Lebanon's corrupt cell

Special Note: For those who wish to donate or assist the bushfire victims in Victoria, please visit the Australian Red Cross website.

It's good to be back writing and blogging after a few weeks away. A few things have happened since my last post on January 19th. I've moved cities (from Melbourne to Canberra) to undergo post-graduate studies at the Australian National University, had to bear an unbearable heat wave (that has caused roughly 300 deaths in my home state of Victoria, Australia's worst ever natural disaster), and commenced writing for Global Voices Online.

I joined the Lebanon team, currently consisting of Moussa Bashir and Nash Sleiman, in preparation for this year's Lebanese parliamentary elections in June. We're hoping to offer an alternative coverage to the tainted reporting we're so often accustomed to in Lebanon.

My first post today entailed the story of one of Lebanon's most corrupt sectors, telecommunications.

New contracts have been forged, Telecommunications Minister Gibran Bassil has promised the lowering of mobile call rates, but Lebanese bloggers aren't impressed. You can read why here.

What I don't understand is the functionality of this sector. The networks and infrastructure, mainly developed under Rafik al-Hariri in the 1990s, are all entirely state-run. The Lebanese Government then awards contracts to two network operators to effectively operate Lebanon's state-run and substandard networks.

The companies bid to run Lebanon's telecommunications networks, pay roughly US$1billion, and then the companies implement their own pricing and make substantial profits.

This is my understanding anyway. An analogy would be a city's railway or metro system. For example, Melbourne has awarded French train operator Connex the contract to run its transportation system, but the infrastructure is completely in government hands.

The reality of this scenario in Lebanon is that mobile phone rates are among the highest in the world, and telecommunications technology is severely lagging. Broadband has scarcely made its way into the country, and mobile phones still operate on decade-old networks. Infrastructure is so far behind that many advanced options you receive with an iPhone or a Blackberry, for example, do not work in Lebanon because the networks aren't up to speed with the phone's technology.

According to this French-Lebanese blog, Lebanon in the 1990s was ahead of many countries in mobile phone technology because companies such as France Telecom (who had majority share of then-Lebanese provider Cellis) would test out new mobile technology, such as GSM, before implementing it in France.

Due to political corruption and the wrangling of which politician could benefit the most in the late-1990s/early 2000s, this arrangement collapsed and has been state-run ever since. Lebanon's telecommunications technology has remained stagnant since the state takeover in 2002.

However, contracts continue to be awarded, and massive profits continue to be earned.

Where has the billions of dollars of government and corporate profit gone?

It is the state's responsibility to provide the latest in telecommunications technology, but if the government isn't investing in this sector, where on earth has the money gone? No money has been thrown onto our horrendous debt of US$46billion. No money has been thrown on essential services. No money has been thrown on reparation work or development projects.

Surely any contract would stipulate that a certain margin of the profits would go back into re-investment, maintenance and development of our telecommunications networks. Not in corrupt Lebanon.

And this isn't partisan. In 2002 when the takeover occurred, the Harirists, Jumblattists and Hezbollah all enjoyed Syrian support. Post-2005, Hariri/Jumblatt retained power, only to have the ministry flip over to Hezbollah's ally in the FPM last year. Either way, the same hands have been in the pie, regardless of how they label their alliances today.

One idea that has been hotly contested in Lebanon's political arena is the privatisation of our two networks, with the addition of a third network. The revenue from the sale would go to our large debt. In Lebanese terms, this means the revenue will go to more villas, private jets, a new apartment in Paris, a new hospital or stadium named after a warlord/chieftain and so forth.

The privatisation has been stalled due to Hezbollah's concerns that Lebanon would lose majority share. Therefore, Bassil has included a stipulation that guarantees Lebanese majority share of the network. The Oxford Business Group says this will decrease foreign investment interest, but I disagree.

Australia retained majority share (51%) of its network until 2006, and there was still substantial interest in the country's telecommunications sector. However, it is worth adding that Australia didn't restrict the amount of operators in the country to two. It did, originally, when it first opened the market in the late 1980s (an indication of how far behind Lebanon is), but since then the industry has expanded, developed, whilst keeping solid competivity.

Two operators, or a duopoly, will not increase competition, but only maintain domination and high call rates.

I'm happy for Lebanese to retain majority share, but the market needs to be opened up and more providers need to be allowed to operate in Lebanon. I have no problem with the networks remaining in majority Lebanese hands, so long as the Lebanese invest in its infrastructure and root out corruption. Of course, I'm dreaming, but this is the most effective solution.

If the government or a Lebanese enterprise is unwilling to invest in our infrastructure, at least allow someone else who will. Telecommunications is one among many sectors where the Lebanese people are getting robbed on a daily basis.

But of course come the next elections, the sheep that is the Lebanese people will ignore the fact that their lives are being manipulated and raped at every corner, and will re-elect their selfish, sectarian warlords.

It all falls back on the corrupt political culture of our country ... everyone is in it for themselves. 'National interest' doesn't exist in Lebanon.