It is a wild and wondrous time. Almost a Big Bang moment. If all goes perfectly, Lebanon in April and May 2018 laid crucial seeds for a dual process of political maturation and economic resurrection. The two-month long excitement began with better than anticipated commitments from the CEDRE conference, an immense hope for billions of dollars in international economic investment inflows that was not dented even as the results of the Brussels II conference on Syria and refugees left much to be desired in every regard.
The period peaked on May 6 with a development that less than a year ago many verbose and not so outspoken naysayers had doubted would ever happen: smooth elections. In short, government formation is progressing, all the while in between these epochal moments of the past two months, Lebanon saw almost an overburden of investment conferences, international statements of encouragement, and local ones of promise tinted in every conceivable political color. Rationally disinclined minds might even add that the weather in May stood out as very unusual.
Thus, the picture as it presents itself at this felt halfway point between international support events, elections, the appointment of the next government leaders, and the actual formation of a government, is a positive and hopeful one.
a moment to savor
Yet, of course, this picture is not perfect. There are promises of rapid action in government formation and calls for swift agreements that have come from every powermonger in the political arena. But, as the experiences have taught us in similar situations in recent history, inflated promises mean nothing in Lebanon. As of today, the country has no proof yet that its competing tribal chiefs are coming to agreements among themselves, or much more importantly, that they are serious about sacrificing part of their power and initiating needed reforms. Also, shouldn’t one ask, as a responsible business publication, when was the last time that everything went according to plan in Lebanon, irrespective of any consideration as to whether the plan was perfect or flawed?
Perhaps, for now, this moment on the domestic stage is one to savor, and to remember that it could not have happened without the example and success of Lebanese banking. It stands to reason, from the messages and comments that Executive has gathered over these last two months, that this country’s international credibility as an investment destination and partner of international donors would have been far lower if our banking story in recent tough times was not one of resilience and prudent regulations.
It also stands to reason that the ability to conduct elections in this country, and do so reasonably well, rested upon the two pillars of internal military security—kudos to them—and national economic security, which has been channeled for the past 25 years through Lebanese commercial banks and the financial system supervised by the central bank. But another impression that also asserts itself strongly at this particular point in time is that Lebanese banking is profoundly and inextricably entwined with global developments, including developments that range far outside of the spheres of economics and reason.
If there are grounds for concern in this region, and there are, then the biggest tumbleweeds of worry were blown in from the international fields last month, witnessed in the abomination of reckless disregard for international law and the rights of Arab people through the relocation of the US embassy to Jerusalem, and in the stoking of the risk of war following the US decision to renege on the Iran nuclear agreement.
This side of spring 2018 reminds us that Lebanon may be able to stand on her head and wiggle flowers between her toes, but she can’t dream of deciding things of geopolitical consequence in the Middle East, and thus can’t determine her own fate. The ultimate big picture, seen from Beirut, is one of hope but also of high opacity and more risk—geopolitical, geo-economic, and multi-societal risks—than anyone can welcome.
What to call for in these times? Sanity? But calls for sanity always appear to be either futile or counterproductive. Attempt a reverse psychology gambit and call for insanity, conflict, and geopolitical games of playing chicken? The risk that these would spin out of control stands against such a toying with incendiary tools; this call also doesn’t feel right morally. We want to remain human.
no room for complacency
Calls for better banking practices are always in order, as banking is integral to the never-ending quest for human economic development. However, calls for banking improvements cannot address the need for wider political and social sanity. Let’s make this a general call then, for being aware of human fundamentals, such as the reality that bullies are the losers of history. We have seen the chief bully in Washington and the tier-two bully of Tel Aviv. We are also seeing, but are less directly affected by, bullies in Europe and Asia. But the rise of the global bullies means one thing for all of us: Beware of the bully within.
We are all potential bullies because we have aggressive animal spirits in our blueprint of culture and biological heritage. And the dangerous thing is that bullies can score wins. But what is true for fooling people is also true for bullying: You can bully most of the people some of the time and some people all of the time, but you cannot bully all of the people all of the time. That’s why bullies are losers in the long run.
More importantly, bullies lack the ability to aim for win-win or win-win-win outcomes. They are experts in “I win, you lose.” Yet in a world where peace and sustainability have to be engineered with resilient and durable institutional foundations, where contracts and greater public goods have to be matched into winning combinations, bullies are incapable of performing according to desired and needed outcomes. They are incapable of helping the world move forward into a more sustainable future. This is necessary to keep in mind in a time when global bullies sail with strong tailwinds.
The next thing to call for at this time is relentless alertness. Abandon complacency. Complacency is not exactly a prime risk in Lebanon, except perhaps for the few and very powerful who had been the beneficiaries of the economic balance-on-the-brink-of-an-abyss for the last 20 or 30 years. It will remain to be seen if these elites have still enough vigor to break out of the narcissism, smugness, and vainglory of the role that they did nothing to deserve. But while we are waiting for the ‘elites’ to reform (or else), we can ill afford to wait for our banks. It is reassuring that the sector appears to be in good health, but Lebanon needs more of them by helping toward improving the socio-economic equilibrium. For this, Executive looks at links between banking and infrastructure investment potential under the scenarios from CEDRE to PPP.
A final thing to call for is to take ownership of our attention. We often do not pay enough attention to who grabs our attention, with what means, and for what purpose. One assumption with high favor in 20th century economics construed human rational behavior as basis for the core premise of economic theory that people choose by “optimizing.” In truth, and very different to the assumption of man as rational economic agent, we are driven by a plethora of motivations, desires, and influences. This bears well to remember also in banking where the drift of our society to consumerism is leading to increasingly un-economic behaviors. In this context, we nudge you to think about your banking choices in the age of consumerism, continually expand and improve your own financial literacy, and pay attention to your personal data privacy in this era of growing digital exposure.