After visiting Beirut, a reader wrote to me remarking on the incongruity of price tags and of the predominant luxury vehicles in town. Given that the evidence of a recent conflict lingers on in a whiff of tension, a whir of helicopters, bullet holes and third world utilities, the lavish lifestyle on display does indeed seem out of place.
A number of factors contribute to the striking proximity of prosperity and privation in Lebanon. I will cover the main points – feel free to add those I may have missed out.
First and foremost, Lebanon receives a considerable inflow of money from the huge diaspora (several times larger than the current population) either via their holiday spending, their local investments like holiday homes, or in the form of remittances. The contribution of remittances to the general economy is one of the world’s highest.
Second, money flows in from the rich Gulf states, also in the form of holiday spending and sumptuous second homes. The semi-westernised Lebanon is enjoyed as a liberal holiday destination by Muslim neighbours the way Amsterdam is by European tourists. Until ten years ago, the threat of more war had kept property cheap which brought in key investments by risk-takers who set the tone for the rampant modernisation to come.
Third, the Lebanese have long been a people of trade, and make the most of leverage between international markets using their two advantages of business skills and a broad contact base abroad. A high proportion of Lebanese are involved in some form of international business operations, be it foreign-brand franchises, import (both low-cost products and luxury), or export. The emigrants of the late 1970s and 80s and their offspring have had time to launch many a successful business in their adopted countries. The Lebanese are born networkers who make little difference between business and social ties. Their close ties to their motherland is also a motivating factor to invest here and provide a business opportunity for their friends and family.
In addition, importing cheap maids to do the housework and babysitting for a pittance also allows both parents to work, making for more spending money for consumer goods. However, at the same time it directs wages away from the working class, whose buying power drops creating a bigger wealth gap. Same story for importing low-cost construction labour.
Obviously the majority of Lebanese do not live in the lap of luxury and the capital is only representative of the rest of the country if you get out of Solidere-ville and wander the back streets of Basta or the suburbs (east as well as south). Wages are low for most and lag behind the increasing cost of living because the latter is boosted by foreign buying power. 1,000 USD a month is considered a decent wage even for a university graduate, while 2,000 USD leaves them feeling flush. But there are a great deal of nouveaux riches in Lebanon who get well-paying jobs by connections (wasta) not by qualifications. Some of these well-paying positions are bolstered by aquifers of corruption and political bias.
Even then, many of Beirut’s glitterati are not as rich as they appear. A luxury car in other countries would indicate that the driver has a high income, a decent home, and a garage to keep it safe. Not in Lebanon. Here one might drive a Jag but park on the street and live in a family home, unable to afford the maintenance let alone a garage. Often their brash brand names, the type which are spurned by the jet set of minimalist Paris, are all they possess. They are happy to invest most of their salary in clothes or parties and rely on parents or credit for the big things in life. It’s all about appearances. Scratch deeper and behind the showiest set of wheels you may find, as my banker friends tell me, the deepest debt. Lebanon may be a nation of bankers, but they are spenders, not savers.