Good morning Mr. Abdelnour. Delighted to have you here again on such a timely issue as the future of Lebanon, when we see the circumstances changing around us. Always appreciate your insights and your thoughts.

Q. Mr. Abdelnour, what are the perspectives for full economic recovery of Lebanon and the possibility of regaining the pre-war status of "Switzerland of the Middle East"?

A. Giving precedence to physical and material reconstruction of Lebanon over the restoration and rejuvenation of the latter's eclipsed freedoms is placing the cart before the horse.

Hence, the urgent issue for Lebanon today is not how to regain its pre-war status of "Switzerland of the Middle East", but rather how can the country regain its political independence, territorial sovereignty, and personal and communal freedoms that are the true sources of its distinctiveness before embarking on full economic recovery.

Q. What is going on in the Lebanese banking sector and what are the perspectives of returning flight capital to war-torn Lebanon?

A. I believe that as long as the country's political power, industrial control and financial capital are concentrated in the hands of only a few, Lebanon will hardly be able to attract its human and capital resources who have left the country seeking better opportunities abroad.

By the same token, as long as there is no public corporate bond market, as we know it in the U.S, Lebanon will have a very hard and arduous way in developing the kinds of secondary markets that financed growing U.S. companies.

It won't be easy to overcome tradition and reform the Lebanese economy.

When a few powerful families control a developing nation's media outlets, how fast will change occur?

If a politically connected holding company can shift most of its liabilities to a few subsidiaries and then give those units to the government, will investment grow?

Will a farmer plant fruit trees that take eight years to produce if he's not sure he will own his fruit in eight years?

While much of Lebanon is beginning to address these issues, the kind of revolution in capital markets that set the stage for the U.S. boom can take root in Lebanon only in the soil of comprehensive social capital. Throughout the developing world today, inadequate social capital - especially the incentive to put investment capital at risk - is the weak link that limits the multiplier effect of financial technology in creating broad-based and lasting prosperity.

Q. Does Lebanon has a real potential of becoming a regional leader in attracting tourism and industry?

A. If we are to learn anything from the history of developing nations, it is that the financial services industry must always move in tandem with tourism and industry to create the growth rate that is sought. It is sad to note that the different Lebanese administrations since 1992 seem to have completely missed this point.

What is the purpose of erecting multi-million dollar commercial and residential properties if the Lebanese government has not yet devised any specific policies regarding industry? How are people going to pay for these real estate properties if they do not have jobs to support both their lifestyle and the economy? What is the use of Lebanon's banking industry if they can't lend money to the core of the Lebanese economy (i.e.: tourism and industry)? Already, unemployment is a serious problem in Lebanon and even under the most optimistic scenario, financial and non-financial services alone will not provide work for the country's growing population.

Having said that, support for developing the country's capital markets should be a serious priority for Lebanon's government. Now since capital is the most coward element in the overall equation; and unless the Lebanese completely control their destiny, capital will not in my opinion come back home any time soon despite all of the conferences and "dog and pony" shows being thrown around by the different Lebanese government entities to attract investors.

Q. How could the recent death of Syrian President Hafez Assad change the situation in Lebanon? Do you think there is a possibility of a new outbreak of civil war in Lebanon?

A. The recent death of Syrian President Hafez Assad can only improve things in Lebanon...assuming of course that the Lebanese people have both the courage and the will to embrace change. Under Assad the father, we had a situation of stasis, ossification, of the sort that's extreme. And I believe this was due to Hafez Assad's very narrow assessment of what his concerns were, which were to stay in power and to pass on the power to his son. Everything was seen through the prism of regime maintenance, staying in power and of course controlling Lebanon. Nothing else mattered.

Though it is not yet clear what Bashar's agenda is, I believe that he is more willing to take chances that would lessen the grip on the country that his father had maintained.

Regarding the possibility of a new outbreak of civil war in Lebanon in case the Syrians leave, this is utter "Syrian propaganda" that has no foundations whatsoever. Lebanon today is in a very different situation than in 1975-76 and any such insurrection will be squashed from day one. In addition, no Lebanese group today has ammunitions at their disposal except for Hizballah; but their power still pales compared to the 70,000 strong Lebanese Army; which frankly is double the number of Syrian soldiers in Lebanon but never even mentioned in any local or international press.

Q. How do the different Lebanese communities view the future of the state; what countries do they have close ties with?

A. Lebanese at large are very apprehensive of the future, especially given the fact that Lebanon has always been hostage to both Israel and Syria's ambitions. Until a new generation of leaders steps up to the plate, and breaks the circle of fear and intimidation surrounding Lebanese at large with a “crystal clear” foreign policy, economic, and national security agenda for the country; and unless the Syrian leadership changes its "narrow-minded" view of the region or is pressured to do it, things will always be the same.

I assume that Lebanese have close ties with probably more countries than any other people do. It is a fact that the Lebanese Diaspora today has over 15 million individuals spread around over 100 countries throughout the world. However, unless Lebanese locals get their act together and stop playing their petty religious/feudal games, the Diaspora will not contribute in any meaningful way their intellectual and financial capital to the homeland.

The Lebanese today have some attributes of every culture they ever encountered. Likewise, every people who ever came across the Lebanese have a touch of Lebanon within himself or herself. It is exactly that open-minded attitude of the Lebanese towards others that enabled them to tolerate and assimilate the differences among their partners on this earth. And it is exactly that attitude we must maintain for the sake of human preservation and advancement.

Q. What is the structural (religious) composition of the Lebanese Diaspora? Is it true that the Diaspora has a huge lobbying potential in the US and EU?

A. To the best of my knowledge, the overwhelming majority of the Lebanese Diaspora members in the Western world are Christians while the majority of those based in Africa, Asia and the Middle East are Muslims though I don't have exact statistics.

Regarding your second question, the Diaspora will have a huge potential lobby in the U.S only if they would spend more time educating themselves about the critical issues facing their peers back home and encouraging a consensus on at least some key issues. If they are confused about their message, U.S lawmakers will never take them seriously. Sharing the Arab agenda does not for example necessarily play in Lebanon's hand unless one considers Lebanon as part of Syria; which I believe most Lebanese along with Lebanese Americans still fiercely reject. I guess the same would apply to the Lebanese Diaspora in the E.U.

Q. Is Israel a potential ally of Lebanon or a competitor?

A. Lebanese are ideally suited to fill the role of bridge between Israel and the Arabs once an Arab-Israeli peace is reached. Their high level of Western education and orientation is evident in the United States, where the great majority of Arab American business and political leaders hail from Lebanon. It is a fact that no country in the Arab world contains a diversity of people like Lebanon, and this makes it easier for Lebanese to assimilate. The presence of seventeen religious sects in such a small country gives Lebanese an unequaled ease in dealing with people of different faiths and outlooks.

Tourism is another area where both Israel and Lebanon can benefit tremendously. Joint ventures between Israeli and Lebanese tourism companies can turn the Levant into one of the most attractive resort centers in the Near East, taking advantage of such factors as their shared climate and coastline. The wealth of historical sites in the region is a resource with great potential waiting to be tapped. Historical sites of the ancient Phoenician cities of Tyre, Sidon, and Byblos can be revived to attract thousands of tourists, both from the immediate region and from the West. Tours can be developed that visit these sites as well as those of Israel in Jerusalem, Bethlehem, Nazareth, and Jericho. This building-up of tourism between Lebanon and Israel could serve as the springboard for other cooperative efforts, such as the establishment of communication links between them. There is also the potential of developing the Lebanese-Israeli coastline into the Monte Carlo of the Middle East.

On another note, both Lebanese and Jews have large and powerful Diaspora which could be of tremendous value-added to both communities in funding joint-venture projects once a Lebanese-Israeli peace accord is reached.

Last, Lebanon has clear advantages in working with Israel when compared to Egypt, Jordan or the West Bank and Gaza. Cairo was the first Arab State to reach formal peace with Israel, yet the Egyptians never built close or extensive ties with Israelis. The two sides do not fit well together commercially; also, the Egyptian sense of Arabness gets in the way because of the persistent Nasserite influence. This "inferiority complex" does not exist with the Lebanese; ...at least the ones I know.

In all, Lebanon is the key to breaking the commercial and economic isolation of the Middle East. Its human skills and strategic geographic location give our country a chance to break the logjam in the Levant and forge a political and economic bloc that could one day help create one of the most attractive emerging markets in the world. With its secular, market-oriented tradition and its people's long-standing relations with much of the Middle East, the Lebanese at large stand out as the outstanding potential interlocutors and best businessmen in the region, if it wasn't for Syria's constant meddling in the country's affairs.

Q. What can you say about an idea of a Middle East Federation of Lebanon, Israel, Syria and Jordan with the Lebanese Republic playing role of a financial center, Israel as a technological and industrial center, Syria and Jordan as a source of cheap workforce and place where some industries could be transmitted (like South-East Asia for Japan and the US)?

 A. I don't believe in Federations but I do believe in private joint-venture partnerships. Why don't we leave business matters to the business people and public matters to their respective governments?

 If we are to learn anything from the economic history of the Middle East, it is that every time government intervened to fix business matters, they ended up creating disasters with repercussions still felt until today.

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