Lebanon's fear of change will stifle its brave new world

Beirut is a city of mood swings. People will tell you one day that Lebanon is wasting its potential, that corruption and sectarian interests will win through. Then the next day, they will be punching the air with hope.

A Utopian vision for Beirut by the British ambassador to Lebanon includes a car-free city centre by 2020. Anwar Amro / AFP

Beirut is a city of mood swings. People will tell you one day that Lebanon is wasting its potential, that corruption and sectarian interests will win through. Then the next day, refreshed after a good lunch at Cocteau, they will be punching the air with hope, babbling about the rapidly diminishing shelf life of our prehistoric political class and a vibrant new generation ready to take the reins in a new regional order. The country is either on life support or limbering up for a triathlon.

The British ambassador, for example, has been in a bullish mood lately. HMA Tom Fletcher - as he is known on Twitter - is a can-do chap. Hewn from different, more enthusiastic, timber than many of his predecessors, he is also young - around 40 I am told - and in possession of an infectious belief in Lebanon's potential. So much so, in fact, last month he took time to outline on his official blog (ambassadors have these nowadays apparently) his Utopian vision for Lebanon in 2020 as seen through the eyes of one of his successors.

In this brave new Levant, Lebanon is enjoying the riches from oil and natural gas. We are the new Qatar and the new political debate is defined, not by which sect-based election law will get which bloc of gangsters into parliament, but by more progressive topics, such as how to distribute our new-found wealth: to create a sovereign wealth fund or give each citizen a dividend of the revenues. It's heady stuff.

Elsewhere, we have peace with Israel (Hizbollah has renounced violence) and formal border demarcation with Syria, while the envoy also enthuses about Lebanon's "brain gain", about Beirut having the world's first car-free city centre and, yes, you guessed it ... 24-hour electricity.

It made for great PR and, yes, it's what we all want. But I fear that our fortunes are too intricately tied to regional powers, and that we are too petrified - literally and figuratively - to effect any fundamental change.

This unfortunate condition was highlighted last weekend with fears that the kingdom of Saudi Arabia would withdraw its deposits from Lebanese banks. I'm not sure how the rumour started or just how much money the Saudis have here, but such a liquidity shortfall would indeed be a blow, forcing the Central Bank to dip into its foreign currency reserves to make up the deficit, with the added fear that it might create a domino effect among the other Arabian Gulf states. We'd be OK, but we'd have taken a mauling.

"It was a bluff, or at least a warning," a banker friend said. "The Saudis don't want to see Lebanon go bankrupt, nor do they want to cede any ground to Iran. In any case, the thousands of Lebanese expats living in the KSA are hardly likely to stop sending money every month."

He had a point. Still, the rumour, not to mention the ripple of panic it created, did underscore our short-termist approach to almost everything, including how we operate our famous banking system, which relies too much on deposit funding.

"Our problem is that there is no long-term strategy to diversify this funding. Where are the commercial paper programmes, the preferred shares or fixed income products? We are the kings of the short-term solution," the banker explained.

Tellingly, the only factor that is keeping us afloat is the legacy of a decision made in the 1960s to buy gold and hold on to it. Lebanon has 9.22 million ounces. We have the 17th biggest gold reserves in the world and in terms of gold per capita, the biggest reserves in the Middle East. "If there is a return to the gold standard, we will all be rich," the banker sighed.

In a country defined by so many "ifs", ambassador Fletcher ends his blog post with a bizarre post-script. "PS, it was a pleasure to see my predecessor Tom Fletcher win the 100m and 200m at this year's Olympics." Maybe he also realises that it's all nothing more than a dream.

Michael Karam is a Beirut-based freelance writer