Lebanon isn’t a country where population studies are omnipresent. However, given the data that the country has, Credit Suisse, in their yearly report on Global Wealth, has managed to paint a picture on how things in this country actually are.
The report dates back to October 2014, and frankly I am surprised that these numbers did not cause a stir and were not discussed. The report, at 160 pages, can be found here. Perhaps no one noticed the info, so here they are:
At an estimated population of 4.37 million, Lebanon’s wealth is estimated at $91 billion. That actually constitutes 0% of global wealth. How anticlimactic.
When it comes to the Middle East, and despite the reputation we get of being oil-rich, things are similar: Saudi Arabia has an estimated wealth of $653 billion, which ends up as roughly 0.2% of global wealth. Qatar, and all our shoukrans, has $200 billion, which is 0.1% of global wealth. The UAE is at $461 billion, and 0.2%. Meanwhile, Israel has an estimated wealth of $843 billion, translating to 0.3% of global wealth.
All of these numbers look flimsy compared to the United States’ $83708 billion, constituting 31.6% of world wealth.
Keep in mind that – with the exception of Israel and the United States – Credit Suisse considers the data for Lebanon and other Middle Eastern countries to be poor in quality. However, I highly doubt that any estimations are overly erroneous in any way or that the margin of error they are admitting to will change the findings considerably.
But this isn’t the story. We all know the country has money. Recent leaks out of Switzerland placed the country at #11 in total customers at their banks and #12 in total deposits within the few months whose data was actually leaked. We’re 10452 km2. That’s a lot (link).
The story is in how that money is actually divided on the 4.3 million Lebanese living here.
Out of all those $91 billion, 0.3% or approximately 8000 people of the estimated workforce according the study own about half (48% to be exact), which is approximately $44.6 billion. Meanwhile, 99.7% of Lebanese own slightly more than half at $46.4 billion.
To put those numbers in perspective, Credit Suisse employed a criteria called the Gini score. The score, according to Wikipedia, is essentially a “measure of statistical dispersion intended to represent the income distribution of a nation’s residents, and is the most commonly used measure of inequality.”
Lebanon’s Gini score is 85.6. a score of 85.6 places Lebanon 6th worldwide in terms of wealth inequality behind Ukraine, Denmark, Kazakhstan, Seychelles and Russia.
The story doesn’t end here. Even among those 0.3%, there are disparities. That 0.3% basically any Lebanese who has an estimated wealth above $1million. But who actually owns most of the country? The answer is two families: The Hariri and the Miqatis.
According to the Forbes latest list of billionaires, there are 6 Lebanese on the list whose ranking ranges from 530 worldwide to 1478. Two of those 6 are the Miqati brothers. The other 4 are the Hariri brothers, including former PM Saad Hariri. Their cumulative wealth is estimated, according to Forbes, at $12.6 billion. This is 30% of the total wealth owned by those 0.3% of Lebanese – except it’s owned by just 6 men.
This isn’t to say that the Hariris and Miqatis do not deserve their wealth. The Miqatis started and ran a telecom empire. The Hariris started and ran a major contracting company in Saudi Arabia. Good for them.
The problem with these numbers is the other side that they portray. About two thirds of the Lebanese population (64.6%) have an estimated wealth of less than $10,000. Such numbers indicate massive poverty in the country, and yet I was unable to find substantial studies apart from one that was recently done by the UN about Tripoli.
In numbers, (link) the UN found that 57% of Tripoli’s families struggle to reach an acceptable standard of living, while 26% are considered extremely deprived. It wouldn’t be a stretch to assume that things are similar in other regions beyond Beirut.
To the background of this massive poverty is the 0.3% who owns 50% of the country’s wealth, and those 0.3% happen to include most (if not all) of our politicians. Aoun is in it. Geagea is in it. Our MPs and ministers are probably part of those 8000 people too. There are no estimates of the wealths of Lebanese politicians if their last name isn’t Hariri or Miqati, but one assumes they are not middle class folk who are going by paycheck to paycheck.
Of course, it only makes sense that money brings influence, and then influence brings power. A politician’s job in Lebanon isn’t only to legislate but to “provide” for the voters. This is how democracy works here.
The problem with those 0.3% (not all of them obviously) being those running the country is that the country’s policies over the years have not served to close the gap or make those 64.6% with little to no wealth slightly better off. The Gini coefficient clearly shows as much. The country’s policies have not aimed at improving education, providing economic opportunities (for instance, a 1 million m2 zone in Tripoli to bring in international technology has been on hold over sectarian causes for the past 6 years) or making living standards better. Those 0.3% do not get how things are for the 64.6%, the people they’re in contact with once every 4 years for that pre-electoral paycheck. And honestly, there’s no reason for them to get it. And yet our MPs and ministers wanted to increase their salaries?
Meanwhile, the Lebanese population who happens to be of the third that has wealth above $10,000 is pre-occupied with selfies, porn stars, bananas and Kardashian-like reality TV shows because those are what matters.
A Separate State of Mind | A Blog by Elie Fares 
You said it: Lebanon isn’t a country where population studies are omnipresent.
So thanks for sharing.
You’re suprized that these number did not cause a stir? All the TV medias (and probably most of the printed medias as well) are owned by those politicians you say are in this list.
They will also not cover any new political group who wants to enter the scene. You can ask Rami Ollaik from “Lebanon Ahead” about his experience on this matter.
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I’ve heard of Rami Ollaik. Read his “Bee” book. I have mixed feelings about it. Unless we are talking about a different person.
I really hope though that the country does more studies such as this or even about other topics. We need population studies and data that can be used to dictate policies and guide the country forward. It’s sad that we have to rely on foreign reports to manage things on our own turf.
I agree about your other point.
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This is indeed a very interesting issue, and one needs to be very accurate when it comes to such numbers. So the Gini’s score is not a “measure of statistical dispersion intended to represent the income distribution of a nation’s residents”, but a much more generic way to measure the dispersion of any analyzed factor in a given population. You are also confusing here between “wealth” and “revenues”. Wealth does generate revenues, like work also does, but is not revenues. This said, Credit Suisse can indeed use the Gini’s factor as a measure of dispersion of wealth among Lebanese. Lebanon might then be the 6th country in terms of inequal wealth distribution, but I doubt Danemark is in the top five when it comes to income distribution. (*)
Then, mixing Lebanon’s ‘intra-muros’ wealth with the Forbes data is highly debatable: I am positively sure that a significative part of these people’s wealth is outside of Lebanon (including switzerland!). You cannot just use these numbers to say who owns most of the country. It’s definitely misleading.
Some compliments now: thanks for your time and the most pertinent issues you are addressing here. Such a work deserve to be shared and publicized, definitely.
(*) on all these questions of wealth and revenues (and the Gini thing), please read the most interesting book by Thomas Piketty: “le capital au xxie siècle”
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Hello,
I’m just reporting the findings of the report I posted. I’m not an economist so I don’t pretend that the many technical terms are within my scope but I did some research and I think the Wikipedia definition is what Credit Suisse meant by employing the Gini score. I may be mistaken, and the score may not be entirely accurate. It being as high as it is, however, helps portray how things are in Lebanon. Regardless of what the score is. That said, there is a discrepancy in the amount of data for Denmark and all 5 other countries.
Regarding the second point, the Credit Suisse report also lists 6 Lebanese billionaires in one of its tables. It employs data from Forbes. So I didn’t see why I wouldn’t at least revert back to that same data.
Thank you for reading! Will check out the book when I have time. 🙂
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Hello Elie, and thanks for your answer. Sorry to be so picky on the billionaire point, but, as your interpretation could quickly become a legend, and a political argument for some of us, I’d like to make it very clear: the Miqatis and the Hariris can be tremendously rich, but this does not mean they own most of the country, as they can (and do effectively) have considerable assets outside of Lebanon. Compared to their global wealth, the ‘Lebanese’ part of it can even be close to peanuts!
And I’m going to read this Credit Suisse document, because I’d love to understand how they take into consideration the wealth of institutions like some of our churches which, according to many, own a major part of the country!
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They don’t go into that much details about the country. As I said, data quality is poor and I don’t think there’s any way to quantify the assets of Churches.
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Excellent point about religious institutions, they own huge swathes of the country we know so little about how their assets are managed and spent.
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Case in point is my previous post in which I talked about a project to take place in Batroun: https://stateofmind13.com/2015/02/17/lebanon-to-have-its-very-own-high-tech-silicon-valley-soon/
The land will be donated by the Maronite Church. It’s about 300,000 squared meters. For comparison, a 300,000 squared meters plot was sold in my hometown last year for about $12 million.
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I always wanted to find the Lebanese Gini coefficient but couldn’t. Glad (and not) I found it.
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Put it to some good use!
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Brilliant piece
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Thank you for reading. 🙂
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Reblogged this on Loop55.
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Sounds like a free market paradise, where can I get a Lebanese passport?
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Wanna switch?
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You have to marry a Lebanese man since women unfortunately can’t give citizenship.
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Great that you are bringing this up. On the point about media exposure, a similar story came out in Executive magazine about a year ago: http://www.executive-magazine.com/cre8mania/frontend/millionaires-own-half-lebanese-wealth/ But I don’t know how much it was covered in local (Arabic) mainstream media. The income gap–and poverty in general–is so poorly covered by our press. We need more posts like this!
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As another person said in a comment here, those newspapers and TV channels are owned by the 0.3%. Of course they won’t go around to propagate such data. Thank you for the Executive Magazine article. It uses the 2013 report, but few info have changed since. Notably, the Gini score has gotten lower and the population has increased in estimates, including adult workforce. I’m surprised they didn’t do a follow up article given the previous one was – judging by the social media response it has according to Facebook shares and Tweets – a success.
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Interesting read, and thanks for sharing.
However, If we take a moment and think about all the different companies (owned by different Lebanese people) in Lebanon generating considerable turnovers (ie Debbas, Yared, Rasamny, ITG, all the banks, hotels, malls, construction companies, etc.), I really find it difficult to believe that only 0.3% of the total workforce (and not total population) have a wealth exceeding 1 million USD.
It is a fact that the wealth is poorly distributed in Lebanon but 0.3% seems too exaggerated.
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Rami,
typically, in this kind of accounting, companies are transparent, where their value is distributed among their ‘physical’ shareholders. So the value of a bank, its subsidiaries or its holding an be allocated to its final and individual owners.
Saying that, we still have not solved the problem of institutions without shareholders , like Churches …
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And there’s no way to know about religious establishments.
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As pgrondier said, the values of those companies are attributed to their owners. Obviously those owners are likely to be part of the 8000 people list.
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Reblogged this on Moe's Blog.
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Hi Elie, good read here but there a few things worth noting. As an economist (PhD candidate in economics), and as someone who has worked in a large organization doing cross country analysis, the numbers that credit suisse are most likely riddled with errors and have very very large standard errors (which they allude to by saying that the data is not good). While Lebanon has a very high rate of inequality, it is definitely not 6th in the world (in terms of income or asset/wealth) and neither is Denmark. As noted earlier, the Mikati’s and Hariri’s wealth is gained and kept mostly abroad and would not be considered part of the country wealth; so saying that those 6 people own 30% of the 50% is not accurate and very misleading.
This is a good post anyway, and it is good to think about these things, but as an academic economist, I believe accuracy is important. There is more than enough to be said about inequality in Lebanon without inaccurate numbers and there is a lot to be said about the need for good data to monitor all of these things.
Thanks for the space and good work!
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Hello! Thank you for reading.
I’m nowhere near the economics field so thank you for the comment. As I said, the lack of studies in this country about such data – I haven’t seen a Lebanese study – means we have to revert to foreign studies that brush over our country. The Credit Suisse report doesn’t even remotely go into the details of Lebanon because, well, we’re irrelevant, and the data upon which they deduced whatever it is they deduced is poor, which is not surprising. That is also something I noted in the post itself.
In their report, they mention that they also used Forbes’ data of billionaires in their assessment of wealth in a certain country. The Forbes’ list lists 6 Lebanese billionaires and Credit Suisse’s also lists 6. So it is within the confines of the information provided that they are saying Hariri and Miqati own as much as it is they own.
Yeah, I understand that their assets are not in Lebanon per se, and that there are probably other organizations in the country (Churches, Mosques, etc…) that own a whole lot that isn’t reported, but is there really a way of knowing?
Again, I can’t say I’m an expert. I just figured this was an interesting enough topic with interesting enough numbers to at least bring into the spotlight, and I’m glad people are talking about this, regardless of whether the numbers are 100% accurate, which is not the case obviously because the sheer amount of deduction and assumption that had to go through them.
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Hi Elie, good read here but there a few things worth noting. As an economist (PhD candidate in economics), and as someone who has worked in a large organization doing cross country analysis, the numbers that credit suisse are most likely riddled with errors and have very very large standard errors (which they allude to by saying that the data is not good). While Lebanon has a very high rate of inequality, it is definitely not 6th in the world (in terms of income or asset/wealth) and neither is Denmark. As noted earlier, the Mikati’s and Hariri’s wealth is gained and kept mostly abroad and would not be considered part of the country wealth; so saying that those 6 people own 30% of the 50% is not accurate and very misleading.
This is a good blog post anyway, and it is good to think about these things, but as an academic economist, accuracy is important. There is more than enough to be said about inequality in Lebanon without inaccurate numbers and there is a lot to be said about the need for good data to monitor all of these things.
Thanks for the space and good work!
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Just noticed that this is the same comment.
Anyway, I don’t think you can say much about income or wealth inequality in the country without data. We all know there’s a serious discrepancy but the numbers, objective and scientific, bring the message home. The problem, as I said and as you probably know, is that there isn’t enough data.
Thanks for reading again!
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It would have been more accurate (my friend Adnan Ghandour would agree with me!) to sum it up in your closing paragraph: ” Meanwhile, 64.6% of Lebanese population are pre-occupied with selfies, porn stars, bananas and Kardashian-like reality and woodpecker talk TV shows,because those are what matters “…LOL!!
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Great article! But I can’t help the tears from my eyes (sarcastically speaking) ! What about that other party that has an army and heavy artillery in Lebanon. I think and I’m sure many things are flying over the radar first class! What a schizophrenic country.. The title is a bit misleading btw.. owning and wealth are two different things esp that most of the money on the list was injected from telecom or construction money from abroad I hope all this is taken as constructive criticism…
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Good work, you got people thinking, thinking gets people involved, getting involved is a prerequisite to caring, and caring is a sign of civility, and that is what matter most.
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Enjoyed reading the article too, nice1. Also good of Michael Thomas to highlight the blogger got people thinking & involved with interest. I enjoyed the comments here too. Damn sham on the lack of Data. Control is a powerful thing. @BritishLebanese
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It’s sad that most of the comments (not all) are pointing out technicalities and small inaccuracies. I know that it’s for the sake of science, but this is taking away the spotlight from the initial and much more important debate.
Yes I also think that Elie made a huge shortcut and that the wealth of lebanese billionaires is most likely both national and international. Yes I also think that the credit suisse report is far from exhaustive and that Elie hasn’t mentionned churches etc..
But is this article supposed to be an accurate scientific research or a piece of thought probably written on a weekend to raise awareness? Is it really necessary to stress that much the inaccurate details while the big picture is much more important? is it really a deal-breaker if the figure actually is 0.9% instead of 0.3%?
Don’t take me wrong, it is good to be a purist, but this is probably indirectly denying such articles the buzz they need. Elie’s job isn’t to be more catholic than the pope. He’s raising awareness. We’re not helping him if we indirectly discredit him (i’m stressing on the “indirectly” because i know that it’s all coming from a good will). Such articles should go viral. So let’s maybe leave the “yes but” for scientific plateforms and use this time to share this article as much as we can.
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Reblogged this on Whale Pizza vs. the Internet.
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Political corruption and bribery are standard in Lebanon since Time Immemorial. So how can you get any accurate financial figures from those wealthy and powerful people, yet corrupt to the hilt? They make their money from investments inside and outside the country but they are the movers and shakers in Lebanon and they are Lebanese. Thus their TOTAL wealth is subject to Lebanese taxes (I wonder if they pay any taxes!). I agree with those who commented and said that this article should not be whether the figures are accurate or not but to take its spirit that shows the discrepancy of wealth in Lebanon. Who knows if the figures were sort of accurate, what kind of horrors would be revealed!
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Read the excellent article by Elie and read mostly excellent comments.
Elie raised a hugely important topic.
As the saying goes: “Do NOT research it to death”
We Arabs are great at discussing issues at nice café trotoirs. Instead, let us face it. Lebanon has a huge problem of inequality that will touch the life of every single Lebanese, regardless of where they are on the economic model.
Now, let our efforts focus on HOW to remedy the situation – in the field of economics.
Otherwise, disaster awaits all of us, just around the corner.
P.S. Sorry I won’t be able to engage in discussions, but that’s my 2 cents’ worth, as they say.
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Unfortunately, the lambs have been reelecting the wolves since first day of independence. And that is what one calls feodality.
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Forgive me, I should of used your name Elie, instead of Blogger:0) & ps well done!
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But isn’t that the same thing around the whole world, less than 1% of population own more than 50%?
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That might be true, but then? In how many countries can you be offered decent life conditions, including security, health care, education? Lebanon is definitely not in the list! And it happen that such countries have usually a Gini score of around 30, or less, when Lebanon gets a nice 85!
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“according to Wikipedia”… never use wikis as a reference…
this article decreases dear Lebanon wealth
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Reblogged this on Nizar Rammal.
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There’s a recent Lebanese study about this, that gives an updated (still high) gini coefficient of 45.3, thus advancing us to 129th from 141 countries in income equality.
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I couldn’t find media coverage of this study as well.
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you messed up the numbers – denmark has a gini coefficient on 27 or less making them one of the least unequal contries in the world
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