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Abstract
Celebrants of neo-liberal globalisation and their critics ascribe to the rationality of finance capital enormous power. It opens new territories, produces new cultural forms and creates a hierarchy of cities and the spaces within them. How might this image change when viewed from spaces allegedly excluded from capitalist globalisation? For many, Lebanon during its 1975–1990 civil war was such a place. The international financial institutions and their Lebanese allies presented neo-liberal reform as the necessary prerequisite for post-conflict re-integration with rational processes of capitalist globalisation. Through a multi-sited political economy of one financial network operant in wartime Lebanon, I show that the “militia economy” was never outside larger processes of financial globalisation. I argue that it was integrated into a global realm consisting not of financial corporations operating according to a universal capitalist rationality, but rather one of similarly constituted networks of capitalists, companies and other institutions working within and alongside a variety of states in pursuit of politico-economic power.
Notes
1. See coverage of the ceremonies in Al-Nahar, 22 Sept. 1994.
2. See the comments of Hariri associate and president of the governmental Council for Development and Reconstruction, Al-Fadl Shallaq, in Al-Nahar, 18 Nov. 1991.
3. Samir Khalaf, ‘Contested Space and the Forging of New Cultural Identities’, in Peter Rowe and Hashim Sarkis (eds.), Projecting Beirut: Episodes in the Construction and Reconstruction of a Modern City (Munich: Prestel 1998).
4. See for example Freddie Baz, ‘The Macro-Economic Basis of Reconstruction’, in Peter Rowe and Hashim Sarkis (eds.), Projecting Beirut: Episodes in the Construction and Reconstruction of a Modern City (Munich and London: Prestel 1998); and the collection of essays by Vice Governor of the Central Bank, Nasser Saidi, entitled Growth, Destruction and the Challenges of Reconstruction: Macroeconomic Essays on Lebanon (Beirut: Lebanese Center for Policy Studies 1999).
5. Oussama Kabbani, ‘Postwar Reconstruction of Beirut Central District & the Experience of Solidere’, paper presented at ‘The Construction of the Mediterranean City’, University of Venice, 26–27 April 1996.
6. The World Bank, The World Bank's Experience with Post-Conflict Reconstruction, 5 vols., World Bank Report No. 17769, 4 May 1998, p. 46.
7. See Lebanon Report 2/1 (Jan. 1991) p. 4. Lebanon's first IMF-inspired austerity programme began in early 1991 with the abolition of wheat and fuel subsidies.
8. Economist Intelligence Unit Country Report (EIUCR), No. 1, 1993, pp. 17–18. See the text of the World Bank report published in serial form in Al-Anwar on 19, 20 and 21 Dec. 1992, much of which was later incorporated into Report No. 11406-LE, Lebanon: Stabilization and Reconstruction, 2 vols., 1 March 1993.
9. S. Roberts, A. Secord, and M. Sparke, ‘Neoliberal Geopolitics’, Antipode 35 (2003) pp. 886–897.
10. Jaime Peck, ‘Geography and Public Policy: Constructions of Neoliberalism’, Progress in Human Geography 28/3 (2004) pp. 392–405.
11. For such arguments as presented in the press, see Al-Hayat, 11 July and 7 Nov. 1991; Al-Nahar, 21 Aug. 1991; Al-‘Iqtisaad Wal-‘Amal, Jan. 1992; Al-Nahar, 21 April 1992. For a critical analysis of the assetisation of land see Anne Haila, ‘Land as a Financial Asset: The Theory of Urban Rent as a Mirror of Economic Transformation’, Antipode 20/2 (1998).
12. Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (New York: Basic Books 2003).
13. See for example, David Harvey, The Condition of Postmodernity (Oxford: Blackwell Publishers 1990); and Frederick Jamison, Postmodernism or The Cultural Logic of Late Capitalism (Durham, NC: Duke University Press 1991).
14. Saskia Sassen, The Global City: New York, London, Tokyo (Princeton: Princeton University Press 1991); Bob Jessop and Ngai-Ling Sum, ‘An Entrepreneurial City in Action: Hong Kong's Emerging Strategies in and for (Inter) Urban Competition’, Urban Studies 37/12 (2000) pp. 2287–2313; and David Harvey, ‘From Managerialism to Entrepreneurialism: The Transformation of Urban Governance in Late Capitalism’, Geographiska Anneler, Series B: Human Geography, 71B/1 (1989) pp. 3–17.
15. Manuel Castells, The Rise of the Network Society (Oxford: Blackwell Publishers 1996) pp. 66–147.
16. Karen Ho, ‘Situating Global Capitalisms: A View from Wall Street Investment Banks’, Cultural Anthropology 20/1 (Feb. 2005) pp. 68–96.
17. Ibid. p. 83.
18. James Ferguson, ‘Globalizing Africa? Observations from an Inconvenient Continent’, in his Global Shadows: Africa in the Neoliberal World Order (Durham: Duke University Press 2006) pp. 34–49.
19. Carolyn Nordstrom, Global Outlaws: Crime, Money and Power in the Contemporary World (Berkeley: University of California Press 2007) pp. 206–207.
20. See for example, George E. Marcus Ethnography Through Thick & Thin (Princeton: Princeton University Press 1998). See also Arjun Appadurai Akil Gupta and James Ferguson (eds.), Anthropological Locations: Boundaries and Grounds of a Field Science (Berkeley: University of California Press 1997).
21. The study of the Kata'ib network – one of several financial and business networks with operations in wartime Lebanon, opens new terrain in the study of the civil war. The majority of existing literature focuses upon the political competition between sectarian communities through the political interests and positions of their leaderships. See for example, Kamal S. Salibi, A House of Many Mansions: The History of Lebanon Reconsidered (Berkeley: University of California Press 1998); Samir Khalaf, ‘Ties that Bind: Sectarian Loyalties and the Restoration of Pluralism in Lebanon’, The Beirut Review 1/1 (Spring 1991). For a more recent recapitulation of these arguments see Samir Khalaf, Civil and Uncivil Violence in Lebanon: A History of the Internationalization of Communal Conflict (New York: Columbia University Press 2002). While there are a handful of studies that take the political economy of the conflict seriously, they largely focus upon the informal, predatory or criminal activities of the parties involved, thus reinforcing the image of the militia economy as outside of “normal” capitalism. See for example Georges Corm, ‘Liban: L'Argent Des Milices’, Cahiers de l'Orient 10 (1988); Georges Corm, ‘The War System: Militia Hegemony and the Reestablishment of the State’, in Deidre Collings (ed.), Peace for Lebanon? From War to Reconstruction (Boulder: Lynne Rienner Publishers 1994); Theodor Hanf, Coexistence in Wartime Lebanon: Decline of a State and Rise of a Nation (London: Center for Lebanese Studies in association with I.B. Taurus. 1993) Chapter 5; William Harris, Faces of Lebanon: Sects, Wars, and Global Extensions (Princeton: Markus Wiener Publishers 1996) Chapter 6; Elizabeth Picard, Lebanon, a Shattered Country: Myths and Realities of the Wars in Lebanon (New York: Holmes & Meier Publishers Inc. 1996) pp. 144–152.
22. Marcus (note 20) p. 81.
23. For a discussion of this view, see Carolyn Gates, The Merchant Republic of Lebanon: Rise of an Open Economy. (Oxford: Centre for Lebanese Studies in association with I.B. Tauris & Co. 1998).
24. Yusif A. Sayigh, Entrepreneurs of Lebanon: The Role of the Business Leader in a Developing Economy (Cambridge: Harvard University Press 1962) p. 80.
25. The classic class analysis remains Claude Dubar and Salim Nasr, Les Classes Sociales au Liban (Paris: Presses de la Fondation Nationale des Sciences Politiques 1976); Kamal Hamdan Le Conflit Libanais: Communautes Religieuses, Classes Sociales et Identite Nationale (Geneva: Garnet Editions in association with the UNRISD 1976) Chapter 2; Harris (note 21) Chapter 4; B. J. Odeh, Lebanon: Dynamics of a Conflict: A Modern Political History (London: Zed Books Ltd. 1985) Chapters 3 and 4; Picard, Lebanon a Shattered Country (note 21) especially Chapter 4.
26. James Ferguson, ‘Transnational Topographies of Power: Beyond ‘The State’ and ‘Civil Society’ in the Study of African Politics’, in his Global Shadows: Africa in the Neoliberal World Order (Durham: Duke University Press 2006).
27. The term adapted from Foucault captures the rise of population management techniques as developed in the context of late Ottoman administrative and political reforms. See, for example Leila Hudson, ‘Late Ottoman Damascus: Investments in Public Space and the Emergence of Popular Sovereignty’, Critique: Critical Middle Eastern Studies 15/2 (Summer 2006) pp. 151–169.
28. For an overview of the familial order in Lebanese politics see Harris (note 21) pp. 99–122. On the financial sector see Clement Henry Moore, ‘Le Systeme Bancaire Libanais: Les Substituts Financiers d'un Ordre Politique’, Maghreb-Machrek 99 (Jan. Feb. March 1983); and Clement Henry Moore, ‘Prisoners’ Financial Dilemmas: A Consociational Future for Lebanon?’, American Political Science Review 81/1 (March 1987). For a general history of the banking sector, see George Corm, Al-Qudrat al-Tanafasiyya lil-Nizam al-Masrafi al-Lubnani (Beirut: Lebanese Association of Banks 1995).
29. Michael Johnson, Class and Client in Beirut: The Sunni Muslim Community and the Lebanese State, 1840–1985 (London: Ithaca Press 1986).
30. Moore, ‘Le Systeme Bancaire Libanais’ and ‘Prisoners’ Financial Dilemmas’ (note 28).
31. Tabitha Petran, The Struggle Over Lebanon (New York: Monthly Review Press 1987).
32. Ibid., p. 128.
33. Gates (note 23) pp. 90 and 95.
34. Petran (note 31) p. 128–129.
35. For the petrodollar-driven growth of the deposits see George Corm, Al-Qudrat al-Tanafasiyya (note 28) pp. 45–46.
36. MEED 19/27 (4 July 1975) p. 20.
37. There was a brief period following the 1958 conflict in which President Chehab pushed a statist agenda. Although the “Chehabist Period” lasted until 1970, the project faltered after Chehab himself opted not to run for a second term of office in 1964. With the election of President Frangieh in 1970, the oligarchs regained control and reversed much of the Chehabist programme. The Chehabist period witnessed the creation the BdL in the wake of the Intra Bank crisis of 1966, when the oligarchy recognised the benefit of having a lender of last resort to stabilise the system as a whole.
38. See Economist Intelligence Unit, Quarterly Economic Review of Lebanon and Cyprus Annual Supplement (1981) p. 22; and MEED 22/10 (10 March 1978) pp. 33–34.
39. Decree # 29, of 5 Feb. 1977.
40. For the development of Arab banking in general, including overseas expansion via consortium institutions, see Traute Wohlers-Scharf, Arab and Islamic Banks: New Business Partners for Developing Countries (Paris: Development Centre of the Organization for Economic Co-operation and Development 1983).
41. Moore, ‘Le System Bancaire’ (note 28) p. 37.
42. Economist Intelligence Unit Quarterly Review (Fourth Quarter 1982) p. 15; Al-Iqtisaad wal-Amal (June 1984) p. 31; and Corm, ‘The War System’ (note 21) p. 217.
43. Elizabeth Picard, ‘The Political Economy of the Civil War in Lebanon’, in Steven Heydemann (ed.), War, Institutions and Social Change in the Middle East (Berkeley: University of California Press 2000) p. 306.
44. Although the LF was a unified force, its Command Council, presided over by Bashir, was made up of the leaderships of the constitutive organisations – the lesser militias controlled by lesser zu'ama. The Kata'ib dominated the LF until Bashir's assassination in 1982. With the death of his father Pierre, patriarch of the family, in 1984, the LF was removed from control of the Gemayel wing of the Kata'ib by LF members allied with former president and militia leader Camille Chamoun. See John P. Entelis, Pluralism and Party Transformation in Lebanon: Al-Kata'ib 1936–1970 (Leiden: E.J. Brill 1974); and Lewis W. Snider, ‘The Lebanese Forces: Wartime Origins and Political Significance’, in Azar Edward et. al. (eds.), The Emergence of a New Lebanon: Fantasy or Reality (New York: Praeger Publishing 1984). For the dynamics of consolidation of Kata'ib power during the first five years of the war, including Israeli assistance, see Walid Khalidi, Conflict and Violence in Lebanon: Confrontation in the Middle East (Cambridge: Center for International Affairs, Harvard University 1979); Itamar Rabinovich, The War for Lebanon, 1970–1985 (Ithaca: Cornell University Press 1985); and Jonathan C. Randal, Going All the Way: Christian Warlords, Israeli Adventurers and the War in Lebanon (New York: Viking Press 1983).
45. For the 1982 shotgun election of Bashir Gemayel and later, his brother, see Robert Fisk, Pity the Nation: The Abduction of Lebanon, 4th ed. (New York: Thunder's Mouth Press/Nation Books 2002) pp. 339–341; and Hanf (note 21) p. 268. On Israeli motivations and relations with the Gemayels, see Rabinovich (note 44); and Randal (note 44).
46. Petran (note 31) pp. 295–296.
47. Litex Bank itself was a transnational connection in which family and finance capital blended. Formally a joint venture ninety-seven percent owned by the Bulgarian Foreign Trade Bank, its board of directors at the end of 1982 consisted of Bulgarian officials and three Lebanese – Mr. Sami Maroun, Mrs. Lily Maroun and Mrs. Ronalda Maroun. Financial Times, 25 May 1984. For the creation of COFER see MEED (8 April 1983) p. 29.
48. The collapse of IntraBank was the product of precisely the kind of politico-economic fusion that characterises the Lebanese financial sector. As a large, Palestinian-owned institution, IntraBank represented a threat to the post-independence oligarchy. During the liquidity crisis of 1966 monetary authorities stepped in to rescue a number banks facing difficulty, but steadfastly refused to assist IntraBank in the interest of its competitors. As the New York Times reported “The credit squeeze against Intra was spearheaded by the Central Bank.” Quoted in Petran (note 31) pp. 63–64. For a history of IntraBank and its successor Intra Investment Company, see the series of articles appearing in Al-Iqtisaad wal-Amal, Dec. 1987, pp. 61–71.
49. For background on the political and financial role of Intra, see MEED (29 July 1983) p. 30; and Al-Iqtisaad wal-Amal, Sept. 1984, p. 12.
50. Al-Iqtisaad wal-Amal (note 42).
51. The American Banker, 27 April 1982, p. 9.
52. New York Times, 7 Aug. 1980. BAII combines resources of Saudi financial institutions including the National Commercial Bank (NCB) – banker to the Royal Family – owned by the Bin Mahfouz and Kaaki families, with those of a number of French banks. See Traute Wohlers-Scharf, Arab and Islamic Banks: New Business Partners for Developing Countries (Paris: OECD Development Centre 1983) pp. 25–26; and Peter W. Wilson, A Question of Interest: The Paralysis of Saudi Banking (Boulder: Westview Press 1991) pp. 63–66.
53. Quoted in New York Times, 26 March 1981.
54. Washington Post, 9 Sept. 1997. The May 17th Agreement was a US-backed initiative in which the Israelis were to withdraw from Lebanon in exchange for a peace treaty stipulating normalised relations and free trade between the two countries.
55. In 1991 Kimche allegedly persuaded Tamraz to help bail out the media empire of Robert Maxwell by convincing Arab investors to pump 400 million dollars into the Maxwell Group. The scheme fell apart upon revelations of enormous losses to employee pension funds of Maxwell Group companies. As for Kimche's motivations, he claimed that his efforts were meant to repay a debt to the late Robert Maxwell, for “the help he [Maxwell] had given him through his Russian contacts in enabling Russian Jews to leave for Israel.” See Independent (London), 10 Nov. 1995; and Financial Times, 20 Jan. 1996.
56. New York Times, 7 Aug. 1980. On Furmark and Iran-Contra, see Peter Truell and Larry Gurwin, False Profits: The Inside Story of BCCI, the World's Most Corrupt Financial Empire (Boston and New York: Houghton Mifflin Company 1992) p. 129.
57. See Kenneth R. Timmerman and James Ring Adams, ‘Who is Roger Tamraz?’, American Spectator (May 1997); and Kenneth R. Timmerman, ‘8 Questions for Roger Tamraz’, Washington Times, 17 Sept. 1997.
58. Tamraz was the only witness to appear before the committee without lawyers. He candidly defended his attempts to buy influence in no uncertain terms. “Who do I meet at the White House but my peers, all the oil company executives,” Tamraz told the committee, “So now they know that Roger is also there, so they can't bluff me. At least I neutralized their position.” He went on to explain, “The oil companies have been paying for years. So a poor guy like me who gets blocked by [then National Security Council aide] Sheila Heslin has no alternative.” Tamraz responded to condemnation from the committee, saying, “Thank God we are a capitalist society, and there's nothing wrong in running after money.” See also the Washington Post, 19 Sept. 1997.
59. MEED (10 March 1995).
60. “Bob's” testimony before the Senate Committee and the efforts to hide his covert identity added drama to the story. For more on “Bob's” testimony before the Senate Committee and the suggestion that he too was seeking to trade favours for future employment, see the Washington Post, 10 Oct. 1997.
61. This was the conclusion of the Republican-authored report entitled Investigation of Illegal or Improper Activities in Connection with 1996 Federal Election Campaigns: Final Report of the Committee on Governmental Affairs, Senate Report 105–167, 105th Congress, 2nd Session, 10 March 1998, p. 1.
62. See Investigation of Illegal or Improper Activities (note 59). See also a Democratic response not included in the above, entitled Additional Views of Senator Carl Levin, Committee on Governmental Affairs, 5 March 1998, in which Levin rehearses Tamraz's connection to the Reagan White House as well as the efforts of Senator Trent Lott.
63. Tamraz's testimony, considered as colourful as it was unapologetic, earned him appearances on all the major networks. When chided by the Senators for not having registered to vote since becoming an American citizen in 1989, Tamraz responded dryly that his contributions to the party constituted a “bit more than a vote.” When Senator Liebermann (D-Conn) asked him if he got “his money's worth,” Tamraz reflected on his failure to secure Clinton's backing for his pipeline and responded, “Next time I'll give 600,000.” See the Washington Post, 19 Sept. 1997.
64. See his book See No Evil: The True Story of A Ground Soldier in the CIA's War on Terrorism (New York: Three Rivers Press 2002) pp. 243–244. For opposition to Tamraz from US oil companies – Penzoil in particular – see the Washington Post, 9 Sept. 1997. See also the three-part series in the Washington Post on pipeline politics beginning 4 Oct. 1998. Baer devotes much of the latter half of the book to distancing himself from Tamraz (who he claims not to have known in the Beirut of the 1980s). “Bob” was neither a dupe, nor a rogue agent however. His superiors allegedly knew of his activities and his immediate supervisor went to work for Tamraz upon retirement from the CIA in 1995. Washington Post, 10 Oct. 1997.
65. Al-Iqtisaad wal-Amaal, Feb. 1985 and Jan. 1986.
66. See Economist Intelligence Unit Country Report for Lebanon and Cyprus, no. 2 (1986) p. 12; and Al-Nahar, 26 Jan. 1986. For the purchase of Chemical Bank Lebanon and its re-incarnation as Uni-Bank, see Al-Iqtisaad wal-Amal, Jan. 1986, p. III. See also al-Shiraa’, 12 Jan. 1987.
67. Financial Times, 1 March 1989.
68. Cited in Timothy Mitchell, ‘No Factories, No Problems: the Logic of Neo-Liberalism in Egypt’, Review of African Political Economy 26/82 (Dec. 1999).
69. See ‘Report of the Administrative Committee of Al-Mashreq’, as serialised in Al-Nida’, 12–14 July 1991.
70. Al-Anwar, 30 Sept. 1990. The existence of the New York bank, however, does not appear in the ‘Report of the Administrative Committee’, as published in 1991.
71. Financial Times, 24 Jan. 1989.
72. Economist Intelligence Unit Country Report, no. 2 (1989) p. 13.
73. Al-Iqtisaad wal-‘Amaal, Feb. 1989, p. 19.
74. Chalabi gained notoriety as head of the Iraqi National Congress and favourite of the Pentagon to lead Iraq following the US invasion. At the time of the Lebanese civil war however, his business network included Petra Bank, based in Amman, Jordan, the Middle East Banking Company (MEBCO) and its European subsidiaries, the National Bank of Sudan, and an investment firm called SOCOFI. Chalabi also held stakes in two other Jordanian banks – Cairo-Amman Bank and the Jordan Gulf Bank. See the Financial Times, 23 Oct. 1986 and 26 Sept. 1989. On Chalabi's networked rise in neoconservative foreign policy circle see Robert Dreyfuss, ‘Tinker, Banker, NeoCon, Spy: Ahmed Chalabi's Long and Winding Road From (and to) Baghdad’, The American Prospect 13/21 (18 Nov. 2002). Within Lebanon MEBCO was Amal's preferred bank. Members of the Chalabi family ran the militia's port south of Beirut. Another sat on the Banks Control Commission of the BdL. For a biography of Chalabi that details these connections, see Aram Roston, The Man Who Pushed America to War: The Extraordinary Life, Adventures and Obsessions of Ahmad Chalabi (New York: Avalon Publishing Group 2009).
75. For milestones in the growth of the network see Al-Iqtisaad wal-Amal, Sept. 1984, p. 13; April 1987, p. 13; Nov. 1987, p. 15; and 2 Nov. 1989, p. 31. See also Emmanuel Bonne's Vie Publique, Patronage et Clientele: Rafic Hariri a Saida (Beirut: Centre d'Etudes et de Recherches sur le Moyen-Orient Contemporain 1995); Rene Naba's Rafic Hariri: Un Homme d'Affaires Premier Ministre (Paris: L'Harmattan 1999); and Najah Wakim's Al-Ayyadi al-Soud (Beirut: Sharika al Matbou'aat lil-Tawzee’ wal-Nashr 1999)
76. Hariri was assassinated in 2005, but the network, at the head of which sits his son, Sa'ad al-Hariri, and Rafiq al-Hariri's Finance Minister, now Prime Minister Fouad Siniora, continues to dominate the Lebanese scene.