Lebanon's economic champion

BBC NEWS | Business: "Former Lebanese Prime Minister Rafik Hariri used his business empire to rebuild Beirut after years of civil war. He was his country's richest man, reckoned to be worth roughly $4bn (£2.1bn). But it is his corporate brain-child, Solidere, that best illustrates his central role in regenerating Lebanon's economy.

LEBANON'S ECONOMY
Population: 3.7 million
Life expectancy: 72 years
GDP: $17.8bn (£9.4bn) in 2003
GDP per head: $4,800 a year
28% of Lebanese below the poverty line
Source: CIA World Factbook

Beirut has been pulling in record numbers of visitors. The tourism ministry says there were 1.2 million tourist arrivals in the first 11 months of 2004, a 30% rise on the same period of 2003.

Mr Hariri was born in a poor family in Sidon in 1944. But aged 21, he left for Saudi Arabia and made a fortune in the construction boom created by the oil-rich Gulf state's rush for modernisation, returning to Lebanon at the end of its civil war. As prime minister, Mr Hariri's public works and rebuilding programmes ran up debts that threatened to overwhelm the public finances.

The budget deficit climbed to 17% of gross domestic product (GDP) by 2002, and debt repayments were costing the government 80% of revenue. But he pulled together the Paris 2 debt reconstruction conference in 2002 where creditors, led by France and Gulf states, provided $3bn that the Lebanese government used to swap expensive loans for cheaper ones.

For many Lebanese, the redevelopment of central Beirut meant dispossession of homes or property without adequate compensation, and the enrichment of Mr Hariri. Policy-making stalled during his last two years as prime minister because of his rivalry with President Emile Lahoud, until Syria sided decisively with the president. It remains uncertain what economic impact his assassination will have. Much depends on how wealthy Gulf Arab investors react.

The financial services industry is much stronger than a few years ago, part of Mr Hariri's vision of Lebanon as "the Singapore of the Middle East". Today, service industries - banking, tourism, retailing - make up three quarters of the economy. But Beirut's chances of wiping out the lost civil war years and catching up with Bahrain and Dubai have always been slight.

Public finances remain rocky, but are stronger than two years ago. Outside Beirut, the country remains poor with at least a quarter of its people below the poverty line. Mr Hariri's vision for wealth creation of Lebanon was definitely of the trickle-down variety. In power, he cut social services, public sector wages and company taxes. But his vision of Beirut as the flagship for a market-driven, service sector economy appears to be working, while he himself was widely viewed as an impressive ambassador for Lebanese interests.

Mr Hariri's personal empire does not seem at any risk of collapsing either. Several family members helped him run his companies, Solidere, Saudi Oger and Oger Liban, and he had a reputation for hiring the brightest and best outsiders. "