Opinion Analysis by Gaia Bchara, Featured Writer

June 20th, 2021

Lebanon’s political and economic scene is in shambles. Designated Prime Minister Hariri is entering his eighth month of struggle to form a coalition government, amid public disagreements with President Aoun. French President Macron’s attempt to mediate between political blocs has failed to create political willingness for governmental formation in Lebanon. International financial institutions’ help hinges on unlikely political reform, as exhibited by the suspension of a $246M World Bank loan that was to be used for the assistance of vulnerable families in the absence of a transparent plan for implementation. As Lebanon enters the month of July, the Central Bank is faced with the crucial decision of either sustaining or removing subsidies. With subsidies removed, prices of essential goods will soar, exacerbating existing socioeconomic inequalities and threatening the livelihood of thousands. Keeping subsidies equates depleting depositors’ money, effectively annihilating hopes of Lebanese’s rightful access to their money. It is safe to say that the end of Lebanon’s current crisis is nowhere in sight.

Although Lebanon’s suffering of a multifaceted calamity, the crisis remains – first and foremost – political. Solutions, despite their necessary severity, exist – namely the formation of a government with exceptional powers to negotiate an IMF deal and structure a clear implementation plan, after which it would oversee fair early parliamentary elections. It is the local political resolve to act them out that is absent. This prompts a necessary question; considering the substantial role major powers play in Lebanese politics, what should be, rather than what currently is, the international community’s role throughout this crisis?

The international community has legitimized, propped up, and revived the ruling oligarchy on numerous occasions, thus sustaining myths of stabilization amid disastrous political and economic policies. This is clearest in the continuous economic and financial bailouts that serve to bolster Lebanon’s political class, free of both reforms and somewhat coherent implementation plans. In 2001, over 500 million euros were pumped into the Lebanese economy following the Paris I conference, at the request of the Lebanese government who then pledged containment of public expenditures and attraction of investment. Unsurprisingly, public debt spiraled, and the original strategy presented by the Lebanese government to donors yielded no results. Second and third rounds – labelled Paris II and III– witnessed the repackaging of the Paris I policies in return for over $4 billion granted by the international community. Regional Financial Institutions, such as the Arab Fund for Economic and Social Development, European Investment Bank, and the Kuwait Fund for Arab Economic Development have allocated almost $1 billion alone. Direct economic aid has extended the Lebanese political class a lifeline to protract their rule, strengthen their grip over their respective sectarian communities in the backdrop of a fallible economic and financial infrastructure, and delay what is now clearly - in hindsight- an imminent collapse.  

Presently, the international donor community has forgone the Sisyphean task of bailing out Lebanese oligarchs. For instance, following the Beirut Blast, international donors allocated relief funding directly to civil society organizations, reflecting the now-conditional nature of governmental assistance. Nevertheless, some remain insistent on unleashing the potential of soft power and negotiations to come to possible reforms, still with the current class.

France, a leading actor in Lebanese politics, launched its “French Initiative” under the ongoing political deadlock and no government. President Macron and Foreign Minister Le Drian’s public deploring of the Lebanese state of affairs and political class – most staunchly exhibited in Macron’s visits to Beirut in the aftermath of the explosion – is far from consistent with its policy towards Lebanon’s political class. Threats of sanctions and travel bans on key Lebanese figures for corruption and blocking the formation of government have yet to come to fruition. More importantly, France’s role in applying pressure on Lebanon’s leading coalition in both parliament and government is strained by its excellent economic relations with Iran, a key ally of the Hezbollah-FPM camp. France’s end goal holds no intention of revamping of the political class, but rather that of reforming the ruling Lebanese oligarchy.

The US’s approach is that of undivided pressure on Hezbollah. The crux of the US’s problem in Lebanese politics resides in the existence and operation of an Iranian proxy in the Middle East, in the backdrop of US-Iran feud over nuclear power production. The US’s involvement in Lebanese politics is conducted in a tit-for-tat manner, whereby bolstering funding and strengthening the Lebanese Army would require an “ousting”, or decline, of Hezbollah’s influence in government. This approach relies exclusively on willingness of the political class to forgo its relationship with the group, but it is under no obligation to reform itself. Far from a genuine concern over Lebanese policymaking, central to the US’s foreign policy in Lebanon is countering Iranian influence. This is reflected in the exclusive American sanctions over officials either directly or indirectly affiliated to the Hezbollah-FPM alliance.

Another question can be raised regarding the effectiveness of sanctions.  While Iran is often studied as a successful case, a study conducted by CNAS on the effectiveness of sanctions yields different results. In Iran, the plummeting of worldwide oil prices in 2014, coupled with internal economic mismanagement has proven to be the chief cause of the country’s economic deterioration that is often referenced by US lawmakers and officials as the product of effective sanctions. Similarly, the Russian experience of sanctions was an outright failure. As a result, the European Union separated from its US ally’s policy and voted to lift sanctions on Russia, after suffering the economic knock-off impacts of trade and export reduction with Russia – a key economic power, particularly in energy. In North Korea, the US’s policy of isolation has not stopped NK’s dictatorship from developing, testing, and launching rockets and nuclear weapons. In Somalia, US sanctions have unintendedly blocked remittances, which constitute a major source of income for civilians and failed to curb the impact of Al-Shabab militants.

Most importantly, at the heart of policies directed at the Lebanese political class, whether from the US, France, or their allies in the international community, is the prospect of reform. France’s initiative operates on the assumption that the Lebanese oligarchy has the potential to reform itself, the US’s approach perceives the only problem in mismanagement and corruption to be rooted in Hezbollah and his allies, and the international community’s efforts to negotiate a transparent implementation plan for loans resides on the postulation that the current regime has the potential to see it through. When the survival of the country relies on political and economic recovery, a strong Lebanese partner is necessary. It is increasingly clear that this Lebanese partner cannot be found in the current oligarchy because it cannot reform itself.

Going forward, the international community must stop attempting to negotiate the survival of the ruling oligarchy, representing an effective reversal of its traditional approach. Instead, it must negotiate with an emerging, capable political class to take the helm, in the same fashion that Le Drian met opposition parties in Beirut ahead of the 2022 parliamentary elections. In return, a key role falls on Lebanese independent parties. Short of ousting the current political regime – for which there is no willingness, international actors cannot save Lebanon. What could is an organized opposition with clear objectives and a realistic plan to achieve them – which inevitably involves negotiating with the international community and positing themselves as legitimate partners for Lebanese reconstruction capable of delivering promising results for the prosperity of the country.