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<p class=MsoNormal><span style='font-size:9.0pt;font-family:"Arial","sans-serif";
color:#333333'>October 25, 2008<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:19.0pt;font-family:"Georgia","serif";
color:#0066CC'>Robert Fisk's World: Financial doom and gloom is everywhere
– except Lebanon<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><i><span
style='font-size:12.5pt;font-family:"Arial","sans-serif";color:#333333'>Beirut’s
Blombank has just boasted a record 34 per cent rise in profits<o:p></o:p></span></i></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>A monster
roars all day – and much of the evening – next to my Beirut home.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>My
landlord Mustafa sits in his little soft drinks store downstairs with his
fingers in his ears. I work in The Independent's office, windows tight shut, as
a slurry of fine powder pours below the frame, coating archives and books,
laptop and printer (and Fisk), with a patina of brown, greasy dust. Yes, I have
a building site right next door, where diggers roar in an effort to build a
spanking new twin-towers apartment complex. All over Beirut, it's the same, the
skyline constantly transformed by housing projects and high-rise office blocks.
Yup, that's right. In Lebanon, in a country whose name is still synonymous with
war – and in a world where capitalism is enduring a collapse of biblical
proportions – business is booming.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>Now
readers, I am not – I am absolutely not – advising you to invest in
this little statelet, with its sectarian government and mass graves and squalid
Palestinian refugee camps. I am not an economist. At school, I failed O-level
maths three times and as a result lost an offered place at Liverpool
University. But someone needs to explain to me how this little Middle Eastern
cabbage patch is bouncing along so happily amid the cyclones ripping through
the world's economy.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>Beirut's
Blombank has just boasted a record 34 per cent rise in profits in the first
three quarters of this year. The chairman of Audi Saradar Bank, who happens to
be minister for the displaced in the Lebanese government, says that Lebanon is
expected to record its highest GDP growth in many years. House prices continue
to soar. And this in a nation that suffers a $45.5bn public debt. So out came
the little leather-covered Fisk notebook this week to garner words of Lebanese
wisdom from the men (few women) who know the secrets of the country's financial
miracle. Well, it turns out the Audi bank did lose about $20m with Lehman
Brothers but made a hair's-breadth escape from the Wachovia collapse because
the maturity date on its $200m deposit investment fell on 3 October. In all,
Lebanon's 58 banks made about $750m profit this year. And why does this money
look so safe? Because three years ago, the Lebanese Central Bank forbade all
commercial banks to go into derivatives. Not one Lebanese bank made any
investments in US sub-prime mortgages. Commercial banks, in fact, are prohibited
from making real estate investments anywhere outside Lebanon.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>Lebanon,
of course, has no oil – or has it? Back in 1976, when Ghassan Tueni was
minister of petroleum, most of the world's oil conglomerates showed interest to
explore parcels of sea-bed off the coast between Batroun and the northern city
of Tripoli. But the day Lebanon was to open offices for the bids in Tripoli,
fighting broke out there between Syria and the Palestinians, embracing the very
area where staff would be working. Then in 1980, Lebanese economist Marwan
Iskander suggested to then President Elias Sarkis that the exploration bids
should be opened again. Iskander offered a large Cuban cigar when he told me
the Sarkis story. For some reason, all Lebanese smoke cigars when they are talking
about financial folly.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>"When
I made my suggestion, Sarkis turned to me and said: 'Look Marwan, the Lebanese
are crazy without oil. If we get oil, they'll go out of their minds! Anyway, if
we did find oil, the Syrians are not going to allow us to export it.'"
Today, the Syrians have – politically – returned to Lebanon and the
Siniora government is in no hurry to discover oil reserves under the
Mediterranean.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>But the
Lebanese may have a commodity as wealthy as oil: it is the only country in the
world that has 35-40 per cent of its population working abroad, and they are
sending home about $7.5bn a year. Lebanon has also received $1.3bn of its
$7.6bn Paris aid commitments – which will total $7.6bn after Lebanese
government reforms. Not to be mentioned, by the way, is the estimated $1bn
which the Hizbollah militia receives from Iran each year. So much for America's
ability to "staunch the flow of money to terrorist organisations".<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>As for
the public debt, no problem. At least $24bn of the $45.4bn is in foreign
currency and $21bn in Lebanese currency. But 80 per cent of the foreign debt is
held by Lebanese banks or individual Lebanese businessmen who have no interest
in taking their own country into bankruptcy; they are quite happy to go on
taking their massive interest payments. As for the internal debt, Siniora can
print more money if anything goes wrong.<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>Phew,
that's the first time I've ploughed into the profit and loss of this strange
country. In the hell-disaster of the Middle East, it's almost comical to find
that Lebanon – politically, a Rolls-Royce without wheels – manages
to make ends meet. Should the world learn anything from this? Next time we
meet, I told Iskander on Thursday, he can define a "derivative" for
me. "No," he said, "you can explain it to me!"<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>How do
the Lebanese do it? By being optimistic. Surprisingly, few of them know T S
Eliot's dark warning to their ancestors, the Phoenicians. In "Death by
Water", he wrote: "Phlebas the Phoenician, a fortnight dead,/ Forgot
the cry of gulls, and the deep sea swell/ And the profit and loss./ A current
under sea/Picked his bones in whispers/ ...O you who turn to the wheel and look
to windward,/Consider Phlebas, who was once handsome and tall as you."<o:p></o:p></span></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:10.5pt;font-family:"Arial","sans-serif";color:black'>But who
in Beirut cares about Phlebas under the Mediterranean? The day may come when
the Lebanese can find, richer, darker treasures beneath his bones.<o:p></o:p></span></p>
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