Areas of strength and of dysfunction in Lebanon’s socio-economic contract. Wealth and income disparities, the causes of the widening divide, and policy remedies.

I am going to give you today some qualitative analyses that I am currently working on quantifying and validating

  • From the 40’s to the mid 70’s, it was clearly Lebanon’s vibrant middle class that made it so successful and so different from its neighbors.
  • The quality of life and the purchasing power of the middle class, i.e. employees, civil servants, judges, military, teachers… was remarkably good.
  • Banking secrecy was introduced to protect citizens of neighboring countries from predator governments, not to allow the Lebanese to evade taxes

Look at Tripoli as a sample, a microcosm. I have chosen a city that is relatively big, relatively homogeneous when it comes to communitarianism (so no one can argue that it is about communitarianism), and that used to be a typical middle-class city, with a few prominent families that would enjoy significant wealth, mainly in land properties. Tripoli, where civil servants, teachers, craftsmen, bank employees, etc. used to enjoy a decent cultural life (movies, theatres, cafes,…) became today a city with hundreds of thousands of extremely poor people, with the noticeable presence of a few extremely wealthy billionaires. The eradication of the middle class in the capital of northern Lebanon is typical of the country’s evolution.

What went wrong?

Insider trading (story of the law)

Depreciation of the pound

Financial engineering (not the fault of the CB)

Interest rates


Job opportunities

The demolition of the public service and administration, and the freeze in its salaries (issue of salaries and wages today)

The big corruption, as a concentrator of wealth (unlike the small one?)

The public debt, treasury bills, 40% interest rates

Solidere, and the loss of small owners’ rights

Securing permanently higher profits for banks, from taxpayers’ money and without any objective reason (financial engineering)

The inability to create jobs in the private sector (0.5% in 2008-2009), hidden unemployment, loss of competitiveness

Brain drain toward Europe, the Gulf, etc.

Concentration of deposits

Free trade treaties

Anti-industry measures

Tax system that favors rent against investment and labor. Money is available, but no incentive to invest.

The continuous increase in real estate, supported by public policies, which increases wealth in the hands of few, and penalize investment in productive sectors

Budget spending

Broad-based subsidies that fail to target the poor

The inefficient infrastructure

Poor social safety nets

Rigidity of the labor market

Impossible to succeed without “protection” (in some areas, it is forbidden to work without a “partner”)

Bank lending against mortgages, no project financing

Small market without complementary markets

Real estate speculation, which attracts most of the investment, and high returns that other activities cannot match


Government’s poor performance: Refraining from paying compensations for expropriation, for settling social security arrears, etc. which causes chain reaction effects





بيفاني حاضر في المركز الاسلامي عن التحديات المالية: بالاصلاح ووقف الهدر نعيد بناء الاقتصاد والقطاع المالي

وطنية – استضاف المركز الإسلامي – عائشة بكار، المدير العام للمالية آلان بيفاني، في محاضرة بعنوان “لبنان والتحديات المالية الداخلية والخارجية”، في حضور رئيس مجلس الوزراء سعد الحريري ممثلا بالنائب الدكتور عمار حوري، الرئيس نجيب ميقاتي ممثلا بعبد الفتاح خطاب، مفتي الجمهورية الشيخ عبداللطيف دريان ممثلا برئيس المحاكم الشرعية السنية الدكتور الشيخ محمد عساف، والوزراء السابقين الياس حنا وحسن السبع ووليد الداعوق، النائب السابق محمد الأمين عيتاني، وممثلين عن قيادات امنية وشخصيات سياسية وقضاة وعلماء دين واطباء وجمعيات اهلية وفاعليات اجتماعية وثقافية واعلامية.

Bifani : L’inefficience des services publics plus coûteuse que les impôts

Pour la première fois depuis 2012, le gouvernement a adopté un projet de budget en vue de le transmettre au Parlement, laissant entrevoir la possibilité de mettre fin à des années d’aberration démocratique. Êtes-vous confiant sur son vote définitif par les députés, alors qu’ils ne l’ont pas fait depuis 2005 et que plusieurs obstacles juridiques demeurent ?