Beirut Port Blast: Why a Domestic Investigation Won’t Bring Justice

It’s been almost one year since 2,750 tons of ammonium nitrate stored in the Port of Beirut caught fire and caused one of the largest non-nuclear explosions in history. The blast cost the lives of 217 people, injured more than 6,000, and forcibly displaced over 300,000.

The chemicals were stored haphazardly in the capital’s port for six years and Lebanon officials knew about it. This government malfeasance cost up to $4.6 billion in damages with estimates of losses in financial flows as high as $3.5 billion according to the World Bank. It destroyed the port’s wheat silos, surrounding businesses, residential neighborhoods, and damaged major hospitals and structures in the area. One year later, the culprits have yet to be identified and held accountable. Why?

An inherently flawed domestic investigation

Even a cursory review of Lebanon’s judicial system reveals a vulnerable structure susceptible to political interference. Take for example the State Council Bureau, which is meant to act as a safeguard for judicial independence. Its seven judges are essentially handpicked by the executive branch. And though Bureau members are not supposed to be selected by sectarian affiliation, legal advocates report selections are often based on quota-sharing deals among sectarian leaders. Further, Bureau members are all judges, whereas international standards dictate a diverse membership that should include legislators, lawyers, and academics.

But this reflects just one of the long-term systemic issues that needs reform to adequately administer justice in Lebanon. For the port blast investigation, the government assigned the case to the Judicial Council, which is an exceptional court, and legal advocates in Lebanon have identified systemic flaws within this process as well. First, there is no appeals process through this court, so any decisions made by the investigating judge cannot be appealed. Further, and following the theme of Lebanon’s judiciary appointments discussed above, the Judicial Council does not maintain judiciary independence from the executive branch. Its five members are appointed by the government following the recommendations of the Minister of Justice with approval by the Supreme Judicial Council (whose eight out of ten members are also appointed by the executive branch).

Beyond these systemic flaws, Judge Fadi Sawan and now Judge Tarek Bitar have faced a host of challenges in their efforts to lead the blast investigation. Judge Sawan, who was originally assigned to lead the investigation last year, was removed from the case after two former ministers that Sawan had previously charged filed a complaint alleging the judge could not maintain neutrality. The Court of Cassation dismissed him and concurred that Sawan could not be impartial because his own home was damaged in the blast.

And since his appointment following Sawan’s removal, Judge Tarek Bitar has faced his own barriers. When earlier this month Bitar requested permission to investigate MPs and high-level security officials, Interior Minister Mohammad Fahmi denied the request. Lebanon’s parliament is currently stalled on a decision on whether to lift the immunities given to officials. And recently, a parliamentary motion was initiated that would open a parallel investigation to Judge Bitar’s. It called for Lebanese officials to be tried by the Supreme Council instead of through the Judicial Council which would mean facing the eight out of ten politically appointed judges mentioned previously. Over 50 MPs initially signed the motion, but pressure from legal activists and the media resulted in dozens of MPs withdrawing their support, leaving only 24 signees. Sixty-one signatures are needed for it to pass.

So when assessing the domestic investigation’s validity, the question to ask is not really if Bitar is a fair judge, but whether or not he is able to conduct a fair investigation within the constraints of the judicial system and pressure from Lebanon’s political elite.

Are there other options?

In the short-term, Lebanon needs an international investigation to take over the Beirut Port blast case. Lebanese citizens, local civil society groups, and international NGOs alike have been calling for this. A coalition of over 50 Lebanese and international organizations wrote to the UN Human Rights Council requesting an independent investigative mission that would “identify human rights violations arising from the Lebanese state’s failure to protect the right to life.”

Victims and families of victims deserve justice and accountability. The culprits of these crimes that cost Lebanese lives and billions of dollars need to be held accountable. If an international investigation is refused, then immunities given to Lebanese authorities must be lifted to give Bitar a chance at conducting a full domestic investigation, though, as noted, political interference will likely infect the process.

In the long-term, Lebanon’s judiciary needs systemic reform to ensure its independence. Some of these changes are already written into law but have not been implemented. Taking Lebanon’s judiciary out of the hands of Lebanon’s executive branch is a necessary step to diminish the impact of sectarian power plays that have corrupted and diminished its credibility.

Cassia King is a master’s student at Johns Hopkins School of Advanced International Studies with a concentration in Conflict Management. She is ATFL’s media coordinator and summer research associate.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

Drowning in Corruption, Lebanon’s Water Supply Dribbles to a Halt

“Generator Nabatiye pumping station” by Julien Harneis is licensed under CC BY-SA 2.0

According to the UN Children’s Fund (UNICEF), “More than four million people, including one million refugees, are at immediate risk of losing access to safe water in Lebanon. With the rapidly escalating economic crisis, shortages of funding, fuel, and supplies such as chlorine and spare parts … most water pumping will gradually cease across the country in the next four to six weeks.”

No, you did read that right. Lebanon, which was once a key water resource country in the Fertile Crescent, is projected to run out of potable water in the coming hot, humid summer months. Is it due to climate change? NO. Like every current crisis in Lebanon, it’s man-made.

Yukie Mokuo, UNICEF Representative in Lebanon, commented, “The water sector is being squeezed to destruction by the current economic crisis in Lebanon, unable to function due to the dollarized maintenance costs, water loss caused by non-revenue water, the parallel collapse of the power grid, and the threat of rising fuel costs.”

What that means is that, like everything else in Lebanon, safe water will shortly be beyond the means of 71% of the country’s residents.

How did this become an economic crisis? The availability of water for 1.7 million residents dropped in 2020 by 80% from 43.6 to 9 gallons of potable water a day. This has resulted in an increase of 35% in the price of private sector bulk water supplies, while the cost of bottled water has doubled.

And where does the blame lay? There are no dollars to buy chlorine or spare parts for the municipal water systems – suppliers insist on being paid in real money, not Lebanese lira. Hard to blame them.

Then there are the intermittent power supplies and blackouts interrupting the treatment, pumping, and distribution of water. That’s the government’s responsibility since it controls contracting and maintenance of the public water supply.

And, about 40% of the safe water supply is wasted through faulty, corroded pipes and water being illegally diverted. Bad luck maybe, but more likely negligence on the part of the municipal and regional water authorities for ignoring or avoiding these issues for the past 20 years. These jobs are the patrimony of political parties, and accountability is not enforced lest the dons lose the votes of the employees and their families.

The report points out that “UNICEF needs US $40 million a year to keep the water flowing to over four million people across the country – by securing the minimum levels of fuel, chlorine, spare parts, and maintenance required to keep critical systems operational – and safeguarding access and operation of the public water systems.”

So, there we have it. Will 40 of Lebanon’s million/billionaires each please transfer $1 million to UNICEF, which is not a Lebanese entity, to enable UNICEF to carry out its commitment “to support, particularly as the global pandemic evolves, to ensure that the most basic right to clean water is met for children and families at this critical time for Lebanon?”

We will thank you and toast you with safe Lebanese water the next time we see you.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

SDRs: For the People or for the Government

The latest financial controversy in Lebanon and many other countries is what to do with the upcoming disbursements of Special Drawing Rights (SDRs) from the International Monetary Fund (IMF). According to the IMF, the SDR is an artificial currency based on a basket of five currencies: the US dollar, Japanese yen, Chinese yuan, the euro, and the British pound. The purpose of SDR allocation is to provide liquidity to member states as well as supplement members’ official reserves. It is an asset belonging to the country that is being held by the IMF on its behalf. So it is not a loan or a grant. Countries that receive SDRs can exchange them for hard currencies with other IMF members. This is typically done on a voluntary basis at a very low exchange rate.

Samir El Daher, a prominent Lebanese economist formerly at the World Bank, remarked, ”Drawing on Lebanon’s SDR reserves at the IMF, be it for humanitarian assistance or currency stabilization provides a mere short-term relief to a population under duress…it will not address the entrenched economic and financial problems in the absence of the necessary sweeping monetary, fiscal, and structural reforms within a credible macro-economic framework.”

It has been mentioned that the Lebanese government is considering the use of the SDR funds to partially offset the costs of the new ration card passed by Parliament to provide relief to some 500,000 Lebanese families to enable them to make purchases at retail outlets. Stuck in limbo is the World Bank allocation of some $246 million for cash cards. Parliament has stalled on that program over disagreements with the World Bank over transparency of identifying beneficiaries and monitoring distribution and impact.

Unfortunately, this may be the latest political hedge by the Parliament to avoid responsibility for fiscal reform. After passing the legislation, Speaker Nabih Berri said that “It is now up to the country’s caretaker Cabinet to identify the program’s beneficiaries and secure funding. Parliament is bound to discuss and approve the ration card bill.… As for the card’s financing and payment mechanisms, it remains the government’s responsibility rather than Parliament’s.”

So the government is looking to the SDRs as a less painful means of paying for the program, even though it is short term. Another option, in fact the original intention of the SDRs, is to strengthen the recipient country’s currency reserves through the injection of the SDR funds. The SDR is a national asset held by the IMF for the country as it is made up of the accumulated contributions of the country to the IMF. Thus, the IMF cannot set conditions on the use of the SDRs. It can only work with the recipient country’s agent, be it a central bank, a ministry, or an agency, to record the transfer of the funds. In order for the SDRs to become cash, Lebanon must find a country that has sufficient liquidity to buy Lebanon’s SDRs.

Neither the funding of ration cards nor cash card are remedies for the wreck that is Lebanon’s economy. If these card programs are implemented, they simply delay the need for reforms that will then come at a higher price. Per economist El Daher: “Delaying the inevitability of structural adjustments in using ad-hoc, opportunistic means, such as the SDRs, depletes in the process scarce foreign assets, and only adds to the suffering of the people of Lebanon, while increasing the costs of reform and lengthening the period of recovery. Focusing on the short term and ignoring the long term consequences brought us to the current disastrous state of economic collapse.”

While it is attractive to use the SDRs to alleviate the humanitarian needs of the Lebanese, it does not excuse the caretaker government or parliament from taking responsibility for economic reforms. This appears to be a calculated move by politicians to gain traction in the upcoming elections by rewarding their constituents with cash cards purchased at the cost of the country’s longer term economic stability and financial integrity. They are literally holding the cards at this point and the Lebanese people will only really win by changing the game in the spring elections.

Thanks to ATFL media coordinator Cassia King for providing research for this blog.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

Hiding in Plain View – No Solutions in Lebanon

My mind is wandering a bit as I begin to write this blog. I wanted to focus on the respect deficit observable among elites in Lebanon. The notion of respect for others, let alone self-respect, does not appear to be in their calculus. I don’t need to recite the economic, humanitarian, societal, and psychological consequences of the country’s failure. It’s obvious in how the families of the victims of the August 4 explosion are being treated as well as the continued refusal of leaders to step aside and repair the damage to the economy and the banking system.

There are many culprits. From officials to economic elites, from militia members to the mafia and thugs that abuse human and civil rights with impunity, knowing that they are beyond the law, such as it is in Lebanon. The latest drama is playing out in many scenarios but I want to focus on three: the port explosion investigation, the resignation of Saad Hariri as PM designate, and the alleged Hezbollah missile storage facilities near a school in the South.

In a nod to the victims’ families who have been demonstrating for several weeks against immunity for political figures called by the investigation, President Aoun declared August 4 a national day of mourning as if that would be sufficient to mollify the families and their friends. The official decree marking the anniversary is expected to clear Parliament shortly. Sadly, there have been scuffles between the demonstrators seeking to have the immunity lifted and security forces. General Abbas Ibrahim, the Director of General Security, has even volunteered to testify but is being restrained by the government.

Even Hariri, as he exited the shaky stage of his not-to-happen comeback, noted in an interview that an international tribunal was needed to pursue the Beirut Port investigation as the government was not to be forthcoming. His remarks support a claim by a former senior security official who told ATFL that the judge overseeing the investigation had the documents that would clearly point to those political forces, local and regional, that make the explosions inevitable. Even he was sanguine about Judge Bitar’s mission to bring the information to light and the culprits named and shamed.

What will happen now with the formation of a government seems even more challenging. None of the parties will step back from their maximalist demands for retaining control of certain ministries and the ability to veto proposed legislation and actions. The next step is for President Aoun to consult Parliament and the Council of Ministers (actually Nabih Berri, Speaker of the Parliament who wields the most power of the three main leaders) and nominate an acceptable Sunni candidate. There is always a list of wannabe Prime Ministers despite the cesspool that is Lebanese politics. Just ask Caretaker Prime Minister Diab if he would do it again. I can already anticipate his reply. But there are those in the Sunni community who are anti-Saad Hariri and likely acceptable to Aoun and Berri, particularly given the pressure being exerted by the international community to install a reformist government to move ahead with changes need to secure badly needed funding.

While all of these internal gyrations are going on, Israel felt it needed to remind the Lebanese how volatile the security situation has become due to what it claims are Hezbollah missile storage facilities in civilian areas, in this case, near a school in Abba in the Nabatieh district. This is the beginning of a campaign by the IDF to both publically identify likely targets if there is a conflict, and challenge the LAF and UNIFIL to take steps to verify the claims as called for in the UN mandate, which is due for renewal in August. Coincidence? Not likely. It is an opportunity for the new Israeli government to reassert its basic position of defending Israel by extracting severe repercussions against perceived threats. And put pressure on the UN Security Council.

Finally, I want to close with the statement by US Secretary of State Antony Blinken regarding Hariri’s resignation.

Resignation of Lebanese Prime Minister-designate Saad Hariri
Today’s announcement that Saad Hariri is resigning as Prime Minister-designate is yet another disappointing development for the Lebanese people.

It is critical that a government committed and able to implement priority reforms be formed now. The government must also start preparing for the 2022 parliamentary elections, which should be held on-time and conducted in a free and fair manner.

Lebanon’s political class has squandered the last nine months. The Lebanese economy is in free-fall, and the current government is not providing basic services in a reliable fashion. Leaders in Beirut must urgently put aside partisan differences and form a government that serves the Lebanese people. That is what the people of Lebanon desperately need.

No further comment needed.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

LAF – A Great Investment for the US

At a time when people are questioning what US interests were secured for the $820+ billion spent in military costs in Afghanistan, not counting deaths, casualties, and PTSD after effects, there are still those on the Hill and in think tanks who challenge the $2+ billion the US has spent in support of the LAF since 2010. The Taliban will soon overrun what little resistance the Afghan government can stand up; while in Lebanon, the LAF has demonstrated time and again that they are among the most well-prepared and disciplined forces in the region.

With the one year anniversary of the Beirut Port explosions nearing, the LAF is once again demonstrating its intention to continue to support Lebanon’s sovereignty, despite the negligence of its political leadership. And their integrity is drawing positive responses and support for the troops and their families from countries as diverse as France, Qatar, China, and Egypt. From foodstuffs to vehicles and fuel, the LAF is hoping that these last minute infusions of support will enable it to maintain readiness and operational capability in the growing uncertainty.

With caretaker Prime Minister Diab warning that Lebanon is “days away” from an “impending social explosion,” the LAF is even more challenged to take actions that both prevent chaos and protect the rights of the protestors – a very tough proposition. In the meantime, the LAF is hosting the US Central Command in cooperation with the Defense Threat Reduction Agency to assess the sea and land border capabilities. Since the LAF oversees both the navy and the army, this will be an extensive review, taking two weeks of site visits, discussions, exercises, and planning. It could not be more timely.

A recent news story in the Washington Post examined the difficulties faced in blocking smuggling along the eastern and northern borders with Syria. Many goods until now, including fuel, are subsidized in Lebanon. Smugglers buy them at the lower prices and transport their valuable cargo to Syria through the porous and often un-demarcated border where trails are hard to detect and easy to shift. Even though the UK and US have supported building a series of observation posts along the eastern border, command of the terrain and ability to respond quickly is undermined by limited supplies of food and the availability of troops.

Given the extensive economic paralysis of Syria’s economy, it is no wonder that Syrians are desperate for Lebanese goods although the bulk of the smuggling is controlled by cartels that sell the good across Africa and the Gulf. Gasoline, however, is in high demand in Syria, as it is in Lebanon, and is a very lucrative trade on both sides of the border. There was even a video circulating where newlyweds received a large jug of gasoline as a wedding present.

The LAF has also responded to the civil unrest at gas stations where gunfire and fist fights are occurring with greater frequency. Extensive media coverage these past few weeks have shown lines of six or more hours to get only a third of a tank, bringing whatever economic activity is left to a standstill. Many stations have closed and there have been fatalities as an outcome of the lack of fuel. And it’s just not cars.

In Tripoli, the situation is most dire and unsettled as homeowners cannot afford diesel fuel for their generators to power their homes. Twice in the past two weeks, the LAF has donated fuel to homeowners in the poorest neighborhoods and Lebanese Armed Forces (LAF) Commander General Joseph Aoun visited Tripoli to show solidarity with its people. “Your pain is our pain,” he said and warned of serious repercussions to anyone who harms the city’s security.

So to those who would punish the LAF for the spinelessness of the political leadership, I recommend that they take their complaints elsewhere. Then contemplate what would happen without the LAF…Syrian and Lebanese refugees fleeing to Europe, the likelihood of the Syrian civil war engulfing Lebanon, the resurrection of ISIS and al Qaeda, and other consequences that make the Taliban in Afghanistan a remote and diminished threat.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

An Appeal from Lebanon – Help Save the Health System as it Nears Collapse

Over the past month, as the lira continued to devaluate and the coming end of subsidies and government funds erodes the public and private health sector, the LEBANON RELIEF PROJECT has received numerous requests for supplies and equipment to save and rebuild lives. Here at ATFL, we are providing this information to you to appeal to your generosity once again to HELP LEBANON HEAL.

Here are some of the more poignant notes we have received. The first is from a Lebanese-American doctor who has been very active in relief efforts.

Reading daily stories of worsening medical conditions in Lebanon including reports from my colleagues at the once prominent medical centers in Lebanon of routine cases that go untreated, and recourse to closing down hospital wards despite increased demand for care is simply revolting. As a nephrologist, the most recent report of dialysis shortage and resulting certain slow miserable death of about 10,000 dialysis dependent adults and children goes beyond mere revolt: this no different from any crime against humanity, and should be treated as such by the world. We physicians have taken the oath to preserve a sacred life, no matter whose it is. These few remaining specialists in Lebanon are asked to save lives with their hands
tied behind their backs.

Kidney failure death is slow, bitter, and certain, yet completely preventable. We cannot watch in silence as these crimes being committed against helpless patients who have no other recourse continues. Helping these patients is an immediate need, otherwise it’s like watching a hostage- taker eliminate his hostages one at a time.

And another cri du coeur…

Dear Expatriates…
Please keep Lebanon in your hearts and minds. Lebanon is in deep pain and suffering.

We urge the United Nations and the friends of Lebanon to remove all the selfish, corrupt politicians. And give us back a little dignity! Where are the basic human rights that you stand for in the world? Who will help us avoid the total collapse of the health center system? The list of needs is endless and we are on the brink of collapse. Can we really wait until the elections in 2022 with people starving, health professionals leaving, communities fighting each other over medicine and bread? What good are elections in 2022 with the ballot boxes surrounding by dying people and their families? Don’t you think we have suffered enough?!

Finally, here’s a detailed description of the systemic failure of health care in the country provided by an NGO working throughout the country.

I am writing this email to gently refocus and redirect your kind attention to the current situation at our beloved country Lebanon. As you all know, with your past help, we made a difference, but I want to frankly let you know that our help today, tomorrow, and for a few months thereafter coupled with sustainable support remain badly needed as much as before, if not much more.
Our on the ground situation is dire and will be more chaotic. With the constant increase of the exchange rate to the US dollar and the eventual lifting of subsidies, pharmacies and
bakeries supplying basic medications and bread will close because of hyperinflation and lack of inventory.

Healthcare, social welfare and food security are central to the foundation of any society. Our government and civil systems are failing to provide our fellow citizens with their respective minimal needs and that will lead to more chaos and, God forbid, civil obedience. Please, let us put our hands together again to continue providing medications and other necessary items to help alleviate the sufferings of these innocent men and women living within this maze run by uncaring leaders.

Thanks to the Center for Arab American Philanthropy, the Lebanon Relief Project aggregates 100% of your donation with others and provides funding to well-respected, honest, and dynamic NGOs and community organizations working to help all Lebanese throughout the country.

Donate now at this link or contact LRP at its website www.lebanonreliefproject.com.

If you have medical supplies, equipment, or companies that can help in this most critical hour of need, reach out at rashalbaz@gmail.com , the volunteer co-director of LRP.

Lebanon: The staying power of the ruling caste, and the stalled “WhatsApp revolution*”

In the eye of the storm, Lebanon is in the midst of the most acute social and humanitarian crisis it has known through its recorded history (save possibly the 1915 Great Famine that decimated one third of Mount Lebanon’s population). The banking system has failed, the people are facing rising unemployment and poverty and inflation, and many families are surviving on handouts and food assistance. This situation has been tragically compounded by the devastating toll of the pandemic and the aftermath of the Beirut port explosion. As the government intends to phase out subsidies given vanishing foreign reserves and drop in capital inflows, it [the non-government] is considering a welfare scheme with cash transfers to 80% of the population, a percentage of beneficiaries hardly seen under social welfare programs elsewhere. Last year, the World Bank referred to the situation in Lebanon as a “deliberate depression,” brought about by reckless policies and unconscionable lack of response by the Nomenklatura holding the nation’s destiny for nearly half a century and now presiding over its demise.

History will judge Lebanon’s leadership for dereliction of duty, some may say criminal negligence, for abandoning nearly destitute people on a steep slope into the abyss. Rather than charting a road to recovery, this leadership is oblivious to the pain of a nation buffeted by the vagaries of regional politics and partisan rivalries, leaving its people to the whims of an overreaching central bank blatantly mishandling monetary policy and tinkering with the wreckage of a banking sector methodically defrauding an ever-shrinking middle class.

The dire situation has been years in the making and should come as no surprise. What may be surprising is the resilience of a ruling caste ostensibly loathed and vilified by the people and weakened by months of discontent, yet still steady in the saddle on the rugged road the nation is going through on all fronts. What could explain such tenacity?

In Lebanon, nationals and foreigners alike had for a long time a standard of living well above what the country’s economic fundamentals would warrant. They enjoyed the largess of a welfare state subsidizing residents across all social strata. The regime of non-targeted subsidies usually benefitted in disproportionate ways the affluent over the poor. The main lever of this wide net of subsidy was the overvalued exchange rate which made imports so cheap that they accounted, directly or indirectly, for some 80% of Lebanon’s consumption. Conversely, local production, save for non-tradable goods (such as construction) was depressed, and exports were heavily penalized by the fictitious value of the exchange rate that made exports so expensive that they could not compete with imports of the same product.

How could Lebanon afford a fixed, over-valued exchange rate regime for nearly three decades? That was only possible given the steady capital inflows from a large Lebanese diaspora – Lebanon suffers from the “Dutch disease” where its main export commodity is its own people – and deposits lured into an overgrown banking system by lofty interest rates (and sometimes discretion and tolerance regarding the origin of incoming funds). When regional events, notably the war in Syria, an increasingly unwelcoming, at time hostile business environment, and shameless governance practices disrupted the smooth inflows, the unstable imports-and-consumption-based economic model could no longer be sustained. The pillars of the whole structure (currency value, banking system, public finance, social welfare, and way of life) caved in, abruptly spelling the end of the joy ride.

Yet, almost two years after a vast cross-confessional, cross-regional and inter-generational national uprising expressed overwhelming popular discontent at the absence of credible plans and actions to manage let alone solve the crisis, innumerable natural and man-made disasters (Beirut port explosion, covid pandemic, failing health care and education systems, decaying infrastructure, irreversible environmental degradation, hollowed public institutions, plus the unbearable brunt of Syria’s 1.5 million refugees) the cohort of confessional warlords and their partisan brigades are still holding the reins of power.

In my view it is because many, beholden not to the state and its institutions but to their respective clan godfathers – who have engrained in the individual and collective psyche a culture of dependency and cronyism over the values of citizenry – blame political opponents for the nation’s woes, and fear that in the absence of their protective godfathers, the alternative to today’s near collapse could be an even more calamitous fate, an “Apocalypse” of sort.

To illustrate, say the standard of living index as a measure of Lebanon’s economic fundamentals would have been 100. Lifted by lavish subsidy, the Lebanese standard was at the 200 level. The system’s recent precipitous collapse brought it down to 40. Still, many harbor the hope of sinking no further and believe that, once their godfathers prevail upon their rivals at the polls or otherwise, those leaders – to whom they owe their jobs and livelihoods, or who shielded them from prosecution when they breached the law – will steer them through the crisis.

Feeding into the fear of the Apocalypse, the leaders’ strategy is to preserve the status quo through a variety of “bribes” until the May 2022 legislative elections. In the meantime, they are striving to maintain subsidies on essential consumption (food staples, medicine, and oil derivatives) despite creeping shortages of supply. In parallel they are proposing a scheme, assuming banks can afford it, to free part of the dollar-denominated bank deposits in targeting some 800,000 accounts of up to about US$25,000 each. During this period, the neediest are kept somewhat afloat by external and internal humanitarian assistance flowing through NGOs; a cash transfer program funded by a US$250 million World Bank loan yet to be approved by Parliament; and last, but most importantly, some US$2-3 billion in annual remittances for family support from Lebanese abroad.

In conclusion, although the various relief measures go some way in easing the pain of many Lebanese households, the political outcome may be disheartening and could come as a shocking disappointment for those who hope to drive the ruling caste out of power at next year’s elections – were they to be held on schedule – especially under the existing made-to-measure electoral law and the fragmented, ineffectual opposition of the “WhatsApp mutineers.”

However, great caution is called for in the case that serious reform leadership and governance changes cannot be secured at the polls. So far social peace has been preserved due to the good nature of the Lebanese, hot-blooded yet generally ready to help fellows in need; their proven resilience to hardship acquired throughout Lebanon’s painful history of conflict and strife; and their ability to devise substitutes for failing or sub-par public services – neighborhood power generation, private water supply through tankers, private education, and even…. private army – and the occasional lifeline provided by family members abroad.

However, with conditions ever deteriorating and no solutions in sight, tolerance of deprivation may reach its threshold, stoking social tensions which could degenerate into disturbances and violence with untold consequences on peace and stability. Were crowds of impoverished citizens to overrun metal gates now spiking around hospitals, climb fences protecting banks, break into supply stores, and block main thoroughfares, the armed forces, guardian of law and order, entrusted with protecting public and private property, would be put in a difficult spot, as too forceful a crackdown could erode the goodwill they have earned in the hearts and minds of the Lebanese people. It is not too early for those at the country’s helm to wake up to the stark situation that seems to elude them and shoulder their duties towards a people in need of salvation. But do they have the vision and willingness to do it?

(*) – Lebanon popular uprising of October 17, 2019, was prompted by a government decision, subsequently rescinded, to impose a 20-cent daily levy on WhatsApp accounts.

Samir Daher is a former economist at the World Bank and former advisor to the government of Lebanon.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

People – Still at the Center of Lebanese Society

I first went to Saudi Arabia 45 years ago. There were no commercial hotels to speak of except for a converted TB hospital in Jeddah. In those days, you had to surrender your passport, which was returned when you departed. It was a bit unsettling for Western businessmen, seldom women, who were used to a bit more control. They hated the ambiguity – about the rules to master to get meetings, then showing up at appointments only to wait for their Saudi or Egyptian counterparts, or trying to find the next meeting despite the lack of street signs and landmarks.

Most of my work in those days was either producing World’s Fairs pavilions (’82, ’86), training expats on how to survive in the Kingdom, or preparing Saudis for training programs in-country or overseas, usually in the US. However, this is not a story about KSA, rather I’m sharing some of my memories of expats who spent time working under Saudi guidance to build their new country. It was a similar story in Kuwait and the UAE, my other assignments, where there was a premium on enabling locals to acquire English, science, and mathematics skills to take their part in the development projects. I also spent time in Iran, which, while another story, had a different set of challenges for expats and locals.

My clients (Saudi, US, and international companies) shared a common concern: that the locals and others Arabs were just not used to working the way that Westerners worked – set hours, well-detailed routines, reporting, records-keeping, and performance appraisals. We continually butted up against cross-cultural issues in building the local workforce. We were in a milieu in which the government felt obligated to provide an expansive social services subsidy program for every Saudi, from free health care and education to scholarships and subsidized mortgages. Of course, in those days, women and men were treated differently, customs which are only now starting to fade.

Being Lebanese-American and having previously worked for a year in (North) Yemen, I was able to navigate many cross-cultural challenges and enjoy a level of comfort. I was accepted by many I encountered either by sharing memories with Yeminis who staffed the souks and provided the bulk of the semi-skilled workforce, or benefiting from the general high regard that Arabs felt towards Lebanon, its institutions, and its cultural diversity.

While preparing for the 1982 World’s Fair in Knoxville, TN, I spent weeks with Aramco traveling throughout the Eastern Province gathering information for the design and content of the pavilion. It was not lost on me that whether I was in the agricultural areas of Al Ahsa oasis or the high tech headquarters of Aramco, usually the second question I heard was “min waynak?” The Arabs I encountered, from Lebanon, Egypt, and Palestine, were pleased when “one of their own” was working with them, and work they did. Contrary to the stereotypes of the day, Arabs worked hard, saved their money, and sent it home. These remittances were the lifeblood of those economies and they were willing to work long hours with very few benefits to support their distant families.

Time and time again, as I spent more time in workforce development, the same negative images of Arabs were repeated: lazy, hard to motivate, careless, unconcerned. I found that this was not the case at all for the Lebanese, who along with their Palestinian counterparts provided the skilled and professional workers for the first two generations working on development in the GCC. In banking, construction, computers, services, and myriad other jobs, the Lebanese excelled at building systems that would carry the GCC countries until their own citizens, educated and trained at home and abroad, stepped up to take responsibility for their national development outcomes, a process still ongoing.

These negative stereotypes thrive in states where personal initiative, merit-based hiring, and achievement are subject to the whims of government employees who are paid no matter the outcomes. One only has to look at the success of expatriate Arabs to appreciate the profound and important contributions they continue to make to their countries’ development – from the outside. In Lebanon, the biggest concern today, as a result of its multiple crises, is the loss of its most valuable resource – its skilled workforce. There are stories daily of education interrupted, difficulties encountered in emigration, restrictions on funds to start or restart business, inability to fund overseas travel, and the sadness of families facing separation and anxiety as loved ones emigrate, with or without papers.

Lebanon has always been a special place because of its people. Their initiative, inventiveness, diligence, and sense of adventure are their compass points to a better life – a future being denied them by the callous disregard for their futures by an oligarchy that treats its human resources as expendable.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

Robbed of Their Future – Who Will Make It Right?

The movie Capernaüm (“Chaos”) tells the story of Zain, a Lebanese boy who sues his parents for the “crime” of giving him life. Ironically, Zain is played by Zain al-Rafeea, a Syrian refugee. In the Bible, Jesus moves from Nazareth to Capernaum at the beginning of his mission because the Nazarenes attempted to stone him when he began to preach in Nazareth. He escapes, but you know how that story ends…

These bits of information carry several messages and I’ll focus on these: the Lebanese can’t separate their fate from that of the Syrian refugees – those challenges must be solved for both peoples. Jesus had good news, the gospel, but it didn’t matter, his message of urgency and change was not welcome.

And so it is as the World Bank keeps ringing the alarms on how Lebanon’s disastrous leadership is abetting the collapse of the country, but to no avail. On June 1, it released the most recent Lebanon Economic Monitor entitled, “Lebanon Sinking to the Top 3,” an ironic twist on achieving something that is far from desirable, becoming perhaps the one of the worst economic crises in more than 150 years.

The report begins with a lucid and helpful summary of the more than 90 pages of analyses, charts, and special annexes that follow, worth reading, even skimming the bold face sentences that highlight the text. The many conditions that caused the current crisis are clear: the economic collapse, the pandemic, the Beirut blast, and mismanagement by the leadership cadre. Short-term solutions are also clear: stabilize the currency, build a reliable social safety net, strengthen humanitarian relief and assistance to small businesses, and tame the oligarchs from causing further damage. Each of these requires myriad actions by Lebanon’s leaders, none of which is forthcoming. The capital controls law is languishing in Parliament. Hyperinflation is eroding the value of humanitarian, social, and health services. And the party leaders are immune to sharing responsibility for moving Lebanon forward, only to the abyss.

According to Asharq Al-Awsat, “The bankrupt state is unable to settle many of its bills and Lebanon’s own energy minister, Raymond Ghajar, has warned that electricity supply was becoming critical and that the country could be plunged into total darkness by June’s end.” Illustrative of this failure was the notice from the Central Bank to the electricity company to come up with a plan to repay the government its $25 billion in past loans (out of $42+B), just another day in the debt-ridden country.

An editorial in The National placed the blame squarely on “A leadership vacuum that has seen politicians wrangle for months on end over control of various ministries, with seemingly little interest in actual policymaking, is both a cause and an amplifier of the crisis. Compounding it is Covid-19, as well as the fallout from last summer’s Beirut blast, one of the largest non-nuclear explosions in history.” It went on: “The economic meltdown has made worse the political and sectarian fragmentation of the country, undermining an already-weak rule of law.”

This sentiment was echoed in the World Bank report which pointed out Lebanon’s status as a “Fragility, Conflict & Violence (FCV) State, and as such, the dire socio-economic conditions risk systemic national failings with regional and potentially global consequences.” Two of the consequences are obvious in the economic repercussions in Syria and the increase in extensive cross-border smuggling. The Report goes on to say, “This illustrates the magnitude of the economic depression that the country is enduring, with sadly no clear turning point on the horizon, given the disastrous deliberate policy inaction.”

It is hard to ignore how the elites are insulated from the worst of the currency manipulations. “The burden of the ongoing adjustment/deleveraging is regressive and concentrated on the smaller depositors, who lack other source of savings, the local labor force, that is paid in lira, and smaller businesses,” according to the report’s authors.

There is a section on the proposed 2021 budget that exposes the unrealistic approach being favored by the oligarchs. By ignoring that any projected savings are due to the decreased purchasing power of the currency accompanied by high inflation, its numbers are not credible. As the Report opines, “This predisposition can either (i) degrade the proposed budget’s creditability, due to expected social pressures and real costs resulting from the high inflationary environment; or, if forced through, (ii) further entrench the severe decline in purchasing power for another year.”

Regarding the need for a social safety net, the Report mentions that “The economic crisis and resulting rising in poverty raise an urgent need for social assistance. High levels of poverty can have a long-lasting impact on Lebanon’s human development and increase vulnerabilities across the lifecycle. Adequate social assistance will therefore be critical both in the short term to provide emergency relief, and in the medium-long term to improve resilience to shocks among vulnerable Lebanese.”

This lead to its conclusion that “The Government of Lebanon (GOL) needs to prioritize a comprehensive, consistent, and credible macroeconomic stabilization plan, the fiscal part of which should include a social safety net (SSN) component.” This was also one of the major points mentioned by Ambassador David Hale in his address to the MEI conference as a needed effort by the international community to stabilize Lebanon while needed reforms are implemented.

With the end of subsidies in sight, no apparent willingness to creatively stabilize the currency, and no movement to shrink the country’s budget, Lebanon’s governing class is running out of excuses. They must take needed steps toward reform or recuse themselves so that the hard work can begin.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.

A Moral Calling from the Pope to Lebanon’s Christian Leaders

And just like that, the Vatican is challenging Lebanon’s Christian leadership to do what’s best for Lebanon.

Most believe it would take a miracle, but maybe this is the beginning. After the noon prayer on Sunday, May 30, the Pope said “On July 1, I will meet in the Vatican with the main leaders of the Christian communities in Lebanon, for a day of reflection on the country’s worrying situation and to pray together for the gift of peace and stability.”

The “Christian communities” would be quite large if he includes the Orthodox and Protestant churches, other Catholics such as the Melkites, and the leader of the Maronite Catholic Church, Patriarch Bechara Boutros al-Rahi, who has been actively calling for an international conference to begin the process of reconciliation and healing in Lebanon, free from external interference.

With the subsidies due to expire sometime in June, the holdup in Parliament of a World Bank assistance package, and the continued deterioration of the country’s economy, Lebanon continues to be on the brink of extensive disruption.

The lira is in free fall at an official exchange rate on the government’s platform of 12,000 to the dollar and approaching 12,800 on the informal exchange market, while imports are still priced somewhere between the government rate of 1,500 and the bank rate at 3,900 lira to the dollar.

Confused yet? Think of how hard it is for the Lebanese to cope daily with the uncertainty of access to money to pay for essential services. Even when they will regain access to their bank deposits by the end of June, as promised by the Central Bank, it will be limited at a rate that favors the banking sector.

The story about the Pope’s initiative was reported in the 961 which noted that “Earlier this week, Pope Francis sent a letter to President Michel Aoun hoping that the ‘Spirit of Wisdom’ would support Aoun in rescuing Lebanon. It is stipulated that Pope Francis would seek to unite the Christian leaders that have been politically divided and lead them towards working together to saving Lebanon as a top priority.”

Wisdom is not in short supply, only its acceptance. The path forward is clear. The IMF and the international community are waiting for a government that will serve the people and not the interests of a few. The people of Lebanon and the resident refugee population are suffering as their health and well-being become increasingly precarious.

Other calamities and disasters are pulling the world’s attention away from a country whose leaders have lost the sense of urgency and responsibility to unite even on the basic necessities of recovery and renewal.

As the Pope said on Sunday, “the meeting with Lebanon’s Christian leaders would be an opportunity to ‘pray together for the gift of peace and stability.’”

With perhaps a hint of irony, another report mentioned that “The Argentine pontiff has also picked up the metaphor from his predecessor describing Lebanon ‘as the message’ when it comes to coexistence, tolerance, and respect among people of all faiths.”

The suffering of the Lebanese, across all sects, strengthens his message and highlights the sadness of those around the world whose hearts feel Lebanon’s sorrow.

The views and opinions expressed here are those of the author and do not necessarily reflect the position of the American Task Force on Lebanon.