Q: Regarding the Middle East region, with the U.S. being the only superpower today, and with Iraq looking increasingly like a military target, what do you think of the role the Arab states have played so far, and how should they respond?

A: There has been consensus among the Arab states against a strike and this was epitomized in the last session of the Arab League by a unanimous vote against striking Iraq. Much will depend on what Saddam Hussein will decide on questions related to compliance with United Nations resolutions.

There is very little that the Arabs can do, except express a position against striking Iraq, and this is actually weakening because of positions expressed by certain countries like Qatar, whose foreign minister stated that in case the U.S. would like to use Qatari territory for launching attacks against Iraq, they would consider it favorably. Also, the position voiced by Prince Saud Al Faisal, the foreign minister of Saudi Arabia, was that Saudi Arabia would go along if a resolution is taken by the Security Council. The Arab position is not unified in that respect, and is weakening with time.

I believe that the Arab states should be against any military action against Iraq, in principle, and there should be no deviation from that position. The risks involved in such a strike are enormous. There is fear that a war against Iraq might lead to a break-up of the country into mini-states, in which case there would be a fall-out that many Arab countries would feel.

As the Arab world is replete with minorities, the break-up of Iraq might instigate minorities in various parts of the Arab world. The slogan under which the U.S. is waging war includes democratization of Iraq, but we all know that no Arab country has an effective system of democracy, so under that pretext, any other Arab country might be hit later on.

Q: Do you see the recent resignation of the Palestinian government as a positive change in terms of the future of the Palestinian question?

A: It seems to me that this is irrelevant to what’s going on in the Palestinian scene. I don’t see how this will help the Intifada, and the Intifada is the central question in Palestine these days. This may help to placate the Americans, who are asking for democratization of the system in Palestine, although this demand is very unfair, in the sense that there can be no democracy without freedom and there can be no freedom as long as there is occupation.

How can you have democracy without freedom? I think that the Americans are saying what they are saying under the spell of Israeli policy in order to prolong the war against Palestinians as long as possible, in order to get more concessions and give Israel a chance to impose its own solution to the Palestinian question.

Q: You had a plan for financial reform to stop the increase in the debt and start to deal with the chronic budget deficit. If your government had remained in power for 5 years, do you think you would have been successful in carrying out your plan, or would the political system have prevented you from doing so?

A: At the time of our cabinet, which I presided over, we drafted a program for fiscal adjustment that was a 5-year plan, beginning in the middle of 1999. The objective was to decrease the ratio of public debt to GDP from 120% to less than 96% in five years’ time, and to decrease the ratio of the deficit to GDP from 20% to less than 5%.

The first year of the plan was not a successful one, as it was the year of liberation. The South of Lebanon was liberated in the middle of the year 2000 and the plan started in the middle of 1999. The scene was fraught with acts of Israeli aggression, almost daily. It was marked by three major air raids against Lebanese installations: One in June 1999, the second in February 2000 and the third in May 2000. This caused a lot of destruction in Lebanon and of course our hope that there would be investment activity promoted was not realized. Then the 2000 elections followed. But the plan was to reduce the public debt to 96% of the GDP, which would make it manageable. If we were successful in meeting that goal, the growth of the Lebanese economy would then be instrumental in diminishing the public debt burden in relation to the GDP.

I didn’t have the chance to test the political system, but measures that the present government is adopting were envisaged by our plan, including the VAT and privatization. Actually, the law regulating the process of privatization was enacted by parliament during our time. We also held a donor meeting in Lebanon that was attended by about 40 countries, but the major donors of the world insisted that the first meeting should be at the level of the ambassadors, in order to feel our way into the next meeting, which would be a decisive one. The meeting was attended by the ambassadors of some 40 nations and about ten international institutions. Although we were promised a second meeting that would be held in the fall of 2000, in which assistance would be decided, we did not stay in government long enough to see it.

Q: In terms of the budget, we are now hearing that the budget deficit will be something like 25% of budget expenditures. Do you think that will be attained, if approved by the House of Representatives, and do you believe the budget encompasses all the figures?

A: There are certain maturities the government has not taken into consideration in preparing the budget, which in my estimates add up to over $1 billion. Amounts due to the National Social Security Fund, municipalities, contractors who have implemented projects for the government, private hospitals who have accepted patients on behalf of the government, and property owners whose property was confiscated are substantial figures not taken into consideration, which amount to over $1 billion. So, the deficit will be a lot higher and I don’t see how the government will evade these maturities. They have to pay them.

When I took office, I found some LL 1,200 billion of maturities that were unaccounted for. We went to parliament and obtained authority to issue a special bond to pay those maturities. The government can now do the same to settle these accounts. But it would increase the deficit anyway and the deficit is not 25%, it should be much more.

It is debatable whether drastic reductions in the expenditures of various ministries will be honored - it is doubtful that they will be honored so there may be excesses that would increase the deficit. The budgeted figure for debt servicing might be too ambitious, not to say unrealistic. For 2002, the budgeted figure for debt servicing was LL 4,500 billion. In 2003, when debt will have increased, the budgeted figure for debt servicing is LL 4,000 billion. So it is doubtful whether this target will be met.

Q: When you served as Prime Minister, you did not agree with the electoral law that was passed under your government. Recently, the Interior Minister declared that there is a new electoral law in the works. What are the bases of the new law that you would advance or oppose?

A: The law enacted in our time was a very bad one and I recognized that and objected to it in the Council of Ministers and voted against it. I was against the kind of district formulation that the law spelled out, and explicitly against the division of Beirut into three electoral districts.

The basis of a new law is a matter that should be debated and there are many alternatives under consideration. There was a project promoted by the National Action Forum, which I preside over and which has major contours, including the election of a limited number of deputies on the basis of Lebanon as one electoral district, and the rest on the basis of smaller electoral districts. Under this project, 28 deputies would initially be elected on the basis of Lebanon as a single district (on the basis of proportional representation) and 100 elected on the basis of smaller districts. This would set an example of the kind of image we want to reach in the future. Those elected on the basis of Lebanon as a single district will transcend sectarian considerations and would act nationally, rather than according to narrow considerations, and would set a model for the rest of the parliament.

Later, as we gradually overcome the issue of sectarianism, we hope that the number of those elected on the basis of Lebanon as a single district will increase and the rest will decrease. Eventually, the whole parliament should be elected on the basis of Lebanon as a single district. But we know that it’s not practical now, given sectarian considerations. So, we thought we would start with a limited number and achieve it gradually.

Q: In a recent poll conducted by Information International, people were able to identify leaders on a confessional level, but no major recognition of leaders on the national level was detected. What are your thoughts on that and what do you think are the reasons for these inclinations ?

A: Sectarianism is very unfortunate but it is a fact of life in Lebanon. Politicians are not helping with the tendency in the recent past to form sectarian blocs and groupings, which further exacerbate the question of sectarianism in the country. We are at our worst, as far as confessionalism is concerned. I’m not exaggerating when I say that we are worse off now on the question of sectarianism than we were during the war. People tend to identify with their sectarian communities and politicians are not helping.

Q: Less than 3% of people polled said that their economic situation is comfortable. The remaining percentage varied between Very Bad and Uncomfortable, indicating a gap between the rich and poor in Lebanon. How can this be addressed?

A: There are no easy solutions to this problem and it must be done over time, with medium and long-term planning, but let’s say medium-term planning for now. It can be done by promoting the growth of the economy, which would benefit all classes, especially the middle and lower classes. There must be a reconsideration of tax policy. The one that is now in effect, to some extent favors the rich, as does the 2003 draft budget. It favors the rich and penalizes the middle and poorer classes. Our tax policy is tilted. Income tax is not very progressive and the major sources of revenue for the rich are not usually taxed, such as interest on deposits and securities.

Q: In another poll, 30% of respondents who believe that opposition exists in Lebanon think it is constructive, while roughly 70% believe that opposition is personal, confessional or negative. What do you think of those figures?

A: It is a reflection of the fact that there is no real democracy in Lebanon. As I have said before repeatedly, there is plenty of freedom, but very little democracy. Democracy is identifiable with equal opportunity and there is very little of that in Lebanon. The final say goes to sectarianism, tribalism and nepotism. There is very little left for equal opportunity.

The second point is that democracy is identifiable with accountability and there is also very little of that here. Almost anyone can get away with anything in this country, without much accountability.

The third point is that democracy acts as a safety valve, which would preclude the eruption of national crises of the kind we have had, particularly that which broke out in 1975.

MPs met in Taif under Arab auspices to draft the formula for ending strife, but only in July 1989 – 14 years after the eruption of the crisis. In a real democracy, one would expect our parliament to meet in Beirut, in its own quarters and on call by its Speaker, rather than under Arab auspices, to pre-empt the crisis with a formula similar to the one drafted in Taif, but before the havoc, not after.

This is evidence that we don’t have real opposition and it is because we don’t have real democracy. Opposition here is usually molded on personal or sectarian interests, or narrow political interests.