There is perhaps no more accurate judgment on the state of an economy than the currency market. In this respect, although the Lebanese pound remains officially – fantastically, one might add – pegged at roughly 1,500 to the US dollar, in truth it takes close to 9,000 pounds to exchange for a dollar. That is an 83% devaluation in the market’s faith in the economy.
Many Lebanese, however, are unaware that their national crisis is in fact of Lebanon’s own making. Mostly, they blame an American embargo – one that does not really exist. This misplacement of blame blinds the country to the real cause of its malaise: Hezbollah.
Except for sanctions imposed by the US Treasury Department’s anti-terrorism arm, the Office of Foreign Assets Control, on a few Lebanese entities and individuals connected to Hezbollah – the self-claimed “party of God” – there is no financial restriction on the state of Lebanon or any of great substance against its institutions, public or private.
But even without being under sanctions, foreign direct investment – usually the engine of economic growth – shies away from Lebanon. Foreign investors are simply unwilling to bring their money into a country that lives in a state of perpetual war, with Hezbollah currently involved in regional entanglements – in Syria, Yemen and Iraq – or threatening to go to war with Israel.
When the Friends of Lebanon group convened an international donor conference two years ago that came to be known as Cedre, it pledged a rescue package worth US$11 billion. The only conditions were that Beirut should get its act together and eradicate corruption and privatize state utilities – especially the highly inefficient Electricité du Liban.
It is noteworthy that even though pledging donors included the US and Saudi Arabia, neither made its contribution contingent on disarming Hezbollah, an organization that both nations classify, for good reasons, as a terrorist group. Perhaps they understood that corruption is the lifeblood of Hezbollah. So if Lebanon actually managed to reform away corruption, it would also see off Hezbollah chief Hassan Nasrallah and his acolytes.
The tragedy is that Lebanon cannot reform. Hezbollah, with its powerful militia, won’t let it. And because reform is out of the question, Lebanon increasingly is dependent on remittances from its vast diaspora. Such transfers are among the highest in the world. But no modern economy can be built on such a broad and deep rentier system: It saps ambition and entrepreneurship. The country desperately needs to change.
When the Lebanese economy started on its most recent decline in October, Lebanese citizens took to the streets to demand change. Hezbollah accused them of being agents of foreign powers. Any hint that Hezbollah was to blame for the economic collapse was suppressed by the party’s thugs, who beat up protesters in the streets.
Violence was not the only Hezbollah tool, however. The party also launched a misinformation campaign that depicted Lebanon as a victim of US sanctions, like the group’s allies Syria and Iran.
Next, Hezbollah and its supporters connected every discussion in Lebanon to Israel. Whatever the subject or the problem, they repeated the mantra that the party was preparing not only to launch war on Israel, but to completely destroy Lebanon’s southern neighbor and send Israelis back to “where they came from.”
It didn’t matter how tenuous or improbable the connection. Yet when complaints about the price of bread is answered with “war on Israel,” there is no room in the narrative for macroeconomic plans or support for business.
For Hezbollah and the Lebanese oligarchs it controls, the story of Lebanon is one of war and only of war. They have turned the country into an Iranian missile base with which to threaten Israel and blackmail the US. And Tehran is unwilling to let go of its investment. It is this that has been the recipe for Lebanon’s unfolding economic disaster.
Hezbollah’s tall tales and delusional plans about destroying Israel create a mixture that distorts reasoning. It is no surprise then that many ordinary Lebanese blame the US for the country’s ills.
But they must stop. For it is only by identifying Hezbollah as the scourge of Lebanon that Lebanese might begin to find a way out of the morass, that they might begin to pressure the political class to jettison Hezbollah. So far, however, that hasn’t happened. So far, Lebanon is blaming everyone else and is unwilling to turn on its enemy within.
This article was provided by Syndication Bureau, which holds copyright.
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