April 19, 2010

On Heights (of buildings, incomes, growth and fear of it)

Another 'million dollar per apartment' building going up, blocking my sunset.

I know it is a VERY old cliché about Lebanon, but here it goes again. A couple of foreign economists are invited in the sixties by the Lebanese government to figure out what makes the Lebanese economy work. They get to work, dive deep into the figures, check the books, pour themselves over the banking system and talk with leading businessmen. When they have to report their findings after a month, they have to admit that they can’t figure out how the Lebanese economy works, but “whatever it is, don’t change it.”

These guys (working for about $/$500 a month) adda nother floor every 10 days.

That’s what I have to think off quite often when I look at the high rise mushrooming up in my neighborhood. I understand that we were bypassed by the financial crisis that hit the rest of the world because ‘Lebanese financial model, as designed through the years, does not authorize any excess in borrowing or in the acquisition of “toxic products”. (Source)

I also know that we have had some sort of stability for a while now. No Israeli bombing since 2006, no internal fighting since 2008, and yes, I do understand that the Arabs from the Arab peninsula are spending their hard-earned dollars here, and that Lebanese from overseas send money to their families.
They work under almost no safety at all conditions. In Holland, the union would have stopped the work long ago. This is on the 10th floor. No railing, no safety harnesses, no hard hats (well, once you fall down 10 floors, who needs a hard hat?)

But how do you explain 1 million dollar apartments going up, one after the other, when the average university graduate should be happy with a starter's salary of $750 dollar?

I don’t get this. People in my surrounding explain it to me in detail, (some of them raising their voice in annoyance as it seems to be a question I ponder over quite a bit), but I think everyone is just second-guessing, just like those economists from the sixties.
I don’t think anyone can come with hard proof and figures on paper as to why this economy seems to be growing (some 7% in 2009 ), yet people continue to have shitty incomes.

You see this guy here? He’s standing on a piece of wood on the outside of the building. Not a shelf, no, one little stick. He’s 10 floors up and not attached to anything. I find this amazing. In the Sates, in the forties and fifties, they used to employ Native Americans from a certain tribe to build their skyscrapers, as these people apparently had no fear of heights. It wasn’t in their genes. I wonder about these guys.

I tell you why it bothers me. Because these darn apartment buildings are slowly but surely taking over my view from the Mediterranean and blocking my sunset That’s why.


vic said...

I hate how smug Lebanese are about the financial crisis point. The Lebanese economy wasn't affected by the financial meltdown because the Lebanese economy was already in tatters. It would have been quite a feat to get much worse. And yet people are proud, how pathetic!

Of all these buildings going up and selling for ridiculous prices, how many are being sold to Lebanese? The majority are gulf owners buying up insanely overpriced flats and raising the price for the whole market, no Lebanese can possibly compete with them and that is how we are being driven out of our cities. I've been house hunting for a while now, and the prices being asked for in Beirut are just sickening: It isn't just that the price is inflated, the types of buildings being built aren't targeting the Lebanese market [really? super super deluxe apartments for rent at $70,000/yr? why yes that is totally logical and affordable!]

Basically this has come around as a result of the repealing of the law in the late 90s which imposed restrictions on the amount of land a foreigner can own in the country, as well as repealing the 23% tax foreigners had to pay when buying in the country. The Hariri/Saniora government got rid of these pesky restrictions so they could market Solidere to their Saudi buddies, and they've succeeded in selling us all out.

I hope I'm still alive when peak oil comes around and all these bastards get sent back to their deserts on a bunch of camels.

Marieke said...

Well no need to get racist towards Gulf people about it! In fact, although it's true that a lot of people from the Gulf are buying these apartments, the majority of demand these days comes from Lebanese expatriates. And the Central Bank issued directives that most certainly helped avoid an economic crisis. Riad Salameh, governor of the Central Bank, even received a price for it.

Proof of what I'm saying can be found at the following links, or you can contact me since I'm writing my thesis on this subject...
http://blog.taragana.com/business/2010/01/22/luxury-building-boom-transforms-beirut-as-lebanon-becomes-a-financial-draw-23376/; http://www.creditlibanais.info/template.asp?id=409; http://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=3&article_id=113868#

Anonymous said...

"I don’t think anyone can come with hard proof and figures on paper as to why this economy seems to be growing (some 7% in 2009 ), yet people continue to have shitty incomes."

It's not as great a mystery as you think. Increasing profits leads to higher inequality. Although profits are paid to wealthy shareholders, employees who are in powerful positions relative to their companies - i.e. managers, bankers, skilled employees - can credibly threaten to leave their employer and therefore can extract some of the profits for themselves. Workers who are in a weak bargaining position cannot do this and thus their wages remain low.

Anonymous said...

I hear you. I wonder when Monte Verde, the green mountain, will nit be Verde anymore because every little verde spot has to be filled with super duper deluxe...
What a shame!!!

Francine said...

I remember the woods near our house. I remember the woods that you drove through to reach the school. I remember the sunsets from many a balcony. I remember the sea that you could see nearly uninterrupted from Sour till Tripoli. I remember...
Well, I guess I'm getting old :)