Lebanon is collapsing, so what is to be done?

Cassia King, a first-year Conflict Management student at Johns Hopkins/SAIS, writes:

To launch its new Lebanon Program, the Middle East Institute March 3 hosted a panel discussion on the current state of Lebanon and what kind of policies we should expect from the Biden administration in the country and region. Panelists included:

• Christophe Abi-Nassif (Moderator), MEI Lebanon Program Director
• Ambassador (ret.) Edward M. Gabriel, President of the American Task Force on Lebanon
• May Nasrallah, Chairwoman of the Lebanese International Finance Executives
• Paul Salem, President of the Middle East Institute
• Mona Yacoubian, Senior Advisor to the Vice President of Middle East and North Africa, United States Institute of Peace

Lebanon is in the midst of political and economic crisis. This week the value of the Lebanese pound hit a record low of 10,000 to the dollar. Nationwide protests erupted again March 2 while over 50 percent of the population slips into poverty. Lebanon is scheduled to have parliamentary and presidential elections in 2022. This could be the year that President Michel Aoun and House Speaker Nabih Berry are replaced.

Salem noted that Lebanon is at its lowest point in history. There is no consensus about what the nature of Lebanon is, whether it is independent and sovereign, or attached to other powers. The October 2019 revolt triggered by deteriorating economic conditions shook the political class but did not replace it. The old political order is dying, but the new order has yet to be born. Regionally, Lebanon is embedded in two major dynamics: US talks with Iran and the Abraham Accords. Salem stressed that we (US and international community) must insist that the 2022 elections occur on schedule. Those advocating for change still need to unify and get prepared for the elections with candidates that have real backing. As we have seen across the region, there can be powerful protests but failed election change.

Nasrallah highlighted Lebanon’s economic meltdown. The public sector is hemorrhaging and unable to produce. The government cannot service its debt, as witnessed last year when it first failed to make a $1.2 billion loan payment. The banking sector is shut down and unable to function. People have lost access to their funds. There is no end in sight for the continued collapse of the lira. COVID-19 has caused the health care system to collapse.

Stressing that Lebanon needs leadership with strategy and a plan of execution, Nasrallah remarked there is no sign of intent to fix Lebanon’s problems from its political leadership. The IMF has been waiting on standby for a good year or two. Lebanon needs a small, interim government of experts with exceptional powers to act without the parliament. This should be coordinated with central bank reform.

Yacoubian and Gabriel discussed the Washington perspective and expectations of the Biden administration.

Yacoubian stressed that Lebanon is collapsing. By every indicator the country is failing, not only economically but also in security terms. The protests that are happening now are NOT like the ones in October that were jubilant and full of hope for real change. Protesters are angry and are generating chaos and violence. Yacoubian also warned new waves of displacement could be sparked by this crisis. Lebanon’s most desperate are attempting to cross the Mediterranean to Cyprus in small boats. The Biden administration clearly has a lot on its plate, but if Lebanon is not engaged now, the US will be forced to engage later in ways that are far more costly. The US should use its power/leverage to do two things: pressure the political class to put together a government of experts, like Nasrallah suggested, and increase food aid from WFP to alleviate suffering without letting the “cronies” off the hook.

Gabriel filled in the picture on what can be expected from the Biden administration. Globally, it is focused on rebuilding trust with allies in Europe and Asia and managing great power competition to ensure Russia and China don’t become primary brokers, which could be a concern in Lebanon. The Biden administration has three default buttons: engagement (strengthened US diplomacy), values (human rights, minority inclusion), and collective action (working with like-minded countries). The Abraham Accords will be encouraged, and Palestinian aid will be reconstituted alongside an emphasis on the two-state solution. Hady Amr at the State Department will bring back a sense of trust.

On Lebanon specifically, the Biden administration will stand firm against bailing out a corrupt government and continue its support for the Lebanese Armed Forces. Two additional pragmatic steps are desirable: the creation of a fund within the next 90 days for humanitarian and civil society needs, and a high-level visit to Lebanon from US and French officials to push for the formation of a reform-minded government.