager at Solidere. "It will take the country forward from an era of kidnapping and war into reconstruction and development. It will be Lebanon's Aswan Dam."

Frequent travelers to Beirut say they notice significant improvements on each visit. State-supplied electricity, which collapsed during the war, is available in most areas for at least 12 hours a day. The telephone network, so erratic it was almost useless, now has a 93 percent call-completion rate; a 250,000-line cellular-phone network connects subscribers to the European Groupe Speciale Mobile standard. Beirut airport, badly damaged during the 1982 Israeli invasion, is being expanded at a cost of $550 million; by 1998, it will be able to handle 6 million passengers a year, sufficient for the planned influx of tourists to the region.

Like the mythical phoenix, Beirut rises from ashes

Insight on the News, Oct 16, 1995 by Colin Barraclough

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