Hariri Quits While Lebanon Crumbles

COMMENTARY Middle East

Hariri Quits While Lebanon Crumbles

Aug 4th, 2021 4 min read
COMMENTARY BY
Nicole Robinson

Research Associate, Allison Center for Foreign Policy

Nicole is a research associate in the Allison Center for Foreign Policy at The Heritage Foundation.
Flag of Lebanon flies at half-mast at the devastated Beirut port, almost one year after the August 2020 massive explosion, in Beirut, Lebanon on August 3, 2021. Hussam Shbaro / Anadolu Agency / Getty Images

Key Takeaways

On July 15, Lebanese Prime Minister-designate Saad Hariri announced he was abandoning his efforts to form a government.

Lebanon’s financial crisis is rooted in the actions of an entrenched and corrupt political elite that are unwilling to reform if it means ceding power and money.

U.S. policy has helped shore up state institutions like the Lebanese Armed Forces to deter bad actors, but top-down economic reform is the only path forward.

On July 15, Lebanese Prime Minister-designate Saad Hariri announced he was abandoning his efforts to form a government, sparking violent protests across the country.

Hariri’s parting words? “May God save this country.”

Najib Mikati, one of the richest men in Lebanon, is now slated to take up the post of Prime Minister. Mikati faces the daunting task of reforming a country that is experiencing the worst political and financial crisis in its history.

An implosion in Lebanon could create a power vacuum that empowers Iranian-backed Hezbollah in the south, thereby endangering critical U.S. allies like Israel and Jordan.

What Is Going on in Lebanon?

Years of sectarian squabbling, corruption, and mismanagement by Lebanon’s political elites have created political deadlock that is pushing the country’s economy to the brink.

>>> Beirut Explosion Accelerates Lebanon’s Descent into a Failed State

Since 2019, Lebanon’s economy has contracted by over 20.3 percent; its currency has lost over 90 percent of its value to the U.S. dollar, and inflation has reached triple digits. With depleted foreign reserves and crippling debt, the government has little cash to pay for the food, fuel, electricity, and medicine that it heavily imports for its population. Power blackouts and gas shortages are now a daily occurrence that must be endured alongside food insecurity and growing rates of poverty.

The banking sector—the backbone of the Lebanese economy—is partially to blame for Lebanon’s financial ruin. Since 2011, remittance dollars began to dwindle, but government spending did not. With few restraints, sectarian elites borrowed money from the Central Bank that the bank didn’t have. When anti-government protests erupted in 2019, deposits exited Lebanon. To stop the mad rush of cash transfers, banks shut down, triggering the current financial crisis.

Then, in 2020, the Beirut port explosion and COVID-19 made the situation worse.

An Unchecked Political Oligarchy

Lebanon’s financial crisis is rooted in the actions of an entrenched and corrupt political elite that are unwilling to reform if it means ceding power and money. Reform is desperately needed, but unlikely to manifest since the reforms identified would undermine the ruling class’ very authority and limit their access to state coffers.

The designation of Najib Mikati as Prime Minister is unlikely to generate any change in the status quo.  Even if he forms a government, Mikati is just an extension of the corrupt political class.

Mikati’s political career has been propelled by his telecom investments and Syrian patronage during the Lebanese Civil War. He has served in several ministerial roles and previously held the Prime Minister’s office briefly in 2005 and again from 2011-2014. He was out of politics until Hariri’s resignation brought him back in.

As a pro-Syrian politician with ties to Hezbollah and its allies, Mikati was an easy pick for President Michael Aoun, but he may be no more than a puppet for Hezbollah and its allies.

Over the years, Hezbollah has increased its hold over Lebanon’s government; it now occupies over half of the 128 seats in Parliament and controls two government ministries. To appease his backers, Mikati may grant Hezbollah and its allies’ control over other key government ministries which would further divide Sunnis and tilt the Prime Minister’s office toward a pro-Syrian Hezbollah agenda.

The Lebanese Armed Forces may be the only state institution left to counterbalance Hezbollah’s destabilizing influence, but it faces challenges of its own. Military personnel, including high-level officers, are leaving the force at alarming rates due to low salaries and morale. This is troubling given escalating tensions in the border town of Tripoli.

A Ticking Time Bomb in Tripoli

Tripoli encapsulates the irony of the Lebanese system: It is Lebanon’s poorest city, but is also home to several business tycoons, billionaires, and former prime ministers, including Najib Mikati

Only 40 miles from the Syrian border, Tripoli is no stranger to instability. In the early days of the Syrian civil war, the city experienced cross-border clashes between Lebanese Pro-Assad and anti-Assad forces. These clashes arguably led to Mikati’s resignation as Prime Minister in 2013.

Although the border was secured, Lebanon’s government has since neglected Tripoli. Nearly 70 percent of its residents live in poverty. Unemployment is more than 60 percent.

Unsurprisingly, then, Tripoli has been the epicenter of anti-government protests that have recently turned violent. In late June, groups of armed civilians took to the streets, firing shots in the air and trying to destroy a number of public buildings over fuel shortages. Army units were deployed to ease tensions, but the situation could boil over at any moment.

>>> How COVID-19 Exacerbates Lebanon’s Mounting Economic, Political Woes

For now, Lebanon’s military is keeping Tripoli and the rest of the country from splintering into different factions. If violence were to escalate against military personnel in Tripoli and the armed forces collapse, a security vacuum could leave Lebanon’s border exposed again to cross-border spillover from Syria.

Worse, Hezbollah could become the lone military force in the country—a development that would not bode well for the U.S. and its allies in the region. Hezbollah has made its hatred of Israel clear and would use the chaos to further strengthen its position and attack its enemies.

Lebanon is a ticking time bomb in a particularly volatile neighborhood. U.S. policy has helped shore up state institutions like the Lebanese Armed Forces to deter bad actors, but the situation may soon spiral out of control. Top-down economic reform is the only path forward, but it must ensure elite buy-in to succeed. Prime Minister-designate Najib Mikati is a pillar of the establishment that has enriched itself at Lebanon’s expense. Therefore, he is unlikely to be part of the solution to Lebanon’s problems as it addresses the difficult challenges ahead.

This piece originally appeared in 19fortyfive