Speech before the Los Angeles World Affairs Council on January 10

Thank you. It's good to be back in Los Angeles among friends and especially with the Los Angeles World Affairs Council and my good friends, Curtis Mack and Mary Morris.

Lebanon is in a transition period. Beirut is a beautiful place now. It has probably one of the nicest walls in the whole Mediterranean apart from Florence. The rebuilding was of traditional architecture and not modern architecture and we are very proud of the process. Because of that and because of the stability which the country has witnessed [in the past few years], we have increased tourist activity. In the last year we had about three million visitors to the country, which is a very important number for us. It's a small country and that's a lot of people for us. We are very proud of the progress we've made. Nonetheless, there are obviously a number of challenges which our country is facing, some of them internally, some of them mentioned and some of them regional.

The first problem we're facing is, of course, the economy. It's a very strange set of figures for somebody who tries to study them. That reminds me of the joke of a French specialist who came in the '50s to study Lebanon's economy and then after a few weeks he said, "Just continue doing what you're doing. It's OK." He couldn't figure out what was going on. But actually it's not that complicated. The rebuilding process was done very nicely. It was a very costly affair. Hence we have a very large debt — $ 32 billion. In absolute terms it's not that big. Actually, it's 170 percent of the GDP, which is a lot, even for non-economists.

The country is functioning and the economic situation is manageable, but the distortions are there. There is a great deal of pressure, especially on the middle class. Lebanon was very proud of having a very large middle class and now, because of the economic situation and because of the war, the middle class is shrinking and that is a bad thing for any country. We're trying now to create this certain economic climate, which will allow the middle class to reemerge because we consider it an important element in the stability of our country. We have a very well educated population. It has one of the highest, probably the highest literary ratio in the area for both male and female, it is 86 or 87 percent, and that is very high. On top of that we have several universities. One of them is familiar to many of you in here in the U.S., American University [of Beirut]—it is probably the best American university outside of the U.S.

We don't have cheap labor. Lebanon is an expensive country for visiting. The solution for that is to create certain industries, activities or services which require qualified labor and not cheap labor in order for Lebanon to compete with other third world countries such as Indonesia, Egypt or other countries with cheaper labor. This is where we are in the economy now. We do not want to be a colonized economic system however, there are real economic problems.

The second challenge that is facing our country is the security situation in the south. Israel occupies part of Lebanon, as you know [the Sheba’a Farms]. It is a small place which is the subject of contention between us and Israel. It is occupied by Israel and there are still skirmishes from time to time.

The rest of the [border] between Lebanon and Israel is secure and there has been no military activity there. We do not allow any military activity there. There are some [extremists] in the past who have fired shells across the border and the people who did it were arrested.

There is activity at [Sheba’a Farms], the point where the borders of Lebanon, Syria, Israel, and Palestine meet. This area has seen skirmishes from time to time. We hope there will be no escalation, but these skirmishes are confined to this area. Apart from that, the situation is quite safe and secure and there are no military activities.

There is the issue of Hezbollah. Hezbollah in Lebanon is a large political organization. It is not a fringe group. We disagree with the U.S. on this. They consider it a terrorist group; we do not consider it a terrorist group. It is a large party with representation in parliament; they have 11 members in parliament. And they have a large presence in the country itself. So we do not agree that this is simply a fringe group to be treated as a security problem. There is a political issue, and the solution to all these issues is often part of the Arab-Israeli conflict. It is a political problem.

And that is one [item] of discussion between the US administration and us. There is a great deal of cooperation between the U.S. and my government regarding the Al Qaeda terrorists and all the [terrorism] from which this country has suffered. We are cooperating. We exchange information about financial dealings and transactions and about security problems and the US has expressed its appreciation of the efforts we are making in this respect. So our fight against terrorists, against Al Qaeda, is going well, in full cooperation with the U.S. But there is a separation; if you want to consider terrorist, we do not consider Hezbollah a terrorist organization. And we do not deal in this respect.

The other issue that is raised is the relationship with Syria. The 25,000 or 35,000, I do not know the number, Syrians are an important presence in Lebanon. The Lebanese government thinks that the Syrian presence is a stabilizing factor. It is not an occupation. There are Lebanese who discard the Syrians, they fear them, and they have the right to say it. But in general, by and large, the effect of the Syrians has to be calculated, and not by a procedure of accounting of plus and minus. At the end of the day, the government says it is a stabilizing factor and they think that it is good to have a friendly relationship with the Syrians. Some Lebanese complain about the Syrians and some others concur with us. It’s a subject of debate in the county, but it's also a subject of calculation, whether this relationship is useful to the country at the present juncture.

The other challenge that we are facing is the Palestinian issue. You know that we have approximately 370,000 Palestinians in camps in Lebanon, refugees since 1948 and 1967. These refugees are in camps and they are a problem in Lebanon, a security problem and a demographic problem. Security we are trying to control however, fringe organizations are there and some of them are fringe terrorist organizations, and we are trying to control them. We have the means to control them within the camps and we are doing it.

The other problem is, of course, political and demographic. No country the size of mine can absorb thousands of refugees. An influx of 10 per cent of refugees is an enormous destabilizing element. It's as if you say in the U.S. 27 million refugees have entered and been absorbed by the U.S.—10 per cent—even the U.S. cannot do that. So that is why we are, in Lebanon, adamant about one issue, and that is there should be no permanent settlements of Palestinians in Lebanon. And not only for political reasons. We think Palestinians have a crystallized nationalist identity. They have the right to have their own state. They must be allowed to be settled, and should be allowed to have their own state; their nationalism is crystallized, as crystallized as the Jewish nationalists, the Zionists. That is why we feel that the solution should not be displacing and replacing people here and there, but recognizing the Palestinians as a people and as a state.

The last issue or challenge that concerns Lebanon is the Arab-Israeli conflict and the Iraqi issue. The Arab-Israeli conflict has been very destructive, too. Lebanon takes pride and prospers in times of peace like any country. Conflict has a devastating impact on the country. All the Arab countries came to the Arab summit in Lebanon last year. All of them agreed on a peace platform, which was based on U.N. Security Council resolutions 425 and 242. I believe, in summary, it is a mutual recognition process. Arabs will recognize Israel; the Israelis will recognize the Palestinians as their equal. We thought this is a reasonable proposal: there will be two states living [side by side] and there will be mutual respect for each other and security of each other. The proposal was ignored by Mr. Sharon and he has continued with his oppression of the Palestinians because obviously he does not intend to accept the UN's resolution of two states. Mr. Sharon simply believes that there should be one state, the Jewish state, and not two states. This is in direct contradiction with U.S. policy as announced by the Secretary of State and by President Bush. President Bush, in his speech in July, and you can quote him, and Secretary of State Powell announced that the policy of this government, of this administration, is towards establishing two states in the area: an Israeli state, which is there, and a Palestinian state. And that peace should be achieved in this way and that the establishment of these two states, the harmony and mutual recognition, should be achieved before the end of two years—2 years from [then]….

The Israelis have not moved forward yet, and there is a great need for movement in this respect. There is a very certain cycle, which can be broken only by mutual recognition.

Another challenge that is facing Lebanon now is the prospect of conflict in Iraq. Most of the Arabs are aware of what is going on. The U.S. attacks on Iraq have changed during the past six months with news that ties it to Al-Qaeda, never proven, to weapons of mass destruction, or the future of weapons of mass destruction in the area. There's Israel, there's Pakistan, there's Iran, etc., it's quite spread out through this area. The whole idea of regime change is not very clear to the Arab side. Small countries are more attached to the UN than powerful countries because they relate to what they feel offers some sort of protection in international relations. One way is to help with some organizational and legal procedures and they are attached to that. We think that anything that should be decided should go within the framework of the United Nations. All the Arab leaders in this respect are saying that any move should be within the framework of the United Nations.

The other [thing is, we] don't really know the result. The no-win scenario of the day after has been proposed and we don't really know if it will happen. Everybody will be telling you a story; one would tell you a story about the Iraqi position; another would tell you there would be a military occupation. There is no real conclusion of what the future will be. For all those reasons, the Arab side is a bit apprehensive of the prospect of a direct attack on Iraq. And one important issue is the fact that direct intervention to change a government is something, which is shocking for everybody. We know that governments are not ideal. There are countries whose governments need to be challenged and there are countries who can do these changes to smaller countries, so if you're going to open this door all international relations are going to be a fun place in the future and not very peaceful. The result of this intervention could be negative in the area, it could exacerbate a good deal of the feelings that are already there, negative feelings, and maybe it will not solve the problem which this country suffered from radical extremists. There are a good deal of committed voices in Washington. You can hear them in the press about these issues, whether this is the right solution or not.

An ambassador cannot criticize the host country. It's the first thing we learn when we are trained, you never criticize the host country—so I'm not criticizing the U.S. I'm just explaining our apprehensions, our feeling in the area are. It is certain that there is a need there to discuss this issue further.

I've mentioned these challenges in the region because it's a bad neighborhood, as I've said, and because of the internal problems. We're tough cookies, we Lebanese, and we have made signs of resurging after war, after every conflict. We have had in our history and very long succession of problems and I always use the example of people digging to rebuild. At certain sites they are faced with six layers of civilization—one on top of the other, with archeological artifacts from 2,000 years ago. We have six or seven layers of civilizations on every site. We have seen it all. We manage, nonetheless, to rise like the Phoenix and we are doing it now. We are doing this, not only because we are resilient in the country, but because we are supported by our [people] spread out [across the world]. There are 13 million Lebanese living outside Lebanon. That's a very large population, only shared by the Irish and the Jews, I think. So, this is something of an asset for us. Some times they want to intervene in internal politics and sometimes they want to push the other agendas and vice versa but there is a great deal of feeling and support and I felt that when I was among our community here. In Southern California there are about 100,000 Americans of Lebanese descent, which is a very large concentration for us, only second to another area in New York where there are about 150,000. These people with their attachment to the country are also a good asset to us and they are hoping to promote the relationship, which continues to exist between Lebanon and the United States, which is, despite some issues, a very friendly relationship.

Thank you.