The exacerbating crisis in Lebanon and the regional competition


By Dr. Moshe Albo​​ | February, 2022

Lebanon's Flag
Photo: Shahen books | CC BY-SA 4.0


The rhetorical fist fight between Hizballah and Saudi Arabia has escalated in recent weeks, reflecting the growing regional competition between Iran and its proxies, and the pro-American Middle Eastern camp headed by Saudi Arabia, but it also serves as a concrete display of the aggravating competition over Lebanon. The economic and political crisis in Lebanon is experiencing is being viewed as a strategic opportunity for the Gulf states, Egypt and Jordan to create impact levers designed to reduce Iranian influence and weaken Hizballah in both the regional and internal Lebanese systems by providing financial and energy assistance to Beirut. This step aligns with the Israeli interest, despite its low expected value in view of the central role played by Hizballah in the domestic Lebanese arena, and Iranian clout there.


Nevertheless, the exacerbating crisis and Gulf pressure are not likely to weaken Iranian impact, or gnaw at Hizballah's status in Lebanon. The movement's dominance is not restricted to the military aspect alone. It is deeply integrated into Lebanese society and economy, constituting a key actor in national politics. Iran, on its part, will do everything in its power to maintain its influence in Lebanon, and will take steps to strengthen Hizballah, which it perceives as a strategic asset by which to project power in the region and vis-à-vis Israel.



The Geopolitics of the Lebanese crisis


Lebanon has been suffering from an economic crisis of historical proportions since August 2019 that has pushed close to 70% of the population over the poverty line, crushing the value of the Lebanese Lira by more than 90%. The government is on the brink of bankruptcy, and is unable to promote the required reforms to resuscitate the Lebanese economy. A new government was formed in Lebanon in September 2021, led by Najib Mikati, under the banner of rehabilitation and unity.


In practice, this government is paralyzed and cannot promote significant measures that will extract Lebanon from the deep crisis it is undergoing. Over the last three months Hizballah has slammed down the government's brakes with its demand to remove the judge heading the investigation into the Beirut Port explosion. The government's paralysis has prevented it from taking the necessary steps to address the economic crisis. Former Prime Minister Saad Hariri has recently announced that he would not be running in the upcoming parliamentary elections, explaining in his resignation speech that there was no room for any positive opportunities to Lebanon as long as Iran and Hizballah continued to have such tremendous influence on the country.


The World Bank has issued a poignant accusation against Lebanese political elites and power factors. Its main argument was that Lebanon’s great depression is orchestrated by the elites' corrupt behavior, for they have captured the state's power loci, and left it penniless. This crisis, which, according to the World Bank, is one of the top three most severe economic collapses worldwide since the 1850s, has come to threaten Lebanon’s stability, which the country struggled to create following the great civil war. The government's political paralysis, or the inability or unwillingness of the various actors in the political system to promote an overall plan for grappling with the severe economic crisis poses a growing risk to Lebanon.


Regional rivalry between Saudi Arabia and the United Arab Emirates, and Iran and its proxies in recent months is spilling over into Lebanon, impacting its ability to cope with the economic and political crisis. The breakdown in relations was triggered by the Lebanese Information Minister's public criticism of the Saudi campaign in Yemen, which led to the expulsion of the Lebanese ambassador from Riyadh, the recall of the diplomatic staff of the UAE, Bahrain and Kuwait from Beirut, and the banning of Lebanese import (30 October). The Lebanese government has sought to mitigate the tension, and bring back the Gulf aid crucial to the Lebanese economy, particularly in view of the exacerbating economic crisis.


Just when things seemed to be back on track, Hizballah Secretary General gave a speech in commemoration of the second anniversary of the death of Qassem Soleimani (3 January), in which he focused on the United States, and its ally, Saudi Arabia, as the key destabilizing factors in the region:



"The Saudi King addressed the Lebanese People and leaderships and demanded that they stand against the hegemony of terrorist Hizballah. If some Lebanese parties are afraid of responding, we are not; we care about our dignity. (Raises his voice) O King, the terrorist is he who has exported the Wahhabi, Daeshi thought to the whole world; it's you! The terrorist is he who dispatched thousands of Saudis to carry out suicide attacks in Syria and Iraq; it's you! The terrorist is he who has engaged in a 7-year war against the oppressed people in Yemen, killing women and children, and destroying humans and stones; it's you! The terrorist is he who stands by the USA in all its wars and allows it to use his land and military bases to commit war crimes against humanity; it's you! The terrorist is he who funds all the groups that stir sedition and engage in civil wars in Lebanon and all the region; it's you!"



Lebanon's President, Najib Mikati, underscored immediately after Nasrallah's address that his statement does not serve the national interest:


"For God's sake, have mercy on Lebanon and the Lebanese people and stop the hateful sectarian and political rhetoric."



The Gulf states set out 12 conditions to help Lebanon during the Kuwaiti Foreign Minister's visit there. According to Lebanese newspaper Al-Akhbar, the Gulf initiative has been coordinated with the United States and Europe, as well as with the Sunni states. The key condition set by the Gulf demand is Lebanon's commitment to the Security Council resolutions (Resolutions 1559 and 1701), with special emphasis on "disarming militias in Lebanon", and halting Hizballah's interference in Gulf and Arab affairs (the campaign in Yemen). This step comes in response to Nasrallah's rhetoric as well as to the threat his organization poses to Saudi Arabia and the UAE in Yemen, and is supported both regionally and internationally. It aims to weaken Hizballah's stature in Lebanon, put an end to the organization's involvement in the civil war in Yemen, and increase the pressure exerted on the government and other political forces in view of the exacerbating economic crisis.



The opportunity offered by the crisis – A regional energy partnership


The severe economic crisis has forced the central power stations in Lebanon to shut down (Deir Ammar, Zahrani) due to an acute shortage of fuel supplied to the national electricity company (EDL). Lebanese citizens get three hours of electricity a day, and are forced to pay the hefty prices quoted by private power providers following the reduction in diesel oil subsidies that has led to a considerable rise in prices. Moreover, inflation is running wild (the annual inflation rate is 137%), and the rate of unemployment is nearing 40%.


In this context, Lebanon, Jordan, and Syria have signed an agreement whereby 250 megawatts of electricity will be supplied from Jordan to Lebanon via Syria. The project will be funded by the World Bank and is estimated to cost 200 million Dollars. The Lebanese Minister of Energy stated at the signing in Beirut (26 January) that the Lebanese People needed every hour of electricity they could get in view of the severe crisis the country was experiencing.




Furthermore, talks between Lebanon and Egypt on the operationalization of the Arab Gas Pipeline in the upcoming months to supply Lebanon with gas via Jordan and Syria are also progressing. The gas pipeline was built to export natural gas from Egypt to Jordan, Syria, and Lebanon, with an underwater and underground connection to Israel. It is 1200 km long, and cost 1.2 billion Dollars to build.


The White House has approved the exclusion of gas supply to Lebanon via Syria from the sanctions imposed on the Syrian regime. The United States aims to prevent Lebanon's collapse, and create regional economic levers by which the pro-American Sunni camp, in collaboration with Israel, would reduce Iran's swelling impact in Lebanon.



The Israeli angle


Israel and Egypt share a fruitful energy partnership that also finds expression in the two countries being members of the East Mediterranean Gas Forum (EMGF). In January 2020, Israel became one of Egypt's key natural gas suppliers, after having started to produce gas from Leviathan and Tamar gas reserves. Israel, at that time, had also signed a contract for the provision of natural gas to Jordan, which, in effect, connected Israel directly to the Arab Gas Pipeline.





Will Israeli natural gas be transported to Lebanon via the Arab Gas Pipeline? It may. But that is not the question. Israel is not responsible for the use made of the gas it exports to Egypt and Jordan. Israel does, however, have a strategic interest in broadening its energy partnership with Egypt and Jordan, establishing Israeli valuableness to Arab states' national security, and leveraging it to achieve its security objectives. At the same time, it is clearly in Israel's best interest that Egypt, Jordan, and the Gulf states increase their clout in Lebanon, and reduce the growing Iranian impact there as much as possible, as well as Hizballah's legitimacy, even if is a long shot.


The expected value of the Saudi step is low. Iran's long-standing effect in Lebanon, as well as Hizballah's military, political and social power will most likely curb this Gulf initiative. In addition, should a renewed nuclear deal be signed, many resources will be injected into the Iranian economy, leaving Tehran to invest even more in entrenching Hizballah's status as a leading military and political force in Lebanon.


However, Hizballah's clear Shiite affiliation in Lebanon's complex ethnic fabric, its overt ties with the Iranian patron, and the fact that the steps taken by the organization do not necessarily align with Lebanon's national state interest are fueling criticism and causing pressure to be exerted on Hizballah, thus proving detrimental to its legitimacy in Lebanon and across the region. This could have a long-term destabilizing effect on the organization's status that should be leveraged and enhanced in an effort to weaken Hizballah's power in the Lebanese arena.




Authored by Dr. Moshe Albo, a senior researcher at the Institute for Policy and Strategy (IPS), Reichman University.


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