I. Introduction
II. Challenges
III. Reform Levers
IV. Conclusion
Reforming Lebanon: Building on the Momentum for Change

I. Introduction

After nearly two decades of devastating war, the next fifteen years, although peaceful, continuously and progressively sank the country into a whirlpool of political and administrative corruption and strenuous economic recession, all of which was sponsored by the Syrian and joint Syrian-Lebanese authoritarian regimes, which repressed all liberties and brought new dimensions to corruption and abuse of power.

During that prolonged period, challenges accumulated and achievements paled against momentous requirements and expectations. Dawning towards the end of the year 2004, the winds of change picked up unparalleled momentum upon the assassination of late martyred former Prime Minister Rafic Hariri, culminated with the Cedar Revolution, the Syrian withdrawal, and the ensuing unprecedented free Parliamentary elections, and continue to blow today. Contrary to wishful thinking, Lebanons challenges have since, actually increased in number and magnitude. However, for the first time, Lebanon today has the opportunity to willfully act upon these challenges and make an enduring difference. Recent developments are not so much the solution as they are the catalyst for dynamic and holistic reform. Once again, Lebanon can serve as the model of democracy and reform for a region wrought by corruption, totalitarianism, suppression of freedoms, poverty leading to fundamentalism and all sorts of exploitation, and overall socio-economic disability. For all of these reasons, Lebanon owes it to its citizens, the regions populations, as well as the international community to seize this opportunity and capitalize on these winds of change to bring about all-inclusive well-being.

II. Challenges

Lebanon faces a panoply of challenges, of which a select few are briefly listed:

The newly established Government has yet to establish itself as an enduring entity that represents national unity and fosters an environment where all political constituents work towards fulfilling a common vision.

There is an obvious lack of explicit mechanisms that ensure fiscal discipline, accountability, and the eradication of corruption and bad governance.

The public sector remains a hindrance to socio-economic development, rather than being a catalyst, as current spending continues to grow uncontrollably while capital expenditures, which constitute government investments, are shrinking.

There are several outstanding and crucial obligations that call for national consensus, which have not yet been at the heart of an inclusive and fruitful national debate. Among these issues is the disarmament of Hezbollah and its future, the Syrian-Lebanese relations, fiscal and administrative reform, the Lebanese political system, the pledges of the Taif agreement, a modern electoral law, political parties law, a clear economic vision, and so forth.

There are numerous socio-economic challenges, such as the lack of job opportunities leading to rising unemployment, continuous brain drain of highly educated Lebanese, untapped human capital, and an infrastructure sector (ICT, utilities, healthcare, transportation) which is undermined by current regulations and state monopoly which hinders economic growth across all sectors and social welfare across all classes.

The role and size of the Government and its relationship with the private sector are not defined and optimized enough to drive reform initiatives that could deliver sustainable socio-economic growth across the various sectors and industries.

The lack of national consensus around the main outstanding issues translates into the absence of an explicit political and socio-economic reform plan that would guide Lebanese stakeholders into achieving this reform while holding them accountable whenever they fail to deliver.
III. Reform Levers

In order to be successfully planned and implemented, reform should garner the support and involvement of a wide base of stakeholders from all sectors and at all levels and should be grounded in an in-depth and scientific diagnosis. The following are therefore mere strategic reform levers that are in no way exhaustive or infallible, but are mainly conceptual and may act as a guidelines or a blueprint for comprehensive reform.

A. Personal Property and Safety Reform

Personal and property safety can be considered as a showstopper, whereby its compromise in any way precludes the possibility of effecting change in all other areas. Ensuring personal and property safety necessitates the development of a national strategy that fights terrorism and crime by developing and enhancing all law enforcement agencies. This entails a complete restructuring of the law national law enforcement agencies with the assistance of internationally renowned experts who have established themselves as authorities and who can provide best-in-class guidance in terms of ideal head count, intelligence know-how, and all procedures including recruitment, specialized training, and work steps and processes. The first and foremost reason of being of all national law enforcement agencies should be safeguarding the people, democracy, and socio-economic well-being rather than protecting the regime and spreading oppression.

B. Freedoms, Inclusion, and Human Rights Reform

The Lebanese constitution should be revisited in order to render all freedoms sacred: freedom of expression, opinion, assembly, association, religion, and holding the three state powers accountable. Reform should include explicit and clear plans that foster all forms of inclusion, social, gender, cultural, ethnic, religious, age, and political.

The media sector acts as an important vehicle for safeguarding liberties and driving the inclusion agenda, and thus legislation and legal frameworks should be reformed in order to ensure media sector independence, responsibility, and regulation that serve to establish economic viability- the surest way to guarantee free yet responsible media.

C. Political Reform

The current Lebanese political system needs to be revisited subject to an all-inclusive national debate, leading to a modern political system based on the values brought to light by the Lebanese people on March 14th: democracy, freedom, diversity, national unity, human rights, tolerance, sovereignty, independence, meritocracy, prosperity- all under the umbrella of United Nations resolutions. Serving as this active and model member of the international community translates into enacting a modern law of political parties and an electoral law that ensures fair representation, whereby elected representatives reflect the authority, voice and will of the People. This electoral law would either entail a majoritarian ballot based on small and homogeneous constituencies or a proportional suffrage, applied to larger constituencies, thus encouraging the existence of political parties on a national scale with broad vision.

Political reform should address the outstanding issue of Hezbollah, whereby a clear mechanism should be set that initiates a national debate, which allows all participants to voice their opinion and finally reach a consensual decision. It should also clearly define future relations with Syria, of which national consensus and interest dictate the need to hold friendly and mutually beneficial relations, based on the respect for the sovereignty of each and the revision of all existent and prospective agreements on the grounds of fairness and long-term interests, as well as a stronger relationship between the two Peoples.

Another mechanism that should be established is one that ensures the Peoples voice and the Governments accountability, eradicates the prevalent corruption culture, and effects objective watchdogs that ensure the integrity and proper functioning of the political class, whereby their foremost duty is to serve and uphold the public and national interest above all else. This mechanism should also ensure an open communication culture whereby transparent and consistent reporting and progress monitoring exists within and between the private and public sectors, as well as the three state powers and the public.

D. Judicial Reform

In order to ensure the independence of courts, there should be a clear and effective separation of judiciary power and authorities from executive and legislative powers and authorities, including all law enforcement agencies and authorities. This can only be ensured by enacting proper legislation and an effective governance structure, in addition to revisiting the functioning of the judicial system as a whole, in order to render it more fair, equitable, and infallible and ensure the implacable rule of law. The entire process of appointing judges should be reconsidered and reformed based on meritocracy above all other considerations. In terms of the specialization and qualification of judges, a framework for excellence should be adopted, whereby continuous training, learning, skill updating, and assessment systems are established.

E. Economic and Financial Reform

Economic and financial reform should be guided and driven by a national economic plan which aims at steering the country through its journey to well-being through a set of successive and well-defined development phases, each characterized by a main objective. Across the different development phases, a gap analysis is conducted for each sector, manufacturing, financial services, general services, information and communication technology, media, tourism, trade, water and agriculture, health, and education, and clear initiatives are identified in order to push these sectors to realize their optimum. In both the health and education sectors, Lebanon has a competitive and quality edge which leads to attracting large numbers of regional and international patients and students, rendering the two sectors key sources for economic development, and thus any gap should be addressed in order to capitalize fully on this advantage.

Across the various sectors, financing institutions and mechanisms should be set to support and promote entrepreneurial spirit and stimulate start-ups. This can be done by establishing an authority that develops a national strategy to support and foster individual entrepreneurship, incubators, access to venture capital, university spin-outs, etc.

Small and medium enterprises are bound to become the economic base of Lebanon. For this reason, the micro businesses of which the economy is mainly comprised of today should be upgraded into small and medium enterprises through the creation of supporting and funding mechanisms and agencies that foster this cultural shift.

Developing and updating vocational training programs and curricula is another key initiative that aims at providing the workforce with the knowledge, skills, and abilities necessary to compete in the modern marketplace and meet employment demands, in addition to ensuring a match between areas of specialization and labor market requirements. Other key economic initiatives include updating labor policies that regulate the exchange of labor, increased integration and labor migration. Economic reform should additionally capitalize on the freedom of capital movement and optimize processes to render it even more efficient, since it constitutes Lebanons financial and economic cornerstone.

In terms of financial reform, this should include the introduction of regulations that promote the development of capital markets and improve governmental monetary policies, in addition to revising the currency peg policy. Across all the above-listed initiatives, the involvement of all stakeholders, and especially the private sector, is crucial. Despite having a liberal economy with a mature private sector, a common vision that joins the public and private sectors is key to achieving sustainable change.

F. Fiscal and Monetary Reform

A key initiative for achieving fiscal discipline would be the privatization of state-owned enterprises and the elimination of chronic financial draining commitments through appropriate and radical restructuring measures. Government subsidies, staff, and control should be downsized based on analytical and documented studies, and services should be increasingly outsourced to the private sector. The Government should embark on a fiscal reform plan that aims at reaching a best practice deficit to GDP ratio 5 years down the line, which would stimulate economic growth. Expenditures should be optimized, debt should be managed and contained, and laws should be introduced to limit Government spending, increase transparency, and eliminate corruption. Additionally, all assistance and financial facilities, whether domestic, national, regional, or international, and in the form of grants or long-term loans, should be contingent, where applicable, on a set of reform deliverables, entrenching a philosophy that holds the Government accountable for the money received.

As for monetary reform, the borrower-lender relationship between the Government and the Central Bank should be reconsidered in a way that ensures and preserves the independence of the Central Bank, the back bone of the banking sector in Lebanon. Once a fiscal and monetary reform plan is set, it should be communicated and the Government should be held accountable against an explicit performance scheme with targets that need to be achieved at every stage in order to realize the overall objectives.

G. Social Reform

An utmost social reform priority aims at improving Lebanons indicators for human development and demands ensuring universal access to quality basic and higher education and healthcare, especially to deprived rural areas. Education should be constantly upgraded to achieve regional and international competitive advantages. This ensures a pivotal role in the global knowledge economy, which is spearheaded by developed and emergent economies. Quality education is of paramount importance, as it guarantees the survival and growth of Lebanons most valuable resource, its human capital.

Social reform also includes the modernization of social security and the introduction of pension funds according to international standards to ensure that it serves its core purpose of establishing a social safety net, in addition to remaining self-sufficient and serving as a major source of financial liquidity for the domestic economy.

H. Public Sector Reform

Public sector reform mostly concerns services that are run by state-owned or state-managed enterprises, such as infrastructure and utilities. Reform should entail undertaking a cost-benefit analysis of each state-owned enterprise leading to a clear recommendation, whether it involves integral or partial privatization, private-public partnership, or drastic restructuring. It could also involve partaking in a wider scale regional reform plan whereby services, mainly energy, power, and water are better optimized if addressed at a regional level, through exchange programs or common grids

Public sector reform should be driven by achieving mutual benefits for all stakeholders, i.e. financially draining operations should be streamlined, the role of the Government should be crystallized, and the end user or the public should receive top quality services or products by international standards and at competitive prices. This includes information and communication technology services, roads, transportation, utilities, electricity, water, fuel, etc., all of which should be transparently managed, governed, and operated by the most qualified entity. Before this actual restructuring takes place, a set of standards and criteria should be established regarding every related sector or state-owned enterprise, which would guarantee competitiveness, optimal outcome for stakeholders, transparency and fairness.

I. Administrative Reform

All administrative human resource activities and procedures need to be based on an explicit meritocracy and performance based system, with an incentive driven pay scale. A pivotal dimension of administrative reform should entail fostering a customer and civil service-oriented culture and mindset, and that is across all levels of administration, starting with the President and permeating down to entry level employees. This should be accompanied by a reduction and eventually elimination of red tape, redundancies, and inefficient layers in all administrative systems. Additionally, existing administrative procedures should be revised, simplified, and automated, tallied with a legal revision of obsolete laws linked to administrative inefficiency, whereby in some cases, services should be privatized or outsourced.

J. Legal Reform

Legal reform entails modernizing and reforming legislation across various areas and sectors in the aim of ensuring efficiency, modernity, continuous progress, and the elimination of outdated and obsolete laws that do not foster inclusion and equality. This includes the reform of labor laws, business laws, civil laws, criminal laws, personal and property laws, etc. to conform to performance-based international best practices.
IV. Conclusion

As previously mentioned, the above is merely an attempt to delineate strategic reform levers and does not constitute a finished plan of action, which can only be effectively developed and implemented once it has gone through a participatory effort whereby all stakeholders and experts are involved and engaged in diagnosing Lebanons political and socio-economic status quo, followed by the development of an exhaustive reform plan that acts as a guide and monitoring tool and that embodies the values of national unity, democracy, inclusion and freedom- the pledges of the new Lebanon.

The only way to avoid the vicious cycle of foreign interference and hegemony over Lebanese affairs is to approach these levers in a holistic manner, effecting simultaneous reform across the board. If the Lebanese experiment proves to be successful, Lebanons numerous challenges and its rich social, cultural, and confessional social fabric, render it a model that can almost be guaranteed success in any context. If pursued, this reform effort would assure an independent, sovereign, prosperous, and sustainable future for Lebanon and the Lebanese people, serving as the epitome of reform driven successfully from within and bottom up, rather than superimposed by a great power- an ideal paradigm to be emulated by regional nations.

Robert Ghanem, M.P.