In the past two months, around 16,000 Lebanese lost their jobs as many companies have shut down due to the economic deterioration. This comes at a time when the World Bank warns that while 30 percent of the Lebanese population already live under the poverty line (set at 4$ a day), the figure is likely to increase to 50 percent in the near future given the rate at which the financial situation is worsening.
These incidents of despair and helplessness are only going to increase as Lebanon faces the looming financial crisis. As people are failing to access their savings or salaries from banks, prices of basic goods increasing, and private sector shrinking, there are serious and legitimate concerns that the economy will collapse and that Lebanon will move to a new phase of financial and security mayhem sooner than expected.
According to economists and analysts in Lebanon, only an independent technocratic government can regain the local and international trust, which in turn could help Lebanon with financial stability packages. Otherwise, the economic crash is coming with a Venezuelan scenario.
THE POLITICAL CLASS VS. THE INTERNATIONAL COMMUNITY
As Lebanon faces a financial and thereby a humanitarian disaster, the political class still won’t let go. The Hariri-Bassil-Hezbollah trio of power are still trying to come back to power – via a new government that looks pretty much like the same one.
They are still hoping that two things will help them stay in power. One, that the people will get tired from taking to the streets, and start to worry about poverty and losing their jobs, and two, that the international community will start fearing instability in Lebanon, and Europe will help and compromise out of fear of instability and a new wave of refugees from Lebanon.
To that goal, Hezbollah’s strategy has shifted. Their allies – caretaking PM Saad Hariri and Foreign Minister Gebran Bassil – are conveying to the Europeans that help is needed before the Lebanese protests turn into security incidents and violence. Meanwhile, Hezbollah is slowly but surely taking over the squares and the protests.
The good news is that both the Lebanese street and the international community are not buying the political class’ excuses and pleas for compromises. So far, no bailout for Lebanon will take place without a proper transitional government that will gain the trust of both the Lebanese people and the international community.
The Lebanon meeting held in Paris on Wednesday made it very clear that no international bailout will happen unless an independent and reformist government takes over. Except for possible humanitarian assistance to provide basic goods, the Lebanese current care-taking government and the central bank will get no financial assistance.
In place of the current leadership, a transitional government composed of independent bureaucrats known for their impartiality should be enlisted to run the country. This body would be separated into three parts: economic, constitutional, and judicial. An economic committee would focus on bringing the Lebanese economy back from the abyss; a constitutional committee would draw up a new electoral law that is both nonsectarian and representative; and a judicial committee would create statues to investigate current cases of corruption that had brought Lebanon to its current economic crisis, prevent corruption and at tax evasion
On the economy more specifically, the newly instituted committee would set about implementing real reforms, such as solving the crisis over electricity, which now consumes about a third of the state budget. The electoral law proposed above would produce a new parliament, which in turn would result a new president and cabinet. A serious effort to contain corruption in Lebanon would require applying the rule of law on old and new political figures, in order to prevent another crack in the fragile economy.
THE HEZBOLLAH FACTOR
The problem with Lebanon is both corruption and Iran’s increasing role and influence. The international community – mainly the Europeans – might fear instability and refugees – but with the US maximum pressure campaign on Iran and its regional proxies, Hezbollah in Lebanon will not be allowed to stay in the next government, mainly that its allies are the most corrupt political figures in Lebanon.
Of course, this is not going to pass easily, as Hezbollah insists on shaping the next government as it pleases, ignoring all the warnings and signs of the economic collapse. Their rhetoric so far has been that even if the state institutions collapse and go bankrupt, Hezbollah will still has the money to provide salaries and services to its people.
The ability of Hezbollah to wreak havoc has become clear, in Lebanon and throughout the region. However, they failed to prove their ability to deploy any model of sustainable governance or lead any efforts to develop economies it feasts on. Lebanon, Syria, Iraq and Iran are examples.
While Hezbollah might have prepared itself for a doomsday scenario and stocked up on weapons and dollars to survive through the rough times, this might not be enough for Hezbollah to survive on the long run. Missiles and money are important and will help the party to survive for a few months, but they will not be able to survive the economic crisis at hand.
For these reasons, Hezbollah still insists that Hariri should come back to form the next government. They know that they desperately need someone who can communicate with the Europeans and travel to Washington. They need someone to facilitate the aid to Lebanon and maintain Hezbollah’s interests. They also need someone who can constitute a good “Sunni” cover as the GCC has distanced itself from Lebanon since Hezbollah took over.
Hezbollah is desperate and they need Hariri, and it has become clear to the international community that Hariri has been Hezbollah’s cover and close ally. It has also become clear that Hariri’s alliance with Bassil is problematic, in the light of the latter’s exposed corruption and shameless energy and electricity deals.
The next phase of the crisis is going to be long and excruciating, especially to the Lebanese who will have to deal with economic and political frustration, combined with violence when they complain. The international community has just told Lebanon’s political class that with Hezbollah and its corrupt allies, no financial assistance will come to Lebanon.
At the end, the solution is in the hands of Hezbollah and Iran. If they continue with their strategy of gripping to power and using violence, they will be blamed for the economic collapse. It is no longer a secret that their allies are the ones delaying the transition and the people’s anger will eventually reach them. Their weapons can empty the squares of the protestors, but these weapons cannot buy popular support. Eventually, the voices of streets will be translated in the next elections.
The Paris meeting was one of many to follow, and the international community can wait. However, the Lebanese people will not.
Hanin Ghaddar is the inaugural Friedmann Visiting Fellow at The Washington Institute.
