For almost 18 months, Lebanon has been beset by a series of disjointed and severe crises: economic depression, street protests, the unstoppable coronavirus and an explosion that damaged half of Beirut.

For many states, these conditions would lead to urgent action. For Lebanon, the crises have meant paralysis. Since the resignation of Prime Minister Saad Hariri in October 2019, two prime ministers have come and gone without being able to tackle the problems. Hariri was reappointed last October, and has not yet forged a working cabinet.

 

The costs of rolling disasters

The months since Hariri’s 2019 resignation have left Lebanon in tatters. The value of the Lebanese Pound plunged 80 percent, while inflation rose to 60 percent. Purchases of dollars, needed to finance imports, were restricted. Businesses closed and layoffs were rampant. The country’s unemployment rate is estimated to be as high as 30 percent.

Stores in shopping districts closed their shutters. Emigration surged, including among medical personnel desperately needed to fight the coronavirus outbreak.

On August 4, 2020, a massive explosion at the Beirut port devastated the city and hopes for change. Windows shattered and facades collapsed across the city. At least 200 people were killed and 6,500 wounded. About 300,000 people became homeless and 200,000 homes were destroyed.

The World Bank, in an assessment made following the explosion, placed the damage from the blast at $4.6bn, with an additional $2.9bn to $3.5bn in related economic losses. In response, the government sought $20bn in financial aid – half in loans from the International Monetary Fund (IMF), the other half from funds pledged by countries at a 2018 donors conference. 

Aid to alleviate the damage is dependent on a series of political reforms Lebanese has been unable to meet. Political reforms include creating an independent government of experts, that would help resolve the economic crisis – essentially a complete overhaul of the current sectarian-based political system.

 

Domestic political obstacles

The mass anti-government protests in October 2019 that brought Prime Minister Saad Hariri down called for a complete overhaul of the sectarian-based political system which had kept the same parties in power since the end of the devastating 1975-1990 Civil War and left the country in bankruptcy. Notably, the protestors wanted a non-partisan, technocratic government to resolve the economic crisis.

Discontent over government mismanagement and corruption had been brewing for years. Lebanon’s delicate power-sharing system had been based doling out offices among sectarian political parties, notably Christian Maronites, Sunni Muslims and Shia Muslims, along with Druze and other minorities. Elected parliamentary seats are guaranteed to each sect of the population. The country’s president is always Maronite Christian, the prime minister a Sunni Muslim and the parliamentary speaker a Shiite. Ethnic-religious affiliations rather than civic virtue characterized a vast bureaucracy.

In December 2019, Hassan Diab, an ex-education minister, replaced Hariri, but it soon became clear that Diab and his Cabinet could not provide swift solutions. Diab had been put in place by Hezbollah and allies in the Lebanese parliament, among them Speaker Nabih Berri’s AMAL Movement and President Michel Aoun’s the Free Patriotic Movement (FPM).

Diab pledged to form a government of “independent experts,” protestors accused him of being a front for a Hezbollah government. Other parties, including Hariri’s, attacked him from the sidelines.

Before Diab got anywhere close to tackling the economic problems, the port blast sank his ineffective government. The event was a metaphor for years of government mismanagement. About 2,750 tons of confiscated ammonium nitrate had been stored at an unsecured warehouse the port since 2013. The highly-flammable chemical compound had reportedly been unloaded from a Moldovan-flagged cargo ship impounded at the port in 2013 and kept under lose control.

On August 5, the Lebanese government initiated an administrative, though not criminal, inquiry. In December, according to Lebanon’s state-run National News Agency, a Lebanese judge charged Diab, and three former ministers with carelessness and negligence.

Diab resigned. Before French President Emmanuel Macron’s second visit to Lebanon, who played mediator between foreign donors and the Lebanese government, Mustapha Adib was appointed. Macron also proposed a roadmap for reform designed to create a government with broad backing and not just Hezbollah and its allies. The plan decreed a strict two-week timetable for Adib to form a cabinet.

Macron’s program listed four sectors in need of immediate attention: humanitarian aid and a response to the COVID-19 pandemic; physical reconstruction from the blast; political and economic reforms; and early parliamentary elections. It also called for the immediate resumption of talks with the IMF for loans and swift moves to fight graft.

The two-week deadline passed without formation of a non-sectarian cabinet. Hezbollah and allies were forthright in opposing a government of experts. Adib had pushed to rotate the heads of the Finance, Defense, Interior and Foreign ministries among various Lebanese parties. Instead, Shiite Parliament Speaker Nabih Berri, who leads the Shiite Amal Movement and is an ally of Hezbollah, insisted that the Finance Ministry be held by a Shiite affiliated with the Hezbollah-Amal bloc.

The finance ministry is the traditional "fourth signature” of Lebanese politics, in which major programs must be countersigned by the president, the prime minister and other directly relevant ministers – plus the Finance Minister, whose signature is relevant to most schemes. That is especially true with expectations of looming political reform and a flood of relief money.

Meanwhile, other opposing political groups, including Hariri’s Future Movement, the Druze Progressive Socialist Party, and the Maronite Lebanese Forces, declined to participate in the new government.

In September, 2020, Adib stepped down. Macron blamed the failure on “collective betrayal” by Lebanon’s political parties.

In short, after more than a year, reforms had gone nowhere, stability was elusive. Lebanon turned to a familiar face: Saad Hariri, driven out of power as a representative of a corrupt elite, was tasked with forming a new cabinet. Three months later, he has yet to cobble one together.

 

The international conundrum

The internal wrangling was only part of the problem. Lebanon has long been a country beset by foreign intervention: invasions and occupations by both Israel and Syria; US demands for reform and moves to strip Hezbollah of its militia; and Iran’s sponsorship and Hezbollah, whose militia became powerful enough not only to enforce de facto autonomy in parts of Lebanon but also intervene militarily in Syria’s civil war on behalf of the government of Bashar al-Assad.

Both France and the United States weighed into the Lebanese crisis and stressed the urgency to implement reforms, but they split on one key issue: Hezbollah’s role in decision making. France has long seen itself as a protector of Lebanon. Washington’s leverage lies both in its influence over the IMF, where it is a major shareholder, and as its role as a major donor to Lebanon’s economy and military. According to the State Department, the US has provided more than $4 billion in total foreign aid to Lebanon; since 2010, it has provided more than $2 billion for economic support and security needs.

Macron was willing to give Hezbollah, which it considered an integral part of the Lebanese polity, a say in cabinet creation and any reform program. US officials considers Hezbollah an Iranian transplant and wanted it sidelined. Washington has long considered Hezbollah a terrorist organization.

The Trump Administration had withdrawn from an international deal to curb Iran’s nuclear program. It objected both to the terms of the agreement but also because it ignored Iran’s sponsorship of militias in Iraq, Syria, Yemen and Lebanon. In effect, Trump’s policy placed Lebanon in the thick of American tensions with Tehran.

The Trump Administration assault on Hezbollah’s influence continued even after November’s US presidential elections, which is bringing on a new American administration. Trump administration sanctioned Gebran Bassil, Aoun’s son in law, Free Patriotic Movement head, and one Hezbollah’s key allies, for alleged corruption.

In effect, Lebanon’s internal deadlock was tightly linked to an equally intractable foreign impasse.

 

What can be done

The dual stalemates inside Lebanon and abroad exacerbate already dire condition. In the absence of an IMF bailout and other aid, Lebanese banks can’t operate fully, and large numbers of Lebanese as well as millions of Syrian and the Palestinian refugee populations, are consigned to poverty and even hunger. As Lebanese state authority erodes, turf wars may break out between mafia-like political groups in some areas and conflicts between criminal networks elsewhere. Legal and illegal migration is increasing, creating a significant brain drain.

To untie the Gordian Knot requires compromise by both the US and Hezbollah.

Curiously, the less difficult compromise may be an American one. A new administration under former Democratic Vice President Joe Biden is set to take office January 20. Biden was part of an administration under President Barack Obama that tolerated Hezbollah as an integral part of Lebanese politics, despite Tehran’s sponsorship. Obama focused on getting a nuclear agreement with Iran. Proxy militias and Iranian intervention in the Middle East was set aside.

Biden could justify helping Lebanon on humanitarian grounds while it focused on Iran, either by reviving the nuclear deal or rejiggering it. He could also justify aid on humanitarian grounds while leaving the issue of reform to Macron, all in the name of cooperating with his NATO ally.

Hezbollah would have to find some way of ceding influence. It could give in on demanding control of the Finance Ministry—knowing full well that its own popularity among Shiites and Lebanon’s post-civil war habit of avoiding open conflict with its powerful militia would preclude any exclusion of Hezbollah from funds or input into reform. It can also count on the likelihood that other parties, while paying lip service to the virtues of non-sectarian politics, would be hard pressed to support fundamental change that undermines their or Hezbollah’s position.

Of course, such face-saving measures by Hezbollah and its opponents would leave unresolved the concerns of the millions of 2019 protestors: the desire to really change the thrust of Lebanese politics from sectarian to civic, national concerns. That may be a sacrifice the weary and battered Lebanese may be willing—or compelled to accept.