{"id":9905,"date":"2021-11-23T15:52:13","date_gmt":"2021-11-23T12:52:13","guid":{"rendered":"https:\/\/rasanah-iiis.org\/english\/?p=9905"},"modified":"2021-12-12T17:12:12","modified_gmt":"2021-12-12T14:12:12","slug":"a-reading-into-the-lebanese-arena-chronic-crises-and-prospective-challenges","status":"publish","type":"post","link":"https:\/\/rasanah-iiis.org\/english\/centre-for-researches-and-studies\/a-reading-into-the-lebanese-arena-chronic-crises-and-prospective-challenges\/","title":{"rendered":"A Reading Into the Lebanese Arena: Chronic Crises and Prospective Challenges"},"content":{"rendered":"\n
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Introduction<\/strong><\/p>\n\n\n\n

Lebanon\u2019s successive crises \u2014 including the energy and electricity shortages   as well as the  Tayouneh clashes and the security tensions that followed \u2013  contributed to bringing the country back into the limelight.  The latter Lebanese crisis came at a time when regional countries and beyond  are attempting to tackle  their consecutive crises and deal with their  growing concerns in light of  the  escalating US-Chinese competition and its direct and indirect impact on several regional issues and against the backdrop of US-Iran talks to revive the nuclear deal.  Lebanon is  suffering from  deepening crises, instability and increasing internal and external tensions  because of the consecutive economic and political crises. These crises have emerged due to domestic divisions among the country\u2019s  different political forces and the intersection of  external geopolitical interests. As soon as Lebanon manages to resolve one crisis, it is faced by a deeper and more severe one, adding to the series of crises gripping the country.  These current crises emerged evidently in 2019. Despite  the formation of a new Lebanese government resulting in a partial breakthrough, optimism  is not the prevalent sentiment across the country. This is because most of the indicators point to the country\u2019s challenges and impediments outweighing the number of proposed solutions on the table.  <\/strong><\/p>\n\n\n\n

In this paper, we briefly try to answer some  questions related to the Lebanese landscape. These  pertain to the reality of the Lebanese  crises and their most salient economic, political and security manifestations, the ongoing challenges, and the biggest existing impediments to overcoming the crises facing the country. Finally, we will look at the indicators pointing to the future that is awaiting Lebanon.<\/p>\n\n\n\n

1. Complex Crises and Intractable Solutions<\/strong><\/p>\n\n\n\n

The economic and financial crises as well as the challenges  facing the Lebanese state are diverse.  Lebanon started the year under the weight of the protests that erupted across  the country, prolonging the state of emergency which has been prevailing since late 2019. In addition, the ramifications of the devastating explosion which  rocked Beirut in August 2020 are still being felt. These major incidents  contributed to aggravating the economic woes facing the country.<\/p>\n\n\n\n

  1. Dimensions and Significations of the Lebanese Economic  and Energy Crises<\/strong><\/li><\/ol>\n\n\n\n

    Lebanon is going through one of the worst economic crises globally. In  addition to the long-term systemic and structural problems resulting from the impact of several internal and external factors and the chronic  corruption cutting across  the country\u2019s economic pillars,  the ongoing  crises can also be attributed to the adopted  monetary and banking policies, contributing to significant ramifications \u2014 though expected.  <\/p>\n\n\n\n

    Public debt  until the end of 2020 reached $95.6 billion (17.7 percent of GDP), an increase of nearly 5.3 percent from  2019. The Central Bank\u2019s reserves  in the first quarter of 2021 reached approximately $17.5 billion, down from  an estimated  $30.3 billion in 2020.[1]<\/a><\/p>\n\n\n\n

    All the foregoing can be understood in light of  the value of the local Lebanese currency declining by nearly one-tenth of its value against  other foreign currencies, especially the US dollar.[2]<\/a><\/p>\n\n\n\n

     The World Bank estimated that GDP  contracted by 20.3 percent in 2020 following a 6.7 percent decline in 2019. Meanwhile, living standards have deteriorated further, putting greater pressure on the Lebanese people.  The purchasing power of the Lebanese  people has declined by  nearly 90 percent.[3]<\/a> The best forecasts indicate that Lebanon needs nearly 12 years to initially overcome the ongoing crises.[4]<\/a>  Other indicators paint a bleaker picture, indicating that the country needs two decades for  its economy to bounce back.<\/p>\n\n\n\n

    This economic deterioration was accompanied by a downward trend in Lebanon\u2019s economic relations with regional and international actors.   Lebanon\u2019s trade exchange with the Gulf states over the past 10 years significantly declined, from nearly $450 million per year before the recent  diplomatic crisis to nearly $50 million in 2020. Gulf investments have also gradually declined.[5]<\/a> This decline in economic relations between Lebanon and regional countries is because of the latter\u2019s protest  against the role and practices of Hezbollah \u2014 whether inside or beyond Lebanon.  Further, the financial support to the Lebanese government is conditioned with disarming Hezbollah. Regional protests  against Hezbollah\u2019s overseas practices \u2013 including its links to smuggling operations via the illegal crossings in Lebanon and Syria  and its role in the ongoing crisis between Lebanon and the Gulf states due to  its smuggling activities \u2014 are elements that need to be considered when thinking about the Lebanese crises today.  These elements  have played a significant role in aggravating Lebanon\u2019s crises at the very least,   bringing about  its economic and financial collapse, harming the reputation of the country and its  economy, and  causing a significant change in the way regional and Western countries deal with Beirut.  <\/p>\n\n\n\n

    The economic and  energy crises have worsened  over the past few months which has impacted the delivery of essential public services.  The  capacity of the Lebanese state to supply the needed finances for the country\u2019s regions and districts has declined, hence contributing to millions of Lebanese not having access to health services and water resources.  This is extremely problematic in light of  the coronavirus pandemic.[6]<\/a><\/p>\n\n\n\n

    1. Proposed Solutions Exacerbate the  Crises Further<\/strong><\/li><\/ol>\n\n\n\n

      Given  Lebanon\u2019s deepening economic crises and the decline of the government\u2019s capacity to offer suitable  solutions to reduce their ramifications on the domestic front,  Hezbollah\u2019s Secretary General Hassan Nasrallah over the past few months  made a series of remarks alluding  to Iranian solutions to overcome the domestic crises and prevent further internal deterioration.  He  launched a series of initiatives using private foundations linked to  Hezbollah.  These initiatives have drawn widespread criticism for significantly contributing to the country\u2019s current financial crisis  and operating beyond their remit as tackling crises is the job of state institutions. As a result, Hezbollah has been accused of working to build a state within a state to serve Iranian interests, such as expanding its clout in the region.[7]<\/a><\/p>\n\n\n\n

      Among  Hezbollah\u2019s initiatives was to  secure hard currency through its parallel banking system, known as al-Qard al-Hasan Association (AQAH). The latter  operates as a charitable association, offering loans and carrying out sales and purchases in US dollars.<\/p>\n\n\n\n

      In addition to the aforementioned semi-banking service, Hezbollah  issued ration cards and  implemented agricultural programs through the Jihad al-Binaa Development Association  which is tasked with  constructing civilian and military infrastructure for Iran in several  regional countries.[8]<\/a><\/p>\n\n\n\n

      Through  its array of unofficial activities, Hezbollah  intended to take advantage of  Lebanon\u2019s crises and turn these into opportunities to secure  more power and recognition, expanding its support base and restricting the activities of the Lebanese state  through building a new alternative economy. This will lead to severe ramifications, particularly related to upholding the writ of the Lebanese state. <\/p>\n\n\n\n

       As the economy and the energy crises  continued to escalate, Hezbollah announced that a ship carrying fuel was setting sail from Iran to Lebanon. Then it spoke of a second and third ship. Then Hezbollah made a controversial proposal, suggesting that  Iranian companies should search for oil in  Lebanon\u2019s territorial waters. Hezbollah\u2019s activities  in the Lebanese energy crisis  indicate a new equation  related to  Lebanese politics and the balance of power inside and  beyond the country.   There are many sinister objectives behind Hezbollah wanting to import fuel from Tehran to Beirut that go beyond the purported humanitarian assistance to the country amid ongoing domestic crises.<\/p>\n\n\n\n

       Nasrallah\u2019s proposal of importing  Iranian fuel is consistent with the  idea he floated nearly one year ago:  asking Beirut to look eastwards and boost  its economic cooperation with Iran  to overcome its economic crises. This idea is in line with Iranian aspirations following the 1978 revolution, such as  turning the region away from the West and replicating its political and socioeconomic model across the region.<\/p>\n\n\n\n

      In light of Lebanon\u2019s  ongoing deterioration, Hezbollah believes the time is ripe for Lebanon to turn eastwards and rely on  Iranian help,  including cooperation in the oil and gas sectors.  There is a heavy cost as well as there will be severe ramifications if Lebanon embraces this path of turning to Iran.[9]<\/a><\/p>\n\n\n\n

      While Nasrallah\u2019s proposal would help mitigate some of the fuel shortage problems  facing Lebanon, in fact, it  is not a sustainable solution to the energy crisis and its ongoing ramifications which are felt across Lebanese society.   It is rather a temporary solution, with the risks outweighing the benefits.  In addition to the aforesaid, Hezbollah\u2019s efforts to strengthen its image and stature in Lebanon through  taking advantage of the Lebanese fuel crisis by bringing in Iranian fuel ships will open a new chapter in the country\u2019s financial crisis. Hezbollah and Iran will reap financial benefits and profits from selling fuel to Lebanon at prices far higher than the actual market value.[10]<\/a> In addition,  there is a bigger danger lying in the execution  of financial dealings beyond the framework of official  apparatuses \u2014 given the ambiguity surrounding the method of payment. The likeliest scenario is that  any payments will be made in  Lebanon\u2019s national currency due to the constraints placed on Iran and Hezbollah by US sanctions. In the end, the payments will be subject to changes and transfers to convert them to the US  dollar. Hence, all the transactions  will be carried out beyond  the official scope of the Lebanese state.[11]<\/a><\/p>\n\n\n\n

      1. The Initiative of Sending Gas and Electricity and the Framework of Foreign Mediation to Resolve the Crisis<\/strong><\/li><\/ol>\n\n\n\n

        Hezbollah\u2019s announcement to bring  Iranian ships carrying fuel to Lebanon was followed by  an announcement from Washington.  The US Ambassador to Lebanon Dorothy Shea said that the  plan for Lebanon to secure gas and electricity via both  Egypt and Jordan through Syria was consistent with the regional outlook of these countries to enhance economic integration.[12]<\/a><\/p>\n\n\n\n

        Hence, this proposal, according to the prevailing vision of multiple analysts, aims to create some sort of  stability for the aforementioned countries and counterbalance  Iran\u2019s clout that extends throughout multiple countries in the region, including Lebanon. This proposal impedes  Hezbollah\u2019s path \u2014 for fear that it could exploit the distribution  of Iranian fuel to boost its chances in the next Lebanese parliamentary elections.[13]<\/a><\/p>\n\n\n\n

        Despite the goals of the regional project  to send gas and electricity to Lebanon, it reveals a glaring contradiction and huge flaws regarding several aspects of  regional and international policies. Iran continued to send  fuel to Lebanon across the Syrian border despite the international  and regional efforts over the past years  to monitor illegal border crossings and  provide the necessary security infrastructure on the Syrian-Lebanese border.[14]<\/a> Further, several countries in the region  and the world  implemented mechanisms and understandings to  halt  cross-border smuggling operations \u2014 such as  the recent understandings between the United States, Russia and Israel to  end Iran\u2019s presence in Eastern Syria on the border with Iraq. They  also aimed to stop Iran\u2019s  overland communication from its territory to the Mediterranean coast in Lebanon. However, these mechanisms and understandings proved    a failure whether in stopping the illegal smuggling of fuel or in curbing Iran\u2019s proxy: Hezbollah. Therefore, the regional project of sending gas and electricity to Lebanon and the ongoing understandings  regarding Syria\u2019s Daraa Governorate are questionable when it comes to stopping Iran\u2019s activities in the region.[15]<\/a><\/p>\n\n\n\n

        2.  The Crisis of Forming  a New Lebanese Government \u2013 Between Competition and Impediments <\/strong><\/p>\n\n\n\n

        Cautious optimism has prevailed among the observers of Lebanese  affairs, whether inside or beyond  Lebanon, after the formation of the  new Lebanese government was announced on September 20, 2021, headed by Najib Mikati. This announcement  came after the existence of  a governmental vacuum and political gridlock involving  appointments and removals. This phase  began after  the resignation of the Hassan Diab government in August 2020 following the Beirut Port explosion, with Mustapha Adib and Saad al-Hariri declining offers to form a new government. <\/p>\n\n\n\n