Sunday, August 17, 2014

A least costly but efficient stimulus for the Lebanese economy.

The IMF, the World Bank and all the major economic institutions, both public and private, have been constantly lowering their forecasts for expected global economic growth during 2014-15.  Add to the above not so bright news the fact that Lebanon is situated in a neighbourhood that has been rocked by war and political instability for over 3 years and it becomes evident that the Lebanese economy needs economic growth if for nothing else but to service its international sovereign debt.

Obviously, tourism a major sector for hard currency earnings and a substantial employer is not the magnet that it used to be. Not many people will make war torn areas their destination of choice no matter the climate and the other physical endowments. The volume of international funds that flow into the country from Lebanese abroad have also declined with the relative decline in the rates of economic rates of growth in the rest of the world. Luckily there is a way for Lebanon to make a substantial sum of funds available for consumption expenditures that can be guaranteed to stimulate the level of economic activity.
The idea that I chose to highlight is not new but it is time for the government to undertake immediate reform of the electricity sector since the financial burden, besides the economic productivity implications, carried by the Lebanese private sector is becoming intolerable.

Just take a look at these figures: The official rates charged by EDL are fictitious, fictitiously low.  If an average household is to use about 7200 KWH per year (600 KWH per month) then the monthly charge would be under $50.00. That would be a phenomenal bargain except for the fact that the national electricity company (EDL) does not supply even half of that and whatever it supplies is provided at a loss of over $1 billion a year. It is clear that a state cannot aspire to be a tourist destination and yet have severe electricity rationing every day of the year. That, however, is not even half of the story. Since no household, rich or poor, large or small can afford not to have electric power 24/7, the Lebanese had to improvise. They did that by setting up small private electricity generators for every neighbourhood that kicks in as soon as the government electric power is cut off. These private generators use the infrastructure of poles and cables of the official grid and are run on diesel power which is dirty and expensive. Currently it is estimated that the price per Amp is about $100 and most homes need about 15 Amps and some need 30 Amps or more. Since neither the Lebanese government nor EDL provide any up-to-date information about the number of residential subscribers and their estimated annual consumption this brief analysis assumes that the cost of electricity per household is about $375.00 per month. (BTW, that is more than twice what a typical NY family pays for the same amount of electricity although its average income is probably four times as much).

Based on the above the average annual cost of electricity for that typical Lebanese household is around $4500.00 which is at least 15% of the annual earnings of that household. If the Lebanese government can take steps, and it should, to provide that electricity at an average saving of say $300 per month per household then the sum for about 1 million households will be $3.6 billion a year. If one is to assume that only half the household are affected then the annual savings will still amount to $1.8 billion dollars. All such hypothetical savings will be spent on other consumer goods and thus would help revive the economy.

So what can the government do about this situation that has been allowed to fester for over 20 years?  At least 3 things:

(1)   The government can open the field for private investors and encourage competition. The new field should be tightly regulated to prevent consumer abuse. If electric utility firms in some of the highest wage countries in the world can deliver reliable electric power in the range of $0.1 -0.15 then the average bill for our typical customer should drop to about $75.00 per month.

(2)    Encourage through a major well-advertised and well-funded program the installation of solar collectors on roofs of individual units. Again such installations are being provided by profit seeking free market companies in many parts of the developed world at a cost of under $3 per watt. Our typical household would need a 3.5 KW system in order to produce the approximate 7200 KWH per annum. This means that an outlay of about $11000.00 would supply the 7200 KWH of electricity for that household for a period of 20 years. That would amount to a payback period of under 21/2 years. No new buildings should be given permits unless such a PV system is included in the structure.

(3)    Construct an offshore wind farm funded by the World Bank to supply at least 500 MW.

(4)    Phase in a doubling of the current rate structure charged by EDL over a period of 2 years.

(5)    Outlaw any private electricity production by private contractors that use diesel power.

(6)    Adopt a delivery charge from each of the new private large suppliers as a compensation for their use of the present grid.

A program styled around the above parameters would find EDL operating at a zero deficit, consumers spending less for their electric needs, a cleaner environment with less CO2 emissions and a more reliable electricity and competitive electricity. Just the savings from eliminating the EDL deficit and the excessive unwarranted current payments by the consumers would provide the treasury with a savings of over $1 billion and the consumers with about an additional $2 billion of discretionary income. This sum of about $3 billion represents a 10% in consumer spending based on the estimate that total consumption amounts to about $30 billion a year. It is also to be noted that no new funds from the government are called for except to build an offshore wind mill farm plus adopt a program to spread fund residential PV systems. I am almost certain that funding for the above programs can be easily arranged through an international agency since both are self-financing and thus make no claims on the limited finds of the state.

Saturday, June 28, 2014

ME Boundaries are inviolable.

Exactly 100 years ago Archduke Franz Ferdinand was killed in Sarajevo on June 28 , 1914. His assassination set off a series of actions and counter reactions that ended up in one of the greatest tragedies of the 20th century, World War I. This tragedy is relevant to us in more than one way. Obviously the most basic reason for recognizing this day is the hope that the more we think about these tragic events the less likely humanity will be subjected to them again. But another important reason for us is the idea that WW I was a perfect example of unintended consequences. No one wanted to start a world war but the assassination spiraled out of control and ended up in a war that lasted for over 4 years , and resulted in an estimated 37 million casualties.. But there is another reason for us to think about this issue and that is that it culminated in freeing the ME from 400 years of Ottoman rule.

So many articles and thinkers have written about how is it that we might be witnessing the end of Sykes Picot, an agreement that is often described in negative terms by Arabs and many even go as far as to claim that all our problems, and there are so many, can be traced to the political subdivisions that were drawn after the fall of the Ottoman Empire.

I do not subscribe to that vision except in one detail. One can argue very convincingly that had it not been for WWI, the resulting Mandate and the Sykes Picot agreement then possibly the Balfour declaration/Promise might not have been issued and the ME would have been spared the last seventy years of instability related to the establishment of the state of Israel. But if we are to set aside the Balfour Declaration then I cannot find much that is at fault with Sykes Picot.

Note that  Figure1 is a map that would make it clear that the whole of the Arab world, including
North Africa, was ruled by the Ottoman Empire for four centuries . Roughly1516-1916.
                            Figure 1: Ottoman Empire Arab World was under Ottoman Rule of Selim I
 Then in 1916 the infamous Sykes Picot subdivided part of the Ottoman Empire into two regions of influence, one British and one French. (figure 2) .
                  Figure 2: Note that Sykes Picot did not establish boundaries but only spheres of influence

The Sykes Picot agreement resulted in about 25 years of the
 Mandate Figure 3.

         Figure 3: The Mandate powers proceeded to carve out the current countries.(The French gave away Alexandreta to Turkey and initially planned an Alawite Republic as well as a Druze one).

 The two Western powers of France and Great Britain divided the area taken away from the Ottoman Empire into the current major countries of the M.E. Figure 3.
After Sykes Picot gave each of the two European powers an area of influence they then proceeded to carve up the countries that make up the current Middle East. But each of the countries created was able to become independent by the mid 1940’s. Figure 4.
                                     Figure 4: The current boundaries and dates of independence

This is an important point since it makes it clear that the mandate which created the boundaries between Lebanon, Syria, Iraq, Jordan and Palestine/Israel lasted only for 25 years.  
Based on the above and the accompanying maps one needs to ask again whether it was the 25 year mandate or the 400 year Ottoman rule that played a more crucial role in shaping the identity and culture of the people in this region.

If, as it is often claimed, that the current political borders created by the mandatory powers after the Sykes Picot agreement created political divisions that are not acceptable then why weren’t there any major movements to correct that flaw and redraw the borders. It is easier to protest a perceived injustice but is more difficult to prove that such an injustice has taken place. Would it have been better to the inhabitants of the mandated areas had these artificial boundaries not been created? Is there a shared national identity between the residents of these countries in question and are they ready to accept the other and accept the demands of democracy and responsibilities of citizenship that would be required in an efficient modern state? Even if the answer is yes then wouldn’t it be better to create a federation where each of the member states can control its own internal affairs.

I am willing to be a Giraffe ;put my neck out J; by saying that the “death of Sykes Picot has been exaggerated” and that the current map of the ME would hold with very little changes , if any. Ideally the most important radical change would be the settlement of the Israeli Palestinian question. The Kurdish issue would not be so much of a problem had Syria, Iran and Turkey been able to treat all their citizens equally, an autonomous Kurdish region might be the only other alteration of the current inviolable boundaries. I imagine that I am saying that ISIS will not fulfill its wish. No backward thinking group of people ever do.  

Figure 4 The mandate was relatively short lived.

Friday, April 18, 2014

Lebanon is a parliamentary democracy and NOT a presidential one.

On October 22, 2014 Lebanon would celebrate the 25th anniversary of the Taif accords that ended the Lebanese civil war. That is obviously an occasion to celebrate and to be grateful that killings, destruction and divisiveness are no longer on the mind of every Lebanese.  But such developments do not take place in a vacuum. The solution arrived at a quarter of a century ago was predicated on a radical change of the Lebanese political system and I am not referencing the demand by Taif that Lebanon has to get rid of confessionalism and add a Senate.

What Taif demanded and what the Lebanese delivered from day one was a major transformation of the democratic system in Lebanon from being Presidential to becoming a parliamentarian. But unfortunately, although Lebanon delivered on its promise many of its citizens carry on as if there was no change.  The best proof of this willful act to refuse and acknowledge reality can best be seen in the current maneuvering regarding the constitutionally mandated Presidential elections in May of this year.  The Maronite’s act as if the forthcoming President has the power to shape the political agenda, promulgate laws and make a difference in governance.

How can Samir Geagea, a declared candidate for the Presidency, promise that if elected then he would promise to bring about a large number of fundamental changes in the way Lebanon is run? Doesn’t he realize that the Lebanese president does not have the constitutional power to deliver on any of his platform promises? Of course he does but neither he nor the mother perpetual candidate, Michel Aoun, nor Bkirki nor any of the Maronite leadership have the internal strength to admit the truth. I guess that this is a perfect example of what cognitive dissonance is all about.  It is the inability to admit the truth when it contradicts ones desires, just like the fox who claimed that the grapes were sour when he could not find a way of getting to them.

It is time, after 25 years, that the Lebanese in general and the Maronite’s in particular develop the  internal  courage to face reality and accept that Lebanon is no longer a Presidential democracy  and that there is nothing wrong with that.  Actually Lebanon will be in good company, if it can only admit that its President is meant to perform essentially ceremonial functions. That is exactly what the Presidents of Italy, Switzerland, Ireland, Germany and Israel do. They accept the diplomatic credentials from ambassadors, , act as ambassadors of good will and are a symbol of the state, a moral symbol with no power.

Once the Presidential powers are viewed accurately then it becomes clear that there is no need to wage acrimonious campaigns based around issues that are not based in reality and that are not constitutional. Of course the politicians are not speaking the truth to the Lebanese public when they keep the charade that the office of the Presidency in Lebanon can still influence policy in a major way. But even if some might chose to excuse politicians for this major gaffe there is nothing, absolutely nothing, that can  excuse the press for its failure to discuss this idea and to enlighten the public about the truth. The press has a moral obligation to inform and it has not.

Decision making, in all fields, are not expected to be efficient and rational unless they are undertaken in an environment of as perfect of knowledge as possible. In this case the matter is not that difficult to decipher. The Lebanese President has no say in naming either the Prime Minister or any of the cabinet members; he does not have the power or the right to vote during any of the ministerial debates although he can chair such meetings. The Lebanese constitution does not give the Presidency any executive powers whatsoever neither does it allow the president to act in any capacity with the legislature. Under such circumstances should rational people have major disagreements on who is to be elected to fill such a highly visible but purely symbolic position? 

Samir Geagea, General Michel Aoun, Bkirki and all the other Lebanese politicians must put an end to this misinterpretation of what the constitutional presidential powers are. It is time that every Lebanese should read the constitution to learn the truth and put an end to this corrosive and unproductive ritual of pretending that Lebanon does not have a parliamentarian system that dictates a ceremonial role for the presidency. Maybe we should learn to speak the truth so that it can set us free.

Saturday, March 15, 2014

The Lebanese Cabinet Must Stop Reinventing the Wheel

Many things in life are taken for granted and need not be expressly mentioned and redefined at every turn. Freedom, liberty, self determination and by extension the right to be free i.e. to resist occupation, injustice, exploitation and dictatorship are among these concepts. These ideas are intrinsic, natural and inalienable. They cannot be taken away.

Unfortunately there is a propensity in Lebanese politics to assume that whenever two parties have a different way of interpreting an idea then the solution is to be “creative” by coming up with a statement that expresses allegiance and support to both interpretations that are exact opposites. This is what I shall call the tendency to seek a solution through a superficial application of the formula of “No winners, No losers.”   But it should be obvious that such a formulation is pure sophistry. It alleges that both parties are right and that no compromise is necessary despite the fact that each idea is the negation of its counterpart.

A popular and basic idea in economics is attributed to an Italian by the name of Pareto. Pareto Optimality is roughly defined as that allocation when the only way to give Pete is to take away from Paul. If it so happens that the welfare of Ali may be improved without impinging on that of Mustafa then we should definitely do so but once we are at the stage where improving the welfare of one implies taking away from the other then we run into the problem of winners and losers. In that case an action is justified once the gains of one side more than compensate for the loses of the other. But, and that is important, the solution is not predicated on a pretence that there are no winners and no losers.

The right to resist is an idea that has strong support all across the globe and across all institutions of governance. Whether it is the idea of democracy, freedom of the individual, de-colonization, Universal Declaration of Human Rights or International Law just to name a few major international venues, these seminal ideas favour the right to resist. But then one might ask who is this right given to?  Well, that is an easy question since governments in a democracy derives its power to rule from the people who have elected it to rule on their behalf. There ought to be no subsidiarity between the state and its citizens as both are but one. The state derives its power and legitimacy from the people who agree to let it rule on their behalf. That is especially true when it comes to the monopoly of violence and the right to make war and peace. Unless such prerogatives are monopolized by the state then chaos would be the outcome and vigilantism would become dominant. That kind of a society would be an invitation to an n arrangement where no uniform laws are applied to the populace. It would be nothing but an arrangement based on exceptionalism and favouritism derived from the ability of each group to deny the power of the state and replace that by its own illegal militias. That comes very close to a Hobbesian rule of the jungle.

So what can we infer from the above?  A cabinet is not chosen every once in a while to redefine the essential rights and principles on which the state is built. The rights of citizens, international obligations and the right to declare war and peace are already spelled out defined and adopted. It would be counterproductive to attempt to revisit and redefine such principles as if each group is entitled to its own laws and interpretations. In that case there would be no rationale for a government. The power of the state cannot be qualified in such a way as to incorporate challenges to its power. Resistance belongs to the state that is an expression of the people. If and when the state is no longer deemed to be a representative of the wishes of its constituents then the citizens would vote it out of office .The right to resist belongs to all, it is universal and cannot be appropriated by any group at the expense of others. There is no exclusivity in resistance and thus the matter ought to be assumed to be true at all times. There is no benefit from treating this seminal right as an exclusionary one and above all there is nothing to be gained by pretending that a problem does not exist since the patient has been given a palliative. Honesty and courage demand that we stop playing superficial games that do not treat the root ailment. We have the obligation to note that a position and its negation cannot coexist within the same healthy body. We either have a state or we do not.

Friday, February 28, 2014

Hezbollah Is Not "Resistance"

Every once in a while there is an attempt to confute what is otherwise clear. That usually occurs when an entity is not well served if the clear and unobstructed understanding of an idea or concept is to prevail. This is when it becomes essential to manipulate the truth and spin the facts in an effort to obstruct clarity and replace it by an intentionally false interpretation of reality that is masquerading as the truth. This type of obfuscation has been the primary rationale behind the self serving use of the term resistance by Hezbollah and its allies.

The unfortunate thing is that they appear to have succeeded in their effort to such an extent that very few if any, bother to call them on their misuse and even abuse of the term resistance. It is ironic that no one in the Lebanese political structure has found it important to set the record straight and to challenge Hezbollah on its misuse of the term that it seems to have monopolized.

 The right to oppose any power be it a domestic leader or an invader can be traced over 2000 years. Historians speak of the Chinese who have initially solidified the right of people to rebel against their rulers when such rulers lose legitimacy and rule unjustly. This same right can also be seen in Islamic jurisprudence where it is said that “there is no obedience in sin”. The right to resist and wage revolution was also articulated clearly by Thomas Aquinas and later on by both the American and the French revolution about 250 years ago. If this is not enough then we must never forget the teaching of Thoreau about the right to use civil disobedience that was later adopted and applied successfully by Gandhi in India and Nelson Mandela in South Africa.

It is no secret that the right to self determination and the right to resist abuse, injustice and exploitation have been recognized as an inalienable right. Yes resistance is important and it is intrinsic. What it is not is the attempt to monopolize it by abrogating it to a subgroup of people who are intent on using pure raw military power to disenfranchise and even subjugate others. The right to resist, to dissent, to rebel and disobey belongs to all people, it is the most universal of ideas. It does not belong to one race, one religion, one subgroup or what is worse to one political party. Resistance as an idea is as close to sacred as one can get and any attempt to transform it to a provincial concept must be viewed as nothing short of sacrilege.

The Lebanese political system, an almost perfectly dysfunctional one to start with because of its sectarian base and political feudalism has been rendered perfectly dysfunctional by the Hezbollah PR machine that seems to have convinced practically everyone that the term “resistance” has only one meaning and that is to describe every kind of activity by the political party Hezbollah whether in the political, social, economic or even the military field. That is obviously totally flawed use of the term.

The cost of such a misuse of the term is great. One could easily suggest that the deep divisions in the current Lebanese body politic are directly attributable to this confusion. Those who are strongly opposed to the phrase “people, resistance, army” do so NOT because they do not believe in their right and in the right of all people all over the world to resist but because they do not believe for a second, and they are right to have such a belief, that resistance is not to be treated as a pure monopoly that belongs to a small group and that the group in question insists that it is entitled to be treated as a special entity that is above the law and that it can and does use its military privilege to dictate to the state. They demand support from everyone and are obligated to no one.  Once the concept of resistance is no longer used as if it is the private property of a sub group of society then I assure you that there would be no need to disagree about the meaning of a phrase whose meaning can be deduced from the Universal Declaration of Human Rights. Resistance belongs to all and is as intrinsic as any right can be. It is not the property of Hezbollah despite all its sacrifices in fighting the Israeli occupation forces.  The concept is what justifies the acts and not the reverse. Exclusivity in resistance is a contradiction , it is in its universality that resistance attains its sacredness.

Saturday, February 15, 2014

New Lebanese Cabinet: Born Dysfunctional

A very popular saying by Einstein is specially made to describe the new Lebanese cabinet. He has reportedly said that “only irrational people will undertake the same experiment over and over again and yet expect different results”. It took over 10 months to reshuffle the same deck of cards of a weak hand to start with and to give birth to a new hand made up of the same cards but in a different order, an insignificant change. If the first dealt hand was considered weak then why would reshuffling the order make it strong?

A related feature that needs to be highlighted is the feeling that each of these politicians is a “Superman”; joined this time by a “wonder woman” . Is there any portfolio that Gibran Basil is not eminently qualified for? We are told that this civil engineer was a perfect fit for Energy and that he did a great job at Telecommunication. But since background and experience do not matter in Lebanon, we are told to rest assured that he would be our best Foreign Minister yet. Some have suggested that he was offered the Education portfolio also because of his unbelievably strong background in that field. He is very well read and understands all the trends in what it takes to have a successful academic outcome for the new generation of Lebanese. That is what “Supermen” are made for.

Fortunately for us, the Lebanese citizens, Gibran Basil is not the only Lebanese politician with that great and unique capacity to excel at any and all government portfolios. Wael Abu Faour, the young PSP politician is equally blessed, maybe even more so than Mr. Basil. He has already served as a Minister of State and handled the Social affairs Portfolio. Obviously that is a perfect background for the Health Ministry which he is to fill in the new cabinet. He is willing to undertake the responsibility of straightening the governmental mess at any cabinet that Mr. Jumblat asks him to take. Mr. Faour is such an obedient and loyal disciple that he will be more than glad to accept any position as long as Walid Bey asks him to do so. What is more important to the country? Is it qualifications for a post or is it the blessings of a scion of one of the oldest Lebanese feudal landlords masquerading as a modern day socialist?

Then there is the Shia duo of Fneish and Al Khalil. Each is so sure of his expertise in all fields that they would never hesitate to take on the challenge of a new position especially if that coincides with the narrow interests of the Speaker and Sayed Hasan Nasrallah. Devoted and patriotic cadres must always be willing to execute any and all demands of their party leadership. Mr. Fneish conquered all the intricacies of the Energy portfolio before he accepted the challenge of Labour and two different stints as a State Minister.

And what can one say about Mr. Harb, the perennial presidential candidate and the independent Maronite who will again be willing to march to any length provided his name will stay in the limelight. This multitalented lawyer has served as a Public transportation minister, an Education minister as well as a Labour minister prior to his new role as the chief technologist in the Telecommunication ministry.
 We must not forget also the willingness of the Kataeb to always offer party support to any cabinet that will offer them any two portfolios. The Kataeb , just like the FPM, PSP, Amal and Hezbollah have their own “supermen” that can perform marvelously at any position.

And last but not least the Lebanese are blessed to have Al Mustaqbal a party headed by a citizen who does not dare visit the country and whose favourite means of communication is a daily Tweet probably worded by his handlers. One day the Mustaqbal is not willing to join Hezbollah in a cabinet, the next day they will do so if they get the Cabinet of Interior Affairs to one of their favourite sons who is a master at sectarianism, Mr. Rifi. But once a party is essentially leaderless and unprincipled then it is not too difficult to get them to change their mind again. Obviously they accept to move Mr. Rifi to the Justice ministry and rationalize their constant changes in positions and ultimatums by using the thin logic that they will always sacrifice for the sake of peace and tranquility. Only the weak keep on sacrificing.

What is obvious after this charade is that this country has been ruled for a long time by whatever Hezbollah wants. Make no mistake about it. Hezbollah is the clear cut winner in this unproductive game that has become the hallmark of Lebanese politics, a game of incompetence and lack of political maturity. Hezbollah forced the Hariri government to fall, and then they got the Miqati government to replace it. They managed to postpone the Parliamentary elections, to help the Syrian regime although they were part of a government that declared to the world its neutrality in Syria. That is when it became advantageous for them not to have a cabinet except in a care taker capacity and thus they forced Miqati to resign. They have been preventing the formation of an effective cabinet for over 10 months by playing the role of the master puppeteer. FPM under general Aoun was, as always, more than willing to enforce the wishes of Hezbollah to a t. But eventually the level of dissatisfaction by all this dysfunctionality increased to a crescendo and so Hezbollah again comes to the rescue. They force the Al Mustaqbal to go back on many of their demands, ask Aoun to stop his obfuscation and get Tamam Salam to escape the label of having failed to form a cabinet after the longest gestation period in the history of the country. Mr. Salam has not done himself or the nation any favours. He should have formed a small cabinet of qualified technocrats 10 months ago and forced the politicians to take a stand.

Economists and psychologists tell us that Homo sapiens are risk averse by nature. I am willing to take the opposite position. I will be a Giraffe; put my neck out; by saying from the start that this cabinet will not be any different or more effective than any of the last 4-5 ones. Pity the Lebanese.  

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