How Sectarianism Helped Destroy Lebanon’s Economy

The sectarian power-sharing agreement that ended Lebanon's civil war also wrecked its economy and led to widespread protests.

ANWAR AMRO/AFP via Getty Images
Lebanese riot police clash with supporters of Lebanon's Shiite Hezbollah and Amal groups as they were heading to the area where anti-government protests were taking place in Beirut early on Dec. 12.

BEIRUT—Like so many in Lebanon, Samir Hamdan grew up being told that Lebanon’s political system was necessary to protect his sect. Thanks to the sectarian power-sharing agreement that ended the 15-year civil war in 1990, his small Druze minority was guaranteed seats in parliament and positions in government. But now in his twenties, Hamdan says that system has not just kept people divided—it’s also helped destroy the country’s economy.

After a year of searching for jobs with his architecture degree, Hamdan heard that the army was looking for architects and engineers, and he passed months of tough officer exams. He made it through to the final round of selection and, feeling confident, Hamdan checked the website to see the list of those picked for the new officer positions, only to find out he wouldn’t be getting a place. 

Not because he lacked skill or ability—he said he was simply from the wrong sect. “Someone who has worse grades would be accepted and I won’t,” said Hamdan, who has joined the weeks of anti-government protests in Beirut.

Like all public institutions in Lebanon, army recruitment aims for sectarian balance. The army should have a certain number of Christians, Sunni and Shiite Muslims, Druze, and Armenians in high positions, roughly correlating to the Lebanon’s demographic makeup. Filling those quotas comes first, competency later.

Lebanon’s whole government system is built on this share-power-among-sects, keep-the-peace model. The issue is so sensitive here that Hamdan and some protesters Foreign Policy talked to for this article asked not to use their real names.

“When they don’t take people based on qualification, this has a bad impact on the public sector,” Hamdan said.

Protesters in Lebanon say they want more than anything to move beyond this system, pointing to how their leaders have benefited from keeping the masses scared, divided, and dependent. They say leaders are clinging to this system not to keep the peace but to keep alive the networks of patronage and clientelism that they can exploit. 

Some say this model has been exported to other postwar countries, like Iraq, where a similar sectarian-based power sharing system is also being blamed for corruption and government mismanagement amid massive anti-government protests. 

Many of Lebanon’s current leaders rose to power in time of war and chaos. It’s the environment where they thrived. If a new, technocratic government were brought in, the current sectarian parties wouldn’t just lose their political power but also their ability to skim profits off lucrative contracts. It would threaten the nepotism and patronage that underpins the party-led political system we so often call “sectarian”—a system fueled not by religious hatred but by the profits and corruption it facilitates.

Lebanon’s bloated bureaucracy is not only too big—it’s ineffective. A 2005 World Bank study found in the health sector, Lebanon required 25 percent more funds to achieve the same health outcomes as best practices countries. The transport department has a budget of over $8 million a year, but it offers a fleet of just 40 buses and little other public transport. The national train service, which hasn’t functioned in decades, has hundreds of staff on payroll. Laying them off could be too sensitive. 

Hamdan said the sectarian quotas also create a system that allows leaders to dole out positions as part of an elaborate network of patronage, clientelism, and nepotism, which has become the defining feature of Lebanon’s politics and economy. The equation is simple: We get you or your family member a position, you stay loyal to the sectarian political party.

Sometimes it goes even further, he said, with families paying thousands of dollars to get someone in a public service position.

In October 1989, Lebanon’s warring parties met in the Saudi mountain town of Taif, signing a deal that stopped the fighting, which had killed more than 100,000 people and left much of the country in ruins. The Taif Accords rejigged a sectarian power sharing system first conceived of under the Ottomans and institutionalized by the National Pact at Lebanon’s independence. Taif promised Lebanon’s warring sects a division of influence and power sharing in return for laying down their arms.

“So after fighting each other for 15 years they realized this is not a profitable way to take advantage of the resources of this country,” said Nassim Zoueini, a 27-year-old protester who was born after the Taif Accords. “They said, ‘Let’s sit together and see how we take advantage,’ and they went to the Taif.”

Sectarian affiliation has been pushed into every aspect of social, political, and economic life here, but it’s not really about religious identity. Protesters complain that basic services that should be provided by the government, such as education and medical care, are instead handed like favors by sect-based political parties. One protester said his father needed a letter from a member of parliament from a sectarian party just to get a business license. Sectarianism plays a role in the private sector, too. Another protester recalled how he returned to Lebanon with an engineering degree from London, only to be told he needed a letter of support from a political leader. He got the letter but said the reason he’s protesting in the streets is because he doesn’t agree with the system.

“You will always be depending on those people to support you,” he said. “Taif is expired. It was to stop the war. It doesn’t work anymore.”

Another protester complained even the leadership of his basketball league was dictated by sect and party affiliations. 

“It’s one thing in basketball,” said Nisreen Salti, an associate professor of economics at the American University of Beirut, “it’s more serious when comes to appointing judges.”

Protesters say the political elite have stolen billions of dollars from the public coffers, with almost no repercussions. The system that came out of Taif created parallel spheres of influence, rather than strong national institutions, and reciprocal impunity between party leaders rather than accountability. 

It’s a political and economic system that was easily exploited by a group of warlords-turned-politicians skilled in pillaging amid crisis, but with no experience creating democratic institutions or a sustainable economy.

“The leaders of the major sects were keeping tabs on each other to maintain that balance, but nothing else,” said Salti. “Always done in the name of peace.”

This lack of accountability, incompetence, and mismanagement have helped Lebanon rack up over $80 billion in debt, giving it one of the biggest debt to GDP ratios in the world—around 150 percent. 

Much of that should have funded postwar reconstruction as Lebanon’s new political class went on what Salti called a “borrowing spree.” Billions of dollars were taken to rebuild the country, help resettle thousands of displaced citizens, and theoretically reestablish shattered government institutions.

But buildings across the country remain in ruin, major highways flood with any significant rainfall, and there are shortages of electricity and potable water. Rather than strong state institutions, there was a strategy to keep the state weak, creating no alternative to the patronage of political parties, further entrenching dependence.

“It’s not just that they will provide you with safety,” said Zoueini, another protester, of the sectarian political parties, “they will make you need them to provide you with your basic rights and basic services.”

Almost everyone in Lebanon seemed to know about the endemic corruption and mismanagement, but, until two months ago, it felt like few thought they could do anything about it.

“What ignited all of this is that even the people that belong to these sectarian safety bubbles felt threatened,” Zoueini said. “The leaders went too far. They tried to touch the very last cent in the pockets of the people.”

The protests started on Oct. 17, after the government announced new taxes, including a fee on free calling services such as WhatsApp. 

“These leaders are ready to try and sell us the air that we breathe,” Zoueini said. “They are shameless.”

Unlike past political movements, these protests aren’t affiliated with any of the country’s traditional, sectarian political parties and have truly crossed religious lines. Sunnis, Shiites, Christians, and Druze are standing together asking for a secular, technocratic government.  

For Rida al-Hallaq, who also didn’t want to use his real name, Beirut’s glitzy downtown is a symbol of the corruption and mismanagement that has helped destroy his country’s economy. Postwar Prime Minister Rafik Hariri, the father of the current caretaker Prime Minister Saad Hariri, awarded his own company, Solidere, the contract to rebuild the city’s devastated center. In the process, thousands of Lebanese were pressured to give up those properties in exchange for shares in Solidere. Hallaq’s grandfather was among them.

The rebuilt downtown has become a semi-empty wasteland for the ultra-rich and visiting, Hallaq said, where government-connected businessmen lease properties for cheap and re-rent them at extortionate rates.

But this area has now become the center of the anti-government protests and also vocal accusations of corruption and embezzlement against Solidere. “End Solidere” was spray-painted in large letters on a wall near where Hallaq was protesting with a group of friends.

Hallaq said sectarianism isn’t an inescapable reality in Lebanon, it’s a tool instrumentalized by political elites to keep people scared and dependent.

“[Lebanese] saw people being killed based on their ID,” Hallaq said. During some of the worst days of the civil war militiamen would ask civilians for ID, then kill them on the spot if they belonged to the wrong sect. “So they are like, ‘Let’s just be grateful for the peace we have.’”

As the protests continue, Lebanon teeters on the verge of an economic collapse that could make the poorest Lebanese even poorer. But that might not be worst-case scenario for Lebanon’s sectarian party leaders, and Salti said it may be why the government has moved so slowly on addressing the economic crisis:

“A complete collapse in the economy is going to make patronage so much cheaper,” Salti said. 

Rebecca Collard is a broadcast journalist and writer covering the Middle East.

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