October 26, 2021
From The Public Source (Lebanon)

Thwarted Reforms

In 1958, a brief civil war rooted in class antagonism erupted, as left-leaning paramilitary groups with sympathies to Egypt’s president Jamal ʿAbd al-Nasir and the nascent United Arab Republic waged an armed struggle against oligarchic president Camille Chamoun and his government. In September of that year, following a military stalemate due to the arrival of US marines summoned by Chamoun, army commander Fuad Chehab assumed the presidency.

Acutely aware of socioeconomic disparities, Chehab’s mandate was characterized by key reforms within the public administration as well as modest attempts at bridging socio economic cleavages, such as establishing the National Social Security Fund.

By 1974, 13 families controlled 47 percent of total industrial capital, 30 percent of total bank assets and 24 percent of total capital in commerce, agriculture and service companies; a mere four politically-connected firms were responsible for importing two-thirds of all commodities from the West.But the reform oriented Chehabists became increasingly repressive, particularly after the failed coup attempt by the Syrian Social Nationalist Party in December 1961. And when Chehab’s term ended in 1964, reforms slowed down significantly. 

As geopolitical tensions grew, feudal lords — or “cheese eaters,” as Chehab called them in reference to their devouring of the public sector — managed to oust Chehabists from office in 1970.

The feudalistic new president and prime minister, Suleiman Frangieh and Saeb Salam, were compelled to form a government that would supposedly respond to growing pressure from below. The result was the anomalous “youth government” (houkoumat al-shabab) made up of unknown young technocrats who pledged to enact long-awaited wide-scale reforms. 

Their efforts were thwarted before they began by parliament and the merchant class.

Such was the case of Decree 1943 in 1971, through which finance minister Elias Saba tried to raise customs dues on over 500 imported commodities including luxury items such as expensive cars and goods that had locally produced equivalents in order to protect local industry and employ additional government revenue towards socio economic development.

A 10-day strike by merchants and shopkeepers in Beirut, tacitly supported by the oligarchy, killed the decree under the absurd reasoning it would harm tourism and the middle class.

Similarly, health minister Dr. Emile Bitar lost his bitter struggle against pharmaceutical importers to make healthcare more affordable and accessible. 

A handful of pharmacies and pharmaceutical importers, all tied to the oligarchy, monopolized the market by importing and selling only the most expensive drugs for astronomical profits. This cartel had managed to stunt any substantial growth of the local pharmaceutical industry by lobbying for high tariffs on equipment needed for the local producers. 

Bitar attempted to place a ceiling on their profits, diversify the type of medicines imported, and support the local pharmaceutical industry. Pharmacies and importers accused him of destroying Lebanon’s free market economy and creating medicine shortages. 

Ultimately, with little support from parliament and from his colleagues in the Council of Ministers, Bitar resigned in protest in December 1971.

Source: Thepublicsource.org