MIDDLE EAST
Lying fat and silky beneath the Mediterranean sun, Beirut is an oasis of prosperity in the Arab Middle East.
Tiny Lebanon's flamboyant capital sprouts new buildings like palm trees, boasts more Mercedeses than mullahs, lures thousands of tourists and happily shares its year-round sunshine with courtesans in bikinis as well as desert Arabs in burnooses. But Beirut's most beneficent climate is the climate of trade, the heritage of its Phoenician forebears. In the Levantine landscape nothing seems to grow faster or greener than the city's banks.
Beirut is the world's newest and fastest-rising financial center. In the last decade it has expanded its banking business by 1,000% — and it shows no signs of slowing. Climbing above its clangorous, double-parked streets are more than 100 banks, including 41 foreign branches and offices as diverse as Moscow's Narodny Bank and the Bank of America. Since July, Manhattan's Morgan Guaranty and Irving Trust have both leased offices in Beirut. The First National Banks of Boston and Chicago are negotiating to open outlets, and another 13 banks have recently been incorporated. Says Lebanese Banking Association President Pierre Edde, whose growing Beirut Riyadh Bank is moving into a new ten-story building: "Beirut handles capital like the Suez Canal handles ships." Saud & Hussein. Because it is both the cosmopolitan gateway to the Middle East and an island of stability in a newly rich but eternally turbulent region, Beirut has become the prudent banker to nervous kings, African smugglers, such huge U.S. oil companies as Aramco, frightened capitalists from socialist Egypt and Iraq—and no fewer than 600 tycoons from booming little Kuwait. Well over half of Beirut's $800 million in deposits comes from abroad.
Saudi Arabia's King Saud keeps some $20 million there, and Jordan's King Hussein has several secret accounts (he signs his checks on one account with a pen name, "The Eagle"). Such depositors appreciate the fact that Lebanon has one of the world's freest capital markets and a Swiss-like secrecy law so rigid that any loose-tongued banker can be jailed for two years. Beirut's safety has also impressed some of the usually suspicious sheiks of the Persian Gulf. Sheik Shakhbut of Abu Dhabi, who earns $1,000,000 a week from his oil, insisted on burying his bank notes in his mud-brick palace—until silverfish began drilling through the bundles.