Well, interesting.

A few comments.

Despite all his various reforms, the new apparatus of government is still at the service of a system that works by divvying up spoils among different religious groups by way of their political leadership.

I am not sure that is a fair juxtaposition in terms of "despite."

The aim of fiscal reforms are to put the government (a government) on a sound operating basis. Not to change the operation of an overall political system. Two different (although related) problems.

While our man apparently was a go getter in terms of getting Lebanese fin sec governance institutions etc. up and running, I am not terribly convinced that the government is running on a sound fiscal basis.

Indeed, quite the contrary. Lebanon is skating along the razor's edge of an Argentine style disaster, although the irrationality (if I may be so opinionated) of Lebs sending money to the homeland and buying Leb paper keeps the funny-money machine running.

And it's also a country where the law enforcement is lax at best and unjustly uneven at worst - where the head of the stock exchange admits in an open interview that there is absolutely nothing he can do about insider trading.

I'd call it a refreshing bit of honesty, really.

So what, in this kind of a world, is a technocrat to do?

Try and make a few things work right, in my opinion. Not try for "world class best-practices" or whatever mumbo jumbo the development people have sold, but a few key things to help business along, work right and proper, and get rid of the thicket of idiotic, unworkable regulation.

During one of the interviews, when the subject of the intellectual property rights law came up, I couldn't restrain myself from snickering. The guy I was interviewing took it well - he turned it around, and made the point that Fuleihan was well aware that this was not going to be an enforceable law. But, he said, he wanted to make sure that the legal and administrative structure was in place for when the political will would be there.

I don't know if that's enough.

Not only is it not enough, it's precisely backwards.

Having unenforceable laws on the books merely lowers respect for the rule of law.

This sort of thing, which is essentially trick the donor posturing (the EU Med Basin initiative, USAID, whatever) - or rather pass stuff so the development aid community can claim "successes" that have no fucking meaning. Bloody idiots (although perhaps its not really their fault given what they have to report to their ignoramuses).

Having unenforceable laws on the books merely lowers respect for the rule of law.

Frankly, I'm not sure that's all that possible in the Lebanese context.

The overall fiscal deficits and debts are the real, major danger for Lebanon right now - they make the (still scary and of course potentially much more dangerous to the world) US problems look puny by comparison. I would have put it in the main article, but didn't feel like looking up the actual numbers. In any case, by some measure or another (debt to GDP, maybe?) Lebanon is the most heavily indebted country in the world.

One difference, as I understand it, between Leb-land and Argentina is that a lot of the Leb debt is domestically held. Don't know what difference that makes.

I forgot to reply to this.

Re the diff between domestically and internationally held, the major difference is with respect to how easy it is to fuck the bond holders.

If they are your own citizens obviously this is easier, as one can more easily force changes.

However, more seriously one can generalise as follows:
(i) If the debt is denominated in local currency one can print one's way out of it. Generally speaking domestically issued debt is in domestic currency (although it could be dollar, euro or other currency denominated), and if one repays in the currency one can print, just print it. There is the small matter of (hyper) inflation, but when you're at 250 odd percent of GDP, what the fuck.
(ii) Domestically held debt at some level is owed to "oneself" or one part of the same family (even if it's denominated in a foreign currency, for example), and so in the abstract the major economic implication is the distributive effects between bondholders and taxpayers (and between generations). All things being equal, one presumes that crisis issues are easier to negotiate en famille.
(iii) Foreign held debt is often denominated in foreign currency; obtaining said foreign currency to pay foreign bond holders can be an expensive or even impossible challenge when one is as deep in the hole as Leb Land. Not paying up may mean currency crisis, inability to roll over debt to finance current government operations, and general economic chaos. While the Lefty anti-Globo types like to portray this as the evil of the IMF, in fact it's pretty bloody basic finance - you stiff the folks that are paying for your spending spree, they're not too likely to be enthusiastic about forking over more money to piss away.

BTW, my executive pieces on Fuleihan are now up here (interviewing his widow) and here (his colleagues - a bit more interesting, imo)