There have been many useful analyses of Lebanon’s current economic demise brought on by years of fiscal mismanagement, corruption, misappropriated funds, diversion of public finances, deficit spending, gross expansion of public service jobs, and other activities that drained the financial system of its integrity and hobbled the private banking system. The solutions proposed consistently call for the installation of a reform government empowered to make immediate and medium term changes in everyday activities, from capital controls of funds transfers to supporting the Lebanese pound to lessen the harsh depreciation in people’s incomes and quality of life.
Regardless of the recommendations, be it introducing a fair and robust tax system or installing regulatory bodies to supervise privatization of sectors draining the national budget, what is evident is that succeed or fail, Lebanon will never be the same. On the political front, the coalescing of a national dialogue and demonstrations across sectarian, regional, and political boundaries portends the start of a movement to change the political calculus of a country long beholden to sectarian elites. While today’s demonstrators may lack a central leadership, their agenda of kullon ya’nah kullon, “when we say all, we mean all,” is common to the people calling for the end to the political dynasties that have fathered this crisis.
Tales of poverty, disillusionment, lack of funds to access education and health services, and a rapidly disappearing middle class, with poverty reaching close to 50% of the people, frame the question, can Lebanon recover? Can it retain its legacy as a haven for intellectual, cultural, and educational expression? Will it find its future mortgaged by a lack of international support contingent on cleaning house when there is no broom acceptable to the current leadership and their proxies?
And those studying the economic crisis, which dominates the news, have not even scratched the surface of the seismic political changes that may occur, leaving Lebanon a shell of its reputation as a spirited forum for debate and disputation. This is clearly one of the likely outcomes if its political leadership loses all dignity and acquiesces to the demands to retain under some guise the sectarian spoils system that is at the heart of the economic failure. This will strengthen Hezbollah by aggregating even more government institutions under its influence and lead it to believe it can restructure the security services to its liking, as it did with the government after the 2008 siege of downtown Beirut.
Hezbollah’s reaction to the assassination of Qassim Soleimani, essentially calling to avenge his death by attacking US military targets throughout the region, surprised no one except those who still believe that the “resistance” that Hezbollah represents is still in Lebanon’s interests. While there are no expectations that Israel will be in the crosshairs as this is an Iranian-US dispute, the inflammatory language and the likely gap in rebuilding IRGC sway over Hezbollah increases the likelihood of “unintended consequences.”
So Lebanon is in a dilemma, caught between the dramatic necessity for reform and a leadershi
p that is unwilling to relinquish their current power without an onerous tradeoff, at least in terms of the integrity of Lebanon’s institutions. Meanwhile, the middle and lower classes in Lebanon are rapidly being suffocated by a dysfunctional economy and political system that provide neither support nor hope. Even the diaspora, which for so many years has been the knight to the rescue of the financial system, are avoiding the mess that the financial sector has become.
Cynics can say that it’s the fault of the Lebanese who for 30 years have continued to support their sectarian leaders due in large part to the spoils they were able to provide. Now the bill has come due, and only those who lack the resources to seek safe havens overseas, most Lebanese, are paying the awful price. And the Lebanese are waiting to see if a new government is introduced this week…will it be more of the same or a real opportunity for Lebanon to reemerge from its failed state?