La contrebande prospère
à la frontière libano-syrienne

http://www.lefigaro.fr/international/2008/10/25/01003-20081025ARTFIG00515-la-contrebande-prospere-a-la-frontiere-libano-syrienne-.php

Fuel, drogue, cigarettes, mais surtout des armes anti-israéliennes destinées au Hezbollah : le contrôle de la démarcationentre les deux voisinsest l’un des principaux contentieux entre Beyrouth et Damas, qui viennent d’établir des relations diplomatiques.

BIENVENUE à Heloua, paradis de la contrebande et de la guérilla, à cheval sur le Liban et la Syrie. Pour y accéder, il faut serpenter entre des positions abandonnées par les rebelles kurdes et palestiniens, puis déjouer l’ultime surveillance de deux soldats libanais en faction à un barrage sur une route de montagne défoncée. Ce village du bout du monde se limite à une dizaine de maisons, et une poignée de campements du Fatah Intifada, un groupuscule palestinien prosyrien, qui tient des fortins alentours. Nous sommes toujours au Liban, mais il y a bien longtemps que l’armée de Beyrouth n’accède plus à cette enclave syrienne, théoriquement interdite à la presse.

« Rien ne se passe ici », jure un gardien d’une villa, désertée par ses propriétaires. En contrebas, on aperçoit pourtant un camion suspect venant de Syrie, qui fait route vers un poste du Fatah Intifada (voir photo). Que transporte-t-il ? Des armes ? Du fuel ? Des jihadistes ? Fin 2006, c’est par Heloua que les militants salafistes du Fatah al-islam se sont infiltrés au Liban, avant d’aller semer le trouble au nord, à Nar el-Bared. « Ici, les Palestiniens ont l’habitude de recevoir de l’armement léger de Syrie, qui est ensuite redistribué dans d’autres camps de réfugiés du Liban », assure un expert militaire occidental.

« Depuis cinquante ans, la frontière entre le Liban et la Syrie est une passoire », regrette un diplomate à Beyrouth. Dix-sept secteurs ne sont toujours pas délimités autour de ses 320 kilomètres, qui courent au fond de vallées ou le long de rivières aux abords touffus. Ce délicat bornage entre deux pays à l’histoire et à la géographie si étroitement im­briquées sera l’un des principaux chantiers des relations di­plomatiques établies cet été entre Beyrouth et Damas.

Gardes frontière soudoyés

Nous voici maintenant plus au nord au poste de Kaa, un village chrétien dans la plaine de la Békaa, point de passage de clandestins irakiens, mais surtout des armes du Hezbollah, pendant la guerre de l’été 2006 face à Israël. Même facilité à tromper la vigilance des gardes libanais grâce à une connaissance locale, qui nous conduit au-delà du poste, où des tentes abritent une population douteuse de travailleurs syriens et de gitans. Mais attention, nous ne sommes pas en Syrie. La frontière est encore à 11 kilomètres. Les 3 000 habitants de cette zone grise se livrent, sans crainte, à leurs trafics en tout genre. Cigarettes acheminées à dos de mulets à travers l’Anti-Liban. Ciment pour l’Irak. Pièces détachées de voitures volées. Drogue. Vêtements. Couches-culottes. Et surtout, à l’approche de l’hiver, le fioul syrien meilleur marché, qui arrive clandestinement. Par camions, la nuit, en franchissant la rivière asséchée du Wadi Khaled. Ou au moyen d’un tuyau qui charge le fuel dans un véhicule en attente sur l’autre berge. Avant de terminer, côté libanais, dans des cuves souterraines, dont les robinets affleurent, au nez et à la barbe des gardes frontière syriens, qui n’ignorent rien de tout cela. Et pour cause !

Couverts par des responsables politiques, les cartels de trafiquants arrosent les soldats libanais ou syriens, trop heureux d’arrondir ainsi leurs modestes soldes. « Des villages entiers vivent grâce au trafic, ajoute le diplomate, on a parfois affaire à du grand banditisme. Nous avons raison de mettre l’accent sur le contrôle de cette frontière, comme le réclame la résolution 1701 de l’ONU, votée après la guerre de 2006, mais il ne faut pas se faire trop d’illusions », poursuit-il. Le partage de la manne se règle, parfois, à la kalachnikov. « À Damas, mon jardinier, qui avait disparu depuis deux mois, est réapparu un matin le crâne rasé, à sa sortie de prison », se souvient un ancien résident dans la capitale syrienne. La journée, l’un de ses fils travaillait à la douane, la nuit, il chapardait pour le compte de son père ! Ces dernières semaines, la menace s’est aggravée. Un officier syrien de haut rang a été tué lors d’affrontements avec un clan de contrebandiers syriens, tandis que, de l’autre côté de la frontière, un soldat libanais trouvait la mort, dans l’attaque de son poste par des trafiquants. Damas a réagi en supprimant les subventions sur le fioul, désormais au même prix que chez son voisin. « Plus rien ne passe », se plaint Nasredine, d’al-Qasr, un village libanais à l’intérieur d’une crique en territoire syrien. Théoriquement, seuls les écoliers du hameau peuvent encore franchir le point de passage illégal, que Damas vient de fermer. Pendant notre séjour, nous apercevrons, pourtant, plusieurs motos, lestées de bombonnes de gaz, achetées en Syrie. Et au-delà des produits de première nécessité, il y a, bien sûr, les armes du Hezbollah, qui continueraient de parvenir au pays du Cèdre. Par les postes frontières officiels ? Par le vieux canal Zénobi, près de Kaa ? Voire par l’aéroport de Beyrouth, sous contrôle Hezbollah ? Nul ne sait. Mais discrètement, des officiers libanais continuent de se plaindre qu’ils doivent « baisser la garde » devant les camions du Hezbollah, quand ils entrent au Liban…

http://www.atimes.com/atimes/Middle_East/JJ25Ak02.html

http://www.atimes.com/atimes/Middle_East/JJ24Ak01.html

http://www.atimes.com/atimes/South_Asia/JJ24Df03.html

http://www.atimes.com/atimes/China/JJ24Ad01.html

http://news.bbc.co.uk/2/hi/asia-pacific/7690730.stm

http://www.mcclatchydc.com/homepage/story/54757.html

Contributors to SC asked me what I think will happen.

My analysis usually takes the larger picture and in most cases I do not confine myself to the particulars of Syria and Lebanon

Here are my comments and observations of how I see things moving

1. In the ME the center of gravity has shifted in the 90’s to the Gulf. The alliance between the US and Israel did not prevent the US from becoming directly engaged in establishing a significant foot print in the area and in using massive force to restore the divisions of the Arab world. Likewise, the center of financial and tourism has moved away from Lebanon to the UAE. It is still fragile but in principle this is on the whole true. Lebanon will slowly and surely integrate more with Syria as the Syrian regime modernizes and Lebanon remains dependent on Syria.
2. In this context, the role of Israel is a little less secure and the debacle in Iraq although initially it was thought would strengthen Israel resulted in an actual weakening of its position. The route of movement of goods and people and weapons and collaboration and economic activity is now open from Teheran, Qom, Najaf, Baghdad, Damascus, Baalabek, Beirut Dahyie, and even Nabatyieh.
3. The idea that the US will remain in the region is a fantasy and there is already a whole chorus of events and academic talks that will soon translate into media preparation for the next President of the US to establish full relations above the table and under the table with Iran. The US is hoping that the Iranian Presidential Elections will give them an opening to talk and not to have the current Ahmadinejad the stumbling block.
4. The idea of having a twin presence to control it in the region has also been rendered obsolete by the Israeli defeat in 06. This would have established the US in the Gulf and Israel in the Mediterranean as the twin pillars of support for the current regimes and divisions and for control of the oil and its routes. Oil control is not only to hold China and India but also to always threaten Russia with ruin by bringing prices down. This is now a failure.
5. The efforts by Europe and Israel to pry Syria out of the Iranian orbit are an attempt to limit the damage that the US policy has wrought on them. The pressure applied to Syria with regard to Lebanon follows the same effort to continue to maintain the divisions of the Arab world into non-entities. Syria acquiesced but I am not sure of what was the price that they got. The only tangible result is that regime change is completely off for now
6. In the world the center of gravity has shifted to the Pacific. The very fact that the Europeans have met in Bejing this WE to resolve the financial crisis after Sarkozy’s failure to get the US to lead in this effort is telling. Nothing came out of this meeting and nothing will as the US is the culprit in this. It can only print money and it can afford to do this because of the dollar as a reserve currency. How long this is going to last is very hard to tell with my limited knowledge in this area. It is China and Japan with over three trillions of surpluses that Europe is looking for. In essence they went begging; one century after having been the masters of that part of the world.
7. What emerged from the current financial debacle is that the EU has built the structures to banish war from the continent and to create a common European market but the EU does not have the structure that will permit the members of the union to confront the world globally. This is true in the structure of the European Central Bank and in the Maastricht treaty that continues to rely on the nation-state as the primary actor. Likewise the European foreign policy is also reflective of this lack of community wide approach that is unified. In dealing with a few chronic hot spots they may be effective but they were totally useless in preventing the Iraq war or in even preventing the US from creating the coalition of the willing or to come to the rescue of Georgia.
This is what I think will happen
1. A rehabilitation of the US Iranian relations with Iran now being the major power in the region and a source of stability
2. An attempt by Israel to sign a separate deal with Syria so that when the world will demand an end to this conflict they will be alone to deal with a much weaker Palestinian partner
3. A semi rapid dissolution of the current Arab regimes due to internal decay and endemic corruption to be replaced by non-state actors and/or ever more uncontrollable security forces.
4. Mass migration to Europe that will require a European Marshall plan for the Southern part of the Mediterranean if they are to preserve their identity
5. Continued strife and conflict in Africa as it is plundered to oblivion with the Congo being a model for Southern Sudan Darfur and Nigeria.

Observer,

May I remind you, that you earlier this year predicted an attack on Iran taking place last August!

Observer,

It seems your first prediction is already coming into shape… http://www.haaretz.com/hasen/spages/1031246.html

Shai,
I am going to put the article for the people in Syria, they do not get Haaretz, i hope you do not mind ,

w w w . h a a r e t z . c o m

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Last update – 19:20 25/10/2008
Report: Bush to declare renewal of ties with Iran
By Yossi Melman, Haaretz Correspondent

Several American media outlets reported on Saturday that President George Bush is likely to announce after next month’s presidential elections that he intends to restore the diplomatic relations with Iran, almost 30 years after they were suspended.

Quoting U.S. civil servants, the reports said that Bush’s decision to postpone the announcement until after the elections was meant to rid the two presidential candidates of having to deal with the controversial move.

In the first stage, the American administration allegedly seeks to appoint a low-level diplomatic delegation, and has already started the recruitment process.

Tehran has already been informed of the initiative, but its view on the matter remains unclear. Similar reports were published a few months ago, but the plan was then put on hold.

Earlier this month, the American Iranian Council, a U.S.-based organization, was banned from operating in Iran. However, Iranian President Mahmoud Ahmadinejad said during a U.S. tour last month that he would consider restoring his country’s relations with the U.S.

Iranian Foreign Minister Manouchehr Mottaki has said Tehran would favorably consider such proposal, as long as it was to be carried out bilaterally.

U.S. sources said the purpose of the diplomatic effort is to better communicate American messages to the Iranian people, which are largely hostile to the U.S. They said that it does not signal a conciliatory approach to the Iranian regime or any change of policy vis-à-vis the contentious issues that are on the table, namely Iran’s nuclear program.

The United States severed its diplomatic ties with Iran in 1979, in the wake of the Islamic revolution that ousted the Shah and brought Ayatollah Khomeini to power. A group of Iranian students, supported by the Islamists, took over the American embassy and held its workers hostage for over a year.

Related articles:

ANALYSIS / Are U.S.-Iran ties undergoing significant change?

Senate urges Bush to declare Iranian force a terrorist group

U.S. drops plan to set up diplomatic outpost in Iran

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Observer,

I agree with you , The power is shifting to Syria and Iran as stabilizing force that can be counted on, The EU and the US are moving in that direction.

Dear Observer,

Since we are making predictions about the future, please allow me to offer you mine:

I believe that the global economy is on the verge of entering sustained deflationary pressures that is likely to be highly destructive to the modern world economic order.

Deflation is defined as a general decline in prices. While the above definition does not appear too threatening to worry about, “general” price declines means that the global broad indexes of prices will generally register ongoing declines deep into negative territory.

What is the basis of my prediction?

In my opinion, the world economy is already in the midst of a collapse of aggregate demand that will lead to a global recession, rising unemployment, continued financial stress and falling prices. The fall in asset prices will pick up pace and produce a self-fulfilling cycle of further drop in demand, profits and prices in what is known as a negative loop.

The global economy will repeat the recent experience of Japan only on a much grander scale. If Japan witnessed a lost decade, the world economy is likely to witness something even worse. Years of leverage that has driven the recent boom will end up becoming the seed of wealth destruction.

Dealing with deflation is much harder than dealing with than inflation. This is because interest rates cannot fall below zero. The U.S. Federal Reserve is of course staring this fact in the eye now. As the world’s dominant Central Bank cuts its official interest rate next week, it will become obvious to all how close the U.S. financial system is to running out of ammunition. As the country closes in on zero interest rates, the financial markets will soon realize that any further weakness in the economy (very likely) will force the Fed to invent unconventional and never-tried-before policy tools to convince global investors that it has the means to deal with the crisis.

While things are likely to look ugly in the U.S., the rest of the world is likely to fare even worse. If I am right on deflation, commodity prices will fall further. Emerging economies (commodity producers) are going to suffer from falling budget deficits and a run on their already weak currencies. What happened to Iceland may start to happen elsewhere. Sovereign risk will become so widespread that country debt defaults will become the norm. This will give global deflation another shot in the arm and result in even more deflation. The negative loop will now be on a global scale.

The general public and even many policy makers do not understand the insidious nature of sustained global deflation and the damage it is likely to inflict. I just hope that I am wrong and that none of us will ever need to find out what it is like to live through deflation and debt deleveraging on a global scale following decades of excess.

Saghir,

Your analysis is frightening, because it makes sense. If this isn’t a time for nations in our region to put aside their differences, and work closely together, I don’t know when is. Our world is interdependent today more than ever. We can no longer do things on our own – we need global, and regional, cooperation.

Saghir,

Thank you for this sobering analysis on this gloomy foggy and cold day 🙂

In your opinion, what unconventional, never-tried before tools will the Fed invent to convince global investors that it has the means to deal with the crisis?

And, out of curiosity, which of the following nations will likely be less severely affected?

Russia
China
India
Canada
Dubai (or UAE)
Syria
Israel
Iran

Norman,

Thank you for putting the entire article. I often forget that the link doesn’t help everyone… What’s the feeling “on the street” in the U.S. – is Obama going to win? I’m always afraid of that Bradley effect; I’ve seen it here in Israel too many times. Last time, polls suggested Livni would win overwhelmingly in the Kadima primaries (over Mofaz) and, as you’ll recall, she just barely won by some 400 votes. You guys have already gone through this once, with George Dubya. I sure hope this will be a landslide. The Republicans need to do some self-introspection over the next few years. There’s a reason why people like Bush, and Cheney, and Ashcroft, got to where they did. And a few Americans should ask themselves why.

Alex,

You asked “In your opinion, what unconventional, never-tried before tools will the Fed invent to convince global investors that it has the means to deal with the crisis?”

Isn’t it obvious? The Fed plans to install Sarah Palin as its new head. There’s a never-tried before tool for you, eh? 🙂 As for your second question, it’s quite obvious here too. Israel will not be affected. Nothing seems to affect us in recent decades… 🙁

LOL … I hope they will invent a sub-zero interest rate or something else, before installing the Sarah Palin tool.

Saghir,

Do you think that we should insist in health care as it is only thing that people can not be without,

Can you explain the strength of the Dollar in spite of the debt and the financial crises in the US , Is that because the EU is worst?.

Shai,

Obama is going to win , I think the US is ready to make the Blacks feel the they belong , electing Obama will do that , One other reason is that electing Obama will make it clear that hard work will get you places and that discrimination does not exist on a wide scale and affirmative action will be directed for the poor , weak and the disadvantaged no matter what color they have ,

I and many in the Republican party will be voting for the Democrats , not because we agree with their goals but because we want to return the Republican party to it’s principles of low taxes ,small government , and that is the only way , get rid of the traitors to our principles and start fresh.

We are tired of old wars for twenty first century enemies we are tired a massive prescription plan which only increased the prices of medicine and put an entitlement on the federal government for years,

Shai, Alex ,

Is there a chance for peace if Olmert has to stay till the election,

The Sunday TimesOctober 26, 2008

Israel’s ruling party calls for election as coalition talks failUzi Mahnaimi in Tel Aviv
Tzipi Livni, the leader of Israel’s ruling Kadima party, last night abandoned talks to form a new coalition government and decided to recommend an early general election.

Livni, who had hoped to become the country’s first woman prime minister in more than three decades, is expected to inform President Shimon Peres of her decision later today.

If a general election is called it is likely to take place next February. According to polls, Livni, 50, would lose to Benjamin Netanyahu, the leader of the right-wing opposition Likud party.

The Kadima leader had hoped that her coalition government could reach a peace agreement with the Palestinians and help to prevent Iran from acquiring nuclear weapons.

Related Links
Livni offers new hope for peace process
The secret life of Tzipi Livni
Attempts to create a coalition failed when Livni was snubbed by the ultra-Orthodox Shas party last week after she refused to give in to its demands.

Her subsequent negotiations with another small religious party, Yahadut Hatorah, also appeared to have collapsed late last night. Livni decided to recommend an early election despite reaching an agreement in principle with the left-wing Meretz party.

However, some observers questioned whether Livni’s decision to ask for an election was a political tactic, aimed at forcing Shas to change its position and join the coalition at the last minute. Talks with Shas foundered on Friday over the party’s huge financial demands and its insistence on a promise to keep Jerusalem entirely under Israeli rule, which would wreck future peace negotiations with the Palestinians.

Shas, whose support is largely drawn from working-class Israelis, was demanding about £166m in increased spending, mainly on child allowances.

Eli Yishai, the party’s leader, hinted that it could still change its mind. The decision was in Kadima’s hands, he said, and “if they don’t meet our demands, we won’t be able to join”.

“Until matters are sewn up, they’re still open,” said Gideon Saar of Likud, which favours an early election. “Tzipi Livni is still trying to tempt all sorts of party fragments and form some sort of clumsy government.”

Last month Livni won the leadership of her party when Ehud Olmert, the outgoing prime minister, stepped down because of corruption allegations. After a month of negotiations, Livni announced a self-imposed deadline of today.

Last week Yossi Beilin, a prominent left-wing MP, called on Livni to “take a brave step” and form a narrowly based coalition government with Labour and small left-wing parties.

Hopes of further talks on a Palestinian deal appear to hang on Livni being able to form a government. Livni has said that she and Ehud Barak, the Labour leader and defence minister, would press ahead with the American-backed peace process. Likud, by contrast, has condemned the government’s peace moves and last week suggested Livni was prepared to sacrifice Jerusalem.

If Peres calls an early election, Olmert, the outgoing prime minister, would remain in office until polling day.

“If Olmert stays in his post, he may strive for an agreement with Syria,” said one insider. In recent months Olmert has sent his advisers to talk to the Syrians. Israeli intelligence reported last week that Damascus was ready for peace talks with Israel.

“Early elections would be the worst possible outcome for the country,” said one Livni aide. “Olmert may try to leave his mark on history at the last possible moment. With the defence situation so uncertain, Israel needs a solid, stable government.”

Dear Alex,

The good news is that in practice the Fed is not actually restricted by the zero bound on interest rates. Since we no longer have a gold standard but rely on paper money, a central bank can conceivably print as many Dollar bills as it wishes. The idea here is you ask the printing press to work overtime till you raise the price of goods and services in dollar equivalent. Under a fiat (paper money) system, therefore, a central bank can literally drop money from a helicopter till it generates higher spending and hence higher inflation.

I understand that what I am saying sounds like fiction to some. But, it is not. In reality rather than actually dropping money from a helicopter, central banks may decide to buy unlimited amounts of securities (pump unlimited amounts of reserves into the system). Another example would be to cap long term interest rates by committing to buy as much as needed in long term securities so that rates do not rise above a predetermined rate. Both solutions are in the end akin to printing money. The idea here is to keep at it till you reverse the deflation psychology.

What worries me is that the world’s central banks may not attach a high probability to my type of prediction. I think that rather than preempting my scenario, most policy makers will wait till it is too late.

Norman,

This brings me to your question of why the Dollar has risen in value. Commodity prices are quoted in Dollars. As commodities fall in price, the Dollar has been going up in value. This is because the deflationary force is stronger than the printing press of the Dollar supply. In other words, the Fed is not easing fast enough to reverse the slide in commodity prices. To reverse this trend, the Fed needs to flood the system even more. U.S. investors sent over $400 billion to international equity funds. As the overseas markets have collapsed, this money was brought back home giving the Dollar a lift as well.

As for the EU, the system is not fully tested under extreme stress. As Observer was alluding to, the EU does not have the equivalent of a region-wide Treasury department that is in charge. Instead, each designs its own solutions. If the stress intensifies much further, it is not impossible for the Maastricht treaty to collapse and for the Euro to break up (not a high probability but certainly not impossible).

Alex,

I forgot to answer your country list question:

Russia = Highly dependent on foreign capital and commodities. It will suffer badly.

China = It has massive excess production industrial capacity. The global slow down in consumption and trade will hit the country very hard.

India = Less exposed than China but will still bear the brunt of a slowdown in international outsourcing and investment.

Canada = As a commodity producer, deflation will hurt its economic prospects. Its currency will reverse the recent massive gains in its value.

Dubai = Highly leveraged. New projects and even existing ones will be hard to finance with bank debt. Cash rich and leverage-free Abu Dhabi may well end up helping Dubai financially.

Syria = No leverage. No foreign debt to speak of. Self-sufficient. Will benefit from lower commodity prices and lower inflation. By far, the least exposed country of the list.

Israel = The high technology sector will be hurt with lower global demand. A cut in foreign aid and money transfers from the west will not help.

Iran = As an oil producer, it will get hurt. Low leverage will help it soften the blow.

Thanks Saghir,

Now … assuming Syria was high leveraged and assuming Syrian state owned industries were mostly privatized by now and Assuming the Syrian economy was reformed at a much faster pace as most were hoping, what would have been Syria’s position today?

Dear Saghir,

Thank you , now can you please tell them to increase Medicare reimbersment to help the economy and save the country , (( That will help me and my employees.))

Dear Alex,

OK , the cation you called for looks very wise now,doesn’t it?.

Robert Fisk’s World: Financial doom and gloom is everywhere – except Lebanon

Beirut’s Blombank has just boasted a record 34 per cent rise in profits

Saturday, 25 October 2008

A monster roars all day – and much of the evening – next to my Beirut home.

My landlord Mustafa sits in his little soft drinks store downstairs with his fingers in his ears. I work in The Independent’s office, windows tight shut, as a slurry of fine powder pours below the frame, coating archives and books, laptop and printer (and Fisk), with a patina of brown, greasy dust. Yes, I have a building site right next door, where diggers roar in an effort to build a spanking new twin-towers apartment complex. All over Beirut, it’s the same, the skyline constantly transformed by housing projects and high-rise office blocks. Yup, that’s right. In Lebanon, in a country whose name is still synonymous with war – and in a world where capitalism is enduring a collapse of biblical proportions – business is booming.

Now readers, I am not – I am absolutely not – advising you to invest in this little statelet, with its sectarian government and mass graves and squalid Palestinian refugee camps. I am not an economist. At school, I failed O-level maths three times and as a result lost an offered place at Liverpool University. But someone needs to explain to me how this little Middle Eastern cabbage patch is bouncing along so happily amid the cyclones ripping through the world’s economy.

Beirut’s Blombank has just boasted a record 34 per cent rise in profits in the first three quarters of this year. The chairman of Audi Saradar Bank, who happens to be minister for the displaced in the Lebanese government, says that Lebanon is expected to record its highest GDP growth in many years. House prices continue to soar. And this in a nation that suffers a $45.5bn public debt. So out came the little leather-covered Fisk notebook this week to garner words of Lebanese wisdom from the men (few women) who know the secrets of the country’s financial miracle. Well, it turns out the Audi bank did lose about $20m with Lehman Brothers but made a hair’s-breadth escape from the Wachovia collapse because the maturity date on its $200m deposit investment fell on 3 October. In all, Lebanon’s 58 banks made about $750m profit this year. And why does this money look so safe? Because three years ago, the Lebanese Central Bank forbade all commercial banks to go into derivatives. Not one Lebanese bank made any investments in US sub-prime mortgages. Commercial banks, in fact, are prohibited from making real estate investments anywhere outside Lebanon.

Lebanon, of course, has no oil – or has it? Back in 1976, when Ghassan Tueni was minister of petroleum, most of the world’s oil conglomerates showed interest to explore parcels of sea-bed off the coast between Batroun and the northern city of Tripoli. But the day Lebanon was to open offices for the bids in Tripoli, fighting broke out there between Syria and the Palestinians, embracing the very area where staff would be working. Then in 1980, Lebanese economist Marwan Iskander suggested to then President Elias Sarkis that the exploration bids should be opened again. Iskander offered a large Cuban cigar when he told me the Sarkis story. For some reason, all Lebanese smoke cigars when they are talking about financial folly.

“When I made my suggestion, Sarkis turned to me and said: ‘Look Marwan, the Lebanese are crazy without oil. If we get oil, they’ll go out of their minds! Anyway, if we did find oil, the Syrians are not going to allow us to export it.'” Today, the Syrians have – politically – returned to Lebanon and the Siniora government is in no hurry to discover oil reserves under the Mediterranean.

But the Lebanese may have a commodity as wealthy as oil: it is the only country in the world that has 35-40 per cent of its population working abroad, and they are sending home about $7.5bn a year. Lebanon has also received $1.3bn of its $7.6bn Paris aid commitments – which will total $7.6bn after Lebanese government reforms. Not to be mentioned, by the way, is the estimated $1bn which the Hizbollah militia receives from Iran each year. So much for America’s ability to “staunch the flow of money to terrorist organisations”.

As for the public debt, no problem. At least $24bn of the $45.4bn is in foreign currency and $21bn in Lebanese currency. But 80 per cent of the foreign debt is held by Lebanese banks or individual Lebanese businessmen who have no interest in taking their own country into bankruptcy; they are quite happy to go on taking their massive interest payments. As for the internal debt, Siniora can print more money if anything goes wrong.

Phew, that’s the first time I’ve ploughed into the profit and loss of this strange country. In the hell-disaster of the Middle East, it’s almost comical to find that Lebanon – politically, a Rolls-Royce without wheels – manages to make ends meet. Should the world learn anything from this? Next time we meet, I told Iskander on Thursday, he can define a “derivative” for me. “No,” he said, “you can explain it to me!”

How do the Lebanese do it? By being optimistic. Surprisingly, few of them know T S Eliot’s dark warning to their ancestors, the Phoenicians. In “Death by Water”, he wrote: “Phlebas the Phoenician, a fortnight dead,/ Forgot the cry of gulls, and the deep sea swell/ And the profit and loss./ A current under sea/Picked his bones in whispers/ …O you who turn to the wheel and look to windward,/Consider Phlebas, who was once handsome and tall as you.”

But who in Beirut cares about Phlebas under the Mediterranean? The day may come when the Lebanese can find, richer, darker treasures beneath his bones.

Norman,

We need to first hear from Saghir what he thinks about that hypothetical situation I described above.

And where is our Mr. Ehsani? .. he used to advocate faster reforms and more aggressive moves towards free market economy.

http://web.mac.com/dwb217/iWeb/WorldViewBender/Blog:%20The%20View%20from%20Syria/0A0F0B2E-E233-4DAE-AB56-3367277DD544_files/Syria-South-Korea.png

Alex,
Look at this graph ,and notice how the South Korean economy was affected by the 1997-98 asian financial crisis and how they recovered.We can say the same about the turkish financial crisis in 2001.
Syria must take this risk if not it will remain a stagnant economy.There is nothing to be proud about,especially if we take into account this factor:
http://www.transparency.org/policy_research/surveys_indices/cpi/2008

Alex,

I am an Ehsani disciple when it comes to economic reform and free markets.

Would Syria have suffered by more than today had she been under a free market system?

Perhaps.

But she would have been much richer than today. Losing 20% or 40% of a big pie would still leave you better off than having lost 5% of an awfully small pie 🙂

Dear Saghir and Alex,

Do you think that now is the ultimate time for Syria to join the world economy at a discount , Syrians investing now will be getting great deals on stocks and in few years Syrians will be much richer.

Dear Appolodorus,

Do you see the difference between Syria and South Korea in access to finance and technology in addition to free access to American markets as a possible reason for the difference in economic growth.

Look at the new law in Syria about the right of the wives,

Wife will get half of the property in case of divorce.

What do you think?.

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Alex, Norman,

Looks like we’re going to elections… http://www.haaretz.com/hasen/spages/1031253.html

Tzipi Livni couldn’t form a coalition, but for some reason thinks she can win an election. The Likud will simply use Obama’s tactics, and say “Do you want another 8 miserable years?”. And Labor and Kadima will use McCain’s tactics, and say “We’re not really Labor and Kadima”…

We’re in for a bumpy road ahead. I hope there’s light at the end of the tunnel, and that it’s not the oncoming train… 🙂

(Rumyal, if you promise not to tell everyone else, I’ll share with you my real hope for Labor. I hope that no one will give their voice to Barak, and that Labor will end up with 8-9 seats in the next election. This will, according to some in the party, force a serious and overdue “bedek bayit” (self-introspection) on those who make up the party, who will consequently force some of the old guard to at last vacate their seats, including and especially the failed Barak. This is the only way the Left could be reborn. And then, when it is, I’ll be there to support its renewal.)

Saghir

Funny : ) .. but

I have a feeling Syria’s economy would have totally collapsed… Syria does not have the same instruments, tools, or skills in dealing with such big losses.

Dear Appolodurus,

I totally agree about the shameful level of corruption.

Although no has the necessary magical tricks, a lot can still be done to fight corruption … they are not doing it.

But I agree with Norman … South Korea had many powerful and rich friends who made sure the country was able to recover.

If Syria’s economy collapsed? … Neocons, Saudi Arabia, and Israel’s friends would have made sure Syria the damage is beyond repair … until Ghardy is brought as next President .. then they can make all kinds of deals with the new Puppet leaders of Syria.

This is not my opinion .. this is something one hears often in Tel Aviv and Washington … let’s wait until Syria’s oil is finished and they go bankrupt … THEN we can force them to be more flexible.

Syria can not afford to play … until there is a safety net.

Shai,

I say .. if Livni really lives up to that statement, then she will initially (at least) gain a few popularity points. People will respect her for not compromising for the sake of being called “Prime Minister” for few months.

For now, Labor is finished… except if some exceptionally charismatic leader can show up. But even then, it seems in Israel “experience” is more attractive than personal charisma.

Alex,

Ordinarily you’d be right. But even I find myself tired of these politicians. Most Israelis are highly suspicious of any politician. The widespread corruption the past few years especially has caused Israelis to lose faith in government, and in politics in general. I doubt Livni will capitalize on this “lack of compromise”, because most of us know that no coalition government can be created without such compromise. That is part of the evil of a multiparty system, especially when we’re talking about 10-13 parties. I hope her move won’t be interpreted for lack of experience – we’ve yet to see. Forget about “some exceptionally charismatic leader” showing up. Those that are ready, have been waiting outside the door for decades. I’m told “the young” in Labor are in their 50’s! The irresponsible power-hungry dinosaurs, which essentially make up the top 10 seats in Labor, won’t give up their seats, and aren’t encouraging new blood. When their party crashes in the next election, they’ll be forced out, in’shalla.

There’s a saying in Hebrew that reflects desperation, it goes “Ein Ma La’asot” (there’s nothing we can do), this time, it’s Likud’s turn in power.

Shai,

look at my note # 14 above

Norman,

As the old saying goes Hell will first freeze over, before Olmert can make peace in the next 90 days. How? Who will back him. He’s not a lame duck, he’s a dead duck. He’s being kept in office, because the law doesn’t allow for anyone else to do so until either a new coalition is formed (too late, Livni gave up), or a new leader is elected. Start forgetting the name Olmert, and start getting used to PM Netanyahu again.

Norman,

The proposed law I trust would be within a comprehensive overhaul of family law- it would affect people with means that can be actually tracked, not an easy thing in Syria.

In the poorer classes, women are simply abandonned with the children and the man who has barely enough to support one family moves on- I have walked on a family of a mother and four children living in a small unheated room, floor of cement and one light bulb very high near the ceiling. All five were huddled in the middle of the room over a bowl of food and some loaves of bread that the neighbors have been supplying for the many months since the husband left. The oldest boy in the family had dropped out of school since he completed the 6th grade and was apprenticing with the neighbor who is a plumber-There was no bathroom or designated water source for cooking or washing.

There are no shelters for such families, no public social services. The matter is made worse by the massive rural migration into the city, there is no family support to absorb this misery as there used to be. The neighbors, or the religious-based charities are the only recourse.

Do I think such a law would increase tension between the genders?
What can I say, Norman, the vast majority of our people do not talk about tension between the genders, they talk about blows that life deals you while you sit completely helpless. The question is irrelevant in our society at the present time in my opinion.

My prediction of an attack on Iran was based on a different set of premises. I thought that the civil war in Iraq would restart and that did not happen as the Sunnis joined the Coalition and the Shia militias stood down, no doubt with prodding from Iran.

The economic mess precludes any strike on anybody right now. In essence Iran won the most decisive of victories because it preempted the attack without firing a shot and now has convinced everybody that it is the player in the Gulf.

I do not follow the Israeli internal politics very closely but elections may mean that Bibi will be prime minister. This will be a disaster for all.

Today, Jordan and Hamas have moved in their negotiations to the details to the great annoyance of Fatah. Jordan has concluded that the two powers are Israel and Hamas and that Fatah is finished.

Shai,

Yes, it seems Netanyahu is offering twice the money that Livni offered the Pensioners and Shas …

I am trying to get used to a Netanyahu government. But I am having a hard time imagining it being solid enough to make peace with the Arabs.

Will the Council of Torah Sages be able to impose limitations on the Netanyahu government’s ability to reach serious agreements with the Arabs? .. if they threaten to leave Netanyahu’s coalition wouldn’t that bring it down?

Damascus – Local residents in a Syrian border town near Iraq reported Sunday that US forces killed seven men in a helicopter-borne commando attack inside Syria. Doctors in the town of Al-Sukkariya, some eight kilometres from the Iraqi border, said seven corpses and four wounded had been delivered to a nearby clinic after the attack.

The eyewitness accounts said that four helicopters were involved in the operation, with two of the helicopters landing in the town and eight American soldiers disembarking. The eyewitnesses said that the seven killed men were supposedly construction workers.

Afterwards, the US helicopters then left Syrian airspace with all the soldiers again on board.

There was no initial US comment about the reported incident. If confirmed, it would be the first time that US forces had carried out.

Alex,

There’s no telling what kind of government Netanyahu will (or won’t) be able to form. If Likud gets tons of seats, and so does Liebermann, and Shas, etc., then it’ll be a strong block on the Right. Otherwise, it’s back to the Center-Left/Center-Right coalition, which basically means near-stagnation. Each side will pull its way, threaten on a near-daily basis to pull out, and to force new elections. The new government will be as impotent as previous ones have been. So obviously, if already Likud in power, better a strong coalition from the Right. Hard to contemplate these words… but we gain nothing by continuing to place powerless governments in power. Principles alone won’t help our future, as has been proven time and again.

As for the religious parties, Shas especially, they can very often actually help reach agreements with the Arabs, rather than obstruct. Unlike most seculars on the Right, the religious (again, especially Shas and their “Council”) have always declared that saving lives is more important than maintaining hold on land. If they are convinced that by holding on to E. Jerusalem, or to the rest of the West Bank, Golan, etc. Jewish lives will continue to be lost, they will issue the “edicts” justifying a withdrawal. I’ve heard Shas’s spiritual leader himself say something of this sort, even though they just rejected Kadima’s proposal also because Livni refused to make promises about not dividing Jerusalem. In that regards, the religious are actually less fanatic than the secular, believe it or not… But it has to be very clear (i.e. a peace agreement, etc.) before they’ll give their support to such a move.

Today the campaign got under way. The next 90 days or a bit more will be quite interesting here in Israel, but they will also take all of our government’s attention away from addressing some other “slightly important” issues like the world financial crisis that is about to hit home. Oh well, I guess the Likud will have to deal with that as well… 🙂 I can’t wait to see Netanyahu’s silly smirk, standing next to Obama, who is NOT smiling…

I heard that the number of casualties increased to 9.

Election prism.

A crime, we are ny now used to.

Reviving security issue?

I am calling my congressman, whome I have no respect for, and ask for investigation, please do the same

Syria should respond very carefully, we do not want the country to be sucked into agrandizing one side of the american election now. Waite for Palin to bring it up as attack on an evil country and try to boast McCain security credential. I am sure by now our ambassador has launched a formal complaint, so should our UN ambassador.

Alex,

Our chief of Military Intelligence today gave a briefing in Knesset regarding Syria’s arming of Hezbollah – http://www.haaretz.com/hasen/spages/1031520.html. And then the entire day, analysts on the radio were discussing the ramifications. What seemed to be of utmost concern to many, were the following (apparent) facts:

1. Syria is providing Hezbollah not only with “simple” weaponry, but apparently now also access to its own strategic weapons.

2. While projecting a continuous will to reach a peace settlement with Israel, Syria is not giving up on its proxy in Lebanon.

3. Syria and Iran seem to be essentially “buying” political control in Lebanon, by providing Hezbollah with everything it needs.

4. If and when Syria and Israel will finally reach a peace agreement, it is doubtful Syria will be have access to those strategic weapons it gave Hezbollah. Therefore, HA will still pose a dangerous threat to Israel, and Syria will not be able to help Israel much in that regards (even if it stops the supply route from Iran). It’ll be too late.

Plus, what worries me, is that Israel may be viewing this continued arming, and especially if it indeed includes strategic weapons, as something approaching a red line, beyond which is harsh military response. It’s a very fine balance, which may be upset by any of the parties. What do you think?

Shai

What are strategic weapons?

QN,

I suppose the MI chief is talking about Syrian strategic capabilities including long-range missiles, perhaps anti-aircraft missiles, and, although not mentioned in the article, perhaps even access to Syria’s WMD’s program (chemical, biological). I think it is well known or assumed that both Syria and Israel have WMD’s, so I’m not getting into a “Did Saddam have WMD’s” argument here…

But the bottom line is that strategic weapons are supposed to be capable of deterring an enemy, for fear they could extract a very heavy toll if used against him. Thousands of short-range missiles are probably more in the “tactical weapons” category, whereas hundreds of long-range ones (especially if equipped with nonconventional warheads) would be considered “strategic”. Does that make sense?

Shai,

I obviously do not have access to real information on what class of weapons Syria provided to Hizbollah.

But Nasrallah did mention many times in his speeches the past few months that his party has new strategic capabilities.

What I don’t understand is … if this is true, why can’t Israel or the Bush administration provide satellite images, or video showing those large trucks carrying those huge long-range missiles from Syria to Lebanon? … follow those trucks until their final destination in Lebanon.

Besides … I don’t understand this flipping between two contradictory claims:

1) Syria’s only effective card is Hizbollah .. the Syrian army is useless.
2) Syria made + sustains Hizbolah

The whole thing is silly.

If Cheney and his friends in Likud want an excuse to go to war against Syria they will find an excuse … Syria is not Switzerland… and Israel is not Switzerland.

Alex,

I don’t think there’s anyone out there who thinks Syria is not supplying Hezbollah, or at least opening the supply route between Tehran and HA. I imagine the transport of such weapons, be they simple mortars all the way to long-range missiles, is not a problem, and doesn’t have to appear on satellite imagery. Even if Israel provided an x-ray image of the SCUD-C underneath the tarp covering on the truck next to its smiling driver, no one in the world would be terribly “impressed”. So what, everyone would say. Because most understand why Syria is supplying Hezbollah, even if they don’t like it. Plus, as far as I know Syria remains ambiguous about its policy vis-a-vis HA (much like Israel remains ambiguous about its nuclear capabilities).

I don’t necessarily see a contradiction between saying the Syrian army is weak, as a classic fighting machine to counter Israel in war, and its ability to pose a serious threat to Israel via its partner/proxy/whatever in Lebanon. The opposite, with the same “tools”, Syria deters Israel by indirectly suggesting that while Israel may be able to defeat Syria on the battlefield, Syria can still make sure Israelis suffers, and whenever it wishes. It’s even better than AIG’s famous “plausible deniability”, because the world has essentially accepted this “plausible un-deniability” status. Quite smart of Syria, to be honest…

Alaska’s largest newspaper (Anchorage Daily News) is endorsing Obama! Maybe Americans are sane after all… http://www.adn.com/opinion/view/story/567867.html

Just a quick note as I think people are misinterpreting my point when I made the graph. I was trying to show how decisions regarding politics and ideology over the decades affect economies. All the points about the rich countries coming to South Korea’s aid are true; and certainly no one would come to Syria’s aid. But why? Because South Korea has put itself in the position where an economic collapse there matters globally, whereas in Syria no one would much be affected.

If anyone’s interested, here’s the whole piece I wrote:
http://web.mac.com/dwb217/iWeb/WorldViewBender/Blog%3A%20The%20View%20from%20Syria/0A0F0B2E-E233-4DAE-AB56-3367277DD544.html