Snubbed by Gulf, Lebanon's PM Diab hosts Iranian official

Reuters , Monday 17 Feb 2020

Lebanese Prime Minister Hassan Diab (R) meets with Iran's Parliament Speaker Ali Larijani (C) in the presence of the Iranian Ambassador in Lebanon Mohammad Jalal Firouznia at the Government headquarters in the capital Beirut, on February 17, 2020. (AFP)

Lebanon's Prime Minister Hassan Diab, who is getting the cold shoulder from Gulf Arab states, on Monday met Iran's parliament speaker, the first senior foreign official to visit since Diab's government took office.

The heavily armed Hezbollah, an ally of Iran, is a main backer of Diab's cabinet, which took office last month after efforts failed to strike a deal with Saad al-Hariri, a traditional Western ally.

Gulf Arab states had long channelled funds into Lebanon. But now, alarmed by the rising influence of Hezbollah, Lebanon's rich neighbours appear loathe to help it out of an unprecedented economic and financial crisis.

The crisis came to a head last year as slowing capital inflows led to a liquidity crunch and protests erupted against the ruling elite.

Banks are curbing access to cash, the Lebanese pound has slumped, inflation has spiked and firms are shedding jobs. Foreign donors say they will only help once Lebanon enacts long-delayed reforms.

Analysts say Hezbollah's role in forming Lebanon's new cabinet could make it harder to get aid from Western and Gulf states that are worried about Tehran's clout in the region.

Diab has said his first trip abroad would be to the Arab region, particularly the Gulf monarchies. But none of them have officially commented on the government nor extended public invitations to Diab.

An Arab diplomat in the Gulf said only Qatar had invited Diab to visit so far. "No other government in the Gulf will invite him," the diplomat said.

Qatar did not immediately respond to a request for comment on whether it had sent an invitation.

Lebanese President Michel Aoun's office said he received an invitation to Tehran during his meeting with Iran's parliament speaker Ali Larijani on Monday. Larijani said in a televised conference that his country stood ready to help Lebanon.

Mohanad Hage Ali, a fellow at the Carnegie Middle East Center, said the visit may not help bolster the new Lebanese government's image as independent.

"It's not very helpful at this stage as Lebanon seeks foreign aid and a bailout and the help of Gulf Arab states. This is the not message you want to send," he said.

Hezbollah leader Hassan Nasrallah said in a speech on Sunday that the cabinet was not "Hezbollah's government" and that opponents who described it that way were damaging Lebanon's ties to foreign states and making it harder to combat the crisis.

A team of IMF experts will begin consultations with Lebanon's government in Beirut on Thursday, a source familiar with the matter said.

The heavily indebted state formally requested the Fund's technical help last week.

On the parallel market - now the main source of hard currency - the price of US dollars hovered around 2,400 Lebanese pounds on Monday, 60% beyond the official peg of 1,507.5 in place since 1997.

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