Jonathan Spyer, founder and executive director of the Middle East Center for Reporting and Analysis and writing fellow at the Middle East Forum, spoke to an August 17 Middle East Forum Webinar (video) about Lebanon's economic, social, and political collapse and the security implications for Israel.
Spyer began with a "whistle-stop tour" of the "very, very dire, social and economic situation in Lebanon." The Lebanese pound has lost 90% of its value in the last 18 months. Chronic shortages of fuel have reduced the capital to about two hours of electricity per day, forcing businesses and even hospitals to "scale back or shut down." According to UN figures, 77% of Lebanese households are unable to purchase sufficient food. "It's about as bad as it could possibly be."
Once considered the "Paris of the Middle East," Lebanon's deterioration began with the arrival of Palestinian refugees and fighting organizations from Jordan in the 1960s, which helped precipitate the outbreak of a 15-year civil war in 1975, followed by a 15-year occupation by Syria. There was a glimmer of hope after Syrian troops withdrew in 2005 with the rise to power of prime minister Saad Hariri and the pro-Western March 14 movement, but it was extinguished by what Spyer called a "hostile takeover bid" by the Shi'a Hezbollah movement, a franchise of Iran's Islamic Revolutionary Guards Corp (IRGC).
Since 2008, when Hezbollah fighters challenged and defeated March 14 forces on the streets of Beirut, Hezbollah has positioned itself "at the center of the largest parliamentary faction" and moved toward "open control of the Lebanese state." Officially, Lebanon as a state, economy, and political system continues to exist only to provide cover for Hezbollah and Iran in using the country as a base to destroy Israel.
The structural roots of Lebanon's current calamity lie in its massive government debt, the world's third largest as a percentage of GDP, and endemic corruption. These problems were manageable so long as outside actors – particularly Saudi Arabia and other Gulf states – pumped money into the Lebanese economy. In recent years, however, the Gulf states have withdrawn funding of the Lebanese Armed Forces and removing their bank holdings.
Additional factors compounding Lebanon's economic collapse include the decline in tourism, U.S. sanctions, the influx of 1.8 million refugees from Syria as a result of that country's civil war, the Covid-19 pandemic, and the destruction of much of Beirut's port by a massive explosion of ammonium nitrate last year.
In March 2020, Lebanon defaulted on its debt for the first time by failing to pay a maturing $1.2 billion Eurobond. The International Monetary Fund (IMF) offered a bailout, but the Lebanese political class refuses to enact the reforms the IMF required. Lebanon has had a caretaker government for nearly a year because the political class cannot agree on the formation of a new cabinet. Hassan Nasrallah, the head of Hezbollah, recently said he will be bringing Iranian oil into Lebanon to deal with fuel shortages. Spyer sees this as "the next stage" in Iran and Hezbollah "swallowing up Lebanon."
The thinking in Israel's security circles presumes that Hezbollah and Iran have their hands full "trying to hold up a collapsed system" and as such "don't really have the bandwidth or the time" for tangling with Israel.
However, this assumption was challenged by the unclaimed launching of three rockets at Israel from Lebanon on August 4, followed by another 20 in response to retaliatory Israeli air strikes. Claims that Hezbollah was not responsible for the initial rocket launches fall flat, Spyer said, because nothing happens in south Lebanon without the direction of the Hezbollah and the IRGC. Spyer believes that Hezbollah and Iran are not "looking for war," but the incidents in August point to the potential for escalating border tensions to "set off a ... large fire" that neither side desires.
Lebanon is a "colony" of Iran and "it would be better if that were to be openly known."
Some in Israel believe that the removal of ambiguity about Iranian and Hezbollah domination of Lebanon is a good thing. "Lebanon is already an owned colony of the Iranian regional empire, and it would be better if that were to be openly known." The polite fiction of a nominal government ruling over Lebanon, works to the advantage of Iran and Hezbollah
During the 2006 war Hezbollah waged against Israel, Lebanon's "ineffectual prime minister," Fouad Siniora, went to the U.N. General Assembly and "burst into tears at the fact that the nasty Israelis are bombing his infrastructure and Israel then suffer[ed] a great deal of diplomatic pressure from the Americans ... [and] Europeans to desist in its war effort."
"The usual fate of brutal dictatorships, eventually, is to fall."
Hezbollah is financially insulated from U.S. sanctions and the lack of an IMF bailout because it has its own financing from Iran and "underground economy" centered around smuggling and other illicit activities. Hezbollah is not invulnerable, as evidenced by the massive street demonstrations prior to the pandemic, but its grip on the country is not yet in serious danger.
Hezbollah will be destroyed when the Islamic Republic of Iran falls, which Spyer believes is inevitable in the long term. "The usual fate of brutal dictatorships, eventually, is to fall."
Marilyn Stern is communications coordinator at the Middle East Forum.