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by mark dameli
Tuesday, Dec. 02, 2003 at 12:11 PM
"It is in exchanging the gifts of the earth that you shall find abundance and be satisfied. Yet unless the exchange be in love and kindly justice, it will but lead some to greed and others to hunger."
Lebanese poet Khalil Gibran, 1923
While few would contend that thirteen years of absolute Syrian military and political hegemony have been kind to Lebanon, outside observers often fail to appreciate the magnitude of human suffering caused by Syria's continuing occupation of its smaller neighbor. To be sure, Syria's October 1990 air and ground assault on east Beirut was nearly as bloody as the Iraqi invasion of Kuwait that preceded it by two months, but the occupation that followed has not witnessed mass killings. Although assassinations of political dissidents and others who run afoul of Syria occasionally punctuate life in Lebanon and hundreds of Lebanese citizens remain imprisoned illegally in Syria, ordinary citizens do not fear for their lives. Political and civil liberties in Lebanon now pale in comparison to the pre-war years, yet the inhabitants of Syrian-occupied Lebanon still enjoy more personal freedom today than the citizens of nearly every other state in the Arab world. The country's autocratic post-war political order may be out of step with Lebanon's liberal democratic culture - a divorce made painfully evident in the past year by the closure of a leading independent television station, the annulment of a parliamentary election result, and the detention of a leading human rights advocate - but this political malaise invokes impassioned outrage only among the educated classes.
For the majority of Lebanese, the most devastating and lasting impact of the occupation has been economic. Unlike Soviet control of Eastern Europe in the past century, Syrian domination of Lebanon has been driven first and foremost by the will to plunder. Backed by a thin stratum of former militia warlords, post-war nouveaux riches, and opportunistic politicians in Lebanon who benefit directly from its patronage, Syria siphons billions of dollars annually from its captive neighbor. Virtually every sector of Lebanon's economy, from telecommunications to construction, is dominated by this oligarchy, which provides kickbacks to officials in Damascus in exchange for preferential access to government contracts, operating licenses, and law enforcement to beat out the competition. Over one million Syrian workers reside in Lebanon without paying taxes or permit fees, a presence that contributes to Lebanon's soaring unemployment rate and deprives the Lebanese treasury of hundreds of millions of dollars per year, while channeling over a billion dollars in remittances into Syria's stagnant economy. Both dimensions of Syrian economic domination hurt the poor most of all by inflating the cost of consumer goods and driving down wages.
Although rarely noted by outside observers, there is a third dimension of Syrian economic domination that is equally devastating to the poor. Much like nineteenth century European colonial powers, Syria treats its protectorate as a captive market for its exports, particularly agricultural produce. Since the late 1990s, Damascus has pressured Lebanon to reduce tariffs and other restrictions on the import of Syrian fruits and vegetables and to end subsidies on local crops that compete with these imports. The Syrian government not only forces its Lebanese counterpart to accept astonishingly disadvantageous terms of trade, but arbitrarily violates these terms when it is expedient to do so. This dimension of Syrian economic domination extends beyond trade relations to deeper economic restructuring. The Lebanese government's conspicuous neglect of its own agricultural sector serves Syria's long-term goal of achieving economic "complementarity."
Due in large part to Syrian intervention, Lebanon is today one of the least agriculturally self-sufficient countries in the world. According to local media reports, agricultural production has declined by 11% over the last five years. In 2002, Lebanon'a agricultural and agro-industrial imports were nearly 20 times its agricultural and agro-industrial exports. Although this imbalance has been enormously lucrative for Syria, its frontal assault on Lebanese agriculture - an economic sector on which around 40% of the population is directly dependent - is generating widespread opposition to the Syrian hegemony among the poor. While the growing discontent of impoverished farmers is not yet a tangible threat to the Syrian-backed political order, it is slowly beginning to manifest itself politically.
Lebanon is blessed with an abundance of arable land (roughly one third of the country), premium soil conditions, plentiful water resources, and rich diversity in topography and climate, allowing for the cultivation of a wide variety of fruits and vegetables. The coastal plains are ideal for the production of citrus fruits, vegetables, tobacco, figs, and even bananas, while the central mountainous regions produce olives and fruits, such as apples, pears, peaches, and cherries. The fertile Beqaa Valley, once the Roman Empire's primary food producer, is suitable for a variety of cereals, vegetables and fruits, while the arid eastern mountain chain is mostly used for grazing of farm animals. Moreover, as one economist notes, Lebanon "is geographically close to some of the most lucrative markets for the type of agricultural products it has a comparative quality advantage in producing (the Arabian Gulf and Europe), and has a legendary mercantile culture that goes back to its early history."
Although Lebanon's economy grew rapidly from the 1950s to the early 1970s, the agricultural sector lagged behind due to government policies that favored services and trade over productive enterprises. Nevertheless, the authorities extensively modernized the country's irrigation networks, boosting irrigated land in the southern coastal plain by 20,000 hectares and in the north by 14,900 hectares. Although low in relative terms, pre-war investment in Lebanon's agricultural sector was sufficient to produce "relatively high labor productivity." The government also protected farmers by restricting imports of fruits and vegetables. Imports of some crops (e.g. citrus fruits, apples, grapes, olives and potatoes) were restricted year-round, while others (e.g. squash, watermelons, garlic, apricots, peaches, and pears) could be imported only during specific times of the year when locally-grown crops were in short supply. As a result, farmers in Lebanon were capable of meeting domestic demand for most crops and exporting a large proportion of their output.
Lebanese Farmers and the Syrian Occupation
The entry of Syrian troops into east Beirut in 1990 was followed by a deluge of Syrian agricultural products. At first, most of this produce was sold by Syrian wholesalers and street vendors, who flooded by the thousands into Beirut and other cities. The intimate relationship between Syrian military and economic hegemony was highlighted when Lebanese police tried to evict scores of Syrian vegetable vendors from sidewalks along the airport highway in March 1992, touching off a gun battle with Syrian soldiers that left six dead and many more wounded.
Until the late 1990s, the flood of Syrian agricultural products into Lebanon was almost entirely unregulated - Lebanese tariffs and customs duties were simply ignored by Damascus. In contrast, Damascus imposed a wide range of official and ad hoc restrictions on the entry of Lebanese agricultural produce into Syria. Some appeared intended less to protect Syrian farmers than to harm Lebanese farmers. A customs levy was imposed on Lebanese bananas, for example, in spite of the fact that Syria does not even produce bananas. Trucks carrying Lebanese produce were typically delayed for many hours by Syrian customs. Unlike imports from other countries, shipments of Lebanese produce lacking country of origin certificates or other required documentation were categorically turned back. Until 1997, the Syrian government, which has long refused to open an embassy in Beirut, reportedly forced Lebanese businessmen to travel to Amman to complete export formalities at the Syrian embassy there.
Consequentially, between 1992 and 1997, Syria exported agricultural products to Lebanon worth $497 million, while the total value of Lebanese agricultural exports to Syria was under $30 million. Outrage in Lebanon about Syria's strong-arm trade dominance was so great that Lebanese Prime Minister Rafiq Hariri issued a rare public rebuke of his Syrian patrons on the eve of bilateral trade talks in January 1997, declaring it is "abnormal that Lebanon could not export its goods to Syria, and it is abnormal that Syrian products enter Lebanon in a way that is not in line with the rules."
In June 1997, Lebanon passed a law banning imports of many agricultural products in order to persuade farmers in the Beqaa Valley to abandon cultivation of hashish and opium poppies. Syria, anxious to secure its removal from the US State Department's list of drug producing countries, abided by the restrictions for a few years and the flood of Syrian produce into the country declined substantially. After both countries were removed from the list, however, Damascus pressured its Lebanese satellite state to abandon the restrictions. A Syrian-Lebanese bilateral trade agreement, signed in October 1999 and ratified in August 2000, granted free passage to Syrian exports of all but 17 agricultural products and stipulated that these remaining tariffs be "gradually lowered" over a five-year period.
The agreement has long been condemned by Lebanese farmers, who face much higher production costs. "We want to abolish the Syrian-Lebanese agricultural agreement," said Waddah Fakhri, the head of the Southern Farmers' Association. "The government should not sign agreements that do not serve our interests." Since per capita income in Lebanon is over three times that of Syria, labor is much more expensive. Moreover, the Syrian government heavily subsidizes agricultural inputs. For example, according to a 1997 United Nations survey, Syrian farmers purchase irrigated water from the government at an annual flat rate of $26 per hectare, while in Lebanon the cost ranges from $40 to $100 per hectare.
Moreover, Syrian smuggling of crops that officially remained subject to Lebanese import taxes has been rampant. While some Syrian smugglers bribe Lebanese border officials, most bypass Lebanese customs entirely by using a network of closed military roads built by the Syrians to quickly move troops across the border and transport Iranian arms to Hezbollah - an indication of high-level official Syrian complicity.
Although some Lebanese farmers have prospered by switching to fruits that are suitable to Lebanon's climate but cannot be grown in Syria, such as bananas and mangos, the vast majority have been unable to make such a transition because they lack access to capital (see below). Moreover, just because Syria doesn't produce a certain crop doesn't mean that Syrian smugglers won't find a way to flood the Lebanese market with it. For example, in recent years Lebanon has been deluged by bananas smuggled from Syria. According to Fakhri, smugglers import the bananas from Latin America through the Syrian port of Latakia, where they avoid customs duties by claiming that the goods are in transit to Lebanon. The shipments are then smuggled past Lebanese customs and enter local markets duty-free. The same problem occurs with respect to other agricultural goods. In June 2003, the local media reported that "watermelon farmers in Lebanon are suffering from excessively low prices for their crops due to the smuggling of Jordanian watermelons across the Syrian border."
The Lebanese authorities have made no visible efforts to stop Syrian contraband from reaching consumers once it has entered the country, partly because Syrian merchants are heavily involved in its distribution. According to Elias Atallah, a spokesman for the Syndicate of Greenhouse Agriculture, Syrian nationals control about 70% of the wholesale market in Lebanon and half of the retail market. As a result, he said, "the state favors merchants to the detriment of the farmers and dares do nothing to halt the smuggling." Lebanese olive growers claim that local companies that process and export olive oil habitually buy smuggled tanks of Syrian olive oil (which are about 40% cheaper), and market their products as Lebanese - a scam to which the authorities turn a blind eye.
Speaking at a regional conference of the United Nations Food and Agriculture Organization (FAO) in Beirut in March 2000, FAO Director-General Jacques Diouf said that a country with Lebanon's endowment of natural resources should be far more competitive in agriculture and lambasted the government's neglect of the sector as "unacceptable." Although Diouf's reprimand was virtually unprecedented (the FAO avoids such direct public criticism of governments), it was an understatement. The Lebanese government's refusal to stem the flow of smuggled Syrian produce into the country is symptomatic of a broader policy that appears intended to undermine, rather than strengthen, Lebanese farmers.
While agriculture accounts for about 12% of Lebanon's GDP, only .04% of the annual budget is allocated to this sector. The agricultural sector also receives a miniscule proportion of development and reconstruction funds. In 1999, the Council for Development and Reconstruction released a five-year plan detailing $7.5 billion in expenditures on development projects, funded mostly by foreign donors. Agriculture and irrigation projects (itemized separately) were allocated only 0.5% and 1.1% of development funds, respectively ("civic education, youth and sports" projects, by contrast, received 2.6%). While the government has spent many billions of dollars building urban infrastructure since the end of the civil war, rural infrastructure has atrophied. In particular, decrepit roadways, decaying irrigation systems and a severe shortage of post-harvest storage facilities have increased costs to farmers.
Not only is the state unwilling to invest in the agricultural sector, but it has been reluctant even to facilitate private investment. Lebanon is one of the only developing countries in the world that has no specialized credit system for the agricultural sector. As a result, the vast majority of farmers have little or no access to capital. The high operation costs of small loans and the inability of most small-scale farmers to provide collateral have long dissuaded the country's oligopolistic commercial banks from lending to the agricultural sector, a trend that has gotten progressively worse. Whereas the agriculture sector's share of bank loans was over 6% in the mid-1960s, in 1999 it was only 1.5% (compared to 21.8% for construction and 47.8% for trade and services). Moreover, most of this lending consists of short-term, seasonal loans extended by commercial banks to large farmers.
Whereas the Syrian government subsidizes the costs of agricultural inputs for its farmers, the Lebanese government inflates the costs. One of the main reasons why production costs are so much higher in Lebanon is the government's protection of companies that have exclusive permits to import and sell agricultural equipment. "Lebanon suffers from high production costs because of government policies that allow firms to monopolize the import of agricultural equipment, seeds and fertilizers," says Hassan Abbas, the head of the Lebanese Farm Workers Union. "Exclusive agents hike up our costs because they are the only ones allowed to import agricultural equipment," according to Fakhri. The government introduced a bill last year that would end exclusive import licensing beginning in 2004, but most farmers believe that well-connected elites will find other ways to protect their monopoly.
While the Lebanese government has been unwilling to extend substantive assistance to the agricultural sector, it has vigorously lobbied the international community to provide development assistance to farmers in the Beqaa in conjunction with its efforts to stop cultivation of cannabis and opium poppies. While the Beqaa flourished from illicit drug cultivation during the 1975-1990 civil war, it has since become the poorest region in Lebanon, with annual per capita income dipping below $500 (one seventh of the national average) in the north. In 1993, a UN study estimated that the investment of $30 million annually for ten years would solve most of these problems. Such a ten-year program would have caused the region to "become developed without any prospect of a return to illicit crops," contends Dr. Muhammad Ferjani, the head of a UN-sponsored rural development program in the Beqaa. However, Syria's refusal to allow the central government to fully extend its authority there sabotaged the program. As of 2001 the UN-sponsored development program had been able to raise only 7% of the needed funds. The main reason, according to Ferjani, is that international donors were reluctant to provide aid to an area controlled by Hezbollah. Over the last few years, farmers in the Beqaa Valley have returned to hashish cultivation in order to avoid financial ruin.
Bilateral assistance to Lebanese farmers by the United States has also been squandered by the Lebanese government, which typically refuses to provide local inputs needed to make the aid effective. A rare glimpse into the Agriculture Ministry's misuse of international largess came earlier this year, when Agriculture Minister Ali Abdullah was expelled from the cabinet following an altercation with pro-Syrian Parliament Speaker Nabih Berri. As is often the case when ruling elites run afoul of their Syrian patrons, Abdullah was quickly brought up on corruption charges - for embezzlement of funds allocated to a joint Lebanese-American agricultural project.
Farmers Fight Back
By the turn of the millennium, the Lebanese economy had entered a deep recession and the agricultural sector was facing unprecedented losses. As growing numbers of Lebanese farmers were driven bankrupt and forced to sell their lands, farmers' syndicates became more vocal in demanding a halt to Syrian agricultural imports. Meanwhile, opposition to the Syrian occupation was on the upswing in other quarters of Lebanese society. Although most Lebanese farmers are Muslim, especially in the impoverished South and Beqaa Valley, Christian and secular nationalist opposition currents embraced the cause of Lebanese agriculture as their own. In the summer of 2000, student activists of Michel Aoun's Free National Current fanned throughout Beirut to sell local produce on the streets and urge motorists to "buy Lebanese." The Maronite Church's landmark September 2000 declaration calling for Syria to withdraw from Lebanon noted that Lebanese products "are not receiving state protection against foreign competition" and accused Damascus of "subsidizing exports of Syrian produce to Lebanon at cut prices and facilitating one-way transport."
In January 2001, an unprecedented wave of protests by farmers erupted across the country. In north Lebanon, hundreds of farmers dumped produce on the Tripoli-Damascus highway and burned tires, blocking traffic for six hours until being dispersed by security forces. Several thousand followed suit in Beirut and surrounding areas. Along the Tyre-Sidon coastal highway, an estimated 1,000 farmers distributed free fruits and vegetables to motorists and displayed placards reading "Where is the government? Can't it stop smuggling along the border?"
Lebanese and Syrian officials were clearly concerned by the protests. Damascus, which had previously refused even to acknowledge that Lebanese farmers were irate, made a rare public statement on the matter. "Talking about a flooding of the Lebanese market is unfair . . . we sell Lebanon what Lebanon needs," said Syrian Agriculture Minister Assad Mustapha in February 2001. Lebanese officials were more unsettled and quickly pledged to introduce a comprehensive program to assist the agricultural sector. What emerged in the months that followed can best be described as a good faith effort to aid Lebanese farmers without compromising the competitiveness of produce imported from Syria.
In August 2001, the government officially kicked off Export Plus, a $33 million program ostensibly designed to subsidize Lebanese agricultural exports. The program, run by the Investment Development Authority of Lebanon (IDAL), was billed as helping Lebanese farmers tap into lucrative foreign markets by contributing up to $100 per ton to the cost of shipping produce overseas. However, Export Plus did nothing to lower production costs and virtually exempted agricultural exports to Syria (by scaling shipping subsidies according to geographical distance).
The director of the program, Andraos Bacha, has called Export Plus a "definite success," claiming that Lebanese exports of fruits and vegetables climbed 20% during its first year. While the farmers' syndicates acknowledge that the program has helped boost exports of Lebanese fruits and vegetables, there have been widespread complaints that traders and various other intermediaries have reaped the profits, not farmers. Not surprisingly, the Syrians found a way to take a cut of the action. According to Fakhri, Lebanese merchants have re-exported Syrian oranges and "benefit[ed] from government funds allocated for Lebanese products."
The government's efforts to square the circle of alleviating farmers' distress (or at least appearing to be doing something about it) while protecting Syrian interests received a boost from the European Union, which signed an association agreement with Lebanon in January 2001. Whereas the agreement stipulates that Europe start dismantling barriers to Lebanese exports immediately upon ratification, Lebanon was granted a grace period of five years to start eliminating restrictions on European exports (and twelve years to complete this transition). No other Arab state was granted such a concession.
Syria's assault on Lebanon's agricultural sector is driven not just by short-term profit-seeking motives, but by a desire to fundamentally restructure the economy of its smaller neighbor in the pursuit of "economic complementarity." In a May 2000 speech before the Economic Forum on Economic and Social Development in Syria, Lebanese economist Kamal Hamdan explained euphemistically what the pursuit of Syrian-Lebanese economic complementarity means:
The two countries must reorganize their structures and must optimize their mutual activities. Syria has a comparative advantage in agriculture and in several manufacturing industries based on high labor concentration. Comparative advantages of Lebanon are in banking, insurance, education . . . The specialization in some activities and the withdrawal from others considering the comparative advantages between both countries will lead to more welfare. This may contribute to the improvement of the standard level of living and to a better redistribution of income.
Syria's drive to bring about a "withdrawal" of Lebanon from agriculture will not only achieve a "better redistribution of income" between the two countries, but will make Lebanon dependent on food imports from Syria. Much like Lebanon's conversion of its power plants to run on Syrian-supplied natural gas instead of petroleum is designed to make it very costly for Lebanese officials to defy Damascus once its troops leave the country, the wholesale destruction of Lebanon's agricultural sector will enable Syria, which surrounds Lebanon on three sides, to starve the population into submission.by Gary C. Gambill
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