Lebanese Hezbollah's growing crisis

Caught between trying to keep a gun to the head of Lebanese democracy and attracting international bailout funds, the Lebanese Hezbollah is mired in a growing crisis.

Economic concerns are front and center here. Lebanon’s economy, already under pressure due to its decrepit infrastructure, endemic corruption, and fundamental mismanagement, was on life support even before the coronavirus pandemic hit. Its structural challenges have metastasized unchecked, barely veiled by artificial currency manipulation. Then, the virus came, and things quickly got a whole lot worse.

Next, the U.S. Caesar Syria Civilian Protection Act went into effect and further restricted Syria’s access to foreign capital. Syria had been providing a critical economic boost to Lebanon — Beirut provided Bashar Assad’s primary means of accessing international finance during the Syrian civil war. All of this has led to a situation in which inflation is wiping out salaries and sending the prices of basic goods soaring.

It’s quite clear what Lebanon needs to get out of this mess: a significant International Monetary Fund bailout tied to economic and countercorruption reform. The problem for Hezbollah, however, is that the United States and the European Union are demanding that any bailout come with serious reforms. Hezbollah knows that such reforms would weaken its ability to dominate Lebanese politics.

Until recently, Hezbollah had been able to paper over these cracks. Facing a decidedly weak opposition led by the Future Movement’s Saad Hariri, Hezbollah has had a veto over prime ministers and policies it dislikes. Led by the canny Hassan Nasrallah, Hezbollah has also benefited from its alliance with leaders who care about little except their own entrenched power. The two most notable are Lebanese President Michel Aoun and the Christian Free Patriotic Movement and Parliamentary Speaker Nabih Berri of the Amal party. Put simply, Aoun is a frail geriatric with no appetite for big, risky reforms, and Berri’s mastery of graft would make any dictator envious. Perfect Hezbollah allies, then.

But things have changed. The old game is no longer sustainable, and an increasing number of Lebanese power brokers can see it. Evincing this dynamic, a Maronite patriarch Bechara al Rahi has been making waves by pointing out that a key obstacle to any international bailout is Hezbollah’s stranglehold over the government. Rahi’s public courage has broken a dam, emboldening others to start saying what no one could before.

In turn, younger politicians are hinting that at least some structural change is now required. Take, for example, the meeting between Rahi and Free Patriotic Movement leader Gebran Bassil on Sunday. Bassil emerged from that discussion echoing Rahi’s rhetoric on the need for true neutrality in Lebanon’s foreign policy. As applied to the prospect of an international bailout, the translation of true neutrality is greater separation from Iran and an associated tempering of Hezbollah’s power.

If Bassil now pushes Aoun and the Free Patriotic Movement to pressure their nominal ally for reform, Hezbollah will quickly and visibly become isolated.

Hezbollah’s central challenge here is that as the economic condition continues getting worse, its position will grow even more tenuous. At some point, new alliances will form in favor of reform, or Hezbollah will return to its old game of violence to protect its position. But in a situation where Iran has little financial means to support Hezbollah, the “Party of God” can no longer be confident that a violent gamble will pay off.

Meanwhile, Hezbollah’s chapter in Iraq faces some similar challenges.