Lebanon 2020: From “The Pearl of the Orient” to failed state?
International Institute for Middle East and Balkan Studies (IFIMES) from Ljubljana, Slovenia, regularly analyses developments in the Middle East and the Balkans. General (Rtd) Corneliu Pivariu is a member of IFIMES Advisory Board and founder and former CEO at Ingepo Consulting. In his comprehensive analysis entitled “Lebanon 2020: From “The Pearl of the Orient” to failed state?” he is analysing the economic and social situation in Lebanon – can Lebanon become again a democratic and modern country of the Middle East.
● General (Rtd) Corneliu Pivariu
Member of IFIMES Advisory Board and
Founder and the former CEO of the INGEPO Consulting
Lebanon 2020: From “The Pearl of the Orient” to failed state?
We will not allow for Lebanon to become a compromise
card between nations that want to rebuild ties amongst themselves.
Patriarch Bechara Boutros Al-Rai – August 15, 2020
Before the explosion of the Port of Beirut (the biggest one in an urban area in the last decades), on August 4, 2020, the situation in Lebanon was circumscribed to the regional focus only while the disaster caused by the blast (around 200 dead, more than 6,000 wounded and damages estimated to 11/15 billion-dollar) brought again the small country of the cedars to the international focus as it happens in fact with any other country where an event of such proportions takes place. Yet Lebanon is in a peculiar situation since the developments in this country represent, as I presented on numerous occasions, a signal concerning possible future evolutions in the Middle East and even in a more extended area.
The present analysis is prepared at a time when the echoes and international emotions after the devastating blast of August, 4 have not gone out and tries to show not only the importance for the area of the developments in Lebanon but also in order to emphasize that what unfolded in Lebanon during the last decades and today is perfectly valid for another numerous countries everywhere in the world, countries which have no resources of their own, endure a multitude of foreign political influences, are confronted with a massive emigration as a result of a dire domestic situation and are worn out by corruption.
Short chronology and considerations on the political evolution before August, 4
On September, 1st, 1920 France, through the voice of General Henri Gourand declared, in Beirut (surrounded by political and religious leaders), the emergence of Greater Lebanon, after centuries of Ottoman occupation and, on November, 22, 1943, Lebanon proclaimed its independence and the end of the French Mandate, a day that became since then the country’s National Day. After the independence, the Lebanese state was founded on the basis of an unwritten agreement between the two prominent leaders of the time: Béchara el-Khoury and Riad el-Solh, a Christian and a Muslim, called later on the National Pact (al Mithaq al Watani), having a capital importance even today.
In the 1950s under the presidency of Camille Chamoun, the economy grew as the international tourism exploded and the banking sector developed as a result of the operations made by the Arab oil exporting countries and of their deposits with the Lebanese banks. However, the first civil war which lasts a few months breaks out in 1958 and the US send troops to assist president Chamoun. The 1960s and the beginning of 1970s witness the consolidation of Lebanon’s place as a regional center for the rich people of the Gulf and of the world who were coming to gamble at the Casino du Liban or to attend the famous Baalbek concerts and festivals.
The Palestinian presence in Lebanon and the attacks launched from the Lebanese territory on Israel led to dissensions on the domestic political scene and represent an important factor for triggering the civil war in 1975, a sectarian war which lasted 15 years and 6 months (more exactly between April 13, 1975 and October 13, 1990 – the forced departure in exile of general Michel Aoun). The war resulted in more than 150.000 dead, more than 300.000 wounded and in immeasurable destruction. Other sources consider the end of the war when the first parliamentary elections took place in the summer of 1992, after 20 years. During the same period Israel launched two invasions, in 1978 and 1982, and the latter resulted in the departure from Lebanon of Yasser Arafat, the president of the Palestine Liberation Organization and part of the Palestinian fighters. In 1982, too, two other important events took place, the massacres of civilians in Sabra and Chatilla refugee camps (450 and, respectively 3.600 dead) and the assassination of the newly elected president Bashir Gemayel.
In 1983 two bomb attacks resulted in the death of 241 US marines in their barracks on the Beirut shore and, in the same day, of 58 French paratroops, a few kilometers away; consequently, in the spring of next year the multinational forces withdrew from Lebanon. The 1982 Israeli invasion and the aforementioned bomb attacks marked the emergence and expansion of Hezbollah which begun to gradually play an ever-important role in the country’s political, economic and social life.
In 1988, when the mandate of president Amine Gemayel expired and in the absence of an elected successor, he designated General Michel Aoun as a caretaker prime minister who, on March 14, declares war against the Syrian presence in Lebanon. After seven months of fighting a ceasefire was reached which was followed by international negotiations that secured the signing of The Taif Agreement on October 22, 1989, ratified by the Lebanese parliament on November 5 of the same year. Fights among different factions broke out again at the beginning of 1990 and after a Syrian offensive strongly backed by the air force; General Michel Aoun left the Baabda Presidential Palace and took refuge at the French Embassy from where ten months later he was evacuated by sea to Paris.
After Israel’s withdrawal from the south of Lebanon in 2000, Hezbollah maintains its military power and declares itself Lebanon’s defender (especially in the south).
On April 26, 2005 the complete withdrawal of the Syrian army from the Lebanon’s entire territory was over, including the closure of the Syrian intelligence offices opened in the country. After more than 29 years of occupation, almost 30.000 Syrian troops left the Lebanese territory in less than two months, a withdrawal that took place under the circumstances of the Cedar Revolution that was unfolding in Lebanon, of the international pressures to withdraw and the strong echo of the assassination, on February 14, 2005 of the former Lebanese Prime Minister Rafik Hariri.
During July-August 2006 a new conflict with Israel took place (or, better said, the confrontation between Hezbollah and Israel in Lebanon) from which we can assess that the winner was Hezbollah, it strengthened its position domestically from all standpoints until today and represents the power without which no political agreement for the governance can be reached. Not only did Hezbollah effectively exploit domestically the 2005 conflict with Israel but it also posed Israel military problems by proving ingeniosity and creativity in conducting the conflict. Its 2006 success was media exploited by setting up an open-air museum presenting the military bravery during the fights, a museum (The Resistance Museum in Jibchit – inaugurated in 2010) which receives yearly a great number of visitors, as a valuable propaganda for the organization’s military as well as political components.
Syria’s civil war which started in 2011 represented another important challenge for Lebanon. The numbers of the Syrian refugees in the small cedars country varied in the course of time in accordance with the intensity of the conflict and is at present around 1 million (it is estimated that the peak was reached in October 2016 when the number of refugees came to 1.5 million). It is a major challenge for a country of 6.8 million inhabitants (2016 est.) already hosting 400,000 Palestinians.
On October 31st, 2016 the Lebanese parliament brought to an end the longest period of the country’s history with no president (29 months since the end of president’s Michel Suleiman mandate – May 2014) after 45 parliamentary sessions in which no candidate had the necessary quorum for being elected. The new president General Michel Aoun could be considered a Lebanon’s legendary personality. His mandate ends in 2022. Nevertheless, the way the Lebanese political stage is conceived and works does not allow the president to take measures short of a wide political accord, something history proved to be extremely difficult to reach in Lebanon. In fact, the difficulties the country went through since 2016, with numerous demonstrations and popular protest manifestations: 2015-2016 - “The Garbage Crisis”, 2019-2020 – protests against the decision to increase the prices of liquid fuels, tobacco and tariffs for on-line communications which later on expanded to other popular discontents such as lack of electricity, of running water, unemployment, economic stagnation, rapid devaluation of national currency, corruption. The economic crisis led to the resignation of the Saad Hariri cabinet and the appointment, on December 19, 2019 of a new prime minister, Hassan Diab – the minister of education in the preceding cabinet.
Short overview of the economic evolution until the August 4
After witnessing a flourishing economic situation in the 1960s and the beginning of the 70s following the development of the banking system, the expansion of tourism and the fact that the Lebanese banks were preferred by the Gulf monarchies for carrying out financial operations resulted from the oil exports and gaining nicknames such as The Switzerland of the Orient or The Pearl of the Orient which caused great envy in the area, Lebanon went through a difficult period which it has not overcome until now. The causes are multiple and this is not the place for an exhaustive approach. The Lebanese diaspora is more numerous than Lebanon’s population and it is estimated at 8-10 million people of whom 1.2 million have Lebanese citizenship and has at its roots the evolution of the country’s political and economic situation over the years. At its beginnings, the diaspora was predominantly Christian yet the situation changed gradually and the percentage of Muslim emigrants grew. The Lebanese diaspora represents a force that the succeeding governments over the years did not succeed in mobilizing enough to contribute to the country’s economic recovery (in 2014 the remittances of the Lebanese ex-pats amounted to 8.9 billion dollar or around 18% of the GDP).
The evolution of the Lebanese economy after the beginning of the civil war until now represented nevertheless a particular situation as a result of the Lebanese’s entrepreneurial spirit and their extraordinary desire of survival and national renaissance. It seems that this spirit has gradually been exhausted to a certain extent and the much sought-after recovery has been delayed beyond the hopes of the majority of citizens.
The difficulties the Lebanese economy has been confronted with were exacerbated by the lack of natural resources, the dependence on imports and by the change in the structure of the GDP, mainly by the decrease of the banking and tourism industries’ share of the GDP; nevertheless, services provide 83% of the GDP.
Lebanon’s external debt amounts now to around 170% of the GDP and the country, due to failure to repay a 1.2 billion Eurobond outstanding in the spring of 2020, witnessed a massive devaluation of the national currency being the first country in the Middle East and North Africa where the inflation rate exceeds 50% for 30 consecutive days. The situation impacted the common citizen who was subject to numerous restrictions including the withdrawal of foreign currency from his account (for a period it was restricted to 200$/week) or the outside transfers which were limited to 10.000$/year starting with August 2020.
The current political, economic and social situation and the outlook to the end of 2020
On August 4, 2020 an extremely powerful explosion occurred in a warehouse of the Port of Beirut, considered by the expert as the most powerful blast of the last decades in an urban area as a result of the ignition of a quantity of around 2,700 tons of ammonium nitrate. The blast resulted in more than 200 dead and around 6,000 wounded, more than 300,000 inhabitants experienced important damages of their homes and the windows in Beirut were broken on a radius of 10 km. 15,000 tons of grains stored in a nearby silo were destroyed (cca. one month of the country’s needs), the port activity was suspended, the electricity crisis amplified, several important hospitals of Beirut were seriously harmed, under the circumstances of Covid-19 pandemic which affected Lebanon, too.
I will not insist on the causes and the possibilities that led to the disaster as it is investigated by a commission with the participation of international experts, yet I am not the adherent of occurrences or coincidences in case of such events.
The event brought about the resignation of Hassan Diab on August, 10 and the president Michel Aoun appointed on August 31st, Mustafa Adib as new prime minister.
The French president Emmanuel Macron remembered that his country had an important influence in Lebanon and paid immediately (August, 6) a visit to Beirut which triggered a less than expected reaction of the population that was exasperated by the incapacity of the authorities and initiated, on August 7, a petition requesting that Lebanon revert under French authority; the petition was signed during the first days by more than 60,000 persons.
France proposed immediately the draft of an action plan whereby reforms (which were to be made through a permanent consultation with the civil society) have a prominent place (reforms in the economic – electricity field; financial, governance, justice, fighting corruption, etc.). The September 15, deadline set by France for forming a new government has already passed as a result of dissensions for assigning certain portfolios, especially the finance portfolio which is sought after by the Shia parties – Hezbollah and Amal. The last compromise suggested was that the portfolio be taken over by an independent Shia politician. Even that was not enough and the nominated prime minister tendered his resignation on September 26. Thus, the Lebanese crisis goes on at its own pace known at least during the latest years. The existing sectarian algorithm for which no replacement has been found yet continues to play an essential role on the Lebanese political stage.
Emmanuel Macron returned to Beirut on September 1st, for marking the anniversary of 100 years since the end of the Ottoman dominance but especially for discussing the evolution of the political and economic situation. He promised to organize an international conference in Paris in order to secure new assistance for Lebanon. As always, there were voices in Beirut that denounced the French president’s acts as neocolonial. Nevertheless, a great part of the Lebanese political forces continue to back the French initiative according to the latest declarations of the Sunni leader Saad Hariri and Nabih Berri – the leader of Amal and president of the parliament.
Lebanon’s importance on the international arena is proved by the numerous delegations who paid visits to Beirut immediately after the blast and in this regard we mention: the visit of the Turkish vice-president Fuat Oktay together with the minister of foreign affairs Mevlut Cavusoglu on August 8; the Iranian minister of foreign affairs Mohammad Javad Zarif on August 14; the American assistant secretaries David Hale (former ambassador to Lebanon) in August and David Schenker on September 4 (the latter discussed with the leaders of the demonstrates only); the President of the European Council Charles Michel on August 8. It is worth mentioning the appeal made by the latter in his statement: „The local political forces must use this opportunity and unite in a national effort in order to address the immediate needs and moreover the challenges the country is confronted with. It is of utmost importance for Lebanon to implement fundamental structural reforms. Lebanon can count in its efforts on the European Union – but the internal unity is the key”.
I don’t think, from previous experience, that the repeated appeal to unity was heard and internalized by all Lebanese political forces and the latest example in this regard was the resignation of the appointed Prime Minister Mustafa Adib nominated to form a new government. He wanted to form a government run by the technocrats which was to find solutions for overcoming the crisis and had, in this respect, the French president’s backing.
The sectarian and group interest to which foreign influences should be added (France, Iran, Turkey, the US, Saudi Arabia, Gulf countries) and Russia, too (the Russian minister of foreign affairs Sergei Lavrov arrived in Damascus on September 5 and joined the delegation headed by the vice-prime minister Yuri Borisov who arrived a day before and whose last visit there was in 2012). We mention that president Vladimir Putin paid a visit to Damascus on January 7, 2020. Russia was always a discrete presence in Lebanon but that does not mean it was less interested in expanding its influence in the country and used to that purpose not only its relations with the Palestinian groups in Lebanon, with political formations of socialist orientation but also with Hezbollah.
Under the circumstances, a new wave of migration emerged and there are more and more Lebanese who lost hope that the domestic situation can recover and are searching for a solution abroad. Unfortunately, those who will leave will be especially the well prepared professionals and with a financial position that can secure them a new beginning in another country, with work capacity and determination. Thus, the Lebanon’s possibilities of recovery will further diminish. A people who for a long period of time went through severe crises and his fiber was weakened by numerous waves of emigration, was subject to immigrants’ pressures and foreign interests is not an inexhaustible reservoir and can be severely affected by these events. How could we otherwise explain Beirut’s revival after the civil war or even the optimism during the civil war when artillery bombardments took place in an area and building was raised in a nearby one? Presently, around 20 hours a day the centralized state network does not supply electricity and the situation is considered to be determined by the mafia of generators and fuel traffickers.
It is not likely that Lebanon’s political and economic situation will witness a significant improvement by the end of the year. Most likely a new government will be formed under renewed international pressures, as it happened in the past but no durable solution and no recovery of the country’s economic and social situation are in sight in this short time horizon.
What are Lebanon’s prospects?
A forecast on a longer period of the evolutions of the Middle East is a risky shot and of the Lebanon’s situation is more than hazard a guess. Given the intertwining of numerous interests and conflicts in Lebanon, the country of the cedars fully deserves the characterization of being a barometer of the geopolitical evolutions in the area and even on a more extensive level. Unfortunately for the Lebanese, when they have fallen prey to those interests they themselves brought the country to the present situation.
The discovery of great oil and gas deposits in Eastern Mediterranean gave Lebanon hopes that it could escape the difficult economic and financial situation. Exploration operations were launched in February 2020 with the ship Tungsten Explorer by a consortium made up of Total (France), ENI (Italy) and Novatek (Russia) and president Michel Aoun stated that the beginning of drilling operations is an opportunity for “the country’s coming back from the abyss”. It was most probably a statement intended to boost the population’s morale.
In 2022 Lebanon should organize both parliamentary (every four years, the last ones took place in 2018 after more than four years – namely in 2009) and presidential elections (the president was elected in 2016 and cannot run for another mandate). It would be in the sense of the Lebanese tradition that the elections be postponed with no clearly defined time horizon while the surprise would be that elections be carried out and finalized in time. The issue here is not the timing but the conditions in which the elections takes place and especially the replacement of the current sectarian political system which met the needs of the middle of the XX-th century but proved later on its limits.
I’d like to hope and to think that Lebanon will not be stationed in the position of a failed state and will find the resources to become again a democratic and modern country of the Middle East. A position the Lebanese people should prove it deserves it in spite of all outside dangers it is confronted with. It depends first and foremost on the Lebanese! I still trust the descendants of the Phoenicians!
About the author:
Corneliu Pivariu is a highly decorated two-star general of the Romanian army (Rtd). He has founded and led for two decades one of the most influential magazines on geopolitics and international relations in Eastern Europe, the bilingual journal Geostrategic Pulse. General Pivariu is member of IFIMES Advisory Board.
Ljubljana/Bucharest, 6 October 2020
 IFIMES – International Institute for Middle East and Balkan Studies, based in Ljubljana, Slovenia, has Special Consultative status at ECOSOC/UN, New York, since 2018.
 The four principles of the Pact are:
- Lebanon is a completely independent state. The Christian community will cease to identify with the West and, in exchange, the Muslim Community will protect Lebanon’s independence and will prevent the union with any other Arab state;
- Although Lebanon is an Arab state having the Arabic as official language, it will not severe the spiritual and intellectual ties with the West to allow for its development in the future;
- Lebanon, as a member of the family of the Arab states, will cooperate with the other Arab states and, in case of a conflict among the latter it will remain neutral;
- Public positions will be distributed proportionally among the recognized religious groups while the technical positions and the appointments will be made first of all based on the competencies, without taking into account sectarian considerations. The first three positions in the state will be distributed as follows: the president of the republic must be a Maronite Christian; the Prime Minister – a Sunni Muslim; the president of the parliament – a Shia Muslim. The distribution of deputies will be 6 Christians to 5 Muslims.
 He was prime minister as well during 1992-1998 and 2000-2004. In 1995 I had the honor of being received by him three times in Beirut.
 Corneliu Pivariu – Important Moves on the Geopolitical Chessboard 2014-2017, pp.353-355.
 If, during the 1982 Israeli invasion we witnessed powerful artillery bombardments while we were invited to bars and restaurants in Jounieh (on the outskirts of Beirut) that were all open, the quiet periods after the end of the civil war were characterized by extensive reconstruction programs, predominantly in real estate and especially in Beirut, where the traces of war disappeared almost completely.
 Lebanon imports around 80% of its consumption needs.
 As compared to the official rate of exchange of 1,507.5 Lebanese Pounds (LBP)/dollar ever since 1997, on the parallel market the dollar was sold against 3,000 LBP in April 2020 and 4,200 LBP/$ in May 2020. On September 11, 2020 the parallel rate of exchange was 7,700 LBP/$.
 Ammonium nitrate is used mainly as agricultural fertilizer but in combination with other substances and an ignition explosive it can detonate. Since it is very stable and not expensive, it is used as well at civil constructions works.
 For an analysis of the causes one should see which the best answer to the well-known question is: Qui prodest? (Who benefits?). A latest public variant/speculation is that the explosion was triggered from space by using a system of Fresnel lens type. Probably the reality is less complicated from a technical point of view.
 Aged 48, Adib (a career diplomat, ambassador to Berlin 2013-2020) was backed in his nomination by The Future Movement and a group of former Lebanese prime ministers and got the votes of 90 parliamentarians out of the total of 120. His nomination took place a few hours before the deadline of September 1st, set by president Emmanuel Macron.
 “With a failed political system, affected by corruption, terrorism, with paramilitary formations, the country drew its last breath. We believe Lebanon must be placed under French mandate in order to acheve a clear and durable governance” – the text of the petition mentions among others.
 The last official census in Lebanon took place in 1932 when the Christian population held a slight majority (51%). According to different researches and documents of late the share of the Christians decreased to around 40% (even 33% according to certain sources), while the Sunni and Shia Muslims represents around 55%.
 A curator at the Lebanon’s National Museum in Beirut, where the history stops at 1920 was saying that the Lebanese were ashamed of continuing its presentation taking into account what they have done to their country. Probably the situation is quite different, namely that not even in what history is concerned the Lebanese politicians could not agree upon the way it is presented.