Declaraciones directas y expresas sobre Dominio Eminente

Neoliberal economic orthodoxy is not necessarily opposed to monopolies as long as

“entry” is possible and new firms can challenge old ones. However, critics of neoliberalism argue that it leads to the concentration of corporate power and the creation of monopolistic structures which may even be protected by the state and are central to the accumulation of capital (Harvey, 2005 pp. 67, 80; Wallerstein, 2007 p.

26). In Lebanon, the state played a crucial role in maintaining the power of monopolies or oligopolies, benefiting different groups in society. Exclusive agencies were put in place in 1967 by the law of commercial representation. The main beneficiaries of this rule were the merchant families of the pre-war era, the majority of which were Christian.⁷³ Exclusive representation thus protected monopolies held by the families belonging to Lebanon’s pre-war bourgeoisie. In 1994, economy minister Hagub

73 MEI, 22^nd February 2002, p. 18-19.

Damarjiyan proposed annulling commercial representation agreements.⁷⁴ The minister was considered an ally of Rafiq Hariri, having served on the board of Hariri-owned Bank Med.⁷⁵ Hariri could thus afford to attack the privileges of the old bourgeoisie in the name of liberalising the economy. However, the initiative came to nothing, probably because Hariri faced too much political opposition.

Oil importation is an example of a sector, which is dominated by those politicians who had benefited from the wartime economy. Leenders traces the way, in which the state tolerated the persistence of a cartel of importers that had formed during the civil war (Leenders, 2004a). Formally, the ministry of industry and oil was in charge of importing oil or at least regulating the sector. However, the ministry was headed by Shahi

Barsumian, an ally of President Iliyas Hrawi. The president had previously represented the Swiss company GAT-oil, had been the managing director of Total-Liban until 1990, and was believed to have a stake in various oil-importing businesses thereafter.

Similarly, Walid Junblatt and Nabih Birri were said to be connected to oil importers.

During the civil war, the two militia leaders had controlled the import and distribution of oil in South Lebanon through the oil company COGECO (Picard, 2000 p. 314). Oil importation was thus a major interest of militia leaders and allied businessmen who had used it to come to wealth during the civil war. The oil ministry under Shahi Barsumian kept foreign competitors out of the Lebanese market and prevented a formalisation of the rules and regulations of importing oil, thus maintaining the

dominance of the importers’ cartel (Leenders, 2004a). These practices only came to an end after both Hrawi and Hariri had stepped down and Barsumian was arrested on corruption charges in March 1999.⁷⁶

The duopoly in the telecommunications sector benefited businessmen who belonged to the group of new contractors and those who had achieved wealth due to their close relations with Syria. One recipient of a mobile phone contract was Cellis, owned by France Telecom (67%) and the Miqati family (33%). The brothers Najib and Taha Miqati

74 Lebanon Report, July 1994, p. 9

75 ANARAM, 7^th January 1985, p. 5.

76 MEI, 9^th April 1999, p. 10-11.

from Tripoli belonged to the new contractor bourgeoisie. They had accumulated their wealth as contractors in the Gulf but they did not enjoy the same strong political backing by the Saudi monarch as Hariri did. Instead, Najib Miqati allied himself with Syria.⁷⁷ The brothers had run the Arabian Contracting Company, which was active in the Gulf. ⁷⁸ At one point Taha Miqati also took some subcontracts from Rafiq Hariri.⁷⁹ They were thus among the contractors who had been successful outside of Lebanon.

They entered the Lebanese banking sector in the early 1980s, buying up the British Bank of Lebanon and the Middle East.⁸⁰ During and immediately after the civil war, the Miqati brothers ran an analogue mobile phone network in Lebanon (Exelby, 1998 p.

27). Najib Miqati’s close ties to Syria allowed him to eventually become transport and public works minister in December 1998.⁸¹ The second mobile phone contract went to Libancell, which was owned by Finland’s Sonera (14%), the Saudi al-Mabani Group (20%) and a collection of Lebanese investors around Nizar Dallul, who eventually acquired majority control of the company (Exelby, 1998 p. 28; Oxford Business Group, 2003 p. 105). Nizar Dallul was also a son-in-law to Hariri. His father Muhsin was

defence minister 1992 to 1998, had built his political career as a prominent member of the leftist Lebanese National Movement after the outbreak of the war in 1975, and was a staunch ally of Syria (Majed and Young, 1996 p. 53). Some sources further alleged that Dallul was fronting Libancell on behalf of Syrian vice-president ‘Abd al-Halim Khaddam and Syrian Chief of Staff Hikmat Shihabi, but these allegations are not verifiable.⁸² Dallul therefore represented the conversion of political influence and Syrian connections acquired during the course of the civil war into economic

advantage in the post-war era. Despite their close political connections to Syria, Hariri took a confrontational line with the mobile phone companies. In 1995 there were rumours that he would break the duopoly by allowing a third operator to enter the market.⁸³ As the debt situation worsened, Hariri discovered the mobile phone companies as a source of government revenue. In 1997 the government forced the mobile phone operators to increase their prices and to pay the resultant windfall to

77 MEED, 21^st November 2008, p. 74.

78 MEED, 21^st November 2008, p. 74.

79 Interview with Sabah al-Haj, Beirut, 8^th November 2008.

80 ANARAM, 19^th December 1983, p. 8.

81 MEED, 21^st November 2008, p. 74.

82 MEIB, January 2003, available at: http://www.meib.org/articles/0301_l2.htm.

83 EIU, Country Report: Lebanon, 4^th Quarter 1995, p. 14.

the government.⁸⁴ In effect, Hariri thus raised the tax on mobile phone usage. By 1998, revenue from both fixed line and mobile phone operations accounted for 7.0% of all fiscal revenue (World Bank, 2005 p. 77).

The discussion of these three examples of wealth concentration through regulation reveals that different mechanisms benefited different groups: The old bourgeoisie was clinging on to exclusive agency, former militia leaders and allied businessmen were controlling oil imports, and a mixture of new contractors and Syrian allies were benefiting from mobile phone licenses. Hariri was not benefiting in a major way from the rents produced by these particular mechanisms. He could therefore afford to take a combative stance towards the “inefficiencies” of exclusive agency, the oil import cartel, or the mobile phone duopoly. Hariri’s confrontation with other members of the elite cartel over rent mechanisms that sustained many of his opponents was to grow worse after 2000, when Hariri returned to office and tension in the field of

international politics negatively affected relations within the elite cartel.