Yes, Lebanon will muddle through in familiar fashion

According to its latest health check on the Lebanese economy, Barclays Capital pinpoints the key challenges facing the nation next year as reducing the debt level and narrowing the financial deficit. To do this, Lebanon will have to sustain its impressive growth and implement financial and economic reforms. But - and this is a very big but - to do this, all we need is a functional and unified government that formulates and carries out policies to this end.

The investment bank has blamed the political differences over the Special Tribunal for Lebanon (STL), the court created to find out who killed Rafik Hariri, the prime minister, and dozens of other poor souls, for the current government's inability to address the fundamentals of basic government.

If the crisis is resolved, Barclays forecasts growth of between 6 and 7 per cent, with the bulk of revenues coming from remittances and tourism. It anticipates limited public spending because of budgetary delays. If this is not resolved, Barclays predicts the government will collapse and the public sector will grind to a halt (did it ever move?).

There is a third option. That nothing happens and the country crawls along in agony, as it has since 2006. But in reality if it were not the STL, it would be something else. In fact, "If it's not one thing, it's another" could be Lebanon's motto. As for a functional government, well, call me a sceptic, but I'll wager a thousand head of cattle it can't be done.

Over the past weekend, this neck of the Mediterranean was subjected to some pretty foul weather. The week before, oddly enough, Lebanon, and much of Israel for that matter, nearly burnt to the ground after forest fires ravaged through the parched countryside.

On both occasions the state was caught with its pants down. Lebanon's leaders went walkabout in the affected areas, but merely gave the impression that they had been called away from a family lunch. To be fair, there was not much they could do. Lebanon is woefully unprepared for such catastrophes (woe betide us if we ever get the big earthquake everyone says is due). Still, the situation had many editorials claiming that the government was so wrapped up in its own bickering over reaching a deal that would avoid suspected murderers being tried in the Hague, that the country was falling apart before their very eyes.

On Sunday, day three of the storm, much of Beirut was without power. I called a friend who had been forced to go to his office to work because his house was in darkness, only to find that he had no internet connection. "You know what?" he fumed. "We're a third-rate country run by fourth-rate leaders."

Quite. But it could be argued that Lebanon has no business being a country in the first place. Yes, it is a remarkable example of religious coexistence in a region of rapidly eroding minorities, but in most Arab states things get done because one man - yes, sadly it is still a man - says this is how we are going to do it. People know better than to object, and those who do either have to leave or end up in jail.

But Lebanon is different. Yes, there must be confessional consensus on all matters (how else do you explain the presence in government of opposition ministers whose sole job is to veto policies they don't like?). But it is also a country in which one thing can shake people out of their sectarian madness, and that thing is money.

At dinner the other night I suggested that we simply privatise the state and run the country by formalising what is already in place. The private sector, the diaspora and the Islamic Republic of Iran are already carrying the state, so why not go the whole hog and treat Lebanon like a company with key stakeholders - although one would encourage the Iranians to eventually sell their holding. The Lebanese already buy a portion of their electricity, water and health care from the private sector. The majority of the schools are fee-paying, and the Shia community even has its own army.

A first-year business student doing a SWOT analysis will tell you everything you need to know. Electricity and water would be priorities, and very achievable ones at that. Banking - I suggested we keep the excellent Central Bank but disband all other ministries and turn them into low-cost housing - and tourism would be no-brainers, while agriculture and industry would be tailored to reflect real demand and actual potential. Social welfare and environmental control would fall under Lebanon's corporate social responsibility policy.

It was a fun game, and by the end of dinner I had formed a cabinet with a woman prime minister. It was that easy. Of course, all this was back-of-the-envelope stuff, but is it any more or any less realistic that Barclays calls for a functional and unified government?

I asked my fuming friend why he still lives here if he felt frustrated. "I suppose it's because I would probably want to live a third-rate life here rather than anywhere else," he confessed.

What is it about this place?

Michael Karam is a communication and publishing consultant based in Beirut