Prime Minister-designate Saad Hariri said today that Lebanon cannot afford to continue without a government that can protect it from regional turmoil and economic downfall, and hoped that a government will be formed before the end of the year.

He added that we face Israeli escalation by committing to International law and resolutions, most importantly UN Security Council resolution 1701, and consider the Lebanese army as the sole defender of sovereignty.

Addressing a large audience at Chatham House in London, during a discussion under the title Lebanon: A vision for the Future, Hariri reminded that his incumbent government took the decision that Lebanon, including all political formations in government, will abide by a policy of disassociation, adding that this policy will be maintained in the new government.

Hariri started by delivering a speech, before answering the questions of the director of Chatham House, Dr Robert Niblett, and the audience.

In his speech, he said: I am honored and humbled to have the opportunity to address this distinguished audience, which I am also sure will be a tough audience! I thank Chatham House and Dr Robert Niblett for having me.

I am here during very complicated times, both for my country and the region.

As you may already know, we held elections in May. The first in 9 years. President Aoun and I agreed to steer the country towards economic and political stability through reforms, capital investments and strengthening our security institutions, in the respect of our constitution and our democracy.

Since May, I have spared no effort to form a National Unity government. I entered consultations in good faith to ensure fair representation in the Council of Ministers.

I am a patient man and I am willing to wait and find a solution. But this is not about me. It is about Lebanon. Our country cannot afford to continue without a government that can protect Lebanon from regional turmoil and economic downfall.

I am confident that we will reach a government soon, as all realize that the need for stability and economic growth far outweighs any political agenda.

Lebanon remains an oasis of peace and stability. We have tested civil war, long before all other countries in the region and learnt many lessons. I, for one, am adamant never to allow the return of divisions and strife.

And even though our power sharing agreement might be complicated, we have to always remember, it is the sort of agreement most countries in the region are aspiring to attain today.

Now, for the really difficult part: Lebanon is in a really, really rough neighborhood. We have to work very hard to prevent the fires from neighboring Syria to spread to our country, and to avoid the belligerent escalation the Netanyahu government seems to be embarked on.

This dual task is complicated by the presence of 1,5 million displaced Syrians, 200 thousand Palestinian refugees, and the accusations made by Israel recently.

To begin with displaced and refugee population, and to give you an order of magnitude, it is as if the UK had 33 million refugees on its territory, today. In Lebanon today, we have 4 million Lebanese and about 2 million refugees.

This has placed incredible pressure on our infrastructure, basic services and fiscal situation. We are receiving humanitarian assistance, which is welcome but still insufficient. And we are working hard to mobilize the International Community to do its part, considering Lebanon is providing a Public good to the world.

Our army and security services are on constant alert to prevent any terrorist infiltration and our national consensus stands strong in the face of extremism.

We face Israeli escalation by committing to International law and resolutions, most importantly UN Security Council resolution 1701. We consider the Lebanese army as the sole defender of sovereignty and we are engaged in a National Dialogue process to agree on a National Defense strategy, which will resume, as soon as government is formed.

In the many inter-Arab conflicts, my incumbent government has taken the decision that Lebanon, including all political formations in government, will abide by a policy of disassociation. This policy will be maintained in the new government.

The region also faces a historic source of instability, in the Israeli-Palestinian conflict. Our position is that of Arab consensus as expressed by the League of Arab States and by the Arab Peace Initiative of 2002. Basically, we see no other solution than 2 separate States, the capital of the Palestinian state in Jerusalem and the right of return guaranteed to the Palestinian diaspora.

This last point is of particular importance to us, since our Constitution forbids the permanent implantation of refugees and our national consensus on this will remain unshakable.

I believe Lebanon has an essential role in the region. As a model of coexistence and tolerance, it is a rampart in the face of extremism. Lebanon has always been the laboratory of creativity and innovation in the Arab world.

In this era of disruptive technology and transition towards a new economy, this role will be maintained and re-invented.

My incumbent government started two years ago laying the groundwork in legislation, telecom infrastructure and education. The new government will continue on this path. And I am sure the legendary resilience, creativity and human capital of the Lebanese will do the rest.

Question: I want to start with the economy because I think that part of your visit is to try to drum up some of the much needed investments in the country in particular in infrastructure. Could you say a word of two about where the country is on that process and how important is it to have a fully functioning government in order to be able to both attract investments and undertake some reforms?

Hariri: We have particular circumstances with 1.5 million refugees and we have had 1% of growth in Lebanon since 2014-2015.

To have quick growth and deal with unemployment of the Lebanese youth, and 75% unemployment among the refugees, we had to look outside the box. We looked at where we could invest money, create jobs quickly, increase the growth and grow our economy.

Historically, Lebanon always used Syrian manpower for all the infrastructure work that we had in the past. In the early 90s for instance we have had 600 to 800 thousand Syrians working in Lebanon in agriculture and infrastructure jobs. Therefore, our idea is to stabilize the country and make sure that our youth and our Lebanese people have enough jobs.

So we went to CEDRE and presented the 250 projects. We wanted to do reforms so we brought in the World Bank, we brought in the IMF, we sat all together, examined each project and took the advice of the IMF on how to fix our fiscal problems. We agreed in the incumbent government, before going to CEDRE, on all the reforms and on all the projects. We went to CEDRE and got the money that we asked for.

Since the elections, work did not stop. For instance, because we thought that certain reforms needed to be passed right after CEDRE, even with a caretaker government, we went to parliament and passed 5 laws of reforms. We agreed also with the Parliament Speaker that any law that has to do with CEDRE needs to go on a fast track. Usually, because of the bureaucracy we have in Lebanon, a reform law or loan from the World Bank used to take a year or two, today it takes 3 to 4 weeks. Everybody realizes in Lebanon that we cannot sustain our economy, we cannot sustain the 1.5 million refugees in Lebanon if we do not create jobs for us, for the Lebanese. And Lebanon has to change, we cannot work like we used to work 10, 15, or 20 years ago. Yesterday, in the joint parliament committees, we finally agreed on changing our commercial law that was written in 1958.

Questions: How important is resolving Syria for your economic hope in Lebanon?

Hariri: Syria represents a path for us to Iraq, to Jordan and to the Gulf. Our strategy is to invest in infrastructure, prepare Lebanon to be a platform so that big companies from Britain, the USA or the European Union would invest in Lebanon or make Lebanon a hub for them for reconstruction in Syria, in Iraq and even in Libya.

Syria represents a big market for Lebanon, and so does Iraq.

Question: In the last legislative elections, your party took a little bit of a hit, giving an element of confidence to Hezbollah to want to be more adamant in designing what a future government would look like. How likely is it that you will form a government and what kind of compromises might be needed for that to be achieved?

Hariri: I think that the government is extremely important but for me the focus is how to make CEDRE functional. Today I came to London and met with so many officials, financial institutions and businesses. We can do business in Lebanon even with a caretaker government. But the ideal thing would be to form a government. I think we are in the last 100 meters of forming the government and hopefully we should be able to form it before the end of the year.

Question: Lebanon is challenged on the foreign policy front and we are not always able to make our own decisions, but on the domestic front, who is responsible for the garbage, electricity and other problems. Who is responsible for fixing them?

Hariri: After the assassination of my father, the country went into a huge division, people were not listening to each other and not talking to each other, until I decided in 2016 to take 2 initiatives to break this division in the country. I nominated a candidate for presidency from the other side. We elected President Aoun and this mixed the cards politically.

What did the division do to Lebanon? Nothing. The problem is, if you want to blame somebody, you should blame all of us because we were politically against each other. If anybody presented a project from one side, the other side would refuse it. We all used to work on how to make sure the other fails. When we elected President Aoun, we decided to put the differences aside, especially the regional issues. Hezbollah is not going to change my mind on Iran and I am not going to change his mind on Saudi Arabia, the gulf, on what we believe in or on our alliance with Great Britain or the United States and all these countries. I am not going to change my mind about his way of dealing in the region. So we decided to put our regional differences aside and to focus on what is good for the country in the past year and a half. This is why we were able to do a budget and to agree on an electoral law. Most governments, when they do electoral laws, they do so assuming that results will be good for them. I knew the law would make me lose a bit, but I accepted for the sake of wanting the country to move forward.

My policy has always been that if we stand still, we are not going to advance. We need to compromise. What happened in the garbage and electricity is due to all our mistakes, all of us together. Now we passed a plan for energy, we passed a plan for solid waste and a strategy for telecommunication. We should have spent on fiber optics or the internet about 600 to 700 million dollars in the early 2010 but we didn't because of our divisions, we did it in 2017 and now it's rolled. The same thing with energy, now we are working very closely with the World Bank and the IFC to help us develop these plans. So hopefully, once we form this government, you will see a lot of these issues being resolved because we have a strategy on how to tackle these problems.

Question: Lebanon benefited from a robust banking system historically, a sector larger than in Greece or Argentina for instance. Deposit inflows are estimated at 2.4 billion dollars this year compared to 7.3 billion last year. To slow down in deposit inflows means that now they fall short of external financing requirement. Funding shortfall is estimated at 2 billion dollars in 2018, what measure would you consider introducing to increase depositors confidence in the medium term?

Hariri: There are several reasons why we have decreased deposits in Lebanese banks. First, the remittances we used to get from the Gulf states diminished because the Gulf states are also suffering from the economic situation. You have less Lebanese working there, less salaries paid in the Gulf.

We used to get remittances of about 9 billion or 8 billion from this region, they dropped down to 5. So this is one of the reasons why we get less investments.

The other is that you have higher interest rates in the world, the USA increased its interest rate up to 3.5 now. What we are doing today to increase that part of pumping money into the country, is opening up our private sector. We passed a PPP law in 2017 and all the projects we want to do will be done by BOT. Money is going to come to the country to build all these projects. You have the 11, 8 billion that was committed in CEDRE, these are specific projects studied by the World Bank. At the same time we are talking with several States, in the Arab world, Europe, and the USA to see if we can put some deposits into the Central Bank to increase dollar deposits in Lebanon. This is something we launched just a week ago. The things I said before are the plan to bring money into the country.

Question: Prime Minister, why is it taking you so long to form a government and how are you going to implement your vision and policies if 7 months after the elections, you are still struggling to form a government?

Hariri: We just organized elections, the first in 10 years. I am sure that by the end of the year we will have a government. The challenges are very hard, there are new MPs in Parliament and we need to take that into consideration. Some people want more, some people want less, this is democracy. If you look at some democracies like Belgium or Germany, it took a while to form a government. We are getting there, it's not a regional issue, it's an internal issue, it's because the equation changed a little bit in parliament and some people want more. I believe that most of the obstacles were solved, there is still one obstacle and I am sure that we will be able to resolve it.

Question: Are external funders helping or not helping, in terms of their demand or need to move beyond the caretaker government? Is it helpful to have pressure from the outside on this or is it irrelevant?

Hariri: When the World Bank and other institutions push us to form a government, this is for the benefit of Lebanon. Most people today really believe in the reforms that are in CEDRE because everybody understands that we cannot do business as usual or as before, we need to change and we need to change now.

Question: Israel doesn't need a reason, like the tunnel, to attack Lebanon. Have you discussed this possibility with the government here and what did they tell you?

Hariri: You open the news today and you see in headlines that Lebanon has tunnels that go all the way to Israel and there are allegations that Hezbollah is doing those tunnels, but have you ever heard about how many sorties Israel makes every month into Lebanon? Have you ever heard how many times did Israel entered our international waters? Do you think this is fair? You think it is fair that 150 sorties were made last month into Lebanon? You think it is fair that our national waters are penetrated ten or twenty times a month and we have occupied lands, the Shebaa Farms? For me as a government, UNSCR 1701 has to be implemented and we will not accept other than that. The Lebanese army will deal with the issue of the tunnels. But to come out blatantly and say that Lebanon is responsible for all of this, I think Israel has a lot to answer to on how many intrusions it made since the approval of the 1701. We have sent countless complaints to the United Nations, but what has been done? Nothing.

Question: Lebanon is in a unique position where you have the Lebanese Army and you also have a highly militarized militia or party, so an outside government is going to ask am I dealing with a state or am I dealing with a state within a state?

Hariri: Israel has launched wars on Lebanon in 1993, 1996, 2006 and between them attacks and assassinations. Did this weaken Hezbollah? In 2006 Hezbollah was saying that it had 10,000 missiles and Israel told the world at the time: look, Hezbollah has 10,000 missiles. Today, Hezbollah says it has 100 thousand missiles. What did the war in 2006 make to all of this? Did it make Lebanon weaker? Did it make Hezbollah weaker? This is a regional and not a Lebanese issue. This is an Iranian issue. If we want to deal with this issue, let us sit on a table and let us stop these wars and talk about how we solve these issues in the region. If we want to make peace with Israel, we have a resolution that came from the Arab League, but Netanyahu doesn't want peace. This is what I really believe. I think Netanyahu wants a little piece of Lebanon, a little piece of Golan, a little piece of Palestine, a little piece of Jordan. Everybody went to Oslo and there was an agreement between governments and this was destroyed. The Arab League had a peace process but nothing happened. We want peace, we don't want war and I don't think anyone in the region wants war. I, for one who suffered from civil war and wars on my country, I agree with the Arab League peace initiative, but what does Israel want. Do they know what they want?

Question: Can you address the Mediterranean energy issue. Do you see this as a game changer and do you see it helping you with investments?

Hariri: I think it is a game changer for Lebanon, Cyprus and everyone in the region. We are countries that never had natural resources. Getting into this today can help our people in Lebanon and the region to move from one level to another, but at the same time we have to be careful on the expectations. I think we should learn from the Norwegian experience where they thought in the beginning that they have oil and gas and they jumped on investment and they almost got the country bankrupt. They told us that what saved them was when the oil jumped because of the crisis that happened in the seventies. We need to be careful, we need to invest in the right places. Lebanon opened its blocks. You have Total, Enni and Nortec that came to Lebanon and there is another round of blocks that are going to be for bids. This is completely transparent in Lebanon. We talked to BP and they are interested to invest in these blocks and you find more companies interested in investing, even American companies.

Question: You have only 5% of women in Parliament. How do you see balancing gender in parliament?

Hariri: Half of these women are in my parliamentary bloc. When we went to vote for the law, I don't want to speak in a confessional way, but Speaker Berri who is a Shiite and me, a Sunni, were the only blocs to vote for quota in parliament, whereas all the other blocs, the Christian blocs, voted against the quota. We are working very hard to push everybody to get a quota in parliament. What we did in the government is that we put a rule that any appointment that the government will do will have a quota of women of 30 percent and in some cases 40 percent.

People in Lebanon underestimate the acceptance of the citizens to vote for women. This is a problem with the political parties and not with the people. When we held elections within my party, people who voted in places like Akkar, Dinniyeh filled the quota, while we were unable to fill it in Beirut and I had to appoint the quota myself.

Question: You mentioned Iraq today and I am aware that the foreign minister was in Baghdad and in the Kurdish region last week. Evidently, you have identified some areas of cooperation. What are these areas and what is the volume of trade between Iraq and Lebanon?

Hariri: We want to open our markets to all our Arab friends and I mentioned Iraq because I am half Iraqi also. Iraq is a big market and I think we can learn from each other a lot. The Iraqis lived the same situation that we had. In the past we didn't focus on economic growth between these countries. We need to focus on these markets, on Morocco, Egypt and all countries. Lebanon needs to open its market and we need to penetrate the markets and this would bring benefit to Lebanon and to Iraq.

Question: You mentioned Netanyahu several times and he threatened something bad would happen. How would you react to this? And how did your relationship with Saudi Arabia evolve in the last three months?

Hariri: If Israel decides to go to war with Lebanon, they will not succeed. The only way to move forward in this region is by dialogue and peace. In the past there was a man who wanted peace in Israel, it was Rabin and he was killed. But Netanyahu doesn't want peace. He talks about it but he promises bad things that could happen to Lebanon.

On the relationship with Saudi Arabia, I was there a month and a half ago for the conference, amidst of what was happening on the issue of Khashoggi, which I condemn, the Saudi government condemns, the whole world condemns. The Saudi government arrested those people. From day one, this issue was handled poorly. But now it is taking its course through justice. My relationship with Saudi Arabia is good and I believe that the Saudi market is a good market for Lebanon and we prepared many of agreements that we will be signing as soon as the government is formed. You will see Saudi Arabia taking some serious steps towards Lebanon and helping economically. In CEDRE, Saudi Arabia committed one billion dollars from the Saudi Development Bank. So, I think the relationship couldn't be better.

Question: Since the murder of Jamal Khashoggi, has there been a change in the regional dynamic? The United States seems from the outside to be applying more pressure for a change in the foreign policy of Saudi Arabia. And they are putting pressure on Iran. Do you sense that there is a change in dynamic since the re-imposition of sanctions on Iran by the US?

Hariri: I think that the United States withdrawal from the JCPOA is an American decision and you can feel the sanctions in the region very bluntly. Iran is suffering economically. You can see that some exports we were getting from Iran stopped these days. Iran is facing a big challenge. But at the same time we hear new talk about ending the war in Yemen and this is good for the region. I believe in dialogue and in peace and I think the way to move forward is by dialogue and peace. But at the same time, you need to have two people willing to sit at the table and talk. My concern today is that any mistake made on the Hormuz strait is detrimental for the region. The tension is high among all these powers. Lebanon is a small country but at the same time it was able to make a little miracle after seven years of war in Syria, where we were able to push back any tension coming from Syria. Surprisingly, other than Hezbollah fighters that fought with the Syrian regime, the number of extremists that came out from Lebanon compared to other Arab nations or compared to Europe even is very minimal. It is about 150 in the past seven years. This is something that we are proud of, because we work hard with our youth to make sure that our youth doesn't go and fight because they see the extreme atrocities that the regime did to its people in Syria.

Question: What is your message for the millions of Lebanese who left the country looking for a better future and have no hopes and can't see the light at the end of the tunnel, giving the economic, political and internal challenges?

Second question: You always seem to be walking a very tight line and have to be compromising and be the moderate voice in the country. Are you condemned for the rest of your time as a Prime Minister to be in this position?

Hariri: Two wrongs don't make a right. If somebody is extremist in his position, it is not right for me to be extremist in my positions. I think we should look at what benefits the country. My political ambitions are there but without a growing country and without finding jobs for the youth, it is not a position I want to be in. Saying the truth on how to deal with issues is the only way to move forward. My father was like this. He had it very hard because he had an occupying power telling him what he can do. My father couldn't appoint one person in any position. Today it is not like this. We have come a long way. We need to understand that we actually gained our freedom after the Syrians left Lebanon. This has been a learning process for us as Lebanese because this is the first time that we are running the country. We didn't do a good job from 2005 till 2016. We did the opposite of what should have been done. We should have sat down and talked to each other regardless of our differences. I came from a business community and I didn't know anything about politics.

And sometimes I feel that I should have done something at this time. But now we know what we're doing, we know how to move forward and we have a plan. I will not compromise all the time, I will compromise for the sake of the country.

The answer to the question about my message to the Lebanese: Lebanon is divided inside and my call for the Lebanese Diaspora is to forget who is in power, forget who is Saad Hariri, forget who's the president and who's the speaker. The Diaspora is the real power for Lebanon. They all should help Lebanon, regardless if Saad Hariri or anyone else is prime minister. We should all focus on how we can help. We should learn from others. Other nations focus on how they can help their country, regardless of who is in politics. I will give you a small example that happened with me. In 1998, my father, in a political maneuver, was kicked out of power. Prime Minister Selim Hoss was going to Saudi Arabia and at that time I was 27 years old. My natural reaction was that I need to make sure that he has a bad visit to Saudi Arabia because he was against my father. I went to tell my father that I have news, that this guy is coming to Saudi Arabia and I am looking how to undermine the visit. He said no, you should work to make it successful. We should all help Selim Hoss to be a good prime minister. This is what we all need to do in the diaspora. We should all work for Lebanon and this is my call for the diaspora. I think Lebanon today is doing the right thing. We have a plan, CEDRE is there, reforms are there and we will implement them. And if we don't implement them punish us with your vote. If we don't do the job, make your vote count.

Question: After the harmonious meeting at the presidential palace on Monday between the prime minister, the speaker and the president, and after and most importantly the impressive speech of the Prime minister today, do you believe that we are going to have a government? Are we going to have any clash in the south? Are we going to solve the problem between us and Syria?

Hariri: On the government, I hope that we will have a government before the end of the year. I don't think we will have clashes in the south. I don't think anybody wants war in Israel and anybody wants war in Lebanon. We know from our contacts with everyone in Lebanon, and this is the message we delivered to the Americans and everyone, that we don't want any clashes so I don't believe there will be a war. And yes Lebanon is a good place to invest and we are open to business.

Question: In Syria, what do you see is the prospect for peace and how will Lebanon cope with the return of the Hezbollah militia, unless you want them to stay there?

Hariri: I think a lot of them have come back. We believe that Hezbollah had a big force in Syria, about 15000 and now they diminished and this is what they are saying. I think they are 2000 to 3000 and this is the intelligence we have from the West also.

I think the position of the Syrian regime today is like Saddam Hussein's position after the first Gulf war. He was moved out from Koweit, and Iraq became under the control of United Nations. Today Syria is under the Russians and you have the Americans, the Iranians, the Turks and God knows who. I think that the position of the regime is very weak. He has to listen to the Russians and unless you have a new constitution in Syria and a right representation of the people, it will still be ambiguous. About 700 thousand people were killed and there is a huge reconciliation that needs to be done in Syria. Is it going to happen? Is Assad ready to reconcile without vengeance? This is the big question mark? I don't have the answer for that.

Question: You presented a bright vision for the future of Lebanon but it seems irrelevant to the reality given the problems in the infrastructure, like the flooded streets recently. Do you think the infrastructure is ready to attract foreign investors to Lebanon? And do you think that the Lebanese people has the right to know what happened to you when you have been forced to resign in Saudi Arabia?

Hariri: Corruption is a serious issue in Lebanon. That's why we made sure when we went to CEDRE to have a committee to oversee a transparent process. The World Bank will work with us very closely on each of those bids. We also started moving to e-government that will clear a lot of the corruption we have in the country. What happened two weeks ago in Beirut is a disgrace and the prosecutor already arrested 3 persons. This is totally unacceptable. I really want to work with the civil society because they have a lot of good ideas. But we need to listen to each other and give each other advice and move ahead on those agendas. When we went to CEDRE, we made sure that the two biggest civil society associations came with us and we want to make sure that everything we do is transparent.

About what happened when I was in Saudi Arabia, I answered this many times. It was a wakeup call to the Lebanese. We were shooting ourselves in the foot. People needed to understand that this is something we cannot continue doing. We cannot tell the Gulf to come to Lebanon and at the same time there are political parties cursing the Gulf. I myself should not make statements about Iran and expect Iran not to answer. We need to disassociate ourselves and move away from the regional conflicts. Lebanon is too small to pay a price in these big conflicts. The big countries can afford it but we can't.

Question: What do you expect from the Lebanese youth?

Hariri: We have a lot of startups in Lebanon and it's all by the youth. We made a lot of facilitating laws. We are giving them incentives. We are working with a lot of associations like LIFE and IDEAS that are full of youth and we ask them to give us ideas or advice about what we need to do.

I want to say one last thing, every time I meet an official, anywhere in the world, they have friends from Lebanon or they have some people who work in their offices from Lebanon. This is something we should be proud of and this is the kind of Diaspora we need to work with us. The Lebanese, wherever they go, will thrive because they want to work and achieve. Our problem is how to make all this energy focus on the country. The only way is to create stability, security, the right environment for investment and let the Lebanese do the job. The problem is that politicians have not been letting the Lebanese do their job. We need to move away as a government and do all the legislations that the people want and then Lebanon will thrive.

Source: National News Agency