Billionaire Leader Spurs Lebanese Optimism

Lebanese rushed Friday to convert their savings from dollars into Lebanese pounds, buoyed by expectations that a billionaire appointed to be prime minister will revive Lebanon’s war-shattered economy.

Rafik Hariri, named to the post Thursday, began consulting with former heads of government about the makeup of a new Cabinet that he is expected to announce next week.

Hariri, 49, built much of his $2.5-billion fortune in Saudi Arabia and enjoys a tight friendship with the Saudi royal family. He also has the backing of Syria, the main power broker in Lebanon.

His prestige and political connections are expected to help lure back foreign investment and financial aid needed to rebuild Lebanon.

By United Nations estimates, the 1975-90 civil war inflicted $25 billion worth of damage. The Lebanese treasury is virtually empty, and the state has no money for reconstruction. At the same time, the pound has plummeted in value from two to the dollar in 1975, to 2,800 to the dollar last month.

But hopes of economic recovery have soared since reports first began circulating last week that Hariri would be the next prime minister.

Reflecting this optimism, the Lebanese pound opened Friday at 2,100 to the dollar, and appreciated to 1,900 within two hours, forcing the Central Bank to intervene to prop up the dollar. It closed at 2,100 pounds to the dollar.

Fueling expectations of economic recovery was a statement Friday by the outgoing health minister, Marwan Hamadeh, who ordered a 12% decrease in the price of all medicine, effective today, because of the pound’s revaluation. Most medicine in Lebanon is imported.

Hariri is backed by at least 70% of Lebanon’s new, 108-member Parliament. The only significant opposition to his appointment came from 12 deputies led by the pro-Iranian Hezbollah, or Party of God.