GP Insights # 489, 21 March 2021
On 15 and 16 March, protestors returned to the streets. The recent agitation arose as the Lebanese Pound broke the economy and hit a record low. The currency has lost more than 85 per cent of its value since 2019. The protestors blocked significant cities in the country like Beirut, Tripoli, and Sidon by burning tires.
On 17 March, the Central Bank of Lebanon received a letter from the EU, UN, and World Bank promising to provide aid to the bleeding country in US Dollars. Before the announcement, the aid was delivered in Lebanese currency; since it crashed, the aid will be provided in hard currency. Although no comments were made by the Lebanese diplomats, various Human Rights groups and urged the parties to create a mechanism for aid to be transferred to the people directly.
On the same day, Lebanese President Aoun met the PM-designate Hariri to discuss the formation of the government. The President was hasty and stern in suggesting Hariri either form the government quickly or step aside from the political canvas. Hariri mentioned that he aims to keep communications open, which was still the case.
What is the background?
First, the deterioration of Lebanon's economy. This has been the case during the recent period, and the massive explosion in the Beirut port in 2020 and COVID-19 have led the economy to a breaking point. Problems of corruption, bankruptcy in every sector and the blow to the banking sector (the only flourishing sector due to unrealistic interests provided) fell apart, leading to Lebanon's downfall. The citizens have been facing food insecurity and electricity black-outs making the situation miserable and harsh.
Second, the nature and composition of the government. The government has provided space to various sects of the country and mandated a Maronite Christian President, a Shia Muslim Speaker of Parliament, and a Sunni Muslim Prime Minister. Established through the 'Taif Agreement' in 1989, it has failed in stabilizing the country's politics. The political crisis deepened since 2019 when PM Hariri stepped down, and the government was dissolved. Internal players from various sects have been unable to come to a consensus and have ignored the economic chaos engulfing Lebanon, rendering the Sectarian form of government ineffectual.
Third, the international players and their involvement. The Saudi-Iran rivalry plays a role in the Lebanon crisis; it has led to alliances being formed within Lebanon that assert themselves with force. The US and Saudi backed camp has clashed on numerous occasions with the pro-Syrian camp as both hold different views on government formation. The US has been suspicious of Syrian involvement in the 2019 Beirut explosion and the financial crisis of the country.
What does it mean?
The growing tensions in Lebanon can only point to further chaos in the country. The many sects involved in the power struggle may lead the country to a probable civil war. The failure of state institutions is another imminent concern. The formation of government is nowhere in sight leading to a mismanaged system of corruption and downfalls. However, the focus needs to be shifted from power politics to the civilians in the line of danger. Growing humanitarian crisis and loss of dignified life is the only certain card based on current situations.