Politics From Across the Globe

[Malthus]

Anyone have insight into what is going on in Lebanon recently?

From what I've read, situation is going from bad to worse.

My understanding of recent events:

- Hezbollah protests against judge probing the Beirut explosion, claiming he's unfairly investigating Hezbollah politicians and not others.

- Hezbollah does a big public protest march

- the march goes through turf traditionally owned by Christian militia, and march is shot at; civilians killed

- Hezbollah claims it isn't interested in starting a new civil war, but won't be pushed around

[Sheilbh]

I think the context is the aftermath of that explosion in the port. There's been fuel shortages for over eighteen months, plus the political fights (and failures) over rebuilding since the explosion. In the last week or so the entire Lebanese national grid was shut down, I think power is back but it's only for a few hours - so the entire country is running on bootleg oil and private generators.

That contributes to, but also takes place in the context of hyperinflation (again following from the economic impact of that explosion) I think the currency is now trading at about 20,000 lir to the dollar v around 1,500 pre-explosion. And the wider economic collapse is huge - according to the World Bank from a GDP of $55 billion in 2018 to $33 billion in 2020. That explosion also destroyed Lebanon's biggest grain silo and a huge chunk of the port which is important as Lebanon imports a lot of food. I believe the Word Bank has said the collapse of Lebanon's economy and financial system is one of the top 10 and possibly top 3 severe economic crises in recorded history - at least since the 19th century.

In the context of this there's the political/elite failure. So the PM (I think) is Lebanon's richest man, the system is corrupt and the politicians who are basically operating to get their share of the economy for their community have not proven capable of mastering any side of this crisis - and instead seem to be looking for new revenue sources (for spoils?) to keep the minimal state going such as a proposed tax on WhatsApp messages

Also, I think, relevant to this is the failure and absence of the international community since the explosion. I remember Macron's quite dramatic visit in 2019. But I think the world has been a little distracted with covid, but also it feels like lots of regional powers (France, Turkey, EU, US) have basically not done much for the last two years. Some of that may be indifference (the US - especially under Trump), or distraction/focus elsewhere but it feels like they were all waiting for it to spill over into an actual crisis to do anything. 

The US is now talking about working to help build solutions for Lebanon's energy system and food supply etc - of course the global context for that is not ideal because there is a wider energy crisis and global supply chain strains. So just yesterday Pakistan opened a tender for deliveries of LNG for their power system over winter - and no-one bid at any price. Similarly global food prices are higher than any time since the 60s and the last time they even approached this level was the early 2010s and it was, probably, a factor in the Arab revolts. 

With the specific Hezbollah angle - they have been able to bring in fuel by the truckload from Iran via Syria, but are also (from Iran) delivering a lot of basic commodities in their communities and using it to expand their influence while the central government fails.

So there's lots of context and especially economic background, plus political failure. In terms of the actual recent events my guess would be Hezbollah making a bit of a play for more power/influence backed up by their ability to materially provide more than the central government or other factions.

Edit: And again I think Lebanon would be a country I would consider could benefit from a "neighbourhood" focused policy from the EU - obviously France would be likely to leave, but I wonder if it could be even better if the EU could convene to increase support/policy cooperation in Lebanon.

[Malthus]

Thanks for that account - it is a sorry outlook all around. This is a case where the world community really ought to be doing more for Lebanon, than just sitting around watching it fall apart.

[Berkut]

Thanks for that account - it is a sorry outlook all around. This is a case where the world community really ought to be doing more for Lebanon, than just sitting around watching it fall apart.

Yeah, that isn't going to happen.

The western liberal order punishes anyone who tries to help in messes like this. It is always assumed to be self serving colonialism or crass power grabbing.

There is no political upside to getting involved in this crap, and that is, IMO, almost entirely a problem within ourselves.

[Agelastus]

Sheilbh's explanation is not 100% complete - Lebanon was deep in the shit and spiralling downwards even before the explosion in 2020. The seeds being sown when after the Civil War Lebanon guaranteed that you could freely exchange 1507 Lebanese pounds for one US$. At any bank. Or apparently even at supermarket checkouts.

Lebanese banks were thus forced to maintain large dollar holdings in a country that the Civil War had left with a virtually non-existent export sector.

Lebanon's economy had depended massively on overseas remittances from the diaspora post Civil War. These started to decline in 2011 as sectarian tensions rose.

The Syrian Civil War dumped nearly a million refugees in a country of six million.

Local banks started to be unable to maintain their dollar holdings.

The wheels really started coming off in 2016, which led Lebanon's central bank to start what amounted to a "Ponzi" scheme (at least according to some observers.)

Then when Lebanon finally started to try and raise more revenue to cover its historical "blank cheques"...they triggered protests. Guess what happens when a country looks unstable to the direction of dollar flows?

Not to mention foreign donors have held back large sums of money due to Lebanon's inability to stem corruption or to make agreed reforms.

And Lebanon's taken 13 months to select a new prime-minister to replace the previous one who had stayed on in a caretaker role. Which doesn't help negotiations with the IMF or overseas donors at all.

See, for example -

https://www.reuters.com/world/middle-east/lebanons-financial-meltdown-how-it-happened-2021-06-17/

Or this article recommending dollarisation - written just before the Port explosion (the opening paragraphs, anyway.)

https://www.cato.org/blog/dollarization-lebanon

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And speaking of corruption in Lebanon and the port explosion? It's possible, based on the explosion strength and other factors and bits of information that have come to light, that roughly 3/4 of the confiscated cargo of ammonium nitrate had gone "walkies" by the time of the explosion.

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Also now waiting for our resident economics expert to tell me how much of the above I got wrong or misunderstood.

[Malthus]

This is really great stuff - I'm learning a lot here. Thanks for that!

[Valmy]

I don't know if great is the word I would use 

But yes thanks for the insight Agelastus

[Malthus]

I don't know if great is the word I would use 

But yes thanks for the insight Agelastus

Ha!

[Jacob]

Looks like Russia has shut down their offices working directly with NATO and the EU, and are similarly kicking the NATO and EU offices out of Russia. Apparently they were upset that the staffing for those offices were cut due to alleged spy activities.

[Jacob]

Looks like Canada is pulling a Meng Wanzhou on Denmark...

So apparently a Canadian firm is suing a state-owned Russian entity in Canadian court. At issue is a state-owned Russian Arctic vessel Akademik Ioffe that the Canadian company hires to conduct Arctic tours. The vessel ran aground during one of the tours, and the travel company claims it lost about CDN$7.5 million as a result (refunds and evacuation and whatnot).



The Akademik Ioffe was held back in a Portuguese port, but escaped. Now it is in a Danish port and is being held back by Danish authorities at the request of the Canadian courts, as surety against the claim.

The Russians - according to marinetraffic.com - sent the corvette Stoiky straight into the Danish harbour in violation of Danish territorial integrity and in a clear attempt at intimidation.


The Stoiky

... except, of course, it wasn't actually there. It was a hack of marinetraffic.com. So it's mere virtual intimidation rather than actual intimidation, which I suppose makes it less egregious.

Here's a story in Danish (google translate does a decent job if you care to read it).

[Savonarola]

No longer a 'cash cow', Saudi squeezes Lebanon's ruined economy

Saudi Arabia's blanket ban on Lebanese imports is another blow to Lebanon's crippled economy, and some fear the squeeze could get worse.

Beirut, Lebanon – It is close to two weeks since Saudi Arabia declared an all-out ban on imported goods from Lebanon after it came to light that a minor Lebanese minister had criticised the kingdom over the civil war in Yemen.

Though the comments were made before the minister took office, for Lebanon, the timing could not be more painful. Cash-strapped and sinking deeper into a two-year-old economic crisis, the import ban by the richest economy in the Arab world is kicking Lebanon's tiny, embattled economy when it is already hopelessly down.

More at Al Jazeera

[viper37]

No longer a 'cash cow', Saudi squeezes Lebanon's ruined economy

Saudi Arabia's blanket ban on Lebanese imports is another blow to Lebanon's crippled economy, and some fear the squeeze could get worse.

Beirut, Lebanon – It is close to two weeks since Saudi Arabia declared an all-out ban on imported goods from Lebanon after it came to light that a minor Lebanese minister had criticised the kingdom over the civil war in Yemen.

Though the comments were made before the minister took office, for Lebanon, the timing could not be more painful. Cash-strapped and sinking deeper into a two-year-old economic crisis, the import ban by the richest economy in the Arab world is kicking Lebanon's tiny, embattled economy when it is already hopelessly down.

More at Al Jazeera

No wonder MBS got along with Trump very well.