Billionaire Boss Tries the Impossible in Lebanon

RAFIK HARIRI is a billionaire. He certainly doesn't need to be prime minister of Lebanon for the salary.

But Mr. Hariri has vowed to rebuild this shattered country from the ruins of 16 years of civil war. Now, after nearly three years at the helm of a tiny Mediterranean country of 4 million people, he is starting to feel the strain.

He has resigned twice, threatened to resign once, and suspended himself from office for a week in a bid to break the hold of sectarian infighting on Lebanese politics and lead the country into a new era.

But each time he has been persuaded to stay on by Syria, the silent power in Lebanon that sent its troops into its neighbor in 1990 to end the civil war and never left.

And Hariri is increasingly seen by the United States - and even Israel - as the best chance of securing peace in Lebanon once an Israel-Syria peace deal is reached.

Despite notable achievements in stabilizing the Lebanese currency and launching a $13 billion program for the reconstruction of Beirut, Hariri has experienced a backlash from a population reeling under a soaring cost of living and impatient for promised improvements in basic services like electricity, water, and sewers.

Hariri is also under increasing criticism for failing to tackle the underlying malaise in a society ruled by tribal and clan leaders. Today they dispense patronage under the mantle of parliamentary respectability, unlike their civil-war days of battling each other from heavily guarded bunkers.

But Hariri, an accountant-turned-construction tycoon who amassed a personal fortune estimated at $5 billion in Saudi Arabia, still represents the best hope for Lebanon's emergence as a power in the region and the restoration of its former position as a financial center, the ''Switzerland of the Mideast.''

His critics argue with the priority he has given to high-profile projects like the ambitious reconstruction of the city center, the building of a massive sports stadium for next year's Mediterranean Games, and a state-of-the art airport that would accommodate 6 million travelers a year.

But Hariri has been thwarted by an undeclared international embargo on capital transactions and a perpetuation of a political system of vested interests and patronage dominated by quotas based on religious affiliation.

''He took a gamble that the Mideast peace process was proceeding well and the end was in sight and that Lebanon would open up and money would flow in,'' says political scientist Adnan Iskandar at the American University of Beirut.

''But now there is a feeling that we should have followed a path of greater austerity,'' Professor Iskandar says, noting that the West had not allowed capital to flow in.

'Nothing is impossible'

The return of some 8.5 million expatriate Lebanese also has not materialized. Instead there has been a net outflow of some 150,000 Lebanese in the past two years, mainly Maronite Christians. An estimated 900,000 Lebanese left the country during the civil war.

But even Hariri's critics concede that his resources and contacts in the Arab world place him in a unique position to effect a transformation of Lebanon. And few doubt his motives.

''Lebanon is not used to this kind of prime minister,'' says a researcher at Future Television, which is owned by Hariri. ''To him, there are no obstacles. If he wants something, he buys it. If that fails, he finds another way. For him, nothing is impossible.''

Lebanon's transition from 16 years of civil war began with the signing of the Taif accords in 1989, in which Hariri played a key role well before he became prime minister in 1992.

Then followed the disarming of the militias, the building of the wrecked Lebanese Army, the extension of state authority, and the holding of elections in 1992.

Hariri has taken on the toughest part: to reverse the postwar social and economic deterioration. Beirut today is a bustling metropolis of frenetic activity. The streets are clogged with more than a million automobiles including a dazzling array of luxury German models.

In the downtown area, which bore the brunt of the civil war between Christian-dominated East Beirut and the Muslim-dominated West, there are construction and road works on every corner. Amidst the wreckage and infrastructural development, new hotels are rising and a plethora of upmarket nightclubs and diners offer Beirutis a distraction from the chaos and memory of the war.

Some 400 of the 900 condemned buildings have been demolished and the rubble dumped at a landfill adjoining the harbor that will eventually extend the city center out into the Mediterranean Sea.

Challenged by a strike

But the ambitious reconstruction program is taking its toll.

Last week, Hariri survived the most serious challenge to his leadership: a nationwide general strike by the Federation of Labor Trade Unions protesting a 38 percent increase in gasoline prices levied by his government July 12.

The day passed without loss of life but a massive Army and police presence clashed with demonstrators in Beirut and at least 13 people - including four policemen - were injured in the southern provincial capital of Sidon, Hariri's home town.

''Anything else is up for discussion and negotiation in Lebanon but when it comes to security, we are not prepared to compromise,'' said Hariri in an interview in his sumptuous private palace in downtown Beirut on July 21, the morning after the strike.

Hariri blamed the government's predicament on a plethora of hostile TV and radio stations that arose during the civil war to serve the interests of Lebanese warlords and now beam constant antigovernment propaganda.

He said the Lebanese Parliament had recently passed a law to regulate the electronic media and ensure that all sides were given an airing. ''We want to see a democratic society as close as possible to a Western democracy as in France or Britain,'' he said.

Hariri conceded that the news media are not the only problem for his government.

''We have a severe problem. For the past 20 years, no one had done anything. But we hope that by the end of the year we will be in a much better situation,'' he said.

But his real concern appeared to lie with the impact that the strikes would have on potential foreign investors and bankers who have shown an increasing interest in the country.

''A strike like this makes people think twice,'' he said. ''But I think that the way we handled the problem gives the impression that the government is strong.

''I would like to see more investment,'' he said, noting that the financial markets were in the process of restructuring and that the Beirut Stock Exchange was due to reopen by year's end.

''Many hoped that he would follow a different path,'' says Iskandar, the political scientist. ''But he does not have a fine hand in politics. When he has tried to dismiss ministers, he has been overcome by vested interests. The old system prevailed.

''He still has to meet the challenge: How do you change the old system in Lebanon?''