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Tuesday, 01 December 2020

Lebanon’s dead end

The Lebanese crisis has reached breaking point. But so long as Hizbullah is in power, international assistance is nowhere in sight

Hassan Al-Qishawi , Friday 17 Jan 2020
Lebanon’s dead end
A Lebanese youngster runs holding the national flag as smoke billows from burning tires during a demonstration in Jal el-Dib area on the northern outskirts of Lebanon’s Beirut on January 14, 2020 (photo: AFP)
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When Druze leader Walid Jumblatt, leader of the Progressive Socialist Party, warned that Lebanon and Mount Lebanon region are on the brink of starvation, there was uproar. Many accused him of returning to being a provincial and sectarian leader. In an audio recording, Jumblatt was heard saying: “Mount Lebanon is on the brink of famine. Mount Lebanon and Lebanon; but Mount Lebanon is important to me.”

Today, as the country’s political and economic crisis escalates, Lebanon is on the brink like no other time in its modern history. The production sector is small and the country mostly relies on importing food products and industry; and its exports are few and have diminished due to the Syrian crisis. Lebanon’s real money-makers, workers’ remittances and bank deposits, are now at the heart of the crisis. Tourism, coming from Iraq and Egypt, has all but evaporated after protests began. There is also political turmoil in Iraq, which has become a major source of tourism to Lebanon after Gulf tourists stopped coming.

In the past, world countries moved quickly to save Lebanon from financial crises, but today the world is busy with more serious troubles in the Middle East, from Iran to Libya, and Gulf countries, Europe and the US are not racing to save a country where the government is dominated by Hizbullah. Even worse, at the peak of this crisis and while Hizbullah is distracted by Qassem Suleimani’s assassination and the siege by the West, its partner and ally Gebran Bassil, the president’s son-in-law, is trying to take advantage of the situation to expand his quota in the cabinet and control one third (which could block cabinet decisions and lead to its resignation). It was understood that picking Hassan Diab to form the government would lead to a technocratic cabinet in order not to antagonise protesters, the West, and even the 14 March Movement.

The most serious element in the Lebanese crisis is that there is no light at the end of the tunnel. Hizbullah does not want to concede to forming an independent technocratic government that will appease the masses and allow reconnecting with the West and Gulf countries to receive assistance. The Free Patriotic Movement is refusing to curb its ambitions, while Amal is confused between its desire to appease its ally Hizbullah, attempting to reach agreement with its traditional interlocutors Jumblatt and Saad Al-Hariri, connecting with Gulf countries and the West, and also bickering with its so-called ally, Bassil.

Historic Lebanese leaders who are known for their wisdom during times of crisis have left the reins to Hizbullah after they became stuck between the anger of the street and a cold shoulder by Western and Arab countries because of their partnership with Hizbullah in the resigned cabinet. Hizbullah is focused on overseas crises that are greater than Lebanon, and is leaving the domestic turmoil to its most recent ally, the Patriotic Movement led by President Michel Aoun, to provide it with political cover. The group desperately needs this due to the international and Arab boycott.

Meanwhile, Aoun is reading the scene as a war on the Patriotic Movement because of his alliance with Hizbullah, an alliance that brought him to power. If Aoun abandons Hizbullah, he will not only lose the support of this political heavyweight but it could trigger a more serious conflict due to Hizbullah’s firepower and influence, along with Amal, in various state agencies. 

They are now at the helm of a government that has no resources. The Lebanese lira continues its free fall, banks pay salaries in installments, and no one knows how much longer the government can pay the salaries of civil servants during this crisis. Jumblatt previously objected to raising salaries and years ago predicted that if Lebanon collapses like Greece, there will not be a Europe to save it and Arabs are no longer focused on it. Today, Jumblatt is focused on providing basic needs for his sect who live on a mountain famous for its breath-taking beauty, but is not self-sufficient.

It is a plush mountain with abundant water, where apples can grow but not wheat. Nonetheless, there are reports that Jumblatt directed his party to support families in need within the Druze sect, distributing food packages, encouraging the planting of wheat, lentils and grains. Also, stockpiling medicine, treating patients and calling on Lebanese expatriates abroad to support agencies in Druze areas, especially hospitals, and creatively brainstorming about how to create more jobs. After Jumblatt’s outcry last month, activists in Mount Lebanon began broadcasting photos showing young men in Ain Wazein plowing the land, as one of them prepares a large reservoir with a capacity of 60 barrels of diesel fuel in case the power goes out.

Due to Lebanon’s geography and economic focus on tourism and financial services, it is not self-sufficient by any means. It earns economic revenue by being open to the world and based on confidence in its banking system, which have now both dissipated. Depositors have lost confidence in the banking system which now only pays dues by shares and quotas due to a bank run, when people panicked after banks closed their doors for a time. Many withdrew their deposits out of fear the banks will go bankrupt. Under normal circumstances, liquidity at banks is about 10 per cent of deposits, and the bank will default if there is heavy demand on withdrawals, and so it imposes restrictions. Even if the financial crisis subsides in Lebanon, regaining confidence in the banking system will take time.

Lebanon is well known for its openness, but this ended since a party came to power that is affiliated with a country that is already under siege. Its partners in power distanced themselves from this party, so even if Hizbullah overcame its bickering with its ally Bassil and formed a technocratic government, it is unlikely this would lead to a deluge of international aid to Lebanon. Even if Prime Minister Diab, who is designated to form a technocratic government, succeeded, everyone at home and abroad will continue to view it as Hizbullah’s government and no one will be willing to give money to save Lebanon. Former Lebanese finance minister Nasser Saeedi previously told Reuters that Lebanon is in need of financial rescue worth $20-25 billion, including from the IMF.

Accordingly, Hizbullah is trying to make room for Hariri’s return as prime minister, but the latter seems to understand that the powers interested in Lebanon will not repeat what they view as past mistakes of saving the country financially and handing it over to Syria and now Iran through Hizbullah. The formula of Western-Gulf funds while Iranian arms dominate is no longer viable. For many countries interested in Lebanon, this is the moment they have been waiting for, to end or at least curb Hizbullah’s control of the country.

Perhaps they could suggest disarming Hizbullah altogether, but for a group that believes its firepower is a red line, this would mean Lebanon’s economic crisis will worsen and the Lebanese people will pay the price. Amid fears the state will stop paying salaries to civil servants, including security and military forces, this will increase the influence of political parties that are the only refuge for citizens as the state withdraws from its duties. This will lead to more sectarianism and rallying around old leaders the popular uprising originally demanded be ousted.

*A version of this article appears in print in the 16 January, 2020 edition of Al-Ahram Weekly.

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