REDEFINING LEBANON

Reforms and Resolutions for a Lebanese Leading role in the 21^st Century.

June, 2004

The religious and cultural conflicts raging across the Middle East and the world pose a serious threat of interacting with simmering internal divisions, where Lebanon could once again find itself a battleground for broader conflicts that threaten its very existence.

However, with proper planning, the Lebanese can turn the course of events, capitalizing on their historical experiences to protect the country and capture a leading role in the 21^st century. Lebanon should set the standard for coexistence and power sharing in a democratic showcase that can help defuse the brewing regional conflict and set the stage for real political and economic development.

The Lebanese have historical experience and commitment to peaceful coexistence.
The Lebanese have a historical commitment to democracy, freedom and liberal economy.
The Lebanese have first hand experience in the futility of religious conflicts.
The drive and aspiration for change is now all encompassing in Lebanon.
The Lebanese have historical solid relations with, and a deep understanding of, both the Moslem world and the West.

LEBANON’S ROLE

Taking advantage of its unique position and experiences, Lebanon must reinvent it regional and international role within the context of current events and the needs of the region and the international community.

A living example of coexistence and power sharing.
An economic, cultural and political bridge between East and West.
A leader in guaranteeing and protecting minority rights.
A leader in political reforms commensurate with regional cultures and traditions.
A meeting ground Christian-Moslem dialogue.
A leader in regional economic reforms, liberalization and development.

REDEFINING LEBANON

Lebanon requires substantial political and economic reforms that address the public’s aspirations and hopes, capitalizes on the country’s potential and eases the fears and concerns of the people. It is critical that all Lebanese feel secure and safe within their own country and have the opportunity to achieve their full potential for the well being of Lebanon and the region.

Lebanon must strive to modernize its political and economic systems to establish transparency in Government, institutionalize ethical behavior and eliminate corruption that is draining the countries resources and driving away Lebanese and foreign businesses. Corruption and political favoritism substantially increase the cost of businesses, decreases efficiency and minimizes Government revenues.

Internal reforms must also be accompanied by a resolution of critical issues that have been a source of division as well as a major impediment for political and economic progress.

POLITICAL REFORMS

Political reforms should be geared towards insuring proper representation of the electorate, guaranteeing the rights of all citizens and providing the proper checks and balances to prevent corruption and the ability of any one person or group to dominate or abuse the system.

DECENTRATIZATION

Decentralization is a primary element of Lebanese political reforms as it is the most effective venue for public empowerment and facilitating diversity. Decentralization serves to:

Enhance the efficiency of Government operations.
Facilitate the citizens’ interaction with Government.
Empower the citizenry with more control over their daily lives.
Facilitate development and growth.
Facilitate social and cultural diversity while minimizing internal conflicts.

In this light, Decentralization in Lebanon should replace the existing Mouhafazahs and Quadas with 10 to 15 provinces that are:

Based on current economic, social and geographic integration.
Independent of existing divisions to properly account for current conditions.
Independent of Parliamentary districts and may overlap.
Do not need to be uniformly sized.

Provincial Governments

Each province shall have a locally elected provincial council and Governor.
The number of council members to be determined by the needs of each province.
Council members shall represent specific districts to insure proper representation.
Provincial Councils shall by law closely resemble the religious mix of the province.
Provinces shall provide a referenda mechanism for voting on critical issues.
Provinces should have their own courts to adjudicate local issues.

Provincial Authority

Provincial Governments shall have the following responsibilities and authorities:

Social and Human services, including:

Personal and family records.
Property registration and transactions.
Department of Transportation.
Etc.

Police Force (Internal security to remain the domain of the national Government)
Civil Defense.
Development and Zoning authority.
Business regulations, limitations and incentives.

Local development and infrastructure.

Provincial Funding

To carry out their responsibilities and authorities, provincial governments shall have two sources of funding:

Local taxation in addition to national taxes, including: Sales, Property, Income, etc., with the authority to impose taxes requiring public approval via a referendum.
Disbursements from the national governments in accordance with provincial needs and a national policy of equitable development.

Municipal Councils

Each municipality shall have a council singularly or in combination with neighboring municipalities. Municipal council regulations should be amended to grant councils more control over local operations and development, including:

Full authority over disbursement and use of municipal funds
Full authority over local development and zoning.
Authority to impose taxes with a requirement for public approval via a referendum.
Other amendments as deemed necessary to facilitate and enhance the efficiency of municipal councils.

PARLIAMENT

Currently, Members of Parliament simultaneously represent their district with all its diversity as well as their coreligionists within the sectarian quota in the parliament. However, representation on both fronts is severely hampered. The large districts with multiple representation result in MPs elected by voters who are neither from their district nor their religious affiliation.

To insure proper representation as well as guarantee the rights of all citizens, Lebanon needs to establish two chambers of Parliament with distinct electoral laws and districts, which shall not be subject to dissolution under any circumstance.

A Lower Chamber shall guarantee proper regional and district representation with an eye towards eventual elimination of sectarian requirements.
An Upper Chamber shall be designed to insure all religious groups that their rights and aspirations will remain protected.

Lower Chamber

The Lower Chamber will replace the current Parliament with the same responsibilities and duties where members are representative of their constituency regardless of religious affiliation.

Elected on the bases of one member per districts.

Initially maintain the same percentage allotment to each religious sect.
Districts drawn with clear sectarian majority to insure representatives are initially elected from the majority of each district while maintaining the existing sectarian balance.
Districts to be independent from existing divisions to allow for the most efficient divisions with comparable numbers.
District divisions shall be reviewed every 10 years and if necessary redrawn to accommodate demographic changes.

With the proper implementation of the Upper Chamber and other constitutional modifications, the sectarian requirements in the Lower Chamber can eventually be removed. The clear sectarian majority in each district will guarantee that even a member of the minority will not be viewed as imposed upon them. Furthermore, with religious rights protected by the Upper Chamber, people will be more open to accept representation in the Lower Chamber by a member of the minority.

Upper Chamber

Members of the Upper Chamber are elected purely on sectarian bases and are primarily responsible for representing the interests of their co-religionists.

100 representatives divided equally between Moslems and Christians and equitably among the various sects of each religion.
Voters elect only representatives of their own sect and shall not vote for others.
Representatives of each sect shall be distributed proportionally throughout the country to insure proper representation of the various regions within each sect.
Headed by a Christian to balance the Moslem Christian leadership into two Moslems and two Christians. The leadership could go either to any non-Maronite Christian or specifically to the Orthodox as the second largest Christian denomination.
Guarantee that no laws are enacted that infringe on or discriminate against any sect.

PRESIDENT

The Lebanese President shall be directly elected by the people to insure:

True separation of powers.
Proper checks and balances.
Empower the public in the selection of the head of Government.

The president shall be elected via an electoral college voting mechanism that designates specific electoral votes for each province or district commensurate with demographic size and in keeping with equitable sectarian distribution of voting powers.

THE CABINET

The Executive Branch of the Government, endowed with the responsibility of executing the laws promulgated by the legislature, shall be reflective of the political make up of the Parliament. Furthermore, to guarantee proper governmental functioning, the Cabinet must also be in accord with the president. As such the Government must be formed as follows:

The PM is nominated by a Parliamentary majority.
The PM is formally appointed by the president if acceptable.
The PM nominates ministers with the advice and consent of the President each of which is individually approved by the president and both chambers of Parliament.
A new Government must be formed upon the election of Parliament or President.
The Cabinet may be dissolved through:

Presidential decree.
Parliamentary withdrawal of confidence
Resignation of the Prime Minister.

Individual Ministers may resign or be removed without dissolving the cabinet.
Ministers cannot simultaneously hold another top level Government office.

JUDICIARY

The Judicial Branch shall have the power of judicial review over the Executive and Legislative Branches of Government to insure the constitutionality of all laws enacted and all Governmental actions. As such, a new system must be enacted to ensure the independence of the Judiciary, including direct elections of judges, while maintaining strict qualifying standards.

Furthermore, a mechanism must be established to allow any citizen or organization to challenge in court the constitutionality of laws or Government actions. This will empower the citizenry and grant stronger public oversight of Government activity.

REFERENDA

To insure public empowerment and safeguard the interest of the people, Lebanon must establish a mechanism for direct public referenda that allow the people to vote on all issues that carry the risk of major impact on:

The lives of the people.
The country’s structure.
The country’s political, cultural, or social identity.
The country’s or the people’s economic or political interests.

POLITICAL PARTIES

Freedom of opinion and belief must remain a sacred tenant of the Lebanese system. However, for political parties to be formally licensed to enter the political field they must adhere to the Lebanese Constitution within specific administrative and legal guidelines as follows:

Accept, as final, the constitutional assertion of Lebanon’s borders as an independent and sovereign country, and make no claims direct or indirect to the contrary.
Accept, as final, the constitutional assertion of Lebanon’s religious and ethnic diversity and pledge of coexistence, and make no claims direct or indirect to the contrary.
Maintain a minimum of 1,000 active full members.
Obtain the certified signed support of 1,000 voters within each district the party plans to nominate a representative for elections in.

INDEPENDENT POLITICAL NOMINATIONS

As a free society, the political system must remain open to all Lebanese. However, to insure an orderly and efficient political process any independent wishing to run for office, must obtain the certified signed support of a minimum of 1,000 voters in any district he/she wishes to run.

CIVIL COURTS

While maintaining the existing religious courts, Lebanon must establish parallel civil courts that address the social and personal needs of the people.

Provide an alternative for individuals whose needs are not met by the religious courts.
Directly guarantee the rights of the individual regardless of religious affiliation.
Reduce the influence of sectarian affiliation on the individual.

IDENTIFICATION NUMBERS

Every Lebanese citizen shall be issued a unique identification number that shall be attached to all legal matters related to the individual citizen. The number shall serve to:

Help certify the legality of the individual’s citizenship.
Assist in identifying citizens.
Provide a reference number for credit reporting and other business and financial statistics.

VOTER REGISTRATION AND PROCEDURE

In addition to the rules associated with the Parliamentary and Provincial structures specified elsewhere, voting within the Lebanese political system should abide by the following guidelines:

Every Lebanese above the age of 18 shall have the right to vote.
Registered voters cast their ballots in their place of registration
Absentia voting shall be granted to individuals who are outside Lebanon at election time.
Absentia voting may be via Lebanese Embassies or via secure electronic systems.

THE DIASPORA

The Lebanese Diaspora represents a substantial economic and political asset for Lebanon as it outnumbers resident Lebanese by several folds and holds an enormous amount of economic and political clout that can and should be recruited for developing Lebanon’s economy and its regional and international role. Thus, it is imperative that the Lebanese Government begins a concerted effort to reconnect the Diaspora to Lebanon and grant them full rights and the mechanism to exercise those rights as is the case in all democratic countries.

Facilitate registration and renewal of citizenship papers.
Provide safeguards and promote venues for Diaspora involvement in Lebanon.
Develop a mechanism for direct involvement of the Diaspora in Lebanese affairs.

ECONOMIC AND FISCAL REFORMS

To realize its full economic potential, Lebanon should upgrade and modify its regulations and initiate a series of reforms and incentives to attract and retain investment and regain its leadership regional role. In addition, Lebanon needs to overhaul its accounting of economic activity and bill collection to insure the accuracy of information that is necessary for economic growth and prosperity and more accurately define Lebanon’s economy.

Furthermore, Lebanon needs to redefine its economic model and its role in the global economy in light of current realities.

Strengths

Highly skilled workforce.
Highly developed business environment.
Highly developed banking and financial systems.
Geographic location.
Extensive foreign business relations and contacts.
Extensive Diaspora with vast economic resources and contacts.
Modern and sophisticated social and cultural life.
Membership in the Euro-Med and Arab Free Market agreements.
Extensive preferential bilateral agreements.

Limitations

Small local market.
Relatively high operating costs.
Lack of open markets and economic freedoms in neighboring countries.
Lack of natural resources.

ECONOMIC ROLE

In light of the above, Lebanon should focus its economic development towards

The Service Sector.
High value-added production.
Banking and Finance.
Tourism and Conventions.
Research and Development.
Media and Production.
International Trade.

Service Industry

Lebanon’s highly skilled professionals, both resident and expatriate lend themselves perfectly for developing Lebanon into a regional and even international center for:

Design and Engineering.
Technical services and support.
Marketing and Advertising.
Medical services and Hospitals.
Education and Training

High-value Added

High value-added industries that require highly skilled labor and professional expertise, but are not dependent on low wage labor are the ideal industries for Lebanon, including:

Automated production.
Designer Products.
Information Technology.

Banking and Finance

Banking and finance is the most developed and most promising sector in Lebanon that should be developed to capture a broader segment of regional operations, specifically business financing, investment and capital markets services.

Tourism and Conventions

Lebanon’s location, geography and weather as well as its sophisticated cultural and social life lend themselves to a highly developed and lucrative tourism and convention operations. Lebanon must focus on:

High end tourists seeking luxury accommodations and extensive entertainment.
Conventions that benefit from Lebanon’s business infrastructure as well as its touristic attractions.

Research and Development

Lebanon must capitalize on the advanced educational levels of its residents and Diaspora as well as the high standards of education to initiate scientific and technical research and development industry that would help transform Lebanon into a key center of innovation.

Media and Production

The existing strong media, publishing and production industry must be supported and encouraged to grow, capitalizing on Lebanese expertise and extensive contacts in the industry.

International Trade

Lebanon should maintain and enhance its status as an international trading center, capitalizing on existing operations and expertise as well as its location and unique free market conditions.

ECONOMIC REFORMS

To achieve its full potential, attract investments, repatriate Lebanese professional expertise and correct the chronic fiscal deficit, Lebanon must embark on a series of reforms and policies that facilitate growth and expansion, increase Government revenues and decrease Government spending, including:

Institute transparent laws to protect and encourage investors.
Improve monitoring and accounting of economic activity.
Privatization and divesting Government run businesses.
Amend business-finance laws to facilitate operations.
Provide the necessary infrastructure for international operations.
Institute competitive wages.
Provide investment incentives and support.

Transparency and Investor Protection

In addition to political stability and security, investors require an open environment where they are assured that their investments and rights are protect by laws that are both transparent and fair. Lebanon has substantial business regulations in this regard that require proper implementation and minor updating to be on par with developed countries.

An independent judiciary that investors can trust to be fair and impartial.
Eliminate corruption in Government
End favoritism in Government dealings with the private sector.

Monitoring and Accounting

Currently the Lebanese government monitoring and accounting of economic activity is severely lacking, resulting in inaccurate data that deprive the Government from badly needed income increases Government costs and hampers proper assessment of market conditions by private and public operations.

A reformed monitoring and accounting system will help more accurately capture Lebanon’s economic activity, which is estimated to be several folds larger than officially stated:

Increase Government revenues in accordance with the new larger economy.
Fully account for future economic growth.
Decrease Government interest payments in accordance with a better debt ratio.
Reduce the debt burden through increased revenues.
Enhance Government services.
Facilitate private investment through more accurate data and better market controls.

Privatization and Government Divesting

Privatization should extend beyond the sale of existing Government operations to open the Lebanese market for competitive services from private operations that have a much stronger economic impact on the country. Private competition results in:

Lower costs for consumers and businesses.
Higher quality services to retain and attract customers.
Expanded job market.
Reduced Government expenditure.
Increased Government revenues.

As such, the Government must immediately open up the Lebanese market for private competition and institute the necessary laws and regulations to safeguard the consumer and Government as well as insure the safety of private investment.

Of primary concern is the need to guarantee private companies their ability to collect their dues and operate freely with appropriate legal protection.

Business-Financing

Current banking and financing regulations in Lebanon fall short of the needs of international businesses as they involve an extensive amount of bureaucratic red tape that encumber businesses and hamper economic growth and competitiveness. As such it is imperative that Lebanon update its regulations to better serve the business community, including:

Reducing bureaucratic requirements.
Fully utilize modern technology in initiating and monitoring financial transactions.
Implement credit reporting and tracking systems to facilitate assessments of creditworthiness and accountability.
Improve and facilitate financial institution’s ability to collect on loans.
Facilitate transnational financing for regional and international businesses.
Facilitate and the support the growth of the capital markets sector.

Infrastructure

Business operations in the 21^st century demand high quality infrastructure that facilitates operations and competitiveness. While Lebanon has highly developed business infrastructure that can support any operation, it remains lagging on crucial requirements that detract from Lebanon’s attractiveness to businesses. Of primary concern is the need for:

Reliable and affordable power supplies that eliminate all shortages.
Implementation of high-speed communications facilities.
Improving the efficiency of transportation venues and facilities.

Competitive Wages

Even at current dismal wages, operating costs in Lebanon remain substantially high due to the high costs of all other business aspects. Thus, Lebanon should abandon any attempt to compete with low cost production centers, as Lebanon’s high cost of living will remain a primary impediment to low cost competitiveness, where low wages have only resulted in a brain drain and impoverishment.

Furthermore, the cost of living in Lebanon is primarily influenced by external costs as imports account for the majority of consumed products and raw materials for production. Thus, higher wages will have a much lower effect on costs than the resultant added purchasing power.

As such, Lebanon should enhance wage competitiveness to retain, repatriate and attract highly skilled professionals needed to achieve its newly defined economic role. Currently wages, guided by the Government set minimum wag are less than a quarter of wages in countries with comparable costs of living.

Taking into consideration the potential economic disruption from a sudden sharp rise in wages, Lebanon should implement a long-range plan to gradually raise wages to competitive levels to allow the economy to adapt to the rising wages. If wages are raised at the pace of 20% every 6 months, wages will triple in 3 years to a much more competitive rate to attract skilled professionals, while operating costs will rise by around 30% from the increased wages.

Investment Incentives

Lebanon has many attractive qualities for international business operations, including: quality of living, reasonable operating costs, highly skilled labor force, highly developed business support infrastructure. However, tax incentives often are the final determining factor in companies relocating decisions.

Companies are interested in corporate taxes and incentives, not the personal taxes their employees pay. As such, instead of lower personal taxes, Lebanon should offer incentives for international corporations to relocate, including:

No tax for a set number of years.
Offering land or similar facilities for operations.
Waving certain fees and duties for a set period of time.

It is important to note, that new operation will result in added employment and economic activity several folds larger than the investment, from which the Government will collect taxes and fees several folds larger than the deferred corporate taxes and fees. Furthermore, international business operations will eventually create the critical mass necessary to spontaneously attract new operations, further expanding the economy and Government revenues.

RESOLUTION OF CRITICAL ISSUES

Political and Economic reforms must also be accompanied by a resolution of critical issues that have been a source of division as well as a major impediment to progress. Those issues include but are not limited to the following:

Shebaa and Liberation.
The Palestinian Refugees.
Non-Governmental Military Operations.
Lebanese-Syrian Relations.
The Lebanese Diaspora.
Sectarianism.

SHEBAA AND LIBERATION

While all Lebanese agree to the legitimate quest to return the Shebaa Farms to Lebanon, the issue continues to lack international legitimacy, and remains a major impediment to peace and the economic and social rehabilitation of South Lebanon and the country as a whole.

As such, the Lebanese government must initiate a systematic process to legalize its quest for the Shebaa farms and progress in its liberation effort beyond the current state of warfare that is draining the countries resources and preventing it from achieving its full potential.

Formalize the Shebaa farms border with Syria, with international assistance.
Present a formal Lebanese-Syrian agreement to the UN to gain international legitimacy for Lebanon’s demands and obtain UN inclusion of Shebaa in UN Resolution 425.
Demand and obtain international support for Israeli withdrawal under UNR 425.
Deploy the LF along the border to defend Lebanese territory and protect the citizens. [This is good]

THE PALESTINIAN REFUGEES

The Palestinians have achieved self-rule in the West Bank and Gaza, with international support for imminent independence. The Palestinian authority is currently issuing citizenship and travel documents to resident Palestinians. The PA has also been engaged in a fierce battle to achieve the right of the refugees to return, while Israel is pushing for settling the refugees in their current host countries. Lebanon can resolve its own problems while leading the way in supporting the Palestinian right to their own country. The Lebanese Government must:

Develop with the PA a process to provide Palestinian citizenship to refugees in Lebanon, which guarantees their rights in Palestine and ends the issue of settlement in Lebanon.
Issue foreign residency and work permits to Palestinians citizens residing in Lebanon in line with other foreigners, until they can return to Palestine.
Bring all Palestinian camps under direct Lebanese authority.
Disarm all Palestinian armed forces operating in Lebanon and provide for their transfer to the PA territory, in accordance with international laws. [This is essential as it undoes the 1969 Cairo Accord whereby the Palestinians were given authority inside the camps and the Lebanese authorities surrendered sovereignty over the camps]

NON-GOVERNMENTAL MILITIAS

For Lebanon to regain the full confidence of the international community and begin the process of true development and growth, the Government must insure that it controls all armed forces within its territories with no possibility of independent military activity that may threaten people’s security and interests. As such, the Lebanese Government must:

Disarm and disband all non-governmental armed forces operating within Lebanon.
Strictly prevent any non-governmental military activity within or through Lebanon.
Demand and obtain international support, assistance and guarantees in this regard.

LEBANESE – SYRIAN RELATIONS

Lebanese-Syrian relations are another critical political issue that requires prompt resolution to pave the way for lasting harmony, development and growth for both countries. The Lebanese Government must develop a clear relationship with Syria that safeguards and promotes the sovereignty, security and prosperity of both countries.

In this light, Lebanon must re-evaluate, amend and expand its existing agreements with Syria to establish permanent friendly relations that account for historic and geographic realities as well as pave the way for concrete economic and social development in both countries.

Enhance current agreements to insure equitable relations between the two countries.
Establish clear agreements governing security and military relations that safeguard the interest and sovereignty of both countries.
Finalize Syrian military withdrawal from Lebanon in accordance with international agreements and in light of the new bilateral agreements.
If necessary, clearly define barrack locations in the Southern Bekaa for Syrian forces until peace is reach with Israel, with strict limitations on military activity.
Establish full diplomatic relations between the two countries on par with other closely related nations (i.e.: the GCC, EU, US-Canada, etc.).
Expand and enhance economic agreements to pave the way for the mutual growth and development on par with other common markets, including:

Establish procedures for open cross-border commerce.
Establish procedures for cross border labor movements, taxation and permits.
Provide Lebanese assistance and consultation for Syrian economic liberalization.
Harmonize free market movement of goods and services.
Harmonize free market investment and business operations regulations.

ARAB-ISAREALI CONFLICT

As a member of the Arab league and in the spirit of brotherhood Lebanon shall remain committed to the goal of comprehensive and just Arab-Israeli peace in accordance with UN resolutions. In this light, Lebanon should commit to join the Arab league in their position, be it peaceful negotiations or warfare, maintaining solidarity with a common approach that at least includes the front line states.

It is unacceptable that Lebanon continue to be required make extensive sacrifices for the larger Arab cause, while all other Arab countries are engage in peaceful discussions with Israel including peace agreements and economic cooperation. Even Syria, the most ardent opposition to Israel has maintained a calm border and engaged in serious peaceful discussions for liberating the Golan Heights.

As such, Lebanon should immediately end all military activity along its border with Israel on par with other states, to allow for a united approach towards resolving the conflict with Israel.