U.S. sanctions on Lebanon have caused Lebanese nationals and residents as well as foreign investors to withdraw or hold off from placing money in Lebanon. The discourse followed by those in America who impose these sanctions is that they act as pressure to return assets stolen by various politicians as well as stopping the flow of funds to the Hezbollah movement. It is worth noting that it could be far more beneficial if Western bodies such as the European Union provided more constructive action such as sanctioning Lebanese politicians who have been avoiding the responsibility of ensuring a new fully working government is formed.
A major concern in Lebanon is the persistent political tension and the internal divisions that have delayed cabinet appointments since Prime Minister Hassan Diab decided to step down in 2020. Western sanctions placed on Lebanon would likely do more good than bad if they were used to encourage the process of assembling a new government sooner. Current foreign intervention or pressure is doing nothing to ameliorate Lebanon’s misery, which stems from the divisions existing in both the economic and political climate.
THE ECONOMIC CRISIS
Since 1997 the dollarised financial system of Lebanon has assured agencies and bodies such as foreign investors of Lebanon’s economic stability. The government’s decision to ration access to the U.S. dollar in 2019 increased fears and tensions within the already tumultuous society. The government has since been offering shockingly high interest rates for new deposits of U.S. dollars. Arguably one of the economic turning points was the 2018 election. When the nation was reaching its breaking point, economically, faced with the immediate need for cutting back on the nation’s expenses, Lebanese politicians began to focus on expenditure on the public sector pay rise before the 2018 elections.
However, the policy which particularly angered the young Lebanese and acted as a trigger to the protests, was the government’s introduction of a plan to tax WhatsApp calls in October of 2018. WhatsApp being the main communication channel which Lebanese people use to keep in touch with friends and family abroad. This, coupled with the low tax plans favouring the rich, ensured that protests ensued. Banks shut down because they were no longer being able to pay enough dollars to depositors, the currency collapsed, and finally there was the Beirut explosion in 2020 which claimed lives and caused billions of dollars in damages.
Protesters have persistently claimed that the political and economic elite have been exploiting resources and the capital of the state for their own political and financial benefit. Furthermore, the investigation as to what was behind the Beirut explosion in 2020 was limited and citizens were left with bitter sentiments regarding the government’s repeated failure to act on anything other than what was in their own personal, and elite, interests. As a result of the Beirut explosion and the damaging expenses associated with it, the government under Prime Minister Hassan Diab decided to step down. Lebanon has been without a fully functional and working government since the latter half of 2020, leaving citizens feeling abandoned and fearful of what is to come.
POLITICAL DIVISIONS
Hezbollah has gained widespread support with both the Shia and non-Shia populations because of its show of power in resistance to Israel and its ability to secure prominent Christian allies. Hezbollah has even formed an unlikely alliance with Lebanon’s Christian President Michel Aoun. The previous government under Hassan Diab, which was closely affiliated with Hezbollah, relied on the group’s nomination and support. However, the resignation of Diab’s government after the Beirut blast in August of 2020 has led to a weakening in power of Hezbollah. This is mainly attributed to the fact that the man charged with forming the next government is former Premier Saad El-Din Rafik Al-Hariri, the leader and founder of the Future Movement (FM) — a Sunni political party.
The greatest political tension currently boiling within Lebanon is now between President Aoun and prime minister-designate, Saad Hariri. On March 22nd, Hariri met with President Aoun to provide the President with a list of potential ministers. Hariri supposedly left the meeting claiming that the president was insisting on veto power over the formation of the government, by which he and Gebran Bassil, his son-in-law and the leader of the Free Patriotic Movement (FPM), would have a degree of power over the cabinet’s agenda. Thereafter in May of 2021, President Aoun stated he believed the prime-minister designate to be incapable of forming an appropriate cabinet to relieve the country of its continuously deepening financial crisis. Hariri and party has since responded and implied that President Aoun has been working in the interests of the FPM and Bassil’s “presidential aspirations“, despite Lebanon’s sectarian power sharing structure.
This political tension requires immediate attention as without a fully functioning government, there is little hope for the much needed reform to help relieve the country of its mounting economic crisis. Perhaps, considering the complex mixture of Lebanon’s growing political and economic misery, decisive action may only be catalysed by Western sanctions being placed on the relevant political actors.
Image: “Flares and flags in Beirut” by NicolasGaron, CC BY-SA 4.0 via Wikimedia Commons
