Peru & Cuba
The finger of blame for the Beirut explosion is pointing at Lebanon’s corrupt and criminally negligent political leadership. Amid continuing protests, the government of prime minister Hassan Diab resigned on August 10, though ministers will stay on in a caretaker role until a new cabinet is formed.
The international community has pledged aid to Lebanon’s government in exchange for political reform. But this stance requires a reversal of the international community’s existing role in Lebanon – and its complicity in the survival of the regime.
Lebanon’s power-sharing system, which sustains sectarianism and thrives on corruption, is propped up by international powers. Rather than promote meaningful reform, countries such as France, the US and the UK have historically viewed power-sharing as a stabilising force.
Based on a 1943 National Pact, Lebanon’s power-sharing formula allocates political offices along sectarian lines, including between Christian, Druze, Sunni and Shia factions. This undermines meritocracy and encourages polarisation.
Still, power-sharing in Lebanon is not a reflection of ancient sectarian hatreds. It is largely the product of the French Mandate between 1923 and 1943, which cemented sectarianism in public life. So it was ironic that when the French president, Emmanuel Macron, arrived in Beirut in the aftermath of the explosions, he called for a new pact for Lebanon in the guise of a National Unity Government.
When Lebanese power-sharing was revised to end the civil war in 1989, international actors were again involved. As a reward for joining an anti-Iraqi coalition led by the US, the international community gave Syria the green light to act as Lebanon’s guardian.
Myths of stabilisation and resilience
Lebanon is inappropriately imagined as the Switzerland of the Middle East, a place where multiple religious groups coexist and a veneer of cosmopolitanism reigns. Any attempt to transform power-sharing is resisted by warlord elites. Reforms such as phasing out sectarian appointments have been frowned upon by political leaders on the basis that they would lead to the terrifying violence seen in neighbouring countries.
The international community often frames Lebanon’s political system as the lesser evil in the context of autocratic fortresses in the neighbourhood. Rather than helping the country move to end political sectarianism, as Lebanon’s post-war peace accord stipulates, power-sharing has become an invasive species, colonising the state.
In an attempt to shield itself from the blowback effects of the Arab Spring, the international community has shifted away from policies aimed at deepening democracy in the Middle East to those of pragmatic realism. Stabilisation rather than change is the goal.
Meanwhile, Lebanon has received more than a million displaced Syrians since the civil war began in 2011. While Lebanon initially adopted an open-border policy towards Syrians fleeing violence, it closed its borders in 2014, cracking down on the livelihoods and rights of displaced people. Yet the international community has lauded Lebanon’s so-called hospitality, portraying it as a pivotal actor in the international refugee regime.
Lebanese politicians leverage the state’s value as a refugee host, warning that any destabilisation of Lebanon would trigger waves of refugees to Europe. The EU has closely cooperated with Lebanon’s governing elite since 2012 to build resilience, in programmes aimed at empowering refugee and host communities.
But the EU’s resilience-building rhetoric conceals accumulated vulnerabilities, injustices and political abnormalities. In response, civil society activists and analysts have cautioned against the EU’s cooperation with Lebanon’s corrupt elite. The false allure of regional stabilisation only consolidates elite power, rather than addressing the needs of citizens and refugees.
Lebanon’s crises have multiplied in recent years. In 2015, a massive garbage crisis epitomised the decline of public services and rising corruption. Yet, in April 2018, the international community used the Cedre Conference to pledge more than US$11 billion to strengthen and develop the Lebanese state.
Back then, the Lebanese government presented “a vision for stabilisation, growth and employment”. In return, the international community called for a follow-up mechanism to track reforms as a condition to unlock pledged grants and loans. Yet, the international community’s call for reforms remained ineffectual and couched in vague terms – and the follow-up mechanism never materialised.
In October 2019, Lebanon’s political leaders faced unprecedented protests demanding the dismantling of sectarian institutions. International powers vowed not to funnel aid to the Lebanese government unless it embarked on radical reforms.
The August 4 blast, however, imposed new realities in the architecture of international aid to Lebanon. Transformed into a site for post-disaster restructuring, Lebanon needs urgent aid. On August 9, France co-hosted an international conference that pledged US$300 million for humanitarian relief and reconstruction.
A new chance
The international community must ensure that this aid does not prop up defunct institutions and inept sectarian leaders.
Myths of stabilisation and resilience-building during overlapping crises have double-edged consequences for Lebanon. By not engaging with the roots of dispossession and conflicts, international powers promote short-term versions of resilience, stability and humanitarian protection. This papers over dysfunctional institutions and deteriorating livelihoods.
Such recipes are counterproductive. Rather than encouraging citizen resilience, they consolidate the robustness of political leaders who feel empowered enough to tread on their citizens’ suffering and hopes.
Only the Lebanese can cast off their own warlords and kleptocrats through new elections and a homegrown political system that strengthens the rule of law and weakens the grip of patronage and sectarian identities on state institutions. Yet the international community can help – by refraining from bolstering and legitimising their rule.
The explosion that tore through Beirut on Tuesday August 4 was so strong that shockwaves were felt on the island of Cyprus, over 200 kilometres away. At least 135 people were killed and 5,000 injured in the blast. Such devastation would be difficult to deal with at the best of times but it hit the Lebanese capital in the midst of a severe economic crisis that has only been compounded by the COVID-19 pandemic.
Before the blast, Lebanon’s currency had plummeted to record lows, losing more than 80% of its value since October 2019. The Lebanese pound has been officially pegged to the US dollar since 1997 at the rate of L£1,500 to US$1, with the two currencies largely used interchangeably. But this exchange rate has long been untenable.
This is because the nation’s government debt levels have for years been among the highest in the world, as were current account deficits (the difference between a country’s imports of goods and services and exports). Lebanon produces little and depends heavily on imports, including most of its food. It was borrowing heavily to pay for these imports.
This would usually prompt capital to leave the country, making the value of the currency fall. For years, however, the country avoided this fate. Local banks were happy to lend to the government because they were receiving exorbitantly high interest rates. The fact that many politicians held stakes in the banks cemented this cosy relationship between government and finance. Meanwhile, the country’s large diaspora was happy to deposit US dollars they had earned elsewhere in Lebanese banks. Friendly Gulf governments also provided financial assistance.
Yet by 2016, even the country’s loyal diaspora started getting cold feet about depositing money back in Lebanon and relations with the Gulf grew frostier. Capital flows into Lebanon slowed down. To try and keep money flowing in, the central bank then engaged in complex borrowing arrangements with local banks which it described as “financial engineering” but critics have labelled a Ponzi scheme.
But economic confidence was not restored and by September 2019 the central bank could no longer stem the flow of money leaving the country. With capital flight in full swing, banks started rationing the amount of dollars that people could withdraw from their accounts. The prospect that Lebanese savers would be unable to access hard-earned dollars or that their Lebanese pounds would lose value led to rising panic.
To raise revenues and present a picture of greater fiscal probity, the government then proposed new taxes on tobacco, petrol and voice calls via messaging services like WhatsApp. This was the straw that broke the camel’s back. Thousands of people took to the streets to protest the tax along with wider issues of corruption, forcing the government to resign. But the currency plummeted as the new government under the next prime minister, Hassan Diab failed to develop a coherent strategy to tackle the country’s problems.
The collapse of the Lebanese pound means imports have become very expensive. Inflation is skyrocketing, causing unprecedented levels of economic hardship for Lebanese families. World Bank estimates from before coronavirus and the latest tragedy suggested poverty could rocket from a third to 50% of the population.
The collapse of Lebanon’s financial system is symptomatic of a wider failure of governance which goes back to the policies adopted after the end of the country’s civil war in 1990. Lebanon’s political class recruits itself from a narrow pool of families, many of whom have been in power for decades.
They claim to represent Lebanon’s many sects and government posts are shared according to a rigid formula based on the country’s religious communities. This system enables politicians to divide up economic spoils and enrich themselves – just as they did with the profits from banks they held stakes in.
Foreign powers from Iran and Saudi Arabia to the US and France have long indulged Lebanon’s leaders. They hoped that aid would gain them influence in this strategically important country.
The explosion of the port fits into the pattern of failed governance in Lebanon. Initial reports suggest that port officials were aware of the dangers posed by the store of ammonium nitrate that caused the explosion. Only an impartial investigation could uncover full culpability. The neglect and incompetence at the centre of this disaster are typical of the myriad failures replicated across the state.
Solutions may emerge as many Lebanese look beyond their failing state and corrupt politicians. The day after the explosion, Beirut’s streets were filled with the sound of glass being swept up as thousands of people worked together without much support from official agencies in sight.
But destruction is widespread. Dwellings are damaged within a six-mile radius and initial estimates suggest 300,000 are homeless. Hospitals that were already struggling to cope with the first wave of COVID-19 cases, are stretched beyond capacity.
There are concerns over food supplies as the national wheat silo was hit and Beirut’s port damaged, which will further curtail the government’s ability to import food. A humanitarian crisis would also affect Lebanon’s estimated 1.5 million Syrian refugees and 270,000 Palestinian refugees.
Various European and Arab governments have rushed emergency aid to Beirut for immediate recovery. A possible rescue package from the International Monetary Fund promises much needed funds but would also impose austerity and privatisation. The latest negotiations with the fund recently broke down over the inability of Lebanese politicians to present a united front.
The immediate future looks bleak and will likely see large-scale emigration. The explosion erodes what little trust citizens may still have had in their political class and long-term solutions require nothing short of fundamental political change.