The recent Lebanon war could be interpreted at many levels, but perhaps its most significant impact was how it came to damage Lebanon’s capitalist culture—a culture of openness, relatively unhindered exchanges, and faith in the regenerative qualities of the market.
A decade ago, Druze leader Walid Jumblatt neatly encapsulated the dilemma of postwar Lebanon, caught between two alternatives: he had wondered whether the country would lean the way of Hanoi, by which he meant, would it embrace the armed militancy of Hizbullah? Or would it go the way of Hong Kong, and yield to the buoyant capitalism of Rafik Hariri, whose vision was for Lebanon as a financial and trade entrepôt, where competition would be peaceful and victory measured in dollars?
Between 1992 and 2005, Lebanon was able to juggle that contradiction. Because of Syrian rule, the country was compelled to be both Hanoi and Hong Kong. This was largely made possible by the geographical isolation between South Lebanon, where the bulk of combat took place, and the rest of the country, particularly Beirut, where Hariri dominated. However, this uneasy equilibrium collapsed after May 2005, when the Syrian Army withdrew from Lebanon. Today, the country must resolve this dangerous ambiguity, and nothing has shown the urgency of this quite as well as the devastating recent hostilities with Israel.
Much has been made of the fact that the conflict was declared by Hizbullah to be a victory. That affirmation was, to say the least, debatable, but the real question, even if one were to accept the party’s triumph, is whether Lebanon can afford many more such victories. Any victory (and Hizbullah has not denied the accuracy of the figures) that turns 1 million people into refugees, that leads to the death of over 1,000 people, mostly civilians, that brings about direct and indirect losses estimated by UN agencies at over $10 billion, that erodes investor confidence probably for years, and that closes countless businesses down, is not one that can be easily reproduced.
And even if one were willingly accept that Hizbullah’s Hanoi choice can, on occasion, revive Arab “honor,” having to defend that honor again anytime soon will almost certainly lead Lebanon to financial ruination.
With this in mind, it seems an obvious point to argue that it’s time for Lebanon to unequivocally embrace a capitalist culture, to be rid of Hanoi in favor of Hong Kong. Except for two problems: Hanoi has its adherents, namely Hizbullah, and they will defend their preference for the foreseeable future. But also, no matter how appealing the brashly capitalist model, Lebanon is not in a healthy economic state to show that alternative at its best. With a debt of $40 billion and a GDP that may have contracted to $18 billion after the war, the country is close to a financial meltdown. Foreign aid may be forthcoming, but unless fundamental structural reform is introduced, this will merely delay the period of economic collapse.
In other words, Hanoi may have been discredited in the July-August fighting, but there are no guarantees that within a reasonable timeframe in the future, Hong Kong will not be, too. And who might be among those worst affected by the failure of the laissez-faire policies favored by the parliamentary and government majority, in particular Prime Minister Fuad Seniora? Why, the advocates of a more militant Lebanon, of Hanoi, those who paid the highest price during the Israeli onslaught, and who, particularly among the Shia community, have not historically benefited from Lebanon’s penchant for free trade and economic openness.
Hanoi on hold
That’s why the problem of pursuing Hanoi—of Lebanon fated to remain a redoubt of armed struggle—can only truly be resolved once its other destiny is shown to be a more alluring alternative. That means that Hong Kong must prove its viability to Hanoi. A capitalist culture must convince detractors of its ability to consolidate itself and benefit everyone.
Hanoi was put on indefinite hold once Lebanon began tallying the costs of the July-August war. However, the proponents of Hong Kong cannot afford to create an impression, whether true or false, that Lebanon lives at two tempos – one for a select few who benefit directly from the prevailing economic framework, and one for a majority that would suffer hardest if that edifice were to cave in. Hanoi has surely lost its justification, but that doesn’t mean Hong Kong must not convince on its own.