The ‘Grand Compromise’ Between Lebanon’s ‘Strong Presidency’ and Iran’s 'Rejectionists' Hastens the Demise of Lebanon’s Economy

By 
Elie Chalala
Image from The New Statesman.


In early July, we wrote about two suicides in Lebanon while holding off on a third until we fact-checked it. Subsequently, the Beirut-based Al Modon newspaper wrote about a total of four suicides, including the two reported here. The article’s author deliberately stressed the reasons behind the suicides were not personal, but rather related to deteriorating economic conditions and the loss of dignity.

As for how the Lebanese government reacted to these tragedies, the following sums it up: “They brought us here just because one is dead," one police officer nonchalantly said upon arriving to the main street where the first suicide took place. Fortunately, a female activist's camera exposed the officer’s insensitivity right on the spot. One only hopes that this attitude toward suicide is unrepresentative of other officers and the government. Lest anyone forget, perhaps no commentary or camera could capture the painful scenes of four men escaping hunger by suicide, the likes of which are unprecedented in Lebanon’s history.

Writing in the British New Statesman magazine, Jim Muir captured the essence of the Lebanese economic and financial crisis. Written in a jargon-free and accessible language to both specialist and layperson, Muir makes an analogy between the coronavirus and Lebanon’s other "viruses" infecting the Lebanese body politic, which, unlike COVID-19, has symptoms “there for all to see.” Foremost of these “viruses” are corruption and sectarianism, and I would add the presence of a parallel state (Hezbollah), a state within the state.

The effects of Lebanon’s problems are easily visible through Muir’s window. Muir, who knows Lebanon quite well, observed the following: “I don’t need to look more than ten yards...where the bistro that opened eight years ago has now closed, just like many other restaurants, cafes, shops and businesses all over town. My local bank is now hidden behind a brutalist cladding of thick steel. Many banks had their façades smashed before the lockdown, when in October 2019 angry protesters attacked them in retribution for the financial meltdown that has brought the country to its knees.”

Those not exposed to daily Lebanese politics, the majority of whom are outsiders, have questions similar to those raised by Muir: “How did Lebanon, once hailed as the Switzerland of the Middle East, reach such desperate straits?”

Although the Swiss comparison is somewhat misleading even during the heyday of its popularity, many have forgotten it during the country's 15-year civil war that claimed about 150,000 casualties. The “Switzerland of the Middle East” was always a bit sensationalist, yet its impression still lives in Lebanon’s collective memory. The war’s end in 1990 might have rekindled the lost “good old days” of the 1950s and the 1960s when Lebanon was “Switzerland.”

The Lebanese soon discovered the term had become merely a sentimental longing for a bygone era, especially when the same sectarian leaders who led the war entrenched themselves in the post-war power structure. They kept dominating Lebanese politics up into  the present – Christians, Druzes, Shiites, and Sunnis. As Muir writes, these same sectarian “factional leaders have milked the country dry. In the post-civil war reconstruction years of the 1990s, money gushed into Lebanon from donors, from Lebanese expatriates remitting to their families or stashing it in high-yielding banks, and from the regional patrons of the political barons. The banks lent the money to the Central Bank, which lent it to successive governments, which went on spending-sprees as the leaders jostled for their share of the proceeds and stuffed the bureaucracy with loyal followers.” The money that went to governments came from Lebanese depositors, from their savings and retirement accounts, which today’s government declined to honor its commitment to pay back the banks so they could pay their clients– the Lebanese people.

I lived part of my formative years during the pre-civil war era and recall many of the ills of today’s Lebanon’s body politic which are traceable to that period. However, corruption, political clientelism, patrimonialism, cronyism, and nepotism – just to mention a few of those ills – were not of the same high intensity as they are today. As cited by Michael D. Barbero in the Atlantic, out of 128 countries, Lebanon placed “96th for rule of law; 92nd for regulatory enforcement; 76th for constraints on government powers; 101st for absence of corruption, and 100th for impartial criminal justice,” which he calls “disgraceful.” Under normal conditions, these underdevelopment features are expected to fade and be replaced by new ideas and methods, including secularization, national identity, and high political participation. None of this has happened.

On the contrary, the same old ruling elites were joined by a new Christian-Shiite alignment to compete with in mismanaging the nation’s resources. This new group consisted of the supposed champions of political reform and change and a militia which justifies its huge armament stockpile to fight Israel, while in reality it has been fighting far from the Lebanese-Israeli borders – in Syria, Iraq, Yemen – and close to home, murdering more than a dozen of the leaders of its opposition, starting with the 2005 assassination of the late Prime Minister, Rafik al-Hariri. 

The new alignment between the Free Patriotic Front (EPM) and Hezbollah has evolved into a strong force, thanks to the latter’s guns, coming to dominate Lebanese politics, despite failing to insure a parliamentary majority in two consecutive elections in 2005 and 2009. Corruption and the propensity to destroy constitutional institutions were top of EPM’s agenda to guarantee the ascendancy to power of President Michel Aoun. With the tacit support of Hezbollah, the EPM developed a mechanism to disrupt cabinet formations and prevent presidential elections from taking place on time even at the cost of causing a constitutional vacuum. In return for Hezbollah's support of the EPM domestically, the supporters of Michel Aoun would provide cover for the party’s military interventions in Lebanon and abroad.

Because of this alignment, Hezbollah consolidated support among an important demographic group, the Christians. This support legitimized much of Hezbollah’s policies and allowed it to expand its influence in different sectors of government and, most recently, the economy and banking system. On the other hand, the EPM was enabled by Hezbollah and its parliamentary allies to increase control over the government by penetrating all bureaucratic agencies, civil and military. In short, it was a mutual exchange of benefits: Hezbollah embarked on military adventures unchecked by the major Christian constituency, while the EPM descended on a government bureaucracy without being scrutinized by its Shiite partner.

The daunting task of those analyzing solutions for the crisis, including immediate humanitarian assistance to prevent starvation, is to picture a post-crisis Lebanon. “Yes, the system could collapse. I am tense all the time. It’s not a question of bombs like we had before. I’m afraid of what will happen after the chaos. This time, I don’t know what the future holds. Nobody does. But surely it will not be the Lebanon you know,” according to a Lebanese banker, as cited by Muir.

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