A WINDOW OF HOPE

FOR
ANOTHER CEDAR REVOLUTION

Execitive Summary

From 28 August to 10 September a three member team conducted a reconnaissance in Lebanon.

The timing of this recon was determined by the cease fire that put an end to overt hostilities in
the 34 day Israeli campaign against Hezbollah and the expectation of US assistance, particularly
the possibility of an OTI program, in the reconstruction effort.

In the course of two weeks in-country, the recon team traveled south to the Israeli border, north
to Tripoli and east into the Bekka Valley. Meetings were held with local and international NGOs;
government officials both at the local and national level; academics; bi-lateral and multi-lateral
donor organizations; and private sector elements.

The case for assistance is apparent:

-Lebanon is the most democratic government in the region. This fact alone might constitute
adequate rationale for significant USG assistance.
-The reconstruction requirements are daunting. In addition to the effects of the recent 34-day
war between Hezbollah and Israel, Lebanon was still in the process of rebuilding after previous
wars.

All parties we met with agreed that an OTI-like program characterized by quick flexible
interventions would be ideally suited to the current situation. It was also agreed that the time for
maximum effect is now. Hezbollah initiated its program of reconstruction within hours of the
cessation of hostilities. The US must act quickly if it intends to enhance the ability of the
Lebanese government to offer a credible alternative to Hezbollah and other radical elements.

I. INTRODUCTION

Lebanon is a small but complex country in the Middle East. Perceived as the most liberal in the
Arab World, it is currently in the peculiar situation of having to rebuild after the recent 34-day

Lebanon Recon Trip Report 1

war between Hezbollah and Israel while it is still in the process of rebuilding after the 15-year
long civil war of 1975-89, and two previous wars with Israel in 1982 and in 1996.

A DAI reconnaissance mission visited Lebanon during the period August 28 - September 10,
2006. The team included two DAI employees, Steve Connolly and Zaki Khoury, and a
consultant, Kirk Day. The objective of the visit was to find facts about current reconstruction
efforts and to identify possible opportunities for DAI involvement. Given the post conflict
environment in place and the need for a transition to stability, the team worked under the
scenario of an anticipated upcoming OTI intervention.

During the recon, our team met with a wide range of Lebanese and visited most of the country to
permit analysis on three levels: the strategic, program, and project level. This report presents the
strategic findings that map the Lebanese context. It provides a political analysis of emerging
issues and opportunities that can lead to a potential DAI program. Possible areas of
programmatic intervention and areas of concern are identified. Cost data that will be useful in
proposal presentation is attached.

II. MAPPING THE LEBANESE CONTEXT

1. Ethnic & Religious Division vs Freedom

With 17 officially recognized sects, Lebanon is religiously diverse. The numerous Christians
were generally favored under the French Mandate in a mostly Muslim region. Despite a
constitution calling for proportional representation of each sect in the government, most now
estimate a 60:40 Muslim majority, split between Sunni, Shiites and Druze groups. The Shiites,
the largest Muslim group in Lebanon, are concentrated in the South, the Bekaa and Beiruts
southern suburbs. The Sunnis are concentrated mainly in the coastal cities, and the Druze
heartland is in the Chouf Mountains. Other Muslim groups include the Ismailis, Alawis and
Nusayris.

The Maronites are the most populous Christian sect and have historical strong hold in the Mount
Lebanon area, as well as in East Beirut. As Catholics, they owe allegiance to the Pope. The
second largest group is the Greek Orthodox, which was historically the urban merchant class
throughout Lebanon. Other Christian groups include Greek Catholics, Armenians Catholics,
Armenian Orthodox, Chaldeans, Syrian Catholics, Syrian Orthodox, Melkite Catholics, Copts
and a small number of Protestants.

Religious - and political groups have their own symbols and identities. Many Lebanese often
identify themselves more with a particular religious sect than with the country as a whole,
making national unity a flighty concept.

2. Demographic Trends

Lebanon Recon Trip Report 2

Although Lebanons population is estimated to be around 3.8 million, a long history of
emigration, most recently during the 1979-1990 Civil War, has built up an overseas diaspora of
an estimated 10 million people.

The exact make-up of the domestic population is a delicate issue since political power struggles
generally follow religious lines. Our interviewees rarely referred to a census or recent
demographic surveys. The first and only comprehensive census was taken in 1932, and it is
unlikely that another will be held in the near future1.

The current population includes between 250,000 and 350,000 Palestinian refugees. They are
still considered as refugees, even though most of them either have been in Lebanon for longer
than half a century, since 1948, or were born in Lebanon. Yet they are deprived of basic rights.
The Lebanese always refer to the Palestinians as refugees waiting to return to their land, and
accepted the consensus that theyre there only temporarily2.

There are also an unknown number of migrant workers, mainly from Syria. It is also a young
population, with around 26.7% under the age of 15, although the national growth rate of 1.26% is
low in regional terms (this rate is higher among the Shia communities).

Lebanon is predominantly urban with over 90% of citizens living in or around large cities and
towns. As observed during our site visits, the most heavily populated areas are along the coastal
area between the mountains and the Mediterranean. Beirut is by far the largest city, home to an
estimated 1.6-1.8 million, almost half of Lebanons population. Other major settlements include
Jounieh and Tripoli to the north of Beirut, and Sidon and Tyre to the south. Zahle, in the Bekaa
with Baalbak, is the largest inland city.

3. The Main Political Actors in Lebanon

There is a complex range of forces operating in Lebanon that can be illustrated in four major
forces:

Firstly, there is the anti-Syrian Lebanese opposition to president Lahoud. This is a very broad
coalition from Walid Jumblatt the Druze leader who used to head the left-wing alliance to
far-right Christian forces, which were responsible for the massacres in Sabra and Shatila. This
coalition also includes Hariris Sunni supporters and even some so-called Leftists. These forces
organized a joint slate in the recent Parliamentary elections on the basis of opposition to Syria
and to Lahoud.

Secondly, there is president Lahoud and his pro-Syrian supporters, who are drawn from various
regional and religious communities. Although Lahoud holds the presidency, his direct supporters

1
According to several interviewees (see Attachment).
2
According to the current Arab mainstream opinion, the proper response should have been while
supporting the Palestinian struggle for their legitimate rights, including the right to return to demand
that Palestinian residents be granted full equality in rights in Lebanon, as is the case formally in Syria and
Jordan.

Lebanon Recon Trip Report 3

and allies represent a small minority. He relies on the two remaining forces to keep his position
as president.

The third force is the movement around Michel Aoun. He was the commander of the Lebanese
army in the 80s, and tried to govern Lebanon after 1988, before being removed by Syria in 1990
and forced into exile. Aoun returned to Lebanon in 2005. Aoun remains a controversial figure.
Although he had been the representative of the most violent anti-Syrian position, and as such
commands an important constituency especially among Lebanese Christians, he refused to join
the anti-Syrian alliance considering them as rivals. He sees it in his interest to maintain the
current presidency until he gains enough support for his own presidential bid. Some have also
criticized Aoun for making unpredictable moves, such as signing a joint work document with
Hezbollah in February 2006, defining 10 key points that required national dialogue3.

The fourth force, second in popular strength in the country, is the Shia alliance backed by Iran
and Syria. This includes Hezbollah and the communalist Amal.

4. The Issue of Palestinians in Lebanon

There are about 350,000 Palestinians who live in Lebanon, the vast majority of which hold
refugee status within the countrys 12 camps. Inside, where the Lebanese army has virtually no
authority, there are believed to be caches of heavy arms left over from the civil war, when the
Palestinian Liberation Organization (PLO) was headquartered in Beirut. The off-limits nature of
the camps, however, meant that the exact type and quantity of weaponry is unclear. Separate
from the camps are several armed Palestinian factions with bases in the Bekaa Valley, near the
Syrian border, and in Naameh, outside Beirut. A significant number of Lebanese, mostly anti-
Syrian, see these groups controlled by Syrians, which is considered an unacceptable vestige of
Syrian influence.

Many politicians have called on the government, which has ruled that weapons outside the
camps are unacceptable, to enforce disarmament. Yet doing so is to depend on finding some rare
internal consensus and willingness to risk considerable instability in and around the Palestinian
bases and camps. In brief, tackling the dilemma of Palestinian-held arms may be less delicate
than opening dialogue on Hezbollahs weapons, it is far from simple and finding a workable
solution in the near future appears unlikely.

5. The Media Factor: Print and Television

In a region often characterized by limited freedom of expression, Lebanon has historically been a
beacon of media liberality. The countrys broad political and religious spectrum, combined with a
long press tradition, has helped it develop a range of print media and audio/visual which
relatively bigger than its domestic market of just 3.8 million would suggest.

3
This rapprochement with Hezbollah and its support during the recent conflict directly contradict Aoun
previous statement of August 2005 about the impossibility to enter into dialogue with Hezbollah.

Lebanon Recon Trip Report 4

The wide range of Lebanese publications is testament to the countrys varied, relatively well-
educated and multilingual readership. An-Nahar remains the countrys most popular newspaper.
It is majority-owned by the Tueni family4. The same shareholder base also controls the most
popular French-language daily, LOrient Le Jour, which carries a similar political leaning
right-wing and anti-Syrian. These two newspapers took some grave hits in terms of key
personnel, following the assassination of the publisher Gibran Tueni and columnist Samir Qassir
by a car bomb in 2005.

The only English-language paper is The Daily Star, published by the Mroue Family and
distributed together with the International Herald Tribune in the Middle East.

Shia-owned As-Safir has traditionally provided left-leaning alternative to the right-wing and
business-friendly policies of An-Nahar and its affiliates. As-Safir is largely anti-US in tone,
portraying Hezbollah as a necessary defender of Lebanons southern boarders.

There is also an array of glossy fashion and lifestyle magazines at the less intellectual or political
end of the media market, targeting the upper class and the youth within the middle class.

Lebanon has a highly developed television industry, particularly in terms of entertainment and
music. There is a large domestic audience: 99% of Lebanese households have access to a
television, 80% of households have access to cable/sat television, mostly dominated by illegal
pirated connections.

The Lebanese Broadcasting Corporation (LBC) is the countrys best known and most popular
channel. It was also Lebanons first founded by Maronite Christian Militias during the civil war
and subsequently toeing that religious communitys political line. The Stations international
arm, LBCI, is popular amongst Lebanese living abroad and produces blockbuster, Western-style
programs, very influential among youth, like Star Academy and reality Shows. The channel is
also amongst the most watched in the Arab world.

Other key stations include MBC, aimed at a Shia Muslim audience; Future TV, owned by the
Sunni Muslim Hariri family; and New TV, an independently-owned station which now aims for
something of a middle ground.

There is also al-Manar channel affiliated with Hezbollah and popular in the Arabic-speaking
world. The channel has been under attacks from various countries (i.e. France and the US),
accusing al-Manar of broadcasting anti-Semitic content, inciting violence and glorifying attacks
on / victory over Israel. According to Hezbollah 5, these attacks are a blatant attack on press
freedoms and an exercise in intellectual terrorism against the voices that are opposed to US and
Israeli policies. This tone and perspective increase the anti-American sentiment among Shia
communities.

Murr-TV (MTV), owned by the Greek Orthodox Murr family, was amongst the top couple of
stations in the country. The Syrian-controlled authorities took the station off air, claiming that its

4
In 2003, Tueni family bought out a 32% share in the paper previously held by late PM Rafik Hariri.
5
As Safir Newspaper.

Lebanon Recon Trip Report 5

anti Syrian line was endangering public order. In August 2005, the Lebanese parliament voted to
reopen the station. It is expect that station will be on air once again early next year.

III. A FRAGILE SITUATION

The Government of Lebanon has recently conducted preliminary assessments of the recent 34-
day war damage. The findings were presented in the Stockholm conference 6 for Lebanons early
recovery that was held on August 31, 2006. It is estimated that the war led to the total or partial
destruction of around 30,000 housing units, most of the bridges in the South, and more than
500,000 internally displaced people, some of whom are currently living with relatives and host
families. Total destruction is observed in a number of towns such as Bint jbeil, Khiyam or Aita
Al Shaab in the South, and large neighborhoods in Beiruts Southern suburbs, the urban core of
Hezbollahs Shiites constituency.

Despite this destruction, recent international developments are cause for optimism about the
prospect of Lebanon's recovery from the war on its territory. The Security Council has passed the
1701 resolution that led to a cessation of hostilities 7, international donors have pledged $940
million to help Lebanon rebuild in Stockholm, Israel lifted the blockade of Lebanon and the
Syrians have agreed to step up their army presence along the border in order to prevent the flow
of illegal arms. All of the vital elements for Lebanon's rebound seem falling into place.

However, the unrest within the capitals southern suburbs, and most of the South, still remain. As
seen in Beirut, most Beirutis are wary returning from their summer retreats in the hills (El-Jabal),
or from outside. Security and Military forces are dense and visible in the capitals streets.

There is also a perceived anti-American sentiment and many view the US as biased in Lebanon
today. With focus on the recent Israeli-Hezbollah war, the Lebanese perception is that the US did
not immediately call for a cease-fire and reportedly increased the supply of some weapons to
Israel after the start of hostilities. Although Secretary of State, Rice, has visited the region, many
there do not see her statement, Hezbollah is the source of the problem, as neutral. In the eyes
of the Lebanese, the US has taken a side. Also, her other statement of "Israel's right to defend
itself" has left many Lebanese with a country significantly seen in ruins amid a humanitarian
crisis and environmental catastrophe that has taken the country back at least 10 years8.

6
Setting the Stage for Long Term Reconstruction: The National Early Recovery Process, the
Govenment of Lebanon, Stockholm Conference, August 31, 2006.
7
A significant number of Lebanese, unlike the case in Sudan for example, support the deployment of a
UN force to Southern Lebanon. A UN force, however big, will not stop Hezbollah or Israel as perceived
by a majority of Lebanese from fighting each other again, if either side is bent on doing so. By getting
in the way, Lebanese hope that the force can discourage both parties to a point. In other terms, the hope is
for to UNIFIL neutralize Hezbollah Militia and halt any future military action, which will provide a
window of opportunity for the State to enhance its role in the recovery and reconstruction.
8
For a youth perspective on anti-American sentiment, see Remi Melhis article, entitled Lebanese Youth
Call on US to Respect Democracy.

Lebanon Recon Trip Report 6

IV. HEZBOLLAH POST-WAR RESPONSE

Lebanons government has struggled to match Hezbollahs impressive post-war relief and
reconstruction efforts. As observed in a field visit to Ayta Al-Shaab in Southern Lebanon, the
Shiites Islamists have handed out wads of cash, between $3,000 and $10,000, to victims of the
war whose homes were damaged or destroyed. Riad Salame, Governor of the Central Bank,
estimated that Hezbollah paid a total of $150 million in humanitarian compensation to date9.

These humanitarian achievements of Hezbollah, while welcomed especially by the countrys

Shiites, point up the countrys divisions. Lebanese, depending on their sectarian affiliations, are
divided when discussing Hezbollahs disarmament. A significant number of Lebanese, the March
14 movements supporters in particular, want Hezbollah to lose its status as a state within a state.
The Shiites and Islamite, on the contrary, see that Hezbollah can reinsert itself, at least, to
continue filling the public service vacuum in the South.

Donor countries have pledged nearly $1 billion for Lebanons relief and recovery. Experience
suggests it could take months (or years) for that money to arrive, and the total will never be
reached. This situation will likely hinder the credibility of the Lebanese Government when
Hezbollah is already handing out Iranian cash and providing quick public services.

The team visited Aita al-Shaab, a Hezbollah stronghold and scene of fierce battles during the
war, is a border village with Israel. Residents say Israeli incursions and the buzzing presence of
surveillance drones are a feature of their daily lives. The team met with Ali Mohammed Sorour, a
school principal for 35 years and father of the elected Mayor, Pharmacist Tayseer Sorour. He said
Hezbollah fighters used the area during the war but has not maintained any armed presence in the
village.
The Israeli military destroyed 1170 houses in the village, in addition to 3 out of the 4 schools
there that it said were filled with Hezbollah weapons. From a hill of bulldozed houses from a
nearby distance from the border, we were able to see Israeli check points just a few feet from a
Lebanese school down the hill. According to Mr. Sorour, Israeli troops also occasionally detain
Lebanese men and release them after questioning, prompting villagers to observe an undeclared
curfew for fear of meeting an Israeli patrol. There's still an atmosphere of war, said Mr. Sorour,
sitting a few meters from an unexploded Israeli missile. ''People don't go out late at night unless
it's urgent.''
During our visit to the village, I also heard from an old woman, Umm Ali, wearing a headscarf
and sitting on a plastic chair in front of what is left of her small supermarket store where there is
no electricity and no running water.
According to Mr. Sorour, Hezbollah representatives came back immediately after the ceasefire
was declared to assess the damages. They handed every family up to $10,000 depending on the
level of destruction of their units. The loss of businesses and tobacco crop for this year has not
been addressed yet. People still have hope that they can restore their livelihoods with a bit more
of help; we refuse to be like the Palestinians, said Mr. Sorour. He is hoping that the 85% of the
villages population who left will come back to help in the reconstruction of Aita Al-Shaab.
9
LOrient Le Jour, Friday September 1st, 2006 - Page 7.

Lebanon Recon Trip Report 7

V. OPPORTUNITIES FOR TRANSITION

Lebanon is arguably the most democratic Arab state. It also has one of the most complex political
systems in the Middle East, based on the premise that a careful balance in all aspects of political
life must be maintained among the 17 recognized religious communities.

This local sectarianism is filled with potential instability and usually led to an unstable political
equilibrium in the country. Among the consequences of this context, many talented young
Lebanese and families, Christians in particular, are currently leaving the country to find work
and more stable life abroad. Also, a system that swings between stable and unstable periods is
always in need of external hands to balance it, like what was the case with Syria until 2005.

The implementation of Security Council Resolution 1701 gives a structure on which thoughtful
Lebanese leadership can now build a functioning state. As has so often been the case in
Lebanon's history, observers are now anxious to see how this country's complex internal dynamic
responds to the incessant pushing and pulling of outside forces. There are fears that the counter-
productive power struggle which was silenced by the war might simply resume, setting the stage
for future crises, both foreign and domestic.

Strengthening the role of the State and state institutions in responding adequately to the
recovery challenge is a priority to stabilize the country. Hezbollah is currently filling a vacuum
created by a failed state through rapid provision of public services and the delivery of donations
and cash injection.

An effective coordination of reconstruction work is necessary for the Government of Lebanon to

enhance its credibility among Lebanese. Instead of the three or four bodies that currently
coordinate this effort10, what Lebanon needs is a smaller, more dependable group to work
directly with the Prime Minister and his cabinet on reconstruction. It is an opportunity for
USAID, through future interventions, to take the lead in making sure that pledges turn into real
projects, and quickly.

A community-based approach is perceived as the most appropriate to gain street credibility and
to improve the livelihoods for thousands of Lebanese. This proposed work can be channeled
through both municipalities and local groups. In Lebanon, mayors and members of the municipal
councils are elected and freely represent their constituencies. There are also more than 3500 local
non-governmental organizations that are currently working in all regions.

A mechanism of quick impact grants is appropriate to address the fragile context in the country.
This delivery mechanism is also flexible to adapt to various needs at different times. The window
of opportunity is slim; Ramadan and the winter are in a few weeks time and people expectations
are high. Also, availability of services is limited: houses for rent or empty spots at public schools
to enroll displaced students. Despite high rate of disapproval of the United States (US), there is

10
Coordination is currently handled by the High Relief Commission; the Council for Development and
Reconstruction (CDR); the Ministry of Social Affairs; and the Ministry of Finance.

Lebanon Recon Trip Report 8

willingness almost everywhere the North, South and the Bekaa to work with USAID funds if
the US show respect for our views and values and partner with us in addressing the
reconstruction challenge, stated the Governor of Balbeck, a city with strong Hezbollah
representation. Samples of needed interventions include the following:

Water (rehabilitation of infrastructure; Irrigation; water supply for drinking and

sanitation) in the South and Bekaa
Rehabilitation of Schools & Clinics (provision of fuel for heating in the Bekaa and
Balbeck); and the rehabilitation of 104 Social Development centers of Ministry of Social
Affairs all over the country.
Agriculture (Restoring the livelihoods of affected people; distribution of tools;
rehabilitating local markets; service roads)- tobacco in the South, Banana and Citrus
along the littoral, and vegetables in the Bekaa
Media (community reporting; media outreach; voices representation; innovative
messages)
Youth Employability (Vocational training programs; cash for work; ) the whole
country, e.g. Tripoli (construction), Al-Nabi Sheet village in Bekaa (Auto mechanics).

The following section elaborates on the last two areas for intervention, namely Media and Youth:

Communication and Media represent an important component of any future transitional

initiatives. They will channel necessary messages to update Lebanese on current progress
and steps for recovery and help in managing their expectations.

The last July war encouraged the Lebanese to watch more TV and read more newspapers.
This was a result both of the sheer weight of news and the bomb factor people tend to
stay at home for fear of explosion and bombing. Internet (blogs) is another area that
expanded during and after the war. While it represents a platform for freedom of opinion,
the low internet penetration is limiting its effect, at least for the time being.

The Lebanese media provides an opportunity for

fuelling the powerful desire for change throughout the
country. The media were seen as playing a leading role
in pushing out the Syrians in March/April 2005. Any
future interventions need to take into consideration the
fine line between politics and media which has grown
since last year. Lebanese remain, however, critical of
media and constantly employ a truth filter given the
current politically manipulated press. A recent outdoor
advertising campaign by Hezbollah was indirectly
glorifying its victory with broad humanitarian
messages. While the latest Johnny Walkers campaign
of Keep walking despite a broken bridge was a
symbol of resistance and hope for the Lebanese. There
is a need for even more innovation in delivering these
messages that can encourage more debates.

Lebanon Recon Trip Report 9

 Lebanese youth will likely play an important role in a transition. Most Lebanese in their
late teens and early 20s have only dim memories of the civil war that gripped Lebanon
for 15 years. This group which represents almost 26% of the population represented the
majority of the Cedar Revolution, which drove the Syrians out of Lebanon in March
2005. According to a recent poll by Zogby International and the University of Maryland,
this group of youth (16-29 years old) overwhelmingly identify themselves as Lebanese.
Only 3% considered themselves first as Muslims and 13% defined themselves as Arab.
These young citizens are the hope for Lebanons future; they are likely to be the first
agents of any future change or transition in the country.

The team visited the northern port town of Tripoli, the second largest city in Lebanon.
Tripoli is a strong hold of Sunni fundamentalists who promote Wahabi Islam through
three independent Islamic radio stations. According to the Mayor, a prominent engineer
and businessman, the main challenges in the city are youth dropout and unemployment
(36%) which increase poverty and create favorable context for more fundamentalism.
The mayor has immediate and long term plans to address these problems with more
vocational training programs and more public-private partnerships to generate blue-collar
job opportunities for youth aged 18 to 29 old.

Finally, with the current reconstruction challenge, there is an opportunity for national dialogue
that brings in others in society (private sector leaders, academics, technocrats, activists) whose
expertise can help generate a truly new political landscape that is at once more stable, equitable,
prosperous and sustainable11. Creating a space for inter-communal dialogues will be necessary
to pave the way for a transition to stable Lebanon.

VI. OTHER OPPORTUNITIES FOR DAI INVOLVEMENT

DAI has other opportunities in the mid- term (the next 6-9 months) in addition to a possible
upcoming OTI transitional program. The current discussion within the USAID Lebanon mission
is about two priorities for reconstruction: supporting SMEs through injection of cash and soft
loans; and replicating the success of the Litany Water Management program to other areas in
the country, the North and Bekaa in particular.

Other long-term initiatives that may occur include support to the decentralization of local
government (municipalities); a cross-cutting Anti-Corruption program among Lebanese public
institutions & Civil Society (i.e., transparency in bidding, procurement, and implementation);
and monitoring of a local Election under a new Legislation12 in 2008-09.
11
An objective expressed by several interviewees, such as Amb. Gilbert Aoun, Mr. Fadi Riachi, Mr.
Ramzi Neaman, and Ms. Lama Oueijan.
12
IFES is currently working with the GoL on new election legislation. Parliamentary democracy comes in
many shapes and sizes, but Lebanon's system has little in common with effective models in other
countries. The goal of electoral reform is to make Parliament more representative and therefore more
democratic. Once that has been accomplished, the transition to relevance will be just short of automatic.
According to Hermann Thiel, IFES country representative, some politicians will suffer as a result, but the

Lebanon Recon Trip Report 10

It is recommended that DAI targets other sources of funding in addition to USAID. EU and
DFID are expected to allocate significant amounts within the next few weeks, likely faster than
USAID.

Finally, it is also recommended to conduct a recon in Syria within the next 3-4 months. Despite
the fact that Syrian troops left Lebanon more than a year ago, Syria still has a bold influence in
the country. There is consensus among various religious / political groups that without Syria
cooperation in cutting Hezbollahs supply lines, UNIFIL will achieve limited results in blocking
weapons smuggling. To ensure Syria cooperation, it is expected that EU countries and may be
the US - put concerted international pressure on and the possibility of easing isolation of Syria
within the next few months. EU and other donors are likely to allocate more funds to increase the
Syrias cooperation. DAI, through its office in London, can rapidly move on this potential
market.

Programming and Operations Considerations

Overview:

To suggest that the situation in Lebanon is compelling and that opportunities exist for the U.S.
Government to engage war-effected communities throughout the country would be a serious
understatement. Despite what most Lebanese and many other observers believe to be
disproportionate use of force by Israel following the kidnapping of two soldiers by Hezbollah --
and despite the pronounced public relations campaign by Hezbollah supposedly supported Syria
and Iran to portray the outcome of the conflict as a Hezbollah victory -- sentiments in the press
and personal accounts suggest that many Lebanese are not so certain. Some Lebanese privately
admit support for the Israeli offensive against Hezbollah.

Lebanese are speaking out against Hezbollah, including Islamic religious leaders, and many
observers see the provision of humanitarian and reconstruction assistance as a means to usurp or
undermine support for and authority of Hezbollah, and by extension of Iran and Syria. This,
however, should be seen as war by other means, because Hezbollah too seems to appreciate the
importance of humanitarian and reconstruction assistance and has been fast to mobilize
-including the provision of cash to those with destroyed or war-effect houses apparently
regardless of religious affiliations, the removal of debris and the surveying of damaged
dwellings.

An opportunity exists to possibly marginalize Hezbollah -- and Syria and Iran -- in Lebanon, but
timely and effective reconstruction efforts will play a crucial role. It is not beyond imagining,
that those credited with the majority of reconstruction successes will reap the benefits during the
next round of Lebanese elections, if not sooner should the government collapse. More
importantly, an emboldened Hezbollah is a threat to further destabilize Lebanon, the region and
may well pose a threat to U.S. foreign policy and domestic interests.

long-term benefits for the country are more than worth it.

Lebanon Recon Trip Report 11

Empowering local communities -- and possibly local governing institutions, though concerns
about transparency and corruption are legitimate worries --to identify and address prioritized
needs could provide meaningful alternatives to those presently dependent on Hezbollah
assistance. Success in diminishing Hezbollah influence in the south, could serve as a model for
similar initiatives in Lebanon to counteract state within a state structures that exist in other areas
of the country. Successful initiatives could also possibly serve as program models for other
divided areas of the Middle East.

The need for a quick dispersing, flexible mechanism to provide high-impact assistance ranging
from physical reconstruction to information campaigns is apparent, and as such a U.S. Agency
for International Development (USAID) Office of Transition Initiatives (OTI) program would be
particularly well-suited to the current Lebanon context. Such support could also provide a
foundation for other U.S. Government interventions, and could go some way to demonstrating
U.S. support for the people of Lebanon, particularly groups that have been marginalized or been
left to the forceful influence of Hezbollah and others.
Unfortunately despite opportunities that exist to undermine Hezbollah influence, to date, the
U.S.Government seems content to provide only humanitarian assistance, continue a largely
traditional development assistance program, and to encourage the private sector to attempt to
positively influence the situation. DAI Washington should, however, continue to monitor the
Lebanon situation closely. Events could change, including a return to war that would provide
additional opportunities for the U.S.Government to revisit policy and assistance positions.
Already, there are some indications thatwithin USAID officials are not content with current and
envisioned assistance programs. Moreimmediately, it may be worthwhile for the collective of
DAI entities to explore possibilities fornon-U.S. Government program funding for Lebanon.

Programming:

Community-Based:

Community-based efforts would seem the best -- if not the only viable -- program entry points
for DAI Washington.1 The highly politicized nature of assistance in Lebanon -- prevalent prior to
the most recent crisis, but all the more so now -- means that there is a real threat of elite/Beirut
capture for any programming coordinated through central government institutions. Moreover,
that the most pressing needs are amongst those traditionally marginalized by the Government of
Lebanon, i.e. the Shia, likely taints any assistance to war-affected communities that might be
channeled through government institutions.

An argument could possibly be made -- and apparently has by an OTI representative of the
USAID Office of Foreign Disaster Assistance Disaster Assistance Response Team --to work
through local, municipal governing structures. This may, however, be perceived as a serious
threat by Hezbollah and at the very least result in communities unable to participate, if not to
more serious threats to program staff and communities that risk participating in such activities. A
seemingly less confrontational approach would be to form broadly representative ad hoc

Lebanon Recon Trip Report 12

community councils to identify and prioritize community needs. A flexible, quick-dispersing
mechanism would need to be available to respond to the myriad needs identified by local
communities, likely ranging from medium-scale infrastructure to softer needs.

1 For more effective community-based programming local contributions in the form of the no-
cost provision of unskilled labor -- sweat-equity -- are often required. It is worth noting that in
Lebanon, most unskilled labor is from Syria. Though, there may be opportunities in the south for
unskilled labor contributions to be required amongst war-
affected Shia communities.

Undoubtedly, shelter needs will be identified as the most pressing need by many war-affected
communities. Shelter has traditionally been a difficult program sector for the international
community, let alone the U.S. Government. In the past, most programs have opted for a
standardized approach, including the provision of uniform emergency shelter/winterization kits
followed often only after prolonged periods of more permanent materials for only those houses
considered most-damaged. Given the complexities associated with shelter programs, the U.S.
Government has often shunned such efforts leaving them for other donors. In the Lebanon
context, however, to be seen providing the assistance most needed, desired may be an asset for
U.S. foreign policy in Lebanon and throughout the region. A DAI Washington Support Which
Implements Fast Transitions (SWIFT) Indefinite Quantity Contract (IQC) competitor has already
suggested addressing past difficulties associated with shelter programs through the provision of
housing vouchers. Given Lebanese past reconstruction experience, and the multitude of local
contracting firms, the idea has merit: empowering local homeowners and communities to assume
responsibility to meet their own needs; and, by providing infusions of cash into the local
economy. An argument could be made that Hezbollah has adopted a similar approach.

Admittedly, these councils would almost without exception include Hezbollah membership and
as a result such a program approach is likely to require clarification -- if not a rethink --of U.S.
assistance policies in Lebanon. That such community-based council programs supported by
USAID are ongoing may mean that something akin to a dont ask, don.t tell approach has been
adopted by the Mission regarding informal, low-level interactions with Hezbollah members.

Local Non-governmental Organizations:

Lebanon seems to have an abundance of local non-governmental organizations, with many

created during or immediately following the most recent conflict to respond to the needs of
displaced populations and war-affected communities. Many local non-governmental
organizations are affiliated -- many closely -- with political parties or sectarian interests. As a
result, and despite past emphasis by OTI and the experience of DAI Washington, working
through local non-governmental organizations may prove counterproductive and result in less
than optimal impacts. Though, DAI Washingtons capability in this area should be demonstrated
in response to any proposal for programming in Lebanon, perhaps though with a recognition that
this sector is highly politicized.

Media:

Lebanon Recon Trip Report 13

Lebanon is a media-rich environment, whether electronic or print. And, not unlike the local
nongovernmental organization sector, most media outlets are affiliated or perceived to be
affiliated with political and sectarian interests. Media outlets, particularly television, appear to be
well-financed and seem quite savvy disseminating what some observers would consider
propaganda. There may exist some relatively impartial outlets through which DAI Washington
could disseminate information/messages, but by in large U.S. Government and other funded
efforts in this sector will be little match for the amounts of money spent on media by Hezbollah
and others. As a result, this too may be a program sector to be given diminished importance in
the Lebanon context, despite past OTI emphasis. That said, there exists an urgent need for a mass
information campaign to outline eligibility and modalities for humanitarian and development
assistance, if for no other reason than to manage what are likely to be over-inflated expectations
amongst affected communities. Given strong perceptions of Government of Lebanon corruption
amongst Lebanese, an inability to quickly implement the widely publicized $900 billion-plus
donated by the international community at the recent Stockholm Conference could ironically
further weaken faith in Lebanese governing institutions. Hezbollah could easily exploit this, and
could garner even more support.

Operations:

Operational considerations for programming in Lebanon will be a significant influence on

programming, and as such are probably best considered not as a separate component. If DAI
Washington receives U.S. Government funding, and as a contractor is required to operate under
Chief of Mission (COM) authority -- a strong likelihood -- programming should at the very least
be considered non-traditional and will require creative, inventive means to reach affected
communities to achieve impact and to monitor/report on activities. Luckily, Lebanon is a small
country. The ability to reach all of Lebanon on day trips likely negates the need for field offices.
Though such offices would be significant value-added to community-based programming, COM
requirements are likely to prohibit the establishment of field offices. Offices staffed by Lebanese
nationals may be a viable means around COM .Given the likely heavy emphasis on small to
medium-scale infrastructure activities, and the possibility of corruption often associated with
infrastructure programming, it would seem prudent to include an expatriate engineer as part of
any DAI Washington proposal for Lebanon. Lebanese engineers and architects would be more
than suitable, given the high education levels and past experience of many, but social and other
pressures may put them in compromised positions. Though, COM authority requirements may
make it difficult for an expatriate engineer to effectively meet their scope of work requirements,
i.e. prohibitive travel restrictions.

Another key staff capability, given what is likely to be significant interest in any U.S.
Government funded activity in Lebanon, would be an enhanced information/reporting capacity.
The demands on the program are likely to exceed those that can routinely be met by the OTI
Activity Database or by DAIs TAMIS. An experienced, native English-speaking information
officer should be considered the minimum requirement, and thought should be given as to how to
cost-efficiently support this person with additional resources.

Timing:

Lebanon Recon Trip Report 14

Program interventions proposed in this document should have been implemented immediately
following the cessation of hostilities to best achieved desired impact/s. Unfortunately, that was
not the case and support for such programming would not seem likely in the near-term.
Implementing such programming now would be more difficult, given the crowded donor
environment and an increasingly politicized development context.

DAI Washington should continue to closely monitor the situation in Lebanon and be prepared to
develop a proposal, deploy and implement a program with little advance notice, particularly
should the situation change and with the possibility of a resumption of violence a real possibility.

Geographic Focus:

The development needs of Lebanon as a whole are not insignificant. The country was, however,
seemingly on the road to economic recovery prior to the most recent crisis. Revenue estimates
for the summer tourist season alone were closely to $5 billion. The conflict has and will continue
to cause serious economic hardship. This is, unfortunately, commonplace in the Lebanon context,
and is something the Lebanese would seem able to cope with and to overcome.

Rather than concentrating on the overall development needs of the country -- an overwhelming
task for any one entity/company -- DAI Washingtons expertise and experience would seem best
suited to exploit the opportunities present to possibly counteract Hezbollah influence in the
south. Such opportunities have not been present in the past, and may not last long. Secondarily,
some might suggest programming in the Bekaa Valley. This area has, however, suffered to a
lesser degree from the recent conflict, and Hezbollahs grip on power is seemingly more
entrenched.

The level of effort and complexities presented by possible programming in the south are likely to
be all-consuming and it may be unwise to expand programming to other geographic areas. A
phased approach to geographic expansion may be the best course of action, and would allow for
the application of lessons learned from south programming elsewhere in Lebanon.

Win-Themes:

Despite the apparent lack of urgency on the part of the U.S. Government to initiate new
programming in Lebanon commensurate to DAI Washington experience and expertise, it would
seem important nonetheless to briefly consider win-themes should USAID or other programming
opportunities materialize. Among those that would seem most compelling would be:

prior, ongoing DAI Washington programming experience in Lebanon;

proven DAI Washington capability to design creative program approaches to ensure
relevance and impact in high-threat, highest-priority U.S. foreign policy contexts; and,
an appreciation and embracing of politically sensitive programming in support of U.S.
foreign policy objectives (e.g. possibly a DAI Washington distinguishing feature from
current USAID implementers in Lebanon that may be less welcoming of politically edgy
programming).

Lebanon Recon Trip Report 15

Challenges:

Challenges posed by possible programming in Lebanon, particularly that funded by the U.S.
Government, are arguably more important to consider than likely DAI Washington win-themes.
The ability to recognize, consider and possibly address the following challenges before
responding to a proposal could be crucial to a DAI Washington successful bid and perhaps even
shaping bid/competition opportunities:

COM authority;
possible non-competitive implementing partner selection, particularly by OTI as has been the
case in similar circumstances in the past and resulted in the selection of the
International Organization for Migration to circumvent COM authority; and,
perceived U.S. non-governmental organization entitlement to U.S. Government funding,
particularly that of USAID for community-based programs.

VII. ATTACHMENTS:

List of Meetings
Map of Lebanon

Lebanon Recon Trip Report 16

 LIST OF MEETINGS
Lebanon Recon

Wednesday Aug 30, 2006

Litani River Authority

o Ali Abboud, General Manager
o Kamal Karaa, Head of Rural Development Dept.
USAID
o Raouf N. Youssef. Mission Director
o Sana Saliba Khoury, Program Development Specialist

Thursday Aug 31, 2006

Ministry of Public Works

o Fadi Nammar, General Director, Roads & Buildings
CHF
o Ayman Abdallah, Country Director
o Talal A. Hajj-Dib, Program Director
o Raymond Lynch, Director Emergency & Transition Programs
Smart Engineering & Transport Solutions (SETS) Private consultancy firm
o Mutasem El-Dafel, Senior Advisor
o Isam A Kaysi, Senior Advisor (Transport Systems)
o Fadi O Darwish, Managing Director
UNDP
o Edgar Chehab, Program coordinator
o Hassan Krayem, Policy Specialist
Karim S. Makdisi, Assistant Professor at the American University in Beirut, Political
Studies & Public Administration Dept.

Friday Sept 1, 2006

Visit to Tripoli
Northern Water District, Tripoli
o Jamal Koraim, Chairman
Tripoli Municipality
o Muhammed Rachid El-Jamali, Mayor of Tripoli

Saturday Sept 2, 2006

Visit to the South (Saidon; Tyre; and Ayta Al-Shaab; Hannen and Rmaish)

Lebanon Recon Trip Report 17

 Met with Mr. Ali Mahmoud Sorrour (Father of the current mayor Mr. Tayseer Sorour &
principal for 35 years)

Dr. Jean Paul Aoun Prof. of Medicine, Gastroenterology Division,

St George Hospital Univ. of Balamand

Sunday Sept 3, 2006

Analysis & Report Writing

Monday Sept 4, 2006

IFES
o Hermann Thiel, Chief of Party - Lebanon
Amb. Gilbert Aoun, Independent Consultant & Professor of International Law at Saint
Joseph University, Faculty of Law, Institute of Political Science.

Tuesday Sept 5, 2006

Visit to Bekaa (Zahle & Baalbak)

Omar Yassin, Chairman of the Great Baalbak region

Abdelatif Ali Nasser Al-Moussawi, Mayor of El-Nabi Sheeth.

Wednesday Sept 6, 2006

Council for Development & Reconstruction

Ramzi Neaman, Director, Community Development Unit.

Bridges Inc. Jessour

Fadi Riachi, CEO and Co-Founder

Thursday Sept 7, 2006

Ministry of Social Affairs

o Joumana Kalot, NGO Liaison Officer, NGO Resource and Support Unit

Ministry of Economy & Trade

o Lama Oueijan, Advisor to the Minister
o Mira Merphy, Senior Economist

Lebanon Recon Trip Report 18

Lebanon Recon Trip Report 19