But what also depends on these elections is the kind of relationship Lebanon will have with Syria, often dubbed its “big sister.” The enmity between the two countries’ governments has been strong since the assassination of billionaire and former Prime Minister Rafik Hariri in February 2005, openly blamed by March 14 on Syria, then Lebanon’s power broker for 15 years. Although Syrian troops withdrew from its small neighbor following the murder, Syria remains very influential in Lebanon, not only through its staunch allies, among whom Hezbollah stands strong, but also by way of a series of agreements that were mostly signed during Syria’s reign over Lebanon.

One example of this is the Fraternity, Cooperation and Coordination Treaty (FCCT) signed in 1991, that codifies cooperation between Lebanon and Syria in all fields from media policy to defense strategy. Another is the Syrian-Lebanese Higher Council, established in 1991 under the FCCT, whose purpose is to “set up the general policy of coordination and cooperation between the two states.”

Their validity and legitimacy could be questioned once embassies are formally up and running between Syria and Lebanon. Or, on the contrary, they could prevail, stripping the embassies of all meaning. Although Nasri Khoury, secretary general of the Syrian Lebanese Higher Council, declared that “the FCCT and the agreements it produced are established truths,” Syrian President Bashar al-Assad declared that “Syria is ready to annul the Higher Council if the Lebanese demand it.”

While March 14 may well demand just that, these agreements are not only binding at a political level, they also have a vast economic dimension, and give Syria a strong hold over Lebanon. One example is the sharing of the Assi river waters, giving a maximum 80 million cubic meters (MCM) to Lebanon out of its total of 400 MCM. Depending on who leads Lebanon, agreements on trade, customs, and telecoms between the two countries will be tackled or left alone.

Maybe more importantly, other decisive aspects of these relations lie in crucial issues that are still left pending: what position will the new parliamentary majority adopt regarding the Special Tribunal for Lebanon (STL), established by the UN to try the killers of Hariri? The Lebanese Parliament hasn’t yet ratified the Memorandum of Understanding that will define the capacity of the STL, and the opposition is still reviewing the power it would give the international community over Lebanese institutions and indicted individuals. If anything, March 8 will continue to pugnaciously oppose the legitimacy of the STL.

The four had been arrested in 2005 in connection with former Prime Minister Rafik Hariri’s murder, and at the recommendation of the UN’s International Independent Investigation Commission (IIIC) they had been jailed for three years and seven months without being charged.

By mid-April, Lebanese judge Sakr Sakr had already lifted arrest warrants against the four, but had ordered they remain in jail pending a decision on their fate by the Hague-based Special Tribunal for Lebanon (STL), which had been handed authority on the case by Lebanon in early April. This decision by pre-trial judge Daniel Fransen at the recommendation of prosecutor Daniel Bellemare, came two weeks later with immediate effect, sparking much media and public fanfare. 

Although, as Bellemare wrote in his submission to Fransen, they could still be indicted later on if evidence implicated them, the pretrial judge declared that at this stage, the generals “cannot be considered as either suspects or accused persons. … The evidence collected thus far is not sufficiently credible to maintain the detention,” said Fransen. 

Since then, the four - who always claimed their innocence - have been hailed as heroes.

The night of the generals’ release, Hezbollah released a statement welcoming Fransen’s decision, after the “arbitrary detention imposed by the [majority] and which took place by politicizing the judicial system.” The apparatchik described the generals’ arrest as a “charade and a big scandal.” More importantly, Hezbollah said that this ” important event” would allow for a “decisive revision of the nation.”

Upon his release, Sayyed - who rumors say could be asked to step up as a minister if the opposition were to win the polls - denounced a “conspiracy.”

To contain the wave of condemnation and prove its own credibility, the Higher Judicial Council expressed “its willingness to bear its responsibility in facing any deficiency committed during judicial practices.”

But as election day looms closer, this release may have a serious impact on how the Lebanese will vote. “Our detention was politically motivated and was exploited for four years by the majority [the pro-Western ruling parliamentary coalition]. So it is perfectly normal that the tables are turned now,” said Sayyed. No wonder political reconciliation is at a nadir.

For his part, majority leader Hariri declared that this decision was “a step toward achieving justice” and that “this is a response to those who said that the tribunal was politicized,” referring to accusations from the opposition that the STL was a pawn in the hands of the United States.

Lebanese Forces leader Samir Geagea said that the release of the four generals scored a point for the majority and not the opposition, because the opposition “has been marketing for years that the tribunal was politicized.”

However, without the STL as a central point of its electoral platform, and faced with virulent accusations of having misled the Lebanese public, the majority coalition now more than ever needs arguments to rally swing voters and reassure its own troops. Hezbollah, on the other hand, which repeatedly asked for the release of the generals, can further mobilize its constituencies because of this victory.

Amid electoral fever, few realize the STL is back to square one, without suspects or any prospect of identifying any. It seems justice for the victims will not take place anytime soon.             

The Lebanese capital is described as the beating heart of culture in the region to rarely. But it’s a place that hosts more than 600 publishing houses, myriad libraries, bookshops and cultural centers. It’s also a haven of freedom for the media and for Arab intellectuals.

So it somehow makes sense that in 2007, Beirut was designated World Book Capital for 2009 by UNESCO, the International Publishers Association (IPA), the International Booksellers Federation (IBF) and the International Federation of Library Associations and Institutions (IFLA). Since 2001, the festival has been organized annually in one major city. Beirut is the ninth to be crowned as such, in the footsteps of Madrid (2001), Alexandria (2002), New Delhi (2003), Antwerp (2004), Montreal (2005), Turin (2006), Bogotá (2007) and Amsterdam (2008).

Strings attached. Beirut now sits at the heart of an impressive number of events promoting books and reading to the widest possible audience - all in a country where, unfortunately, reading is becoming less and less of a habit.

Ambitious plans are underway: 250 projects have already been approved, and this number is expected to reach a staggering 300 in the coming days - or almost one event a day throughout a whole year. “We’ve kept the project submission form open on our Web site in order to keep the dynamic alive,” says general coordinator Leila Barakat. “Anyone can submit a proposal, from individuals to publishing houses, embassies, writers and so on.”

For the past decade, Lebanese expatriates have been leaving their homeland in search of a better future. Now, many are returning as they try to flee the effects of global recession. Some have lost their jobs abroad. Others feared they would soon be laid off. Most hope to find work in their home country, which has fared well in the downturn.

The few economic sectors in Lebanon that have been struggling to find the enough human capital will happily embrace the new job seekers. But overall, Lebanon has a limited overall absorption capacity when it comes to employment. There are other problems as well, including a shortage of housing and low salaries relative to many Gulf countries, which could make this a missed opportunity for Lebanese firms if experienced expatriates are unable to find work at home.

Jad Chaaban, who teaches economics at the American University of Beirut, estimates that 150,000 Lebanese have work visas in the GCC states. He believes that between 5 and 10 percent of them may return home because of the downturn. That will likely shrink Lebanon’s capacity to generate wealth. According to the World Bank, the Lebanese diaspora sent home $6 billion in remittances last year, about a quarter of the country’s 2007 GDP. But those remittances are expected to drop off significantly in 2009.

“We have seen more applicants ap-ply per job, with an increase of about 30 percent since last year,” says Rabih Mogharbel, CEO of Hire Lebanese, a recruitment firm based in Beirut. “If there is one job opening, you have over 30 percent more applications than last year,” he adds. “I am sure that we will have many more job seekers this year.”

The number of requests submitted to Management Plus, another Beirut-based recruiting company, has surged since November. “We are getting people who still have jobs but who are afraid or fed up,” says Sabbah al-Haj, the company’s chairman. “They feel insecure and whenever such a thing happens, you want to go home. For example, 20 to 25 percent of the requests we have received have been coming from North America, all from people holding [a] very senior position but who are feeling that way.”

The STL has an initial, renewable mandate of three years, and its registrar, Robin Vincent, believes it may take as long as five years before any suspect is brought before a judge. At this early stage, four Lebanese generals are in the line of fire: former head of the presidential guard Mustafa Hamdan, security services director Jamil al-Sayyed, domestic security chief Ali Hajj and military intelligence chief Raymond Azar. The four have been held for nearly four years on suspicion of premeditated murder, attempted premeditated murder and carrying out terrorist acts. But they haven’t been indicted.
The aura of secrecy that has characterized the case for the past four years hasn’t dissipated with the STL’s formation. Because of security concerns, the identities of the tribunal’s 11 judges (including four Lebanese) remain secret. The identities of potential witnesses and suspects haven’t been revealed either. The prosecutor is a Canadian judge named Daniel Bellemare. He currently heads the International Independent Investigation Commission (IIIC), which was established in 2005 by the UN, and he “has kept his cards very close to his chest,” Vincent said at the opening ceremony. “It is important that he does that for confidentiality.”
Bellemare confirmed at the inauguration that there would be more than one indictment, saying that the crime was committed “by several individuals, while other people were aware of it.” He also insisted that no one would be “immune” from punishment, and declared during an interview with Al-Arabiya that, “the generals will not be held in custody indefinitely. They will stand trial one day. … There are other suspects in the crime in addition to the four generals.”
Bellemare adamantly repeated that “investigations are still incomplete,” suggesting that official indictments would only be issued based on incriminating evidence, and that he “will not issue an indictment unless fully convinced with the evidence presented.”
Who’s accused. The four generals facing trial were arrested along with five other men, based on evidence gathered from the early investigations of German prosecutor Detlev Mehlis, former head of the IIIC. But the generals have consistently denied the charges. Their lawyers argue that their detention is “illegal” and “unfounded,” claiming that there is no proof against them, and that their clients are being held on false testimony that was later retracted.
Sayyed filed a lawsuit before the French courts in August 2008, against Mehlis for “distorting the investigation and calling false witnesses.” He also declared by the end of February that he hadn’t been interrogated by the IIIC for the past three years. Sayyed even said in a 2008 statement that Lebanon’s president at the time, Emile Lahoud, hadn’t “followed the steps of Syrian President Bashar al-Assad, who approved the investigations of the IIIC with Syrian generals and preserved their rights and dignity. … Assad refused to hand his generals to his political enemies as La-houd did with Lebanese generals.”

In January, Roger Tamraz briefly resurfaced in Lebanon’s news scene. The 69-year-old Lebanese-American businessman, who has been wanted by the Lebanese authorities for years, was arrested in Morocco and released a few days later, despite an extradition request from Beirut.

It’s not the first time the Lebanese justice system has tried and failed to get its hands on Tamraz, whose history in the country is paved by bankruptcies and scandal. The Lebanese authorities have been seeking him since 1987, when local courts convicted Tamraz on several counts and sentenced him to a 33-year prison term for embezzling $200 million, misusing bank assets and collaborating with the enemy, among other things.

From the beginning. That conviction marked the end of Tamraz’ long and colorful career in the cedar state. Back in 1966, 26-year-old Tamraz had just completed his MBA from Harvard Business School, and arrived in Lebanon for the first time to head a team from Kidder, Peabody & Co. The US investment banking and financial consulting firm had been hired by the Lebanese government to salvage the Middle East’s then largest bank, Intrabank.

Established in 1951 by Palestinian banker Youssef Beidas and three partners, Intra had rapidly become “an international business empire [by investing] huge sums outside the sectors traditional for banks,” says Kamal Dib, a Canadian economist and author of several books on Lebanese businessmen.

By 1963, Intrabank had branches in 15 countries including France, Germany and the United States. In 1966, it ac-counted for 40 percent of deposits across the country, and more than half the banking system’s assets and reserves. Its reach was unheard of in Lebanon, with controlling interest in the national airline, the Beirut Harbor Corporation, the Marseille Harbor in France, a French shipbuilding company, Hotel Phoenicia in Beirut and a slew of other ventures.

But 15 years later, the bank was on the verge of collapse. Beidas’ business strategy had been reckless and his political ambitions had ignited hatred among the Lebanese political caste, precipitating his demise. As a result, both the government and central bank declined to provide Intra with the liquidity it needed to get itself out of trouble. “Those in power were able to save Intra if they wished to, but they did not bother. They preferred to see it sink,” Dib says, adding that Beidas was “a Palestinian who was seen by the Lebanese establishment as a foreigner trying to control the Lebanese economy and buy political influence.”

But so far only three companies (Banque BEMO Saudi Fransi, IBTF and Arab Bank Syria) have registered – a far cry from the 30 companies expected by the Syrian Deputy Prime Minister for Economic Affairs Abdallah Dardari last summer.

According to the DSE’s vice chairman, Bassel Hamwi, many potential candidates weren’t sure when the exchange – which has been postponed several times since 2006 – would officially open. They also remain cautious about how successful it will become. “We need to wait at least three months. Many of my clients, including most of the banks in Syria, are interested but the procedure is not easy, ” says Raed Karawani from Karawani Law, a firm that represents several companies applying for a DSE license.

In a country whose economy is dominated by family-owned enterprises, the DSE also means kicking old habits. Trading on the new exchange implies a degree of transparency and standard accounting practices, which many Syrian companies are not used to. As an incentive, a new tax law was passed a year ago to spur the transformation of family-owned general partnerships into joint-stock companies by providing them special tax treatment.

But Hamwi admits that to date, only a few companies have used the new law. “In order to register, the name and the national number of each shareholder is required,” he says. “But national numbers were introduced in Syria only three years ago. Many companies, that have thousands of shareholders, will need time to get these numbers.”

The human resources deficit in Syria’s financial field also remains an issue. “For the DSE to work efficiently, we need the expertise of foreign brokerage companies,” says Karawani, who explains that’s why the Syrian Commission for Financial Markets and Securities demands that Syrian firms have a “strategic partner” (i.e. a foreign company registered on another board with significant results) that holds around 20 percent of their capital.

Before the global meltdown, such requirements may have seemed a little over the top. But not today, at least according to Karawani. “It looks like we were right. Other markets lack transparency due to the increasing number of new instruments,” he says. “So after what happened last year, foreign investors want to go back to basics, which is what the DSE will offer them.”

But the DSE is expected to generate keen interest mostly among local companies which, in the midst of Syria’s economic reform and liberalization program, have posted impressive growth for the past few years and are in need of new investment opportunities. In the absence of a formal stock exchange, around 50 holding companies have undergone over-the-counter IPOs that were often oversubscribed.

“Although they’re not listed, many local companies are already public and their [good] share prices reflect the reality of the market. Trading is already happening, so it will only get better if it happens on a formal stock exchange,” says Hamwi. Institutions with an exceptionally high level of revenues and transparency will be allowed to register on the “big board.” Those that haven’t been audited during the past three years but are deemed transparent will have access to an alternate, development board.

“It’s not unusual for a Stock exchange to open with only three companies,” says Hamwi, who believes another 12 will be listed by the end of 2009. But he remains cautious. “It will take one to two years for confidence and awareness to grow,” he says. “By that time, the world’s economy will do better. Anyway, the restructuring of family owned businesses to be able to get listed will need that time as well.”

Before a wave of nationalization swept the country in the mid-1950s, many companies were listed and traded  in Syria. The new stock exchange’s humble start may be nothing on the same scale, but it will still achieve a major objective: to give the world a clear indication that the country is becoming more liberalized.