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Lebanon’s fate now linked to US-Iran showdown

Jul 21,2020 - Last updated at Jul 21,2020

Lebanon’s economy is in a freefall and chances that the government of Hassan Diab will be able to strike a last minute deal with the International Monetary Fund (IMF) to secure billions of dollars in a rescue package are slim at best. Last week, Minister of Economy and Trade Raoul Nehme admitted that the economic crisis has turned Lebanon into a failed state. The lira has lost almost 80 per cent of its value against the dollar since nation-wide protests first erupted last October, forcing Prime Minister Saad Al Harriri to resign.

But at the core of the economic crisis, which has led to hyperinflation, a spike in unemployment and poverty rates, collapse of basic public services and an acute shortage of foreign currency is a political impasse that has been decades in the making. Lebanon’s once vibrant ethnic and sectarian diversity are now its curse; a political power sharing deal, primarily between Maronites, Sunnis and Shiites, that goes back to the 1940s, has polarised the country, allowing one group, the Hizbollah militia, to dominate the political arena.

It is true that Lebanon’s weakening institutions have allowed for the spread of corruption and abuse of power by its political elite. This has been going on for decades. At the heart of its financial debacle is its central bank, which has been involved in what could only be described as a Ponzi scheme to lure billions of dollars in local and foreign deposits against ludicrously high interest rates. That money was then lent to the government at low rates. The fate of billions of dollars handed to successive governments remains unknown. Last year, that proverbial house of cards suddenly collapsed.

But regional and foreign governments are not dashing to help Lebanon. The dominance of Hizbollah over Lebanese politics has isolated the country. Hizbollah’s leaders admit that they are an organic ideological extension of the Islamic Republic of Iran. Their financial and military dependence on Tehran has come at an exorbitant cost. An unholy alliance between President Michel Aoun’s Free Patriotic Movement (FPM), headed by his son-in-law Jubran Bassil, and Hizbollah has forced the country to abandon its previous policy of self-distancing from regional conflicts.

Under the rising political and military influence of Hizbollah, Lebanon found itself immersed in the bloody Syrian civil war. Hizbollah’s foreign activities now include Iraq and Yemen. By doing so, it had polarised the Lebanese, who in the past had backed the group’s efforts in confronting and repulsing Israeli aggression. Now Hizbollah’s agenda, as spelled out by its leader Hassan Nassrallah, is one and the same of that of Tehran’s extremists.

With the imminent economic collapse and the reality of the political hegemony by Hizbollah over the Cabinet and the presidency, the prospects of the IMF handing the government a lifeline seem remote. While the IMF, the US and France demand genuine economic reforms, the reality is that Hizbollah is today Lebanon’s biggest problem. Its very survival is at stake as the showdown between the US and Iran intensifies.

While calls for genuine dialogue between the ruling elite are sounded every now and then, the reality is that Lebanon’s oligarchs have little concern in reaching a compromise that would damage their own personal interests. The recent protests have brought members of all sects together because inflation, poverty and unemployment have spared no one and have crossed the sectarian divides.

In the midst of this uncertainty comes the call by Maronite Patriarch, Cardinal Bechara Boutros Rahi, for Lebanon to be neutral except in its conflict with the “Israeli enemy”. The call is important and should resonate across the country. It is directed at the Hizbollah-FPM alliance, whose relationship can only be described as symbiotic. It was not surprising that Hizbollah had rebuffed the call while Bassil did not embrace it completely.

The sad reality is that Hizbollah, which has emerged as the key player on the Lebanese stage, has its own priorities which are anchored to a foreign ideological base. It is in no mood to amend the election law, which allowed it to control the legislature, nor it is willing to respond to calls to put its arsenal under the army’s control; the latter being the only remaining neutral institution.

Moreover, it continues to defy the state by overseeing the smuggling of oil products to war-torn Syria when Lebanon is witnessing an endemic energy crisis. In short Hizbollah has taken Lebanon as a hostage.

Lebanon’s future looks grim and its economic woes are turning into a grave humanitarian crisis that affects the majority of Lebanese. The failure to contain the spread of the Covid-19 virus only adds to the plight of that country. The state of paralysis will continue as the political elite pin their hopes on an external bailout that could save the day; but their wait could be in vain. The price for a bailout is hefty and Hizbollah knows that very well. Its fate, as well as that of Lebanon, is firmly linked to the outcome of the US-Iran faceoff.

 

Osama Al Sharif is a journalist and political commentator based in Amman

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