We have chosen life. We refuse to die. This is our clear choice. We have survived wars and destruction over the ages, and we shall do so again. I hope you will not let us down." Prime Minister Fouad Siniora's words in addressing the world when Israel launched its onslaught on Lebanon in July brought tears to the eyes of many Lebanese by evoking both the country's history and its credo of renewal.

Munir Abdullah, 42, was putting the finishing touches to his new restaurant, Bardo, when the war began, but decided to go ahead and open in October.

Business, he said, is not as good as expected. "I'll not leave Lebanon unless it dies," he said. "I've always seen Lebanon as a person I loved who was often very ill. So this is not a time to leave. Beside, no other country is better - the people, the weather, the small size, the quality of life. You can enjoy all these things, especially if there is security."

Bardo's chef, Wael Lazkani, quit a job in London to return to Lebanon just after the hostilities with Israel ended, even though he had acquired Canadian nationality. "Crises in Lebanon come and go," he said. "The country's been ruined several times, but it always manages to live again despite the best efforts of it leaders to wreck it."

With 1,200 dead and $3.6 billion in damage done, renewal depends on international goodwill, and Lebanon's friends responded to Siniora's call with $900 million in aid that has already produced tangible results, with over 750,000 of an estimated 980,000 displaced people returned to their homes by December and 55 out of 95 damaged roads repaired and running as normal.

But sustained economic recovery, say analysts and business leaders, now requires political stability, and that depends on both domestic and international factors. "The region is undergoing a tough struggle between regional powers and global ones, and this puts Lebanon under pressure," explains Masoud Younes, a professor of sociology and anthropology at Lebanese University in Beirut. "Political agreement between the Lebanese is necessary to build stable political institutions, but the international situation is making this even harder."

Younes fears that internal understanding between the different Lebanese leading groups is possible only without the foreign interference that could reduce Lebanon to a battlefield for foreign forces. "Instead of the outside world competing to invest here, they will be sending it their intelligence agencies and arms," he said.

Business and commercial leaders are warning the politicians of the consequences of strife. "Lebanon has been an attractive place to invest, but the current political crisis is putting incredible stress on the whole economic, social and security structure," said Joseph Torbey, the president of the Union of Arab Banks, adding that a continuing crisis will undermine investment and infrastructure projects. "It's inevitable that the success of the donors' meeting in Paris III, scheduled for late January 2007, depends hugely on the political atmosphere in Lebanon."

The Siniora government is hoping the conference will agree to $8 billion in grants and soft loans to help finance reconstruction and to ease the burden of servicing a $40.3 billion public debt, up 9 percent year on year and which has spiraled upward because the strategy of high borrowing during the post-war government of Rafik Hariri was based on the now falsified assumptions of high economic growth and structural reform.

Many bankers are putting a brave face on the outlook, pointing out that although the Israeli war and blockade prompted capital flight, deposits of $1 billion by Saudi Arabia and $500 million by Kuwait in early August steadied the ship, and that half the deposits that left the country returned once fighting ended. The Central Bank has healthy foreign reserves of more than $13.5 billion, excluding gold.

Riad Salameh, the governor of the Central Bank, told a November press conference he expected "continued stability in the monetary market due to the Central Bank's resources and the available liquidity of commercial banks." Salameh said losses in the banking sector during the war amounted to no more than 1 percent of total cash deposits, and so would have a limited effect on profitability. Bank deposits of $60.4 billion in September 2006 were in fact higher than the $56.6 billion in September 2005.

The prognosis is more troubled in other sectors, including tourism, which suffered losses of about $1 billion in the war. "There was 100 percent lost business for everyone in the sector," said Nada Sardouk, the director general at the Lebanese Ministry of Tourism, which is working closely with the private sector to get the industry moving.

Lebanon tried to make a splash at the World Travel Market, the annual London exhibition, with a stand twice as large as last year's. "The strength of the country's presence underlines the tourism authority's determination to win back the confidence of international travelers following the month-long conflict this summer," said Fiona Jeffery, World Travel Market's managing director.

The Ministry of Tourism agreed in August to a recovery package, including a fund to help operators pay workers' salaries and keep them from emigrating. Tax breaks and new financial arrangements are also under discussion "in order to keep working during this difficult period," said Joseph Sarkis, the minister of tourism, who has also announced an international appeal for donations through the Central Bank. "Lebanon will not be able to cope by itself," he added.

Sarkis said his ministry also plans to cooperate with the environment ministry to recover from the massive oil spill that has polluted about 150 kilometers of the Lebanese coast and spread north into Syrian waters. "Fifty to 60 percent of our tourism activity is based on the sea," the minister said.

The ministry also wants a special campaign to lure back Arab tourists. "It is not easy," Sarkis admitted. "We want to be sure anyone we invite back will be safe ... Arabs have long been the majority of visitors to Lebanon."
The figures show the scale of the challenge but do offer hope. The number of tourists was 922,202 in the first ten months of the year, down just 5.2 percent on the same period in 2005, reflecting the impact of the two-month war after a record high number of arrivals in the first half of the year.

But October showed excellent signs of recovery, with 88,817 visitors, up 31.4 percent on October 2005, only for the industry to nosedive once again as hotel occupancy rates fell from 30 percent to 10 percent after the assassination of Pierre Gemayal, the industry minister, in November.

International assistance is also on offer. The United Nations World Tourism Organization (UNWTO) secretary general, Francesco Frangialli, has declared a Special Program for the Reconstruction of Lebanon's Tourism Economy, which will assess the economic impact of the recent conflict and explore ways to restore market confidence and redevelop sustainable tourism.

Tourism is among many sectors looking to Lebanon's famous advertising industry to help its revival. "Come back ... The war has finished," ran the message alongside a picture of Edde Sands, a beach resort north of Beirut, just a few days after the guns stopped firing in August.

And sure enough, there was then a bombardment of feel good advertising on television, radio and billboards tapping the Lebanese people's desire to see their country flourish again. Anyone arriving back saw on the airport road a huge poster, paid for by Byblos Bank, carrying the word damar (destruction), where the first letter of the word was dropped and replaced so the word became e'mar (reconstruction).

Flag-waving advertising campaigns during the war didn't only reveal good marketing strategy. H&C Leo Burnett worked with Bank Audi to produce billboards on the theme "Whatever happens, the sun will always rise again in Lebanon."

But the advertising industry was itself a victim of the war, with the interruption of its high season sparing none of its more than 60 agencies. Total advertising expenditures in Lebanon which rose 21 percent year on year in the first six months of 2006 after a gradual increase in preceding years plummeted 60 percent in July and August as firms cancelled pre-booked campaigns across all media.

In an important show of support, Leo Burnett Middle East and North Africa went ahead with plans to hold its annual planning meeting in Lebanon in November. Tom Bernardin, its chairman and chief executive officer, told colleagues Beirut had "proven time and again to be a city for the ages and a city that breaks through the clutter by defying all challenges to create world-class advertising."

If the advertising executives showed characteristic brashness, Lebanon's teachers faced a new school year, which began a month late in much of the south, with traumatized pupils and damaged buildings. Of the about 1,200 people killed, some 360 were under 12, and the continuing threat of unexploded Israeli cluster-bombs means children must be made alert to their still present dangers.

About 50 schools were destroyed and 300 damaged, and the government has estimated it needs $70 million to rebuild its education system. Khaled Kabbani, the education minister, has said the money is needed for "reconstruction and repair of schools, the purchase of school furniture, and for training teachers to handle traumatized students."

The Arab Gulf states have quickly stepped forward to assist. The UAE is rehabilitating 216 schools in the south, 152 public and 64 private, and has paid for textbooks for all Lebanese public schools. Saudi Arabia has paid the tuition fees for all students registered in public schools enabling the government to offer refunds to cash-strapped parents as well as new equipment for schools and winter supplies for local residents. Qatar is paying to rebuild public and private schools as well as the infrastructure and public buildings in four of the south's worst hit towns, Ait al-Shaab, Ainata, Khiam and Bint Jbeil, and is supplying furniture for schools as well as free heaters and fuel for residents.

Unicef, the UN's children's fund, is also playing an important role in providing materials like blackboards and markers to more than 1,400 public and subsidized private schools throughout Lebanon. Unicef has also distributed to pupils a sky-blue backpack with three notebooks, pencils, an eraser and a pencil sharpener.

NGOs have been supervising the expenditure in south Lebanon, taking on the supervisory role assumed in other countries by the state. "We replaced the government," said Rania Abu Musleh, the program coordinator for Reach Out to Asia, which is overseeing school reconstruction. Musleh's witticism reflects the bemusement many feel toward the government's reluctance to take part in reconstruction efforts.

But the absence of the direct participation of the Lebanese state reflects not just historical precedent but the continuing preoccupation of the country's leaders with fighting battles as regional and international interests France, the US, the Arab states, Iran take sides.

In early December, Nicolas Burns, the US undersecretary of state, said there was a "direct correlation" between international assistance and the continuation of the Siniora government in its present form. A government of "national unity," he said, while urgently needed in Palestine where Hamas won the 2006 election, would not suit Lebanon. Without any irony, he then added, "We want to see the outside powers stop intervening."

Picture: "No matter how cloudy it gets, the sun will shine again on Lebanon," reads an ad for Bank Audi, one of the country's leading financial institutions

By: Zeinab Charafeddine

Source: Arabies Trends, Zawya