Lebanon: chronicle of a state euthanasia

Folk wisdom has it that a skinny dog is all about fleas. The disaster in Beirut adds to the other simultaneous crises plaguing Lebanon, a country that is going from being the eternal promise of the Middle East to joining the sad list of failed states in the region. On paper, Lebanon had everything going for it to become a benchmark country in the Eastern Mediterranean. Its own orography largely determined its cultural differentiation from the Arab world in which it is embedded, thanks to having served secularly as a refuge for all kinds of ethnic, political and religious dissidents, who found asylum in the country's rugged geography. This melting pot, and the lack of natural resources, enabled Lebanon to flourish as a commercial hub and cultural reference, which was reflected in a high population density and high levels of education.  This prosperity, however, circumvented the precarious internal balances that strained the socio-economic organization of the State, which was attempted to be managed through a regime of proportional denominational quotas, which ended up being unsustainable due to the exogenous dynamics generated by the Palestinian-Israeli dialectic, which led to the 1975 civil war, and which was followed by the Syrian occupation, armed conflicts with Israel, sectarian strife and assassinations, the consequences of which still reverberate in the country.

Although -perhaps not without some haste- the cause of the devastation of August 4 in Beirut was framed in the immanent conflict between Iran and Israel, pointing, on the one hand, to an Israeli 'surgical' attack; and the proximity of the sentence for the assassination of Prime Minister Hariri -of whom members of Hezbollah are accused-, on the other hand, the real reasons for the catastrophe seem to point to a more prosaic and accidental origin, which is explained in good measure by the collapse of Lebanon's administrative structures. The mere fact that it has been possible to store 2 750 tonnes of ammonium nitrate in Beirut, a fertiliser whose explosive properties have been used on numerous occasions in terrorist actions, gives us the measure of the prevailing lack of control.  

It is difficult to hope that Lebanon will be able to stand up for itself once again and begin a new phase of recovery. On this occasion, it would not be entirely exaggerated to use a medical simile and speak of multi-organ failure: hours before the explosion, a ministry was occupied by demonstrators, driven by the despair of being trapped in a country with a collapsed economy, no available jobs, and no fiscal capacity to undertake assistance policies that could alleviate the vital needs of families, which will now be even more strained by the practical destruction of the commercial port of Beirut, after a detonation equivalent to one fifth of the Hiroshima bomb. So much so that the Lebanese Minister of Public Works has announced that food supplies will be channelled through a Lebanese port near Syria. The silos in the port of Beirut were destroyed in the incident, and cargo ships carrying grain from Russia and Ukraine were unable to dock after the explosion.

The calculations of the main actors concerned in Lebanon will not escape the fact that allowing further social deterioration entails accepting a high geopolitical risk, which may eventually drag them all down. When Lebanon went into technical bankruptcy in March, its government entered into talks with the IMF with a view to a comprehensive rescue plan. France had given up its attempts to obtain results from the donors' conference it organised in 2018, mainly because of the suspicions of the Gulf countries regarding the possibility that the donations would end up in the hands of Hezbollah, an organisation whose influence on the Lebanese administration has so far made it difficult to make progress in the IMF rescue negotiations.

Whichever angle we choose to analyse the problems of the Lebanese economy, we will always see that the main obstacle is that the underground economy is under Iranian control, through the interposition of Hezbollah, which has created a system of corruption thanks to which it is estimated that it diverts $1 billion annually, income that allows it to maintain a military force parallel to that of the State thanks to which it determines Lebanon's foreign policy.  But Hezbollah is not the only factor that makes the Lebanese problem intractable. Even if the fear that the precipitous descent into a spiral of social chaos will put Lebanon in the hands of Damascus, Tehran and Beijing, encourages Western actors to take action to rescue the country - France, Israel, the US and the Gulf monarchies have already made statements in this direction - restructuring its sovereign debt seems very complicated, beyond the cancellation of loans. As we said before, Lebanon lacks natural resources, does not have a foreign currency reserve either, and the almost 300 tons of gold it keeps in its coffers are worth no more than 17 billion dollars. Its only real value to third parties is its geostrategic location: the country imports 80% of what it consumes, especially foodstuffs and hydrocarbons. Its financial sector is limited to the real estate market and the management of remittances from Lebanese emigration.  It is therefore not surprising that the orthodox banking attempts to attract foreign currency deposits - offering high interest rates to finance the state - failed in a situation of 80% devaluation of the value of the Lebanese lira and massive capital flight. 

As it is, there are only two realistic options for Lebanon, neither of which involve autarkic solutions, nor are they exempt from tolls. The country's future can only come from the hand of structural reforms that put an end to systemic corruption and allow Lebanon to move towards an open economy (IMF option) or by consolidating sectarian misgovernment and turning the country of cedars into a satellite state, with a subsistence economy (IBA option). 

The Lebanese people know that the problems that beset them cannot be solved by the same corrupt and sectarian elite that created them. When the problems you face are hunger, garbage collection, lack of medical care, drinking water supply and power cuts, the flames of geopolitical rhetoric fall on deaf ears. But what happens on the Lebanese streets in the coming weeks will determine your future.