Intertwined Political and Economic Failures

Lebanon is not a wealthy country, but it’s not poor, either. Recent discoveries suggesting the presence of offshore gas deposits in the eastern Mediterranean offer the country the prospect of a domestic energy industry, but for most of its existence, the strength of the Lebanese economy has rested in its “no questions asked” financial sector. In the mid-twentieth century, when oil was creating boom economies across the Middle East and suddenly wealthy Arab aristocrats needed a place to stash their money, Lebanon and its banks were happy to oblige.

Unfortunately, as has become abundantly clear over the past year, this bustling financial sector was built on a foundation of quicksand. In short, Lebanon’s financial elites enriched themselves with foreign deposits, creating a staggering level of inequality and starving the government of resources.

The government was forced to borrow heavily, at high interest rates, just to pay for basic necessities like food imports. This precarious state of affairs could only be maintained through a Ponzi-esque scheme of high-interest borrowing, from the government to the central bank to commercial banks to depositors. When the foreign deposits at the base of this scheme started drying up, as they have been in recent years, the economy collapsed.

Lebanon is now in default on its debt, and the value of its currency has been in free fall. In an effort to prevent a financial collapse, banks last year began restricting withdrawals and overseas transfers of foreign currency. While those restrictions limited small Lebanese depositors’ access to their own money, a whistleblower came forward earlier this year alleging that the banks themselves continued to transfer money abroad to the tune of some $6 billion.

The faltering economy drove thousands of protesters out into the streets last fall to demand wholesale political change, because Lebanon’s economic failures cannot be decoupled from its political failures.

The story of Lebanese politics is a story of factional infighting among corrupt party bosses, or za’im. It’s the story of a government that cannot competently manage trash collection in its largest city, because these powerful za’ims keep fighting over which one of them gets to dole out the lucrative waste management contract.

It’s the story of a country whose people suffer through daily rolling blackouts, because key political factions stand to gain more from funneling public money to foreign power companies, or from ensuring that Lebanon’s powerful private generator lobby gets its slice of the pie, than they do from building new power plants.

Lebanon is a thoroughly corrupt country, ranked 137 out of 180 countries in Transparency International’s Corruption Perception Index for 2019. That corruption stems from a broken political model implemented by French colonial authorities after World War I and restrengthened following the country’s devastating yet largely indecisive 1975–1990 civil war.

When it took control of formerly Ottoman Syria at the end of World War I, the French government had two goals: build a colonial presence in the eastern Mediterranean to rival Britain’s protectorate in Egypt, and carve out a Lebanese state with a predominantly Christian population. And so was born Greater Lebanon, a French mandate centered on the largely Maronite Christian and Druze Mount Lebanon region, but augmented with the inclusion of more heavily Sunni and Shia regions around it.

In an effort to cohere this patchwork state-to-be into a full-fledged nation, French officials reached back into the Ottoman period and constructed a political system in which legislative seats and government offices were parceled out on a confessional basis.

Instead of sewing Lebanon together, though, the effect was to empower local confessional party bosses, the za’ims, who controlled the disbursement of offices and used that control to aggrandize themselves politically and financially, joining forces with corrupt financial elites to maintain the Ponzi scheme that enriched a small cadre at the expense of the Lebanese public.

The most powerful of these za’ims recruited armed militias into their networks, and the competition between them, as well as the tension created by a confessional-based framework that privileged Lebanon’s Christian population over its growing Muslim population, eventually erupted into civil war. The end of that war was achieved through the 1989 Taif Agreement, which adjusted quotas for parliament seats and executive offices to account for demographic changes since the days of the French mandate, but otherwise left the corrosive za’im system untouched.

There’s a direct connection between the port explosion and the za’im system. As Joe Macaron of the Arab Center in Washington points out, the port is jointly managed by the Beirut Port Authority and Lebanon’s Customs Administration. Each is controlled by a separate za’im network — Customs by a network linked to Lebanese president Michel Aoun, the Port Authority by a network linked to former prime minister Saad al-Hariri.

Each is accountable only to its patrons, not to the government or the Lebanese people. Needless to say, there’s little collaboration between them. That neither ever assumed responsibility for dealing with the ammonium nitrate stockpile is unsurprising.

No End In Sight

For the Lebanese people who protested last fall and have lashed out again since the port blast, there is no obvious end to their plight. The wholesale political change needed to eliminate the za’im system and sweep away corrupt elites cannot be achieved as long as those elites control the levers of political and economic power. And those elites show no sign of giving way.

Aoun has already rejected the idea of an international investigation into the explosion, under the apparent principle that the same people whose corruption and negligence caused this disaster are the only ones who can be trusted to hold themselves accountable for it. Even the resignation on Monday of Prime Minister Hassan Diab and his entire cabinet will not bring meaningful change, since the political class whence Diab’s government emerged is still in charge.

Help is supposedly on the horizon.

French president Emmanuel Macron led a United Nations donor conference on Sunday to raise funds for relief and recovery work in Beirut. Before it began, he tweeted optimistically that “Lebanon’s future is being decided now.”

There are a few problems here. First and most obviously, “Lebanon’s future” was being decided at an event that featured no actual Lebanese people apart from Aoun, the target of much of the anti-government movement. But also, putting European governments in charge of reforming Lebanese politics is akin to leaving a fox to guard a henhouse.

After all, it was the very French government that Macron now heads that created Lebanon’s Frankenstein’s monster of a political system in service of its own colonial ambitions. But now Paris is back to fix the problem it caused. What could go wrong?

Indeed, if there has been one constant in Lebanon’s politics since 1943, aside from the corruption of its own elites, it’s that the rest of the world has been unable to leave it well enough alone. From the French mandate, to the 1958 US intervention to save then-president Camille Chamoun from a popular uprising, to the arrival of the Palestinian Liberation Organization in the 1970s, to interventions by Syria, Iran, and the West during the civil war, to Israel’s invasion and occupation of southern Lebanon from 1982 through 2000, the Lebanese people have never been free to determine their own destiny.

Today the factionalism inherent in the za’im system is compounded by the swirling allegiances many of those factions have to foreign powers, whether to the United States, to Israel, to Saudi Arabia, or to Iran.

It is Lebanon’s ties with Iran, specifically via the Shia political party and paramilitary group Hezbollah, that will likely dictate how much international support Lebanon actually receives. The United States and Israel, aided by the Saudis, have weaponized Hezbollah’s role in the Lebanese political system in order to make Lebanon a proxy battleground in their unending, unsuccessful effort to bring Iran to heel. Prior to the port disaster, Hezbollah’s rising political clout in Lebanon was cited as justification for denying Beirut the kind of international relief it desperately needs to begin to fix its broken economy.

As an undeniable cog in the Lebanese political machine, Hezbollah deserves its share of blame for the state in which the country now finds itself. But before outside countries start demanding any political change in Beirut, they must reckon with the damage — now visibly strewn across the city — that their past interference in Lebanon has wrought.