Prosperity and partying in crises in Lebanon

Economic development in the country is happening fast, but the public sector is lagging behind. Still no one really gives the impression that they care.

The water trucks trundle up and down Rue Albert Naccache, filling the tanks of the disgruntled Ashrafieh bourgeoisie who inhabit the street's 1970s-era apartments.

They come at night to avoid creating traffic, and the continuous shuttling makes you forget that silence has become a luxury to be enjoyed for a few minutes before it is snatched away by the rasping trundles of yet another lorry pulling up outside yet another building, announcing its arrival with exhausted jets of steam and the rattling engine that pumps water to the tanks on the roofs.

Once again, the Lebanese are paying extra for what the state should provide. It is December, but it feels like September and there has been no rain or snow. Past governments never had time, or perhaps the inclination, to make provisions for such a shortfall, even though there is plenty of water. In fact, there is so much water that environmental groups tell us that we allow 1.5 billion cubic metres to wash away into the sea every year, leaving a shortfall of 200 million cu metres. The private water suppliers pick up the slack and charge a premium. Quite where they get the water from is anyone's guess.

The current government is too busy to care. It is preoccupied with having to face the tricky reality that a UN-backed investigation will accuse Hizbollah of implication in the murder of a former Lebanese prime minister. But more of that later.

The country would be a challenging proposition for a team of Wharton technocrats at the best of times, but in Lebanon technocrats are kept to a bare minimum. There are a finite number of cabinet portfolios and they need to be allocated to those who really deserve them.

However, the people like a good technocrat - even though they would never vote for one. Ziad Baroud, the interior minister and one of the cabinet selections of Michel Sleiman, the president, is the current poster boy and the man most Lebanese say gets things done. Mr Baroud, a lawyer and former civil society activist, is what the Lebanese call edami, a gentleman.

Still, and almost unbelievably, amid this morass of crime, incompetence and hidebound attitudes to genuine talent, Lebanon cannot stop making money. This week, Merrill Lynch has revised its forecast upwards for Lebanon's real GDP growth to 8 per cent this year and 5.9 per cent for next year, from earlier forecasts of 6.5 per cent and 5.1 per cent respectively. However - and there always is a "however" when Lebanon is concerned - there were the usual caveats that the "existing political tension" in the country might ruin the party.

It's a pity, because left to our own devices - and by "us" I mean the private sector - we can do very well. In fact, the consensus is that economic growth has averaged 9 per cent over the past three years. Most of this has come from shops, hotels and high-rise apartments, and as such Lebanon remains fragile with a very lop-sided economy.

Still, the restaurants, shops and hotels continue to open and property prices are still buoyant (even though only a few days ago, for the first time, I heard talk of 5,000 unsold apartments in Beirut and the words "a buyers' market").

One of the Hariris has allegedly bought a chunk of land in the up-and-coming district of Mar Mikhael, and where the Hariris put their money others follow.

It is therefore sad that the country's political class is as destructive as the private sector is creative. On Sunday Hassan Nasrallah, Hizbollah's secretary general, again told the party faithful, and anyone who cared to listen, that Israel was behind the killing of Rafik Hariri, the former prime minister, on February 14, 2005.

He tried to do this earlier this year by showing us what he purported to be footage from an Israeli spy plane taken over Beirut, but all it told us was that Israel has film of Beirut traffic.

Last week the Canadian Broadcasting Company ran an article apparently based on leaked documents from the Special Tribunal for Lebanon, the court established by the UN to try Hariri's killers, in which it claimed that investigators had placed Hizbollah members at the crime scene by tracking their mobile phones.

Mr Nasrallah hit back by saying that Israel has penetrated Lebanon's two state-owned but privately run mobile networks, and as such any evidence must be thrown out of court.

Amid all this goings-on lies the fact that Lebanon is still a country that can generate 9 per cent growth when the rest of the world is just poking its nose out of what was a harsh economic winter. And yet it is also teetering close to the edge of destruction.

To make matters worse, no one really gives the impression that they care. Last Saturday at Music Hall, one of Beirut's most popular nightspots, one sensed the urge of the hundreds of revellers to rage against the constant threat of uncertainty. An Englishman, a sommelier from Harrogate, leaned over amid the din and Dionysian excess and said it was like watching the last days of Pompeii.

Over at the newly opened MyBar it was the same story. The bottles of Grey Goose jostled for table space with stubby Cohibas resting snugly in their ashtrays.

There were paunchy men with watches the size of space debris and chain-smoking, willowy girls and their Marc Jacobs bags. The 1980s hour kicked in and there was a loud cheer.

The Lebanese were doing what Lebanese do best in a crisis. They party.

Michael Karam is a communication and publishing consultant based in Beirut.