Continuity in Economic Policy in Postware Lebanon: The Record of the Hariri and Hoss Governments Examined, 1992-2000

By Baroudi, Sami E. | Arab Studies Quarterly (ASQ), Winter 2002 | Go to article overview
Save to active project

Continuity in Economic Policy in Postware Lebanon: The Record of the Hariri and Hoss Governments Examined, 1992-2000


Baroudi, Sami E., Arab Studies Quarterly (ASQ)


INTRODUCTION

FOR SIX YEARS (DECEMBER 1992-NOVEMBER 1998), Rafiq Hariri and his economic team were in charge of managing the Lebanese economy. While some of Hariri's economic polices had popular support, most were controversial ones that triggered mixed and sometimes overtly hostile reactions. But despite official criticisms that Hariri's policies received between late 1998 and the summer of 2000, his detractors failed to articulate an alternative set of economic policies. The Hoss government continued most of the policies initiated by Hariri and in certain instances, as with privatization and foreign borrowing, pursued them with much greater vigor. Undoubtedly, the Hoss government introduced certain changes in specific economic policies. (1) Nevertheless, what was preserved from the Hariri years was far more fundamental than what was changed. In light of this basic continuity in economic policy from the Hariri to the Hoss years, Hariri's return to the premiership in November 2000 seemed quite logical.

THE LEGACY (OR HEAVY BURDEN (2)) OF RAFIQ HARIRI: 1992-1998

Hariri's record in office, particularly in the economic policy domain, generated both praise (3) and sharp criticism (4) Hariri's admirers credited him with at least five major achievements: 1) raising the Dollar value of the Lebanese currency (LL) after years of steady (and in some months very steep) deterioration (5); 2) bringing annual inflation rates down to single digit figures (6); 3) launching (and partially completing) a highly ambitious investment project for the reconstruction for the commercial district in downtown Beirut and the modernization of Lebanon's basic infrastructure; 4) simplifying the tax code, providing tax holidays for new investors, and lowering the maximum tax rate to 10 percent (all these measures were designed to increase incentives for local and foreign investors) (7) and 5) (perhaps most importantly) restoring regional and international confidence in the Lebanese economy.

Hariri's critics, on the other hand, brought forward a long list of charges against him. They accused him inter alia of: 1) betting on the quick success of the Middle East process, and subsequently spending billions of US Dollars (of largely borrowed money) to develop Lebanon's infrastructure, in the hope that borrowed finds can be easily repaid once peace arrived; (8) 2) allowing Lebanon's public debt rapidly to mount until it reached dangerous levels towards the end of his term (in 1998); 3) causing real interest rates on deposits in LL to raise owing to excessive government borrowing and the insistence on protecting the value of the LL; 4) overspending on infrastructure development, while under spending on productive projects in agriculture and industry and on social projects (i.e., health care and education; 5) lowering direct taxes which helped the rich, while raising indirect taxes (such as the gasoline tax) whose impacts were mostly felt by the poor and middle classes; (9) and 6) (perhaps most seriousl y) turning a blind eye to rampant corruption among ministers, bureaucrats, local and foreign businessmen bidding on state contracts, as well as among his closest aides. Critics alleged that widespread corruption during the Harm years cost the treasury vast sums of money, estimated by some sources at billions of U.S. Dollars. (10)

Reality is far more complicated than the claims of-either group. At the outset of his term, Hariri was able to generate wide support for his currency stabilization and reconstruction programs. As the costs of these programs mounted, and successive Hariri governments failed to tackle other economic and social problems (such as unemployment, low wages, poverty particularly in the outlying regions in the Biqa' valley and 'Akkar, administrative red-tape, rampant corruption in official circles and poor quality of social services) criticism of Hariri intensified.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Continuity in Economic Policy in Postware Lebanon: The Record of the Hariri and Hoss Governments Examined, 1992-2000
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?