Lebanon: Collapse, Uncertainty, Rejuvenation – or the Next Big War?

It could get much worse, and more violent, before it gets better.

Lebanon has never been in a worse state outside wartime. Historically unstable by imperial design, its region is now rocked by the same waves of strategic competition, destabilisation and malign influence as the rest of the developing world. But Lebanon stands out. Now in the third year of a crushing economic crisis, with political paralysis, heightened social tensions, and the ongoing negative effects of the coronavirus pandemic and the 2020 Beirut port explosion, the human impact is sobering. The country’s catastrophically poor economy severely limits its ability to weather the gathering storm of a global uneven pandemic recovery, supply chain bottlenecks, energy volatility, crushing inflation – and now a war of aggression affecting food security.

For the 11th year in a row – since the outbreak of the Syrian Civil War – Lebanon’s real GDP per capita has fallen. The dollar-pegged Lebanese lira – providing the liquidity in an attractive investment bastion for regional wealth – has been destroyed by a combined economic and fiscal crisis. Now, no one knows what the lira is really worth – the most recent guess is that it has lost more than 90% of its 2019 value.

Last year, the World Food Programme massively ramped up assistance to support a third of the population (2.1 million) through a catastrophic crisis.

Entrenched interests hiding behind a veil of confessionalism – effectively cartels of political and business elites – prevent any significant work to address gaping infrastructure and economic gaps and to conduct reforms. This has drawn lobbying and now outright begging pleas that the country has lost time, opportunities and allies and that it can ill afford to adopt basic reforms to its economic and financial systems. Organised crime has benefited.

Lebanon is used to a lack of accountability. The UN’s 17-year effort to bring the murderers of former Prime Minister Rafik Hariri to justice is finally at an end, costing a billion dollars and leaving the accused assassins at large. Anecdotally, apathy and disenfranchisement among the Lebanese population is palpable, fuelling discontent, desperation and migration.

Then Came the War

With the outbreak of a war in Ukraine – over 1,000 miles away – the litany of woe gets worse.

A June Mercy Corps analysis of impacts of the war on the region suggested that in Lebanon, food prices had risen 400% even before the war began, fuel prices are now nearly triple what they were last September, and there is often a choice of one, the other – or neither. Low-income households will go hungry if supply chains of bread and other staples remain at current levels, as black-market diversion and hoarding capture the majority of basics. Lebanon’s electricity crisis will worsen as fuel prices rise. Basic critical services such as water and telecoms will also deteriorate over the summer as high temperatures strain demand. Poverty, tensions and outward migration are all expected to increase. As the most immediate challenge to stability, food price spikes have demonstrable links to waves of global unrest – most recently in 2007–8 and 2010–11.

As Russia’s vicious, grinding fight for Ukrainian territory continues, Lebanon is reliant on Ukraine for 80% of its wheat, sparking an unusual condemnation of Russia’s actions. There is nonetheless a private perception across the Middle East that the Ukraine war is a European affair, and that the Global South will primarily receive the overspill. Regional populations tend to view the conflict as a US/NATO–Russia war, fuelled at least in part by NATO actions against Russia, rather than by a blatant – and neo-imperial – war of aggression against a sovereign country. There are accusations of double standards against the West over its response to the Ukraine war. The significant and immediate diplomatic efforts over Ukraine, military support to Kyiv, and reception of Ukrainian refugees in Western states are – rightly or wrongly – viewed as indicative of a Western inclination to care significantly more about conflicts in Europe’s immediate neighbourhood than about those in the Middle East.
The Upside?

Even with such significant challenges, Lebanon has historical traits that support its ability to ‘muddle through’, most particularly its oft-quoted ‘resilience’. However tired the concept is, it remains the case that Lebanon has some developed and unifying factors not present in many other countries, which make judgements about its stability complex. These include cultural resilience (a unifying sense of purpose and belonging) and societal resilience (local informal support structures offering education, welfare and security provision outside state influence). What OECD states might refer to as non-traditional resilience is difficult to quantify, but forms a key part of the country’s ability to avoid the worst forms of conflict and state breakdown.

While Hizbullah no longer commands the popularity it once did, it can keep its supporters living in a fantasy world of relentless propaganda for longer than competitors can

Recent elections have provided some minor hope. ‘At a time of existential self-questioning by the Lebanese…Focused on daily survival, and profoundly disillusioned with the political process after decades of war and subjugation, many would not take part…[but] the outcome was more hopeful than many had dared hope’, one former Ambassador wrote.

Hizbullah

The economic crisis and a loss of its electoral majority in May have not dimmed Hizbullah’s fervour. While the party no longer commands the popularity and groundswell of opinion it once did, it can keep its supporters living in a fantasy world of relentless propaganda for longer than competitors can.

While the Lebanese people attempt to focus on practical solutions to their fundamental cost-of-living crisis, they are still being lectured regularly by Hizbullah Secretary General Hassan Nasrallah about the continued necessity of arming ‘the Resistance’ (Hizbullah’s other name), and arguing that given the economic crisis, the issue should be postponed for two more years, ‘because it is not a pressing issue and you have coexisted with them since 2005’.

We should not be under any illusion. Hizbullah is semi-independently funded, highly strategic in its thinking and makeup, and organised carefully to deter, operate against, and survive assault by Israel, one of the most formidable military-technical opponents in the world.

Hizbullah is also an organisation of consummate Israel-watchers. As Israel’s head of state changed on Monday, Hizbullah offered Yair Lapid his first security test, flying three Iranian-made drones towards an Israeli-sponsored gas rig in a disputed area, all of which were promptly shot down. As Hizbullah-watchers predicted in June, the organisation had not aimed to cause damage, but rather intended to score publicity points by filming the rig, while demonstrating a capability to threaten.

Given Lebanon’s context and the state of regional affairs, it remains highly unlikely that Hizbullah has any interest in a war with Israel over a maritime dispute. Likewise, it has not responded to (alleged) Israeli sabotage attacks inside Iran – and telegraphed in April that it would leave Iran to respond for itself.

Israel

Israel is highly aware of Hizbullah’s lack of interest in a shooting war, and shares a disinterest in provoking the level of damage that Hizbullah could cause through use of longer-ranged precision missiles, shutting down major infrastructure and forcing the population into bunkers. It is not waiting around, however. Last month, the recently departed Israeli Prime Minister Naftali Bennett summarised Israel’s so-called Octopus Doctrine against Iran: ‘We no longer play with the tentacles, with Iran’s proxies: we’ve created a new equation by going for the head’. A campaign of sabotage, assassinations, cyber attacks and other covert operations inside Iran proper has targeted critical infrastructure far beyond Iranian nuclear facilities.

Just as Iran has built proxies on its enemies’ borders, Israel is also using clandestine diplomacy to build its network of likeminded countries – with US help – who are just as concerned about the disruptive power of small, parasitic Iranian proxies building political veto power inside their hosts, alongside ever-more-accurate ballistic missile arsenals. Step one was US sponsorship of the ‘Abraham Accords’; step two is a so-called Middle East air defence partnership, which recent announcements suggest has already made significant progress toward a system to share information and counter Iranian missile and air defence threats to Arab countries and to Israel. The Israeli defence minister said on Monday that the partnership had already foiled attempted Iranian attacks and could be boosted by President Joe Biden’s visit next week.

Given the current level of global political and economic volatility, the ability to plan ahead has been further reduced, and the risk of shocks heightened

New Prime Minister Lapid, on the other hand, will have to play this extremely carefully. He has already been tested once. He has four months to prove himself.

Conclusions

The Near East’s security has always been tenuous, but in a region beset by fear and constant warnings of the next war, it is sometimes complex to understand the drivers and tensions that fuel uncontrollable escalations before they happen. Given the current level of global political and economic volatility, the ability to plan ahead has been further reduced, and the risk of shocks heightened.

The most likely major escalation that could snowball is a conflict between Israel and Iran, arguably the region’s two most capable covert actors. Iranian enrichment has now reached an extremely advanced stage, as has Israeli planning to deal with it. The region is now faced with the real prospect of an Iran permanently at the threshold of a nuclear weapon. Those who oppose the achievement of this will have to think creatively about how to manage this state of affairs if they want to avoid an Iranian bomb and the negative consequences that would follow. Get ready to hear more about a ‘lack of good options’. Needless to say, any escalation would have broad implications for the whole region, and potentially the world.

There are several linked issues that may provide indicators of the immediate future direction of the Levant:

The outcome of US-mediated negotiations on the maritime border between Lebanon and Israel continue to evolve. They may yet achieve something – peacefully.
Reports of an Arab-Israeli partnership to focus on air defence should be watched closely. An achievement would be a quiet earthquake for regional security and diplomatic relations, and could provide avenues to resolve a host of other issues.
To date, Russia has been fairly helpful in the region on issues like arms control and, to some extent, UN-linked humanitarian and political processes. But its willingness to silo these issues could easily diminish, should the direction of the war in Ukraine change. There are fears that the region could turn into an additional arena for heightened competition with the West. Russian decision-making over Israeli freedom of action in Syria may be a bellwether.
Finally, Lebanon needs a new government and a new president. The Arab League has made the right noises, though very few have made sensible interventions. The filling of the two vacancies has, in the past, taken years. It should not this time. A collection of fears of escalation provide, on the one hand, a heating effect. On the other hand, they provide a window of opportunity.