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Socio-political and economic turbulence in Lebanon

Middle East, GDP, Lebanon Economic Monitor, October Revolution, The Deliberate Depression, Syrian refugees

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Socio-political and economic turbulence in Lebanon

Inaction by the international community on the issue not only perpetuates the suffering of Lebanese, alongside Syrian and Palestinian refugees, but allows for a much worse situation to develop. Writes Alexander Langlois

A midst a turbulent Middle East with an excess of competing priorities for the international community, Lebanon has nearly devolved into a failed state. Yet while it is easy for many to overlook the small eastern Mediterranean country among wider regional issues, considering Lebanon’s state of affairs as an afterthought will have profoundly negative implications with substantial externalities. Certainly, the case of Lebanon is intricately intertwined with Middle Eastern geopolitics—something world leaders must recognize to prevent the coming tragedy that will extend beyond Lebanon’s borders.

The scale of Lebanon’s political and economic issues speaks to the inherent risks of avoiding the issue. A recent World Bank report paints a stark picture: “The Lebanon financial and economic crisis is likely to rank in the top 10, possibly top three, most severe crises episodes globally since the mid-nineteenth century.”

The economic metrics do not lie. GDP has fallen by nearly 40 percent between 2018 and 2020, unemployment has risen from 28 percent in February 2020 to 40 percent in December 2020, and the Lebanese Lira has reached a real exchange rate—per black market prices—of over LBP 17,000/USD. Merchandise imports have nosedived by 45 percent as inflation has forced the stock of currency in circulation to increase by 197 percent. As a result, over half the population now lives under the poverty line.

The report, citing its Fall 2020 Lebanon Economic Monitor, elegantly defines the crisis as “The Deliberate Depression.” The term is applicable—Lebanon’s ruling class has done little to address the structural issues underpinning the crisis, best personified by the failure to form a cabinet for over eight months. Rather, Lebanon’s political figureheads have worked to sustain the patronage system that enriches them, as serious structural reforms would upend their looting of the country. The result is manufactured political gridlock that only harms Lebanese.

This scenario is not sustainable. Given the degree of social unrest stemming from the 2019 October Revolution, while a notable moment of unity for Lebanon’s diverse populace, it is becoming increasingly difficult to argue that Lebanon is not headed towards collapse and subsequent conflict. Sectarian and ethnic strife has grown as political parties harden division lines along patronage networks. This is especially true between Lebanese citizens and Syrian refugees, as scapegoating tactics have painted a target on 1.5 million Syrians—90 percent of which live in extreme poverty.

Herein lies the regional connection and wider issue—one of the externalities of state instability. While Syrian refugees cannot be blamed for Lebanon’s problems today—the Lebanese government provides minimal services in the first place—their presence has provided political elites a scapegoat that sows instability between ethnic groups. Further, Syria’s currency crisis is driven by Lebanon’s currency crisis and vice versa. History alone, from the Taif Agreement and Syrian meddling in Lebanon, depicts the truly interconnected nature of the two countries. Ultimately, instability within one state surely produces the same in its neighbor.

Such interconnectedness is tied to wider regional geopolitics. Gulf-Damascus normalization efforts, while partially focused on lucrative reconstruction plans, are also likely an attempt to counter Iranian influence in both Syria and Lebanon. This includes Saudi Arabia, whose recent diplomatic engagement with Syrian officials suggests Riyadh views Bashar al-Assad’s government as both necessary for countering Tehran and a backdoor for influence in Lebanon. Riyadh, like other Arab Gulf states, is flashing massive sovereign wealth fund capabilities to influence Syria, which could indirectly reach Lebanese politics through Damascus.

In parallel, Iran continues to play a major role in supporting armed groups like Hezbollah in Lebanon and Syria. Rather than flex economic muscle, Iran and its allies rely on ideology and force. This constitutes a long-running attempt to sustain a corridor of influence from Iran to the Mediterranean Sea—a strategy that is achieving results regardless of domestic constraints stemming from economic hardship.

Thus, Syria and Lebanon are connected to Saudi-Iranian regional competition. Other states, such as Turkey, the United Arab Emirates, and Qatar, are also vying for influence and have eagerly supported armed groups in the Syrian war, let alone in Libya and Yemen. Learning from such case studies, the potential outcome of a repeated scenario in Lebanon are disastrous.

Lebanon’s collapse could set off a chain reaction of events that further destabilize the region. Just as in Syria, Lebanese groups with outside backing will find themselves on opposite sides of a conflict that will certainly spill into neighboring countries. State fragmentation could fracture domestic alliances founded upon personal advancement within the state—the foundations of which could cease to exist should that state collapse. Essentially, the old approach of blaming opposing parties could regress into violence.

This would have a profoundly negative impact on both Lebanese society and regional stability efforts, such as the recent dialogue between Saudi Arabia and Iran. Further, the mass displacement of potentially millions of people would have significant international implications for a world that has already rejected a massive influx of displaced Syrians over the last ten years. In simple terms, the region and world cannot afford the combined shock of state collapse in both Syria and Lebanon, nor the subsequent impact on efforts to stabilize conditions in the Middle East. Frankly, international leaders are unwilling to address such a scenario either.

To be sure, few good answers can address Lebanon’s current crisis. Some, such as France, are working to create structural change through coercive means, but overall engagement on the issue is minimal. France’s approach is commendable but questionable, as any effort to stabilize Lebanon must center the Lebanese people who constitute the core of stability.

Understanding this, direct aid in the form of medical services and food to Lebanese citizens must be considered and expanded in parallel with coercive efforts, as it not only helps the most vulnerable in the country but disrupts the patronage networks that are currently ripping Lebanon apart.

This is, of course, just one short-term solution specifically designed to mitigate suffering. Real influence lies with regional leaders disinterested in the average Lebanese. Still, inaction by the international community on the issue not only perpetuates the suffering of Lebanese, alongside Syrian and Palestinian refugees, but allows for a much worse situation to develop. This dynamic must quickly shift course.

Alexander Langlois is a foreign policy analyst focused on the Middle East and North Africa. He holds an M.A. in International Affairs from American University’s School of International Service.

This article is republished from National Interest

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