After year of political deadlock, financial woes, what next for Lebanon?

Updated 30 December 2018

After year of political deadlock, financial woes, what next for Lebanon?

  • Months-long political paralysis has impacted the already-fragile economy

BEIRUT: Over the course of 2018, Saudi Arabia opened cinemas for the first time in 35 years, Apple Inc. reached $1 trillion on the stock market, and the US withdrew from the Iran nuclear deal. 

Lebanon, on the other hand, continues to stumble around after a year that started out hopeful, only to end in frustration, exhaustion and confusion for its citizens.

The biggest event of the year was the parliamentary election, the first in nine years, which saw many familiar faces and names line up their candidacy, but also a rise in civil society movements that have challenged the status quo.

Voter turnout was just under 50 percent, with little change apart from a single parliamentary seat for civil society groups.

Hezbollah and its allies won more than half the seats, a result that the Iran-backed militant group’s leader Hassan Nasrallah called a “political and moral victory.” 

The Future Movement of Prime Minister Saad Hariri lost a third of its seats, the outcome of years of erosion to his March 14 coalition.

Now we reach the seventh month since he was handed the duty to form a government after the election, with the promise of a “holiday gift to the Lebanese people” in its formation.

Efforts to form the government have been obstructed by conflicting demands for Cabinet seats that must be handed out in line with a sectarian power-sharing system.

Political chess

Two main issues sit at the core of government-formation efforts: Syria and the case of six Sunni MPs. 

As the Syrian conflict heads to its endgame, some Lebanese politicians are keen to normalize relations with Syrian President Bashar Assad, a move Hariri is not exactly fond of.

“It is impossible that I visit Syria, not now and not in the future… and if Lebanon’s interest requires so, then you could find someone else” he said in August.

As for the second issue, six pro-Hezbollah Sunni MPs were elected this year at the expense of Hariri’s tight grasp on the sect’s seats. 

The six demand representation in the Cabinet due to the electoral gains of Hezbollah and its allies. This would mean Hariri ceding his power as the Sunnis’ main leader. 

After deliberation and mediation by Lebanese President Michel Aoun, the six have agreed to give the name of a single MP to represent all their interests. 

A name was given and things appeared to be on the right track, with Hariri saying the government-formation announcement would come “within a few hours.” 

Citizens eased up ahead of the Christmas holidays, before the “few hours” turned into days after the six decided to reject the name that was nominated for their representation.

Lebanese rushed to Beirut’s Martyrs’ Square on Dec. 23, donning yellow vests with a cedar tree emblem, in protest at the continued delay.

“I came because I’m fed up,” protester Youssef Al-Amine told Arab News, “I’m below the legal voting age, but I came because I didn’t want to just sit at home doing nothing.”

As the days go by, Lebanon is looking increasingly likely to enter 2019 without a formed government, as Hariri and Hezbollah continue to squabble over seats and Sunni representation in the Cabinet. 

Economic woes

Early in the third quarter of 2018, there were reports that Lebanon was teetering on the brink of economic collapse, with the lack of government formation accelerating its imminence. 

Earlier this year, at a Paris conference dubbed CEDRE, Lebanon was granted up to $11 billion in aid from Western countries to slow down or halt the impending economic crisis. 

But the lack of government means the funds are inaccessible, leading France and other Western countries to issue statements of caution.

“The lack of a government in Lebanon means running the risk that this dynamic in the international community is lost,” said France’s ambassador to Lebanon, Brouno Foucher.

This summer, the global ratings agency Moody’s gave Lebanon’s economy a “low (+)” grading due to “the deterioration in the regional economic and political environment.” This, and the fear of a real estate collapse, have placed citizens on edge. 

“Since 2011, the lack of investment in infrastructure and the absence of economic reforms have weakened the country’s competitiveness, and would likely prevent Lebanon from returning to previously high real GDP (gross domestic product) growth, even if political risks were to subside,” the Moody’s report said.

Economic growth plummeted from a solid 9 percent since the start of the Syrian revolution in 2011, and has hovered around 1.1 percent for the past three years. Public debt stands at $82 billion, equivalent to 150 percent of GDP.

“We’re passing through challenging times,” former Lebanese Finance Minister Raya Al-Hassan told Arab News. 

“We’re in a huge slump. All the economic indicators point to a downturn in economic activity. All the real economy sectors are suffering and witnessing a downturn.”

Running in parallel with the economic slump is the country’s weak demand for real estate, with megaprojects being halted.

A slump in oil prices from 2014 compounded this slowdown, leaving thousands of apartments unsold across Beirut, and forcing some developers to freeze construction sites.

“Some 3,600 unsold apartments exist today in Beirut alone,” said Guillaume Boudisseau, an expert at the Ramco real estate consultancy firm.

Rays of light

While Lebanon’s economic and political woes have placed considerable strain on its citizens, the cultural sector thrived this year.

Lebanon was represented at the Academy Awards for the first time with Ziad Doueiri’s “The Insult,” which highlighted the sectarian strife still embedded in the country since its 14-year civil war ended in 1990.

Nadine Labaki’s “Capernaum” is also in the running to represent the country at the 91st Academy Awards, after receiving the Jury Prize at the Cannes Film Festival, and being the first Lebanese film nominated for an Emmy Award for Best Foreign Film.

The country announced that it will reopen its national library to the public 40 years since it shut its doors during the civil war. The Beirut Museum of Art will open in 2023.

As 2018 comes to a close, Lebanon’s future — as always — is part of a circus act, with the main show being Hariri juggling the country’s economy, politics and citizens. It is only a matter of time before one — or all — of them come falling down.


Turkey, Greece agree to resume talks to resolve disputes

Updated 22 September 2020

Turkey, Greece agree to resume talks to resolve disputes

  • Erdogan called for a regional conference that would gather all sides involved in the dispute — including Turkish Cypriots
  • The two neighboring NATO members have been locked in a tense standoff over energy exploitation rights

ANKARA, Turkey: Turkey and Greece are ready to resume talks in a bid to overcome a dispute over maritime boundaries and rights to exploit oil and gas resources, Turkish President Recep Tayyip Erdogan’s office said Tuesday.
The statement followed his video conference meeting with German Chancellor Angela Merkel and European Council President Charles Michel.
During the meeting, Erdogan called for a regional conference that would gather all sides involved in the dispute — including Turkish Cypriots — and said the “momentum” for dialogue should be protected,” according to the statement.
The two neighboring NATO members have been locked in a tense standoff over energy exploitation rights in an area between Turkey’s southern coast, several Greek islands and the war-divided island of Cyprus. Turkey sent a research vessel into the disputed waters this summer.
Following mediation efforts by Germany and others, Turkey pulled back the research vessel to port and both countries eased their naval presence and halted military exercises, paving the way for a dialogue.
It was not clear when and how the talks would begin. Erdogan told Merkel and Michel that “steps to be taken by Greece” would determine the course of the talks.
Greek-Turkish talks to resolve disputes were last held in 2016.
The Turkish leader also said he hoped that the next European Union summit would breathe new life into Turkish-EU ties, including allowing Turkish citizens visa-free travel rights to Europe and sealing a new agreement on migration.
EU members Greece and Cyprus had been pushing for EU sanctions against Turkey at the Sept. 24-25 summit meeting to due Turkey’s search for energy inside Cyprus’ economic zone. But the summit has been postponed for a week because Michel has gone into quarantine after a close collaborator was diagnosed with COVID-19.