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Lebanon: the billionaire solution.

Lebanon has a new prime minister. The difference is that he does not belong to the established and largely discredited political elite. He is also a naturalised Saudi citizen. Giles Trendle reports from Beirut that Rafic Hariri may represent Lebanon's last chance to revive its fortunes.

IMMEDIATELY AFTER the designation of the billionaire businessman, Rafic Hariri, as Lebanon's new prime minister, the Lebanese pound began to regain value on the local foreign exchange market. The rise in value of the national currency was an indicator of the hope and confidence that the Lebanese place in their new prime minister.

Hariri, a 48-year-old Sunni Muslim, born the son of a farm-hand in the southern Lebanese town of Sidon, is today rumoured to have a personal fortune of over $3bn. He made his money in Saudi Arabia where he enjoys very close ties to the Saudi royal family and in 1978 was granted the rare privilege of Saudi nationality.

An overwhelming number of Lebanese are now looking to Hariri, well-known for his philanthropic donations in the past, for deliverance from economic depression and ruin. People hope that with his vast wealth, his international connections and his proven business acumen, Hariri can emulate his personal rags-to-riches success by rejuvenating Lebanon, currently in economic tatters.

It is still too early to see if such unbounded popular optimism is justified. Hariri's nomination may help reestablish confidence in the country, indispensable to a return of foreign and local investment. But this mammoth task could prove too big a challenge even for this well-connected money baron.

Hariri will head a ministerial cabinet, already being referred to by the local press as the "government of salvation," with the primary task of reversing the country's economic crisis. The new government's aim will be to beat back monetary collapse (already auspicious signs on that front), reconstitute foreign exchange reserves in the Central Bank, and attempt to reach budgetary equilibrium as soon as possible.

Hariri's government is also expected to reduce the bloated public administration, tackle the politico-economic problem of war refugees (The Middle East, September 1992), and initiate the vast reconstruction programme for Beirut and the rest of the country. All this adds up to a heavy work load.

The new prime minister is expected to inject a lot of his own cash into the country's recovery. But how deep are his pockets?

The selection of Hariri is an interesting indicator of Syria's self-assured position in Lebanon today. Hariri was reportedly President Elias Hrawi's first choice for the job last May when the Omar Karameh government fell during economic riots. But Hariri's close contacts to Saudi Arabia made him suspect for the Syrians who saw Hariri as the thin end of a wedge bringing waxing Saudi influence into Lebanon.

Things are different today. Syrian political influence has been substantiated through the election of a pliant new Lebanese parliament.

The new-found positivism that Hariri's nomination has had would, moreover, eclipse the disgruntled Christian groups that boycotted the parliamentary elections. Their objections will be ignored by most Lebanese should the country's economy take off.

Hariri is a palliative pill that the Syrian doctor has graciously administered to its Lebanese patient. Whether Hariri will be allowed more say than previous prime ministers remains to be seen. At the time The Middle East went to press Hariri was still holding consultations to form his ministerial cabinet. Prior to announcing his cabinet, Hariri was in Damascus "consulting" with Syrian officials - evidence that Syria preserves its last-word prerogative.

The one group to show reservations about Hariri's nomination was the pro-Iranian Hizbollah. The Islamic fundamentalist group announced it would not take part in Hariri's government. Iran - with its own vested interests in Lebanon - felt the Syrian go-ahead was a poor decision.

Tehran radio expressed its dissatisfaction with Hariri's posting and warned him not to push his powers too far, thereby serving him notice that Hizbollah's military operations in the south are sacrosanct.

Though Hariri's job will be to tackle Lebanon's economic afflictions, his position naturally obliges him to deal with political issues, of which the Israeli occupation of south Lebanon remains principal.

Hizbollah (and its Iranian patron), suspicious of Hariri's Saudi and American contacts, fear the new prime minister may push for its disarmament. But a clash between the Hariri government and Hizbollah is not on the cards. It is clear that Hariri's biggest challenge is to pull Lebanon's tumbled economy to its feet. It is within these political parameters, if he chooses to recognise them, that he must live up to his public's expectations. His failure is what most fear, since it would mean Lebanon and its economy are finally beyond the point of salvation.
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Title Annotation:Current Affairs; economic recovery
Author:Trendle, Giles
Publication:The Middle East
Date:Dec 1, 1992
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