While warning signs of Lebanon’s economic meltdown have been apparent for some time, as Crisis Group expert Heiko Wimmen writes, it is still shocking just how close things are to falling apart.
Amid ongoing political paralysis, Central Bank took measure prompting currency devaluation, and France sought to mediate Beirut’s diplomatic spat with Saudi Arabia. Cabinet meetings still on hold with little apparent prospect of resolution. Attempts to reach political deal ended in acrimony: PM Mikati and Parliament Speaker Nabih Berri met 20 Dec, but did not succeed in resolving disputed issues – including Hizbollah and its allies demanding removal of Judge Tarik Bitar from investigation into Aug 2020 Beirut port explosion, Free Patriotic Movement party asking modifications to mode of expatriate voting, and issue of reshuffling senior security positions. On economic front, currency fell to record low. Following 3 Dec resignation of Information Minister George Kordahi, whose comments on Saudi-led war in Yemen had caused frictions with Gulf countries, Lebanese lira improved by nearly 10% within less than 24 hours, reaching 22,000 to U.S. dollar. However, in unexpected move Central Bank 9 Dec raised amount of lira that depositors can receive for U.S. dollars from 3,900 to 8,000, triggering fears of inflation that sent lira to record lows at 29,000 to U.S. dollar on 14 Dec; currency stabilised at 27,000 after Central Bank same day announced injection of additional dollars into market. Shooting 12 Dec erupted at funeral procession in Palestinian camp Burj al-Shemali in Tyre city killing three Hamas members; Hamas blamed factions affiliated with Palestinian Authority (PA) while PA rejected allegations. During visit to Qatar, United Arab Emirates and Saudi Arabia, French President Macron 3-4 Dec sought to restore relations between Riyadh and Beirut; Macron’s attempt to arrange meeting reportedly failed but PM Mikati and Saudi Crown Prince Mohammed bin Salman 4 Dec held telephone call during which they struck agreement on unspecified mechanism for humanitarian cooperation. After Shiite Bahraini opposition group Al-Wefaq 11 Dec held press conference in capital Beirut criticising Bahrain’s human rights record, Minister of Interior Bassam Al-Mawlawi 15 Dec ordered deportation of non-Lebanese members of Al-Wefaq in likely attempt to curry favour with Gulf Cooperation Council. UN Sec-Gen Antonio Guterres 19-21 Dec visited Lebanon on “mission of solidarity”, met religious, civil society and political leaders.
Lebanon is suffering economic meltdown while its politicians dither. Reform – and fiscal relief – is unlikely before 2022 elections. While pushing for timely polls, international partners should send humanitarian assistance to ease the public’s pain, keep key infrastructure running and avert security breakdowns.
As it tries to pull out of its economic tailspin, Lebanon badly needs a functional cabinet able to make reforms. Such a government must have broad support, including from Hizbollah. The party’s domestic and external foes should accordingly stop attempting to curtail its role.
Lebanon’s reeling economy badly needs outside aid. Yet the political class, which largely created the problems, is resisting necessary change. The European Union should keep limiting its assistance to humanitarian relief until Lebanese politicians make reforms that benefit all citizens, not just the privileged few.
An uprising of unprecedented scope has rocked Lebanon as the country’s economy tumbles deeper into recession. Poverty and unemployment could lead to violent unrest. Donors should put together an emergency package but condition further aid upon reforms to tackle corruption, a major grievance driving protest.
Most Syrian refugees in Lebanon have thought many times about going home but in the end deemed the risks too great. Donors should increase aid allowing the Lebanese government to continue hosting the Syrians, so that any decision they make to leave is truly voluntary.
Four years after plunging into Syria’s civil war, Hizbollah has achieved its core aim of preserving the Assad regime. Yet with no clear exit strategy, the Lebanese “Party of God” faces ever greater costs unless it can lower the sectarian flames, open dialogue with non-jihadist rebel groups and help pave the way for a negotiated settlement.
For a large part of the population [in Lebanon], electricity will become a luxury. Driving your car will become a luxury, too. Transportation will become a luxury.
Turkey is also one of the candidates to rebuild Beirut harbour. There is also a section within Lebanese society – amongst Sunni Muslims – who have some sympathy for Turkey’s neo-Ottoman project.
The Lebanese state has been hollowed out by decades of corruption and patronage, and this has undermined due process and any sense of accountability.
[The Trump administration] is content allowing Israel to take the lead in pushing back against Iranian and Hezbollah influence in Syria.
The real risk [for Israel and Lebanon] is that of a miscommunication or accident being a trigger of a conflict across their border.
[The return of Assad’s forces to the border] has the potential of creating a more united front of resistance between Lebanon and Syria against Israel.
Read the full alert here: Violence Threatens Fraying Rule of Law in Lebanon.
In this episode of Hold Your Fire! Richard Atwood and Naz Modirzadeh talk with Crisis Group expert Heiko Wimmen about Lebanon’s unprecedented economic meltdown and the threat it poses to the country’s politics, society and stability.
The enormous explosion that ripped through Lebanon’s capital one year ago left deep socio-economic and political damage as well as physical devastation. The challenge today is not only to rebuild but also to establish accountability for the disaster and ensure better governance in the future.
Four days of violent unrest in Tripoli on Lebanon’s northern coast could presage more to come, as a new coronavirus outbreak deepens the country’s severe socio-economic crisis. Humanitarian aid is urgently needed to keep the worst-case scenarios at bay.