HIZBALLAH AND HARIRI STRIKE A DEAL

C O N F I D E N T I A L SECTION 01 OF 02 BEIRUT 002676


E.0.12356:DECL:07/12/00
TAGS: PGOV PTER ECON LE
SUBJECT: HIZBALLAH AND HARIRI STRIKE A DEAL


1. CONFIDENTIAL - ENTIRE TEXT.


2. SUMMARY AND COMMENT. PM HARIRI, SPEAKER BIRRI,
AND SHI'A SPIRITUAL LEADER SHAMS AD-DIN MET JULY 11
AND RESOLVED DIFFERENCES OVER THE DISTRIBUTION OF TWO
SHI'A-RESERVED SEATS ON THE BOARD OF THE SOUTHERN
SUBURBS REDEVELOPMENT SCHEME, ELYSSAR. A HIZBALLAH
AND BIRRI MAN WILL TAKE THE TWO SEATS, AND FADLALLAH
AND SHAMS AD-DIN EACH WILL WITHDRAW HIS CANDIDATE.
THIS DECISION -- STILL TO BE RATIFIED BY THE CABINET
ON JULY 13 -- COMPLETES THE YEARS-LONG TRANSFORMATION
OF HIZBALLAH'S ATTITUDE TOWARD HARIRI'S SWEEPING
DEVELOPMENT PLANS IN THE SUBURBS FROM OPEN HOSTILITY
TO ACCOMMODATION. WHILE THE NATURE OF THIS ODD AND
LIMITED ALLIANCE OF HARIRI AND HIZBALLAH WILL TAKE
TIME TO CLARIFY, HIZBALLAH'S DECISION TO JOIN THE
BOARD SUGGESTS A REALIZATION THAT IN FUTURE IT CAN
WORK WITH, NOT AGAINST THE STATE TO RETAIN ITS GAINS
IN THE SOUTHERN SUBURBS. END SUMMARY AND COMMENT.


3. PM RAFIQ HARIRI, PARLIAMENTARY SPEAKER NABIH
BERRI, AND SHI'A SPIRITUAL LEADER MUHAMMAD MAHDI
SHAMS AD-DIN GATHERED LATE JULY 11. THEY TOLD THE
PRESS THAT THE TALKS CENTERED ON THE SITUATION IN THE
SOUTH. HOWEVER, ACCORDING TO MUHAMMAD SAMMAK, A KEY
AIDE TO HARIRI AND CONFIDANT OF SHAMS AD-DIN, THE
REAL TOPIC WAS A DISPUTE OVER ELYSSAR, THE
CORPORATION BEING FORMED TO DEVELOP PARTS OF THE
SOUTHERN SUBURBS.


4. THE DISPUTE INVOLVED THE NOMINATION OF FOUR
CANDIDATES FOR TWO RESERVED SHI'A SEATS ON THE BOARD
OF DIRECTORS. BERRI, SHAMS AD-DIN, HIZBALLAH
SPIRITUAL GUIDE MUHAMMAD HUSAYN FADLALLAH, AND
HIZBALLAH EACH PROPOSED A NAME. AFTER LENGTHY
GRIDLOCK, FADLALLAH AND HIZBALLAH AGREED THIS WEEK TO
PROPOSE A SINGLE CANDIDATE (THAT THEY TOOK SO LONG TO
AGREE REFLECTS THE DIVISION BETWEEN FADLALLAH AND THE
LEADERSHIP OF THE PARTY). ON THE LLTH, SHAMS AD-DIN
AGREED TO WITHDRAW HIS PREFERRED CANDIDATE IN FAVOR
OF BERRI'S.


5. THERE WAS LITTLE APPARENT CONTROVERSY OVER THE
OTHER SEATS, WHICH ARE RESERVED FOR TWO SUNNIS, ONE
MARONITE, AND ONE GREEK CATHOLIC. THE CABINET IS
EXPECTED TO APPROVE THE RESULTS OF HARIRI'S BACK-ROOM
NEGOTIATIONS ON JULY 13.


6. THESE DEVELOPMENTS REFLECT A MARKED
TRANSFORMATION IN THE ATTITUDES OF HARIRI AND
HIZBALLAH TO EACH OTHER, AND IN HIZBALLAH'S VIEW OF
THE FUTURE. WHEN IN THE WINTER OF 1992 HARIRI FIRST
UNVEILED THE ELYSSAR CONCEPT -- MODELED ON THE
EQUALLY CONTROVERSIAL SOLIDERE COMPANY SET UP TO
REDEVELOP DOWNTOWN BEIRUT -- HIZBALLAH RAISED
STRIDENT OBJECTIONS IN THE STREETS, MOSQUES, AND
PARLIAMENT.


7. THE PARTY WHIPPED UP A FRENZY BY REMINDING ITS
AUDIENCE OF AMIN GEMAYEL'S ATTEMPTS IN THE 80'S TO
BULLDOZE THE SOUTHERN SUBURBS AND DISPLACE ITS
CITIZENRY UNDER THE GUISE OF REDEVELOPMENT.
HIZBALLAH PREYED ON THIS POPULAR FEAR AMONG THE SHI'A
IN AN OBVIOUS PLOY TO KEEP THE STATE OUT OF THE
SUBURBS, SO HIZBALLAH COULD REMAIN THE SOLE PROVIDER
OF SERVICE AND SECURITY.


8. HARIRI, FOR HIS PART, WAS JUST AS DETERMINED TO
CHALLENGE HIZBALLAH THROUGH HIS MASSIVE REAL ESTATE
DEVELOPMENT SCHEMES, WHICH INTEND TO HARNESS PRIVATE
CAPITAL TO THE DAUNTING TASK OF REBUILDING GREATER
BEIRUT. PARALYSIS RESULTED FROM THIS STANDOFF.


9. IN THE SUMMER OF 1995, HOWEVER, CHANGED
CIRCUMSTANCES BORE FRUIT. IN NEGOTIATIONS WITH
HIZBALLAH, HARIRI AGREED THAT THE THOUSANDS OF
SQUATTERS NOW SETTLED IN THE PROPOSED DEVELOPMENT
ZONE -- HIZBALLAH SUPPORTERS, FOR THE MOST PART --
WOULD BE PERMITTED TO STAY PUT, AND THAT ELYSSAR
WOULD REPLACE THEIR RAMSHACKLE HOUSING WITH NEW
APARTMENTS IN KEEPING WITH THE RESORT-TOWN LOOK
ENVISIONED BY ALYSSAR FOR THE ZONE. THIS REMOVED THE
PARTY'S RALLYING CRY AGAINST THE SCHEME.


10. WIDER POLITICAL CALCULATIONS, HOWEVER, PROBABLY
ACCOUNT FOR THE PARTY'S WILLINGNESS TO JOIN TOGETHER
WITH HARIRI IN DEVELOPING ONE OF ITS STRONGHOLDS.
THE DECISION IS IN KEEPING WITH A PRAGMATIC CURRENT
WITHIN THE PARTY WHICH WANTS TO READY HIZBALLAH FOR
THE TRANSFORMATION FROM A MILITIA WHICH CHALLENGES
THE STATE TO A SERVICE-ORIENTED PARTY WITH A PLACE
INSIDE LEGITIMATE POLITICS. IN SIGNING UP WITH
ELYSSAR, HIZBALLAH MAY ALSO HAVE RECOGNIZED THE VALUE
OF ASSOCIATION WITH THE NEXT LARGE SOURCE OF
INVESTMENT IN THE SUBURBS, ON THE ASSUMPTION THAT THE
IRANIAN CASH FLOW WHICH SUPPORTS HIZBALLAH'S SERVICE
ACTIVITIES IN THE SUBURBS MAY SOON DIMINISH. HARIRI
GAINS THE SUPPORT OF THE MOST VOCAL ELEMENT IN THE
SUBURBS, AND THUS PEACE FOR HIS LUCRATIVE PLAN.



11. THIS MUTUAL COZYING UP BY HARIRI AND HIZBALLAH
COMES CHIEFLY AT THE EXPENSE OF SHI'A SPIRITUAL
LEADER SHAMS AD-DIN. WHILE SHAMS AD-DIN -- THE
SUCCESSOR OF IMAM MUSA SADR AS HEAD OF THE HIGHER
ISLAMIC SHI'A COUNCIL (HISC) -- WOULD BE THE STATE'S
NATURAL ALLY IN SHI'A AFFAIRS, HIS SIMULTANEOUS FEUDS
WITH BERRI AND HIZBALLAH PUT HIM AT A DISADVANTAGE.
HE ALSO LACKS HIZBALLAH'S MUSCLE IN THE SUBURBS, SO
DOES NOT NEED TO BE ACCOMMODATED. IN THE LONG RUN,
HOWEVER, THE SIDELINING OF SHAMS AD-DIN CAN ONLY
ENCOURAGE A FURTHER RADICALIZATION OF SHI'A POLITICS,
DOMINATED BY THE MILITIA-TYPE NETWORKS OF BERRI AND
HIZBALLAH.

SCHLICHER