On July 15, Lebanese Prime Minister designate Saad Hariri announcement he abandoned his efforts to form a government, sparking violent protests across the country.
Hariri’s farewell words? “May God save this country. “
Najib Mikati, one of the richest men in Lebanon, is now foreseen to occupy the post of Prime Minister. Mikati faces the daunting task of reforming a country that is going through the worst political and financial crisis in its history.
Implosion in Lebanon could create power vacuum that allows Iranian backing Hezbollah in the south, endangering critical US allies like Israel and Jordan.
What is happening in Lebanon?
Years of sectarian wrangling, corruption and mismanagement by Lebanese political elites have created a political stalemate that is pushing the country’s economy to the brink of collapse.
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Since 2019, the Lebanese economy has contracted by more than 20.3%; its currency has lost over 90 percent of its value against the US dollar and inflation has hit triple digits. With depleted foreign reserves and crushing debt, the government has little money to pay for the food, fuel, electricity and medicine it imports massively for its people. Power outages and gas shortages are now a daily occurrence and must be endured alongside food insecurity and rising rates of poverty.
The banking sector, the backbone of the Lebanese economy, is partly blame for the financial ruin of Lebanon. Since 2011, remittances have started to decline, but government spending has not. With few constraints, sectarian elites borrowed money from the Central Bank that the bank did not have. When anti-government protests erupted in 2019, the depots left Lebanon. To stop the mad rush of money transfers, banks have closed, triggering the current financial crisis.
Then, in 2020, the explosion in the Port of Beirut and COVID-19 made the situation worse.
An uncontrolled political oligarchy
Lebanon’s financial crisis is rooted in the actions of a entrenched and corrupt political elite who are unwilling to reform if that means handing over power and money. Reform is desperately needed, but it is unlikely to materialize as the reforms identified would undermine the very authority of the ruling class and limit its access to state coffers.
The appointment of Najib Mikati as prime minister should not lead to a change in the status quo. Even though he forms a government, Mikati is just an extension of the corrupt political class.
Mikati’s political career was propelled by his investments in telecommunications and Syrian patronage during the Lebanese civil war. He has held several ministerial posts and previously briefly served as prime minister in 2005 and again from 2011 to 2014. He was out of politics until Hariri’s resignation brought him back.
As a pro-Syrian politician with ties to Hezbollah and its allies, Mikati was an easy choice for President Michael Aoun, but he may just be a puppet for Hezbollah and its allies.
Over the years, Hezbollah has increased its hold on on the Lebanese government; it now occupies more than half of the 128 seats in Parliament and controls two ministries. To appease his supporters, Mikati could grant Hezbollah and its allies control of other key government ministries, further dividing Sunnis and tilting the prime minister’s office towards a pro-Syrian Hezbollah agenda.
The Lebanese Armed Forces may be the only state institution left to counteract the destabilizing influence of Hezbollah, but it faces its own challenges. Military personnel, including high-level officers, are leaving force at alarming rates due to low wages and morale. This is troubling given the escalating tensions in the border town of Tripoli.
A time bomb in Tripoli
Tripoli sums up the irony of the Lebanese system: it is the poorest city in Lebanon, but it is also home to several business tycoons, billionaires and former prime ministers, including Najib Mikati.
Just 40 miles from the Syrian border, Tripoli is no stranger to instability. At the start of the Syrian civil war, the city experienced clashes between pro-Assad and anti-Assad Lebanese forces. These clashes arguably led to Mikati’s resignation from his post as prime minister in 2013.
Although the border has been secured, the Lebanese government has since neglected Tripoli. Almost 70 percent of its inhabitants live in poverty. Unemployment exceeds 60%.
Unsurprisingly, Tripoli has therefore been the epicenter of anti-government protests that have recently turned violent. In end of June, groups of armed civilians took to the streets, firing shots in the air and attempting to destroy a number of public buildings due to fuel shortages. Army units were deployed to ease tensions, but the situation could escalate at any time.
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For now, the Lebanese army is preventing Tripoli and the rest of the country from dividing into different factions. If violence escalates against military personnel in Tripoli and the armed forces collapse, a security vacuum could leave the Lebanese border again exposed to cross-border spillovers from Syria.
Worse yet, Hezbollah could become the country’s only military force – a development that would not bode well for the United States and its allies in the region. Hezbollah has clearly expressed its hatred against Israel and would use the chaos to further strengthen its position and attack its enemies.
Lebanon is a time bomb in a particularly unstable neighborhood. US policy has helped strengthen state institutions like the Lebanese Armed Forces to deter bad actors, but the situation may soon get out of hand. Top-down economic reform is the only way forward, but it must secure elite buy-in to be successful. Prime Minister-designate Najib Mikati is a pillar of the establishment that has grown rich at the expense of Lebanon. Therefore, it is unlikely to be part of the solution to Lebanon’s problems as it addresses the difficult challenges ahead.