The Middle East Fuse is Burning – How Badly Will Lebanon be Scarred?

Thursday, September 19, 2019
Opinion by Jean AbiNader

The missile and drone strikes on Saudi oil fields push mounting Saudi-Iranian tensions; the outcome of the Israeli elections follows on Israeli reprisals against alleged Hamas provocations and Netanyahu’s promise to annex the Jordan Valley settlements; and Lebanon facing unprecedented financial dislocations are all contributing to growing fears that a regional explosion is coming. The prayers of your aunt Salwah in the village will unfortunately not make a difference. If a conflict erupts, Lebanon is going to suffer. The only question is what will be left? So, while Foreign Minister Bassil and President Aoun, his father-in-law, are in the US week for LDE and the opening of the UN General Assembly, the Lebanese are trying to act as if this too shall pass. And the rest of us are saying, “Insh’allah.”

All is not quiet in Lebanon. Under the veneer of its usual political, social, and economic ills, there are regional forces and Hezbollah whose behavior can only have unpleasant if not disastrous consequences for Lebanon. A particularly harsh critic from Saudi Arabia noted that “Although Lebanon is a small state in terms of its geography and population, it has a reputation in the Middle East for being a theater of war. This is due to the fact that many regional countries have settled their own conflicts and disagreements there via proxies.” He adds that “Those defending Hezbollah by whatever justifications they can think of to convince the Lebanese mind that it works in Lebanon’s interests have been let down by the secretary-general of Hezbollah himself, Hassan Nasrallah, when he said: “The leader of our camp today is the Supreme Leader (Ali Khamenei) and its center is the Islamic Republic of Iran.” This statement is clear proof that Nasrallah is working for Iran in Lebanon and not for Lebanon’s national interests.”

His observation follows the argument of an op-ed in the Wall Street Journal that claims that Hezbollah and its sponsor Iran dominate the government, security services, and financial sector in Lebanon. “The State Department has long classified Lebanon as a “safe haven for terrorism.” In fact, it is something worse. With the banks, the military and the government itself answering to a terrorist organization, Lebanon is fully entwined with Hezbollah.” This statement, based on a selected linking of events since 2006, is pushing a narrative that Lebanon is not to be trusted and therefore, the US should…what? The article does not consider either a strategic or credible solution, or what the consequences of walking away from Lebanon would be.

An article in World Politics Review took a look at the current status of Hezbollah given its combat efforts in Syria. The point of the article is that seven years of fighting in Syria, and role in Iraq and Yemen, have diminished its capacity to fully support its social welfare programs, key to its success as a political party. Not only must it satisfy its base, “All the while, it must navigate the dangerous standoff with Israel to avoid a conflict that neither side wants. For a group that has never been stronger, the dangers have never been more pronounced.”

With its shifting emphasis of operations to the southern area of Lebanon and its missile upgrading facilities, Hezbollah has raised the ante in its role as a “resistance” force. The recent exchanges with the Israelis indicate that Hezbollah is a priority in the crosshairs of the IDF. How the Israel elections turn out, whatever the configuration of the new government, Hezbollah has made itself a ready target for political and security threats from Israel.

This, the increased tensions between Saudi Arabia and Iran, and its internal issues of corruption, are, according to the article, threatening its internal solidarity and may well lead to a pushback from other Lebanese that are fed up with Hezbollah’s interference with Lebanon’s independence and territorial integrity.

Another casualty of Hezbollah’s insistence on its independence of action is that the international investment community’s appetite for supporting Lebanon is diminishing. There is a maxim in business that capital is notoriously risk averse. And Lebanon’s safe haven, government-backed financial credibility is eroding as its risk profile becomes more negative. Corruption, the high rate of public expenditures that increase the public debt, lack of significant reforms, and the excessive debt of government-run entities, continue to drive down the value of Lebanon’s credit ratings, thus curbing enthusiasm for purchasing its debt and investments.

A useful analysis by the Arab Bankers Association in the UK summarized it in this way. “Lebanon’s financial ratios are among the weakest in the world and it is hard for a rating agency to make an exception – in the form of a higher rating – when these objective indicators place the country squarely within a certain rating peer group. Making an exception is even more difficult when decades of public commitment to economic reform have had little appreciable impact on the budget or fiscal deficits.” In the past, much of what should have been done rested squarely on the government. Now that is complicated more than ever by regional issues and perceptions of Lebanon’s stability that are not moving in Lebanon’s favor.