Abstract
This essay continues a project begun a decade ago with the article, “A Matter of Life and Debt: The Untold Costs of Rafiq Hariri’s New Beirut.” This new article, or “Postscript,” begins by examining the reception of that first investigation and responds to one criticism directed at the original essay: that it proffers an unfairly pessimistic profile of the reconstruction effort generally and of its prime mover specifically, the now-deceased Prime Minister Rafiq Hariri. This paper follows a cost/benefits analysis of the project and the company behind it, Solidere, and examines two other Solidere-styled developments abroad, both results of the company’s attempts to monetize its so-called “brand.” The first of these, “Abdali,” is in Amman. The second of these comprises a trio of projects that SI prepared for Sheikh Zayed City in metropolitan Cairo. The paper argues that Solidere’s failure to disclose the dubious financial dealings behind such projects further erodes the credibility of a company for whom the notion of “business as usual” works first and foremost to benefit the few at the expense of the many.
Highlights
Peer Review: This article has been peer reviewed through the journal’s standard double blind peer-review, where both the reviewers and authors are anonymised during review
This article moves forward an essay written in the year 2000, “A Matter of Life and Debt: The Untold Costs of Rafiq Hariri’s New Beirut.”1 It began life as a meditation on the extensive reconstruction of the city following Lebanon’s catastrophic civil war
As a response to the 2001 position outlined in the paper, they have applied a positive spin to the notion of political corruption as they describe a viable management mode called “effective corrupt political leadership” that applies to the Middle East, and to the deceased Prime Minister
Summary
It is impossible to understand Neal and Tansey’s largely upbeat appraisal of Hariri’s “effective leadership” without the extraordinary performance of the Lebanese economy circa 2008 in its back story. Even more disturbing is the likelihood of these shares being rebundled into tranches of other asset-backed Lebanese bank issues, and the potential for Solidere’s defaulting contracts to infect a far larger portion of the country’s fixed income financial market. As it turns out, the very same investors who have watched their portfolios of Solidere A shares dwindle over the past six years are again being targeted by the company and its proxies via these new investment vehicles. The ironies notwithstanding, the bet that bondholders take on company debt may be the best hope to date for investors near-term to walk away from Solidere with something to show for the financial risks they have taken here
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