The profitability of organized chaos

Is Lebanon manageable? One can argue that Lebanon can only be mismanaged and can only operate in a state of lawlessness. Forty-four small pubs and clubs in the Monot area were recently fined and three were closed because they are not appropriately licensed. But if we apply for licenses, they say, we will not be able to operate.

Banks are making money; on the average, they bring in $240 million in annual profits, mainly due to treasury bills. Banks should be lending to the private sector, not the government. But if we are to do that, they say, we will not be able to make any profit.

Cement factories are protected with a 75% customs duty. Their selling price per ton is much higher than the international market. But if this fee is cancelled, they say, we will not be able to make any profit.

Beach resort owners infringing on seaside properties and selling one square meter at an average of $1,000 continue to block the passage of a law in parliament regulating the sector. If you pass this law, they say, we will not be able to make a living.

A handful of companies monopolize the import of fuel into the country and continue to operate in defiance of a law prohibiting that. But if you implement this law, they say, we will not be able to make any profit.

In addition, 30% of households, companies and commercial units do not pay their electricity bills. But if we do, they argue, we will not be able to make ends meet.

Quarry operators with licenses to operate use illegal methods of quarrying. With present codes, they argue, we cannot survive.

Politicians who violate the law declare: We are obliged to in order to win votes, while citizens who break the law say : We cannot survive if we don’t.

Breaking the law makes money, applying the law makes a country. The Lebanese have apparently made their choice - organized chaos is the synthesis.

Jawad Adra
Managing Partner

  Current Statistics

Oil imports

• $1,250 million was the cost of oil derivatives imported by Lebanon in 2002, up $250 million from the previous year. Imports for 2002 reached 4,823 million tons.

Municipalities

• LL 200 billion was the revenue of the independent municipality treasuries in 2001, out of which LL 171 billion was disbursed to the Beirut municipality.

Interest on loans

• LL 47 billion was paid by the Lebanese government in 2002 toward the interest on development loans in the areas of agriculture, tourism, industry, artisana and technology.

Real estate

• LL 1,072 million was the cost of a plot of real estate in Chiah (Lot No.7313) that was purchased by the Lebanese government for allocation to the Kuwaiti Embassy.

Financial operations

• 31 is the number of registered financial institutions in Lebanon as of 2003; five is the number of brokerage firms; 293 are the foreign exchange operators in the country.