JAY: So to understand the transaction, you have privately owned Lebanese banks, on behalf of the government, selling these bonds at 49 percent. The money is then owed—this is foreign money? Or it’s Lebanese money that’s loaned to the banks?
TRABOULSI: No. It’s—I mean, it’s everything. But now I should say that now it’s 17.5 percent, the interest rate on government bonds.
JAY: Given, at a time when rates in the US are practically zero.
TRABOULSI: Yup. And at that time in the ’90s you had an inflow of international capital, Arab capital, attracted by the huge [inaudible] profits that you can imagine. But a few years, when the rates came down, most of those sold their government bonds. So now we have—actually, 40 percent is foreign debt, and 60 percent is mainly our local banks. Now, when we say Lebanese banks, we mean—it’s not always necessary to mean that the Lebanese own the majority of those banks. Usually you have oil money invested in it.
JAY: And by oil money you mean Arab oil money?
TRABOULSI: Arab oil money, Arab oil money. And for a time, American banks had a strong hold on Lebanese banks, especially before the war. But you still have a good chunk of non-Arab shares in our banks.
JAY: Is a significant amount of the money Saudi money?
TRABOULSI: Yeah, definitely, definitely. Saudi, Khaleeji—Kuwait, Bahrain, the whole lot.
JAY: Now, many of the people or families that own these banks are also running the Lebanese government. Is that correct?
TRABOULSI: In a sense, yes, and that’s the paradoxical situation. And Lebanon, now, you tell me you see—people see Lebanon as Hezbollah, but, I mean, the overall impression is that Lebanon is a country of sects and ethnicities, and politics is seen as being the politics of ethnicity. So a lot of economic power is very much camouflaged, whereas we are run by a party of bank owners, importers, and of course contractors. Those three effectively run both the state, the economy, and are the greatest influence, let’s say, over the political bosses, who are not necessarily the same people, but who are very much related to the banks.
JAY: In terms of the Hariri family, there you have a direct connection, you know, between a family that owns banks and many other things and also [inaudible]
TRABOULSI: That’s not the only link. I mean, the owner of the biggest bank is also a minister. You have three billionaires representing the city of Tripoli who are MPs. Well, one thing is obvious, and that is the rich people—but more precisely the capitalist rich people, not the landed property—are now a high percentage of people in power directly. Before, it was political bosses who catered for economic powers. Now those who hold economic power, especially after 1990, after the war, and with the advent of the late prime minister Hariri, they are more directly represented in the organs of power.
