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The State of Lebanon: From one Crisis to the Next

Saif Islam 8 September 2020
8 September 2020    Saif Islam

Global Risk Bulletin | September 2020

In this edition of the Global Risk Bulletin we look at the fallout from August’s coup in Mali, assess the prospects for a change of government in Belarus in the wake of ongoing tumult triggered by a disputed election, and delve into the aftermath of the Beirut port explosion, which prompted renewed calls for meaningful political change in Lebanon.

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The 4 August explosions in Beirut opened a new chapter in the ongoing political and socio-economic crisis in Lebanon, rejuvenating the anti-government protest movement and heightening political instability, writes Saif Islam.   

 

The Beirut port explosions, caused by improperly stored ammonium nitrate, triggered one of the most significant crises in the modern history of Lebanon, a country that has experienced civil wars, sectarian strife, and inter-state conflicts in recent decades. The incident killed more than 180 people, injured at least 6,000 others, and left 300,000 people homeless. For many citizens, the explosions – prompted by the authorities’ reported failure to remove the highly combustible material from the civilian port in six years – are symptomatic of government corruption, incompetence, and lack of accountability.

The incident has reignited the anti-government protest movement, resulting in the resignation of Prime Minister Hassan Diab and his administration, who are currently operating as a caretaker government. There is growing domestic and international pressure on Lebanon’s political elites to implement genuine political and economic reforms. However, they remain opposed to any substantive reforms that threaten their power and privileges. The tension between protesters’ demand for far-reaching changes, and the elites’ opposition to them, will likely subject Lebanon to sustained political instability in the coming months and beyond.   

A country in perpetual crisis

Even before the explosions, Lebanon was undergoing considerable instability, which was set in motion in October 2019, when large anti-government protests against proposed new taxes broke out across the country. The demonstrations temporarily paralysed several major cities, including Beirut and Tripoli. The eventual resignation of former Prime Minister Saad Hariri, who was replaced by Diab in January this year, did little to placate the protesters. Frustrated by rampant corruption, rising prices, and falling incomes among other socio-economic grievances, the protesters continued to call for comprehensive political and economic reforms.

The government not only failed to deliver on the protesters’ demands but also defaulted on USD 90 billion of debt in March, prompting a complex fiscal and monetary crisis that was exacerbated by the Covid-19 pandemic and a concomitant drop in remittances from the Lebanese diaspora. In May, inflation rose to almost 57 percent, and by June, the Lebanese pound had lost nearly 80 percent of its value relative to October last year. In July, almost half of Lebanon’s population were living below the poverty line. As if things could not get any worse, the Beirut explosions left more than 70,000 workers unemployed, caused approximately USD 15 billion worth of property damage, and wiped off an estimated 20 percent of the country’s gross domestic product (GDP). As ordinary citizens started coming to terms with the disaster, calls for reform started growing louder.

 

The tension between protesters’ demand for far-reaching changes, and the elites’ opposition to them, will likely subject Lebanon to sustained political uncertainty in the coming months and beyond.   

 

Obstacles to real reforms

In the days following the explosions, anti-government protests broke out across the country, particularly in Beirut. The protesters not only demanded government officials be held accountable for the explosions, but also a complete overhaul of the political system that is built on sectarian patronage. The end of the 1975-1990 civil war ushered a new elite power-sharing agreement between influential Shia, Sunni, and Maronite Christian politicians. These factions transformed government institutions into clientelist networks, giving out positions in government ministries and public entities to their partisans, or allowing them easy access to government contracts in the private sector. This sectarian arrangement allows these factions to maintain their influence over the public and private sectors as well as to retain the loyalty of their supporters. This has contributed to a notable lack of transparency and accountability in the political system.

In recent years, the ascendancy of the Shia Hezbollah movement as the country’s most powerful political and militant movement has not changed the status quo and has arguably made matters worse. Hezbollah primarily operates behind the scenes through everchanging alliances with major Shia, Sunni, and Christian groups, who cannot govern without the group’s backing. Most importantly, neither Hezbollah nor other elites want a complete overhaul of the political system that could bring about an independent, transparent, and more accountable government, as they risk losing their powers and privileges. They have remained committed to the status quo through every crisis – whether it was the October 2019 anti-tax protests or the default on USD 90 billion of debt – and the explosions are not about to change their calculus. This will sustain the collision course between them and the protesters.

 

Outlook

Since Diab’s resignation, Lebanese powerbrokers and parts of the international community have been pushing for the formation of a new government as a way of moving the country forward. There is an urgent need to have a new government that steers Lebanon through its deteriorating economic crisis. After weeks of negotiations behind the scenes, Mustapha Adib – the relatively little-known Lebanon ambassador to Germany – was appointed prime minister-designate on 31 August. He secured 90 votes in the 128-member parliament and the backing of several former prime ministers.

The appointment has generated mixed reviews among protesters, some of whom are questioning his independence given he has been appointed by the same political elites who they have been protesting against. There are also questions about whether Adib can really implement substantial reforms like he claimed in his first press conference. Similar to Diab’s administration, Adib’s government will likely be subjected to high-level political meddling by sectarian elites, continuing the political dysfunction and lack of accountability. Even if a purely technocratic government is formed, the administration will struggle without a political powerbase.

Prior to Adib’s appointment, Diab had said only early elections can truly help the country navigate the complex crisis. But even if parliamentary elections occur later this year or in early 2021, independent candidates and political parties that seek to bridge sectarian grievances will need to make significant gains for any real reforms to be implemented by the new government. Until then, there is no easy escape from the political instability and the related anti-government protests that continue to grip Lebanon.

 

S-RM is a global risk consultancy providing intelligence, resilience and response solutions to clients worldwide. To discuss this article or other industry developments, please reach out to one of our experts.

Saif Islam
Saif Islam SENIOR ANALYST, CRISIS MANAGEMENT Email Saif

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