Beirut blast: How to stop aid being lost to corruption

French leader Emmanuel Macron was clear that aid to Lebanon will not be lost to corruption. But how to ensure reconstruction does not include kickbacks?

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Hospitals and schools, then shattered and bent water pipes, then the crater that once was Beirut’s port.

The rebuilding needs of Lebanon are immense, but so is the question of how to ensure the millions of dollars promised in international aid is not diverted in a country notorious for missing money, invisible infrastructure projects and its refusal to open the books.

The port – the site of the explosion that shattered Beirut, is the heart of Lebanon’s import-based economy and a source of graft so lucrative that Lebanon’s political factions were willing to divide its control so everyone could get a piece. It now sits at the heart of the concerns around reconstruction.

'We are going to a funeral for a country that's dead' – Angry Lebanese pour out into streets

'We are going to a funeral for a country that's dead' – Angry Lebanese pour out into streets

Sunday’s donor teleconference is hosted by French President Emmanuel Macron, who was mobbed last week by tearful Lebanese begging him to ensure the corruption they blame for the explosion of  ammonium nitrate stored at the port does not profit from the destruction it caused.

International diplomacy usually calls for careful language. Rigged votes are “irregular.” The response to furious protests should be “measured.” Disappearing funds require “transparency”.

But Mr Macron’s response to the crowd, and later in a speech in Beirut, was unusually blunt: the aid “will not fall into corrupt hands” and Lebanon’s discredited government must change. Germany, Lebanon’s second-biggest bilateral donor, made similar demands.

“That’s precisely what the Lebanese people have rightly demanded: individual interests and old lines of conflict must be overcome and the welfare of the entire population must be put first,” the German Foreign Ministry said.

In the short-term, the aid streaming into Lebanon is purely for humanitarian emergencies and relatively easy to monitor. France, Britain, Canada and Australia, among others, have been clear that it is going directly to UN agencies or the Lebanese Red Cross. But actual rebuilding requires massive imports of supplies and equipment.

The contracts and subcontracts of such projects have given Lebanon’s ruling elite its wealth and power, while leaving the country with crumbling roads, regular electricity cuts, rubbish on the streets and intermittent water supply.

“The level of infrastructure in Lebanon is directly linked today to the level of corruption,” said Neemat Frem, a prominent Lebanese businessman and independent member of parliament. “We badly need more dollars, but I understand that the Lebanese state and its agencies are not competent.”

Lebanon has an accumulated debt of about $100 billion (Dh367bn), for a population of just under 7 million people – 5 million Lebanese and 2 million Syrians and Palestinians, most of them refugees. Its electricity company, controlled like the port by multiple factions, posts losses of $1.5bn a year, although Mr Frem said most factories pay for their own generators because power is off more than it is on.

“There’s grand theft Lebanon and there’s petty theft Lebanon. Petty theft in Lebanon exists but that’s not what got the country in the hole we’re in,” said Nadim Houry, executive director of the Arab Reform Initiative.

Prior aid, Mr Houry said, ended up as a tool in the hands of the political leaders, who kept their slice and doled out jobs and money to supporters.

Beirut explosion as seen by people around the city

Beirut explosion as seen by people around the city

“The pie is getting smaller and smaller and they just keep taking,” he said.

Protesters, tired of the small indignities they endure to get through a day – 37 per cent of people report needing to pay bribes, compared with 4 per cent in neighbouring Jordan, according to Transparency International – and the larger issue of a collapsing state, are going after both.

On Saturday, people seized the offices of the Economy Ministry, hauling away files they said would show corruption around the sale and distribution of wheat. Lebanon’s wheat stockpile, stored next to the warehouse filled with ammonium nitrate, was destroyed in the explosion.

“We restored the economy ministry to the Lebanese people,” one man called out as they rifled through the desks.

Julien Courson, head of the Lebanon Transparency Association, said the country’s non-profits are forming a coalition to monitor how relief and aid money is spent. He estimated Lebanon loses $2bn to corruption each year.

“The decision-makers and the public servants who are in charge of these files are still in their positions. Until now, we didn’t see any solution to the problem,” he said. “I think the Lebanese government has an interest in finding a suitable solution.”

A first step would be an online clearing-house for every contract linked to reconstruction, Mr Courson said. And the first project has to be highly visible and spread the benefits widely, said Christiaan Poortman, board chairman of Infrastructure Transparency Initiative.

“That will help keeping some of the political stuff at a distance,” Mr Poortman said. “Donors will have to be on top of this. The issue of procurement is always where lots of corruption takes place … it needs to be done quickly, and there is always the temptation to not follow the rules and go ahead and do something where a lot of people are going to make a lot of money.”

Mr Macron’s office said international donors can do nothing until Lebanon’s leaders agree to an audit of the national bank, a key demand of the International Monetary Fund for months and one that the political factions have resisted.

Speaking at a news conference in which he conspicuously did not appear alongside Lebanese President Michel Aoun, Mr Macron said he was approaching Lebanon with “the requirements of a friend who rushes to help, when times are hard, but not to give a blank cheque to systems that no longer have the trust of their people.”