Back to Beirut

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Dear Reader,

As I sit here on the roof top deck of the Hotel Albergo in Beirut smoking shisha, I can’t help but think about how much things have changed, not only in the Middle East but also in the rest of the world – politically, economically, and sadly, philosophically.

Less than 36 hours ago, just a couple of miles from here, a devastating car bomb exploded, killing General Francois al-Hajj and at least three others.

Lebanon seems unavoidably destined for chaos.

On this very terrace, not that long ago, the local Beirut “Junto” held its twice-monthly gathering, a group of friends with one thing in common: the steadfast belief in freedom, open markets, capitalism and the rights and responsibilities of the individual. And like the original Junto, our philosophical outlook was underscored by a strong desire to stay on top of the local and regional deal flow.

The founding members of our group, some of whom you will meet in our Dispatch section, were two Lebanese Shia, one Lebanese Druze, two Lebanese Christians, four Lebanese Sunni, one Armenian Jew, and this non-believing American. The source of my melancholy is that, since the last time our merry bank of capitalists met here, the world has gone bloody nutty, and Beirut seems to me a microcosm of what portends elsewhere.

How so? Well, if during one of our regular meetings I was to have said, “In a few years time, say less than ten years, the following would happen”:

1. The U.S. will occupy Iraq, causing bloody civil war and fermenting resentment throughout the world.
2. Mainstream political thought in the U.S. will turn anti-immigrant, and the people will want to construct a concrete wall along its border.
3. The U.S. Government will not only condone but defend its right to monitor the private communications of its citizens for “their own protection.”
4. The U.S. dollar will no longer have superior purchasing power.
5. Some Emerging Market spreads will be less than 60 basis points.
6. The Russian ruble will be trading over $0.04 and the Brazilian real will be trading over $0.50.
7. Gold will be trading above $800 per ounce.
8. Oil will be closing in on $100 per barrel.
9. Socialism will be on the rise again in Latin America.
10. The Chinese will be eager to pay over the market for oil in Iran…

…everyone would have thought me insane.

So I must admit a bit of frustration and perhaps a notable lack of holiday cheer. This is partly because my memories of life in Beirut are some of my fondest, and partly because sometimes I feel as though we are failing you, dear reader.

You see, as we hunt for bargain basement opportunities in out-of-the-way places, we continue to be struck by how expensive things are in both real and relative terms. Even in places where you might expect things to be cheap, they are not. Don’t get me wrong, there are still ways to play the big trends profitably, and we will continue to formulate our attack using oblique angles to protect our capital. This month, for instance, we highlight a company that stands to gain significantly from an imminent reduction in regulation and we update our plans for investing in real estate in Slovakia.

In the Pulse section, we further elaborate on our view of emerging markets and how to position your portfolio to capitalize on the next phase in the cycle. As we mentioned in this very space two months ago, outside of the resource sector, there are bubbles desperately searching for a pin everywhere we look, and we want to prepare you for the massive opportunities just ahead when the masses panic and head for the hills. A monetary, political, military and demographic perfect storm is brewing just over the horizon.

Finally, let me say how much we enjoy corresponding with our subscribers and even more how much we enjoy meeting you in person. Since launching the letter, it has been a real pleasure meeting a number of you in Denver, Uruguay and Panama. We continue to be humbled by the intellect of our readers. Thanks again for subscribing.

Back to Beirut

Fitz always says, “I may have only Irish blood in me, but I am part Lebanese.” There are two reasons why he says this. First, he wishes that he were Lebanese because they are probably, as a group, the most savvy, entrepreneurial, global, intrepid, relentless and fun group of people he has ever met. And secondly, because every time he goes to Beirut, he gains 20 pounds. Part Lebanese? Yep, half his butt and two of his chins…

Fitz lived in Lebanon – it was his base of operations for the Middle East. Although Dubai has now surpassed Beirut as the international banking and business center in the region, it is a great country. Beirut, Lebanon’s capital, is a strange mixture of tension and carefree living… a schizophrenia that’s intoxicating. Walk through any of the cafés that line the streets in Solidaire, the completely rebuilt city center that was totally destroyed in the civil war, and you’ll think you’re in St. Tropez.

If you speak enough languages, you will hear elegant women discuss fashion and politics. However, it is just as likely they are discussing French or American politics as Lebanese politics. The fashion… well, the world is the Lebanese woman’s shopping mall for reasons we will touch on in due course.

If you can understand the men, they will be talking about one of five topics – global politics, global economics, Lebanese politics, deals and more deals. Now the problem is that it’s tough to understand what they are saying; the Lebanese are so well traveled and global in their mindset, that only the poorest of society speak only Arabic. For example, to say hello in Lebanese is “Hi Kifak Sava,” a three-word, three-language greeting most common amongst the educated and cosmopolitan Lebanese. It doesn’t take long to notice that the wealthy Lebanese don’t meet any of the commonly held beliefs about the society.

Tell the average American to envision Beirut and he thinks car bomb… and with good reason. But that is not the Beirut we know and love so much. It is a vibrant, upbeat city where bars, restaurants, and nightclubs inhabit what seems like half of downtown. Elegant men and beautiful women strut the streets in the latest haute couture. Big skyscrapers and expansive hotel complexes overlook the Mediterranean. Yet, it is not at all uncommon to have a 10-million-dollar building next to a bombed-out shell, looking like the war ended last Wednesday. Leave the city center and the poor live in dilapidated buildings with no windows. Juxtaposition is everywhere. Not surprising, given the history of the land and the culture.

The Phoenicians

The history of this rich land exceeds the amount of space available here, but essential is the lineage of the Phoenician trader that looms in the psyche of the Lebanese. The Phoenicians, due to lack of arable land, were forced to find other ways to thrive. They plied the coast of the Mediterranean as traders of goods ranging from spices to slaves. They traded with warring nations simultaneously and set up outposts in faraway lands, later repatriating their wealth to build what is modern-day Lebanon and Syria. Today, the modern Lebanese are empowered internally by the belief that at any time they can leave Lebanon and return later in life with a fortune capable of supporting La Dolce Vita. They do it in great numbers regularly, especially in times of crisis. They may need to do it again soon.

Diaspora

“Throw a Lebanese to the sea and he will come out of it with a fish” states an old Lebanese saying. They are proud of this reputation and rightfully so. You can’t spend time with a man or woman from Lebanon without them dropping one famous name who has a remote tie to Lebanese society. Check out (http://www.youtube.com/watch?v=CWaiJwPgoYE&feature=related). Want to drive a prominent Lebanese businessman mad? Tell him you’ve never heard of Swatch or the Palms casino.

Lebanon has known three important waves of migration. Starting in the late 1800s, the first wave was frantic and often clandestine, because the Ottomans initially prohibited movement. The second wave was more organized and followed the First World War, when there were too many people to support, and the partitioning of the “Middle East” suspended many of the local trading opportunities. Villages actually banded together and chose which residents were best suited for migration.

They formed schools that taught languages and customs of the lands where many Lebanese were already located. The final wave came during the ’75 to ’91 civil war. The migrants always maintained close ties to the homeland – most left with an eye on returning someday after they made their fortune.

Many of those who left during the civil war returned during the 1990s, but there was little opportunity in the war-torn city. Many men went abroad again to look for opportunities, while their wives and children tried to rebuild their lives in Lebanon. Unlike many other cultures with a significant Diaspora, the Lebanese rarely get jobs – they start businesses. If they have nothing but their wits, they are still armed with the spirit of the Phoenicians. These hungry entrepreneurs are everywhere in the emerging world. They work hard in arduous conditions, saving and investing so they can return to live prosperously along the Mediterranean. This is still the case today. Let us give you one emblematic case.

No You Worry, Mister Fitz, We Have Lebanese

When Fitz was still working for Uncle Sam, he spent some time in Kinshasa, Congo. It is not a great place. Very few places Warren Zevon writes about are nice places. While Fitz never bumped into any headless Thomson gunners, he met quite a cast of characters. One remains legendary. His name is Khalid. He is a Shia Lebanese, unless that wasn’t good for business, in which case he was a Christian named George – or Jacob, if he thought he could get a better price. He deserves his own chair in entrepreneurship at Harvard.

Anyhow, Fitz desperately needed some refrigerated rail cars.

The government said he needed to fill out a requisition form, send it back to Virginia, and then they would send some railcars by cargo ship from Bremerhaven in Germany. He’d have them in three months, if there wasn’t a backlog. That would have been two months and three weeks too late. So, he cabled the States and asked how much he was authorized to spend if he could procure them locally… after all, it was a mission in support of “vital” U.S. interests. He was told he could spend the full requisitioned amount of about 300,000 taxpayer dollars if they could get the local procurement approved. After all, it is patriotic to buy American.

So with a budget of three hundred grand, Fitz went to see the man who really knew the goings on in the Congo. CIA station chief? Nope. MI6? Nope. Tony, the concierge at the Grand Hotel Kinshasa? You betcha. Tony was the man. If it were available to be bought, stolen, smoked, shagged, stripped off and sold for parts, Tony knew the deal. The problem? Tony spoke “not so big Inglessh, Mr. Fitz.” So Fitz, armed with a picture torn from a catalogue, gesticulated wildly, and rubbed his index finger and thumb together indicating he wanted to “make buy.” The smile was immediate and the reply perplexing: “No you worry, Mr. Fitz, we have Lebanese.” Huh? Now shaking his head like a dog with water in his ear, Fitz pointed again and said “make buy” louder than was necessary. Tony only replied, “No problems, Mr. Fitz. Lebanese come tomorrow. Weedsdaaay nite. 630. You be here Weeedsdaay 630 too. Okay?” Perplexed, he agreed. After all, Tony was the man.

At six thirty the next evening, Fitz was sipping what he hoped was tea made with boiled water… and in walked Khalid. What a sight. Five foot eight and a good three hundred pounds, Khalid could not be missed. He was wearing khaki pants, sandals and a short-sleeved, yellow (not daffodil yellow but old newspaper yellow) linen shirt unbuttoned to the navel. Most amazing were the two gold chains so deeply intertwined with Khalid’s chest hair that they ran a gravity-defying circuitous route through his cleavage and hung suspended an inch from his skin, like a scale model of several interlocked freeway interchanges. In his day, Fitz had been caught staring at the third shirt button before, but never on a man. Even worse were Khalid’s teeth, which made Austin Powers look like Donny Osmond. It took a cup of tea to recover from the first impression. Fitz tried to find a spot to look, just above the eyebrows, so as not to openly stare.

In fluent but accented English, Khalid asked what Fitz needed. Fitz told him and handed him the picture. Khalid simply replied, “These are tough to find. It’ll cost you a hundred twenty grand.” Now, Fitz knew that, a) this was less than half the cost to get them the normal U.S.G. route, b) if he agreed to the initial price, he would lose credibility, and c) the refrigerated rail cars in question might belong to the Red Cross. So, trying to muster the best “man of the world” look a twenty-eight-year-old with freckles can, he said “Come on, you can’t be serious.” Khalid shrugged and replied, “That’s the price man. You need ‘em and I got ‘em. They will come with a bill of lading and source documents. If you don’t want ‘em, I have a buyer in Durban who does.” Fitz: “Ah, well I’m not sure I can get that much approved. And when would you be able to get them?” Khalid’s response: “What’s your first language, man? I said I had ‘em. You want me to ask Tony to translate for you? And don’t give me that bullshit about price. You probably already’ve got a quote from U.S. Army Europe HQ, shipped via Bremerhaven for twice my price.”

The best attempts not to look ridiculous and dumbfounded failed. Fitz gaped and agreed. True to Khalid’s word, the brand-new railcars arrived as promised. The money was wired from Virginia to Khalid’s account in Lichtenstein, and all was groovy with global commerce. Over the next several months, Khalid and Fitz became friendly. When Fitz left Africa, he thought he would have a good story for the preppies back home in Northern Virginia. Little did he know that there would be a Khalid chapter 2.

Fast forward to summer 2004, on the rooftop deck of the Hotel Albergo in Beirut. The Junto was meeting and talking about Iraq, and the full-contact sport of Lebanese politics. That week, two members had been jailed for 48 hours while accused of smuggling – trumped-up charges by the government. When released, one of the “political prisoners” asked Fitz why he liked Lebanon and the Lebanese. Fitz said he was interested in the land and the culture ever since he met this crazy guy in the Congo named Khalid. Everyone laughed at the chest hair story. The conversation moved on, but in less than twenty minutes, in walked the new and improved Khalid.

The Khalid of Kinshasa was long gone, and Khalid of Beirut by way of Paris was standing before Fitz.

Evidently, one of the Junto members knew exactly who was running Kinshasa in ‘98 and sent a text message to Khalid to drop by and see his old friend. The new Khalid had undergone quite a transformation. Stomach reduction surgery had helped shed nearly two hundred pounds, a cosmetic dentist had sorted the mandibles and Zegna had replaced the old newspaper shirt… no way to judge the chest hair, but short odds say any surviving chains hung flush with the pecs. After making over ten million dollars in seven years in the Congo, Khalid had bought three villas in the south of France that he rented to minor Kuwaiti princes, and had started a chain of clothing stores in the Middle East.

His strategy? Go to Europe at the end of each season and buy one of everything on the high-end boutiques’ sale racks. He and his super-hot French-Algerian girlfriend Carole would then fly to China, where the sales rack surplus was instantly turned into next year’s line in Khalid’s stores. He also had a stake in the Algerian wireless company, which he later sold to Orascom for quite a profit. Instead of traveling by sandals, he now drove a black Porsche 911 Targa. Parking was tough in Beirut, and Khalid was impatient… so he hired two guys to follow him around in an old Toyota. When he arrived at his destination, he would just let the car idle in the street and one of the flunkies jumped in. BYOVP – bring your own valet parking – why not?

There are literally thousands of Khalids out there, and hundreds of thousands more not quite so flamboyant or prosperous but still making an impact. There are at least four million Lebanese citizens in Brazil today, and we’re confident that a good number of them are capitalizing on opportunity in a big way. In almost every viable market in the world, you can find three things: a Chinaman selling food, an Irishman selling booze, and a Lebanese selling everything else.

Race/Religious Relations

There are four main groups in Lebanon: Christians, Shi’ia, Sunni, and the Druze. These are not monolithic groups, as there are plenty of factions and subsets within each one. But these groups, although divided based on religion, are really little more than interest groups engaged in a power struggle. The Sunni have long been considered the controlling elite; the Shi’ia the rural poor and agitated; the Christians a holdover from the power granted them during French colonial rule; and the Druze a small but influential group able to punch above their weight by leveraging their support. By far the fastest-growing group are the Shi’ia. The Druze and the Christians are shrinking for two reasons: like most other prosperous groups, their birth rate is declining, and being educated, they are more likely to vote with their feet as productive members of the Diaspora.

The Government

Lebanese government is even crazier than most governments. By constitutional design, Lebanon is governed by a system called Confessionalism. Just the name alone, knowing nothing else, makes us shake our heads. Confessionalism is a system of government that distributes political and institutional power proportionally among religious communities. Posts in government and seats in the legislature are apportioned amongst different groups according to the relative demographic composition of those groups in a society, which is seen as a way of formally recognizing the communal political rights of indigenous groups. Its intent is to secure the peaceful coexistence of diverse religious and ethnic communities by empowering each according to its relative presence in the region.

However, this system is like democracy, only worse. It only deepens the divide between “groups” and naturally leads to class warfare. Traditionally, the uneducated and poor have greater population growth, ensuring that over time the have-nots control the purse strings.

In Lebanon, the system requires high-ranking offices in government be reserved for members of specific religious groups: the president must be a Maronite Catholic Christian; the prime minister a Sunni Muslim; the deputy prime minister an Orthodox Christian; and the speaker of the Parliament a Shi’ia Muslim. No wonder they are always tossing each other in jail. The system is designed not to work efficiently but to ensure power struggles.

Greater Syria and the Cedar Revolution

Complicating the situation is the influence of Syria, and therefore Iran, in Lebanese internal affairs. Syria believes that Lebanon is part of Syria. Full stop. No questions. Their argument comes down to the simple fact they don’t recognize the lines drawn by imperial powers in the wake of World War II. Greater Syria also includes Israel and parts of Jordan.

On Valentines Day 2005, former Prime Minister Rafik Hariri (and father of our first Heiress of the Month, see Without Borders, September issue) was assassinated in a car bomb explosion in Beirut. Most Lebanese accused Syria of the attack, because of its intrusive military and intelligence presence in Lebanon. Syria naturally denies any involvement.

The Hariri assassination marked the beginning of a series of assassination attempts. The result has been the loss of many prominent Lebanese figures, including General Francois al-Hajj just a few days ago. Today, the somewhat legitimate claim of a Greater Syria is merely a cover for the Iranian and Syrian coalition’s desire to destabilize Lebanon. There is an accepted expression in the Levant, “As Lebanon goes, the Middle East follows.” Therefore, all interest groups use it as a battleground. Although formal Syrian involvement ended with the Cedar Revolution of 2005, Syria is a driving force in Lebanese politics if not the driving force in Lebanese politics, except when Hezbollah steps into the forefront.

…Hezbollah: The Party of God.

It would be unreasonable not to mention Hezbollah when talking about Beirut. It is also impossible to address it fully within this article, and we have decided to do a full-blown article on Hezbollah in an upcoming issue. Most Americans associate Hezbollah with its 1983 attack on U.S. marine barracks in Beirut that killed 241 servicemen.

Hezbollah has engaged in that and other acts of terrorism, such as the hijacking of TWA flight 847 in 1985, and the 1998 kidnapping of Lieutenant Colonel William R. Higgins of the U.S. Marines, an unarmed U.N. observer who was tortured and murdered. While the blame was not undeserved, it is generally easier to trace much of the terrorism of the ’80s and early ’90s to Iran than to Hezbollah.

But it’s important to note that Hezbollah is a driving force in Lebanese society. But not because of its armed stand against Israel, but because of its social programs. Hezbollah won the support of Shi’ite Muslims by providing social services, health care and welfare when the Lebanese government failed. Hezbollah runs hospitals, news services and educational facilities for its followers in Lebanon. It is behind a large number of economic and infrastructure projects in the country. The aforementioned ineffective government created a void filled by Hezbollah.

Please don’t misunderstand. We are not justifying the horrible things Hezbollah has done in “God’s Name.” However, they do not derive their support from religious fanatics who want to kill infidels. Rather, they brainwash their young men and desperate families who have no other source of education, food, clothing or medical care. They take full advantage of the miserable living conditions in the refugee camps to indoctrinate multiple generations that know nothing else to hate. It’s not hard.

We have said it before and will continue to do so: there is no such thing as religious or ethnic conflict. There is only economic conflict. Often the economic conflict is “justified” by charismatic leaders using ethnicity and religion, because by definition blood and faith need not be justified with reason. Hezbollah is no different, and Sheik Hasan Nasrallah is nothing if not charismatic.

Gulf Money and the Building Boom

Q: Why do you invite two Saudis to your party?

A: Because if you invite only one, he will drink all your booze.

That may be an unfair generalization – there are plenty of pious Saudis – but it is certainly not untrue. If you ever fly to Beirut from any of the Gulf nations, be sure and pee before you get on board. Why? Because the minute the seatbelt light goes off, the locals run for the john to shed their robes for the latest in Italian and French fashion. They need to look good before they land and meet the Tunisian chicks joining them there to party.

Gulf Arabs are no longer welcome in Europe and North America. As such, Beirut has become one of their outlets. Lebanon has casino gambling. Lebanon has skimpily clad, buxom beauties.

Lebanon has nightclubs that don’t close until after breakfast. Lebanon has a beachfront thirty degrees cooler than the Gulf region in July and August. And what goes on in Beirut stays in Beirut. As a result, the Gulf Arabs are pouring money into real estate developments. Apartments in any place you would want to live start at over half a million U.S. dollars, and are being bid up by locals and Gulf Arabs looking not only for party pads but for a place to turn deflating dollars into brick and mortar. So is there a real estate or public equity play for us? No.

If you think the political instability in Lebanon may have caused some bargains, think again. There is no room for any of us to make a killing in the real estate market. Not now and probably not ever. Even when the city was in ruins and rubble, the bidding wars on property were highly contested by those with emotional ties to the area.

Public Markets

Only recently surpassed by Dubai and Cairo, Lebanon was the former financial capital of the region. It has an active stock market, but none of the listed companies look attractive at this time – valuations are at historical highs, and all would be gutted if violence spreads to Beirut. There are some great Lebanese firms that do business all over the world, but most are private. We’d love the opportunity to play the Khalids in Africa selling to the Chinese through a listed company, but there is thus far no outlet.

One interesting way to play Lebanon, however, is to keep your eyes on Lebanese sovereign bonds. From time to time, these provide a very interesting trading opportunity. Believe it or not, these bonds are sitting in a lot of old ladies’ accounts in France, Italy and Spain. Why? Because when they’re trading at par, they yield close to 10%. And although it’s one of the most indebted nations in the world per capita, Lebanon has never missed a payment. Nonetheless, when Lebanon hits the news in a bad way, many of these bonds are sold off to anyone who will buy them. During the summer of ’06, when Israel invaded, we bought some for about 76. They are now trading at 120. Yields are currently in the 4.5% to 6.5% range, but if they drop sharply you can pick them up on the cheap, with a yield north of 14%. You can either sell them and move on as they recover, or hold them and clip the coupons.

The Future?

As I mentioned in the Welcome Letter this month, we are not optimistic. We want to be. We love the Lebanese. We love Lebanon. But this trip has not been kind to our spirits. Friends who are normally bullish are bearish, and sending their kids out of the country for education and jobs. Perhaps more prescient is the belief of several of our well-educated, globally minded contacts that the country needs another civil war. Yes, they actually make the case for war the way a good Austrian economist argues for a correction. One actually used the term “Creative Destruction” and others talked about their belief that “Lebanon is a Phoenix” and will “rise from the ashes.” Flashy rhetoric aside, a dark cloud now hangs over Beirut, and the smart money thinks it will get worse before it gets better.

A Place to Live

Five years ago, we would have heartily recommended you visit, even consider living in, Lebanon. Today it is expensive and likely to get dangerous; a full-blown civil war is being discussed in circles that would have ruled it out completely two years ago. It is still a delightful place full of delightful people. But there are too many options out there, making it tough to choose Lebanon. If you’re at the stage in your life where you need excitement, and are thinking about going to Africa to find a hot spot, then we think you should look at Beirut – just as much potential for turmoil, and much more fun. If you’re one of the wise folks, looking for your place to go should calamity strike the U.S., we can’t say Beirut is a good choice as safe haven.

Worth a Visit?

Should you still visit? It’s a tough call. We still feel comfortable there, and so far the violence has been targeted towards specific internal political leaders. There has been no random violence. You are probably safer in Beirut than New Orleans after dark; today your greatest danger in Lebanon is a car accident, not a car bomb or kidnapping. We don’t ride in the passenger seat in any car in Lebanon, we sit behind the driver. Why? Because our buddy Mohamed drives his new Mercedes SUV at 70 miles an hour in town and told us red lights are for tourists. No matter how much the driver likes you, the split second before impact, he’ll jerk the wheel in the way that best protects him. Always sit behind the driver in the emerging world.

If you want the chance to be the one at the neighbor’s pool party to drop, “Oh, I was in Beirut just before the civil war started…” then now may be the time to go. For U.S. citizens, you can visit without a visa for up to 30 days. There are daily direct flights from London on British Airways and from Paris on Air France.

Where to Stay?

So if indeed you want to go now, then by far the best place to stay is the Hotel Albergo if you are looking for service, quiet and elegance. Fitz just stayed there, and even after a three-year absence, the management had enough institutional retention to have the mini-bar stocked with extra Scotch and Diet Cokes, and the FT was delivered shortly after check-in – all without asking, they just remembered… impressive service by any standard. Room rates are on a par with the rest of Lebanon’s finer hotels at around US$200 a night.

The catch? Well, if you are going to Lebanon on business with a Muslim Lebanese, it is advisable to stay in either of the two Intercontinental Hotels, or perhaps Hotel Palm Beach. These hotels are Muslim-owned and considered neutral. Unfortunately, the Albergo is in the Christian part of town. So if you don’t know the people you are meeting, they may interpret your choice as a statement in the land of misguided symbolism. To be candid, not until Fitz felt he had fully established his Arabist credentials with his local partners, did he think it acceptable to start staying at the Albergo. If you are a tourist, it is absolutely not an issue, and the Albergo is the best choice unless you need to be directly on the sea. If weather permits, please smoke some shisha on the rooftop deck for us.

Where to Eat?

The Italian restaurant in the Albergo is one of the very best in Beirut. But why eat Italian when in Lebanon? We recommend Abdoul Wahab, in the Monot district, for the best local cuisine. If you like steak and frites with that French Lebanese flair, then L’Entrecôte is for you. There is also DUO, in Solidaire, for more eclectic continental fare with some of the most glamorous of Beirut’s jet setters. For coffee and sandwiches, Paul, located in the pedestrian area of Solidaire, is a great French café. Dining is great in Beirut. You get the best of French élan with Lebanese friendliness and passion.

You simply can’t go to Beirut without sampling the world-famous nightlife. Even if you have partied like a rock star in Cannes and smoked weed with Dylan, you haven’t completed the party circuit until you’ve emerged from a Lebanese disco at seven in the morning. The Lebanese are very status conscious, and nowhere does that trait come out more than in the clubs. We have seen tables battle one another for prestige and “wasta,” each trying to order the greater number of $1,500 bottles of champagne. The waiters carry a silver bowl with twenty sparklers over their heads to make a real show of the delivery… it is quite a spectacle.

For you brave souls willing to try hanging with the locals, we suggest Crystal in Monot and

The Sky Bar on the roof of the Palm Beach Hotel. Also, if you enjoy live Arabic pop music, try Taj in Monot, owned by a friend’s brother. Tell the big guy at the door that Abu Pete sent you. Even if your nights of partying till dawn are behind you, have a late dinner on the pedestrian mall in Solidaire and then stroll on the cornice along the Mediterranean. But be careful to stay in central Beirut. Once you leave the downtown areas, it can get dangerous for tourists in the poorer neighborhoods.

Further Reading

If you’re as fascinated by the city and the culture as we are, but not planning to visit anytime soon, we recommend a novel titled Bliss Street, by Kriss Kenway. It’s an easy read that tells a fascinating story and highlights many of the interesting and unique elements of the society, government and the capital city. It is frankly better than most of the scholarly works with their inherent bias, and desperate attempts by the authors to claim insight into an al