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Lebanon and the Arabs: Amending Relations Achieves Joint Interests

Lebanon and the Arabs: Amending Relations Achieves Joint Interests

Saturday, 27 February, 2021 - 09:15
Lebanon's Central Bank facade is defaced by protesters. (Reuters file photo)

Lebanon has long enjoyed unique political, economic and social relations with its Arab environment. These ties often overcame political disputes related to Lebanon’s identity and role. These disputes date back to the time of its independence from French mandate in 1943 and persist to this day. Lebanon has managed to withstand all the turbulence of the past decades, even its 1975-90 civil war, but now finds itself confronted with its worst crisis since its inception.

The clash that had erupted between Lebanon’s Muslims and Christians over the country’s Arabism soon disappeared with the discovery of oil in the Gulf, which reshaped the politics and relations in the region. When Lebanon was caught in the dispute between Muslim demands that it merge with Syria and the Arab world and Christian ones that it follow France and the West a reconciliation, known as the national pact, was struck. The pact was forged in the typical Lebanese way that appeases all sides and left no one with a sense of defeat. It retained Lebanon’s borders that were declared in the 1920s and cemented the nation as an independent Arab country.

Politically, debates continued to rage for decades over Lebanon’s identity and Arabism. They peaked during the times of unrest and Arab-Israeli military conflicts. Those conflicts would reverberate inside Lebanon, which was divided over its political, cultural and sectarian identities. These divisions were exemplified in the 1958 “revolt” against an attempt to drag Lebanon towards foreign axes with the aim of altering its identity and role.

Decades later, the 1989 Taif Accord, which helped end the civil war, would completely settle the issue of Lebanon’s Arab identity. The pact would amend the introduction of the Lebanese constitution, which now stipulates that “Lebanon is Arab in identity” and a founding member of the Arab League, whose charter it is committed to.

1950s and 60s prosperity

The occupation of Palestine and declaration of the formation of Israel in 1948 led to a widespread Arab boycott of the new country. This led to a boycott of Palestinian ports, which came under occupation, shifting the attention to Lebanon’s Beirut and Tripoli ports. Trade consequently flourished between Lebanon and the Arab world.

Lebanon’s liberal economy and banking system helped raise trust in it and led to more Arab and Gulf capital to flow in, in the shape of bank deposits, transactions, investments and others. Moreover, the country’s cultural diversity, which had attracted several foreign missions, helped build solid potential in several fields. Graduates of the American University of Beirut, which was founded by missionaries in 1866, and Saint Joseph University, founded in 1872, would land jobs in the Gulf region, which they helped develop.

Needless to say, the Lebanese diaspora also helped bolster Lebanon’s economy and society. Lebanon became a focal point for Gulf students where they could earn an education at its prestigious universities and the Gulf attracted the Lebanese for employment opportunities. Tourism also thrived in Lebanon during the 1950s and 60s, attracting people from all over the globe.

Civil war

All of the above took a massive hit with the eruption of the civil war in 1978. The conflict cost Lebanon its regional standing, even as Arab initiatives to resolve the war poured in. Among them was a proposal by Kuwait’s late Emir Sheikh Sabah al-Ahmad al-Jaber Al-Sabah, who was then foreign minister. Current President Michel Aoun, who was then army commander, rejected the proposal, as he did the Taif Accord months later.

In the post-war period, Arab support for Lebanon’s reconstruction poured in. Arabs, led by Saudi Arabia, took part in international conferences for its reconstruction, notably the Paris 1, 2 and 3 meetings. Later, friendly Arab governments and funds would finance the rebuilding of infrastructure, roads, bridges, government hospitals and others. They would also play a role in rebuilding what Israel destroyed in its offensives against Lebanon in 1993, 1996 and 2006. To demonstrate the extent of the outpouring of support for Lebanon, an international report some five years ago revealed that between 1990 and 2015 Saudi Arabia alone offered some 50 billion dollars in support for Lebanon in the shape of official aid, private direct investments, loans, foreign transactions by expatriates and others.

Four factors

- Lebanese-Gulf economic ties are based on economic and trade exchange, whereby Lebanon’s imports outweigh its exports.

- They are based on Gulf deposits in Lebanese banks, many of which have since been withdrawn after the 2019 anti-government protests and the beginning of Lebanon’s economic collapse.

- Lebanese expatriates working in the Gulf and their financial remittances to Lebanon. These remittances are continuing and are a main factor in propping up the economy amid the collapse and severe shortage of dollars in the country.

- Gulf investments in Lebanon: They were focused primarily in the real estate sector, but have since waned when Lebanon’s ties with the Arabs deteriorated with the eruption of the Syrian conflict in 2011. Reports have said that more and more Gulf nationals are selling their properties in Lebanon.

Road to collapse

Lebanon has for years been suffering from a major deficit in its public budget. Its spending always outweighed its revenues due to massive waste and corruption. The electricity sector is the greatest source of losses, estimated at 2 billion dollars annually, which is massive compared to Lebanon’s small size.

The eruption of anti-government protests in October 2019 compounded the situation and deepened mistrust with the banking system and the country’s largely corrupt rulers. With the passing months, the deposits were withdrawn from Lebanon and transferred abroad, a move that contrasted sharply to they heyday when the banking sector used to attract billions of dollars from abroad. The move of deposits led to the severe shortage in foreign currencies, pushing Lebanon to stop pegging the pound to the dollar, leading it to slump to unprecedented lows, as much as 9,000 pounds to the dollar. To stem the flow of deposits, banks have imposed severe restrictions on withdrawals, depriving people of their savings.

The decline in the currency led to a drop in the people’s purchasing power, coupled with an astronomical rise in the prices of goods, and poverty that has climbed to 45 percent of the population. The country is also faced with a shortage in goods caused by the lack of dollars, which the state uses to import products. The dire reality naturally led to a brain drain with many people leaving Lebanon for much better living conditions abroad, dealing the country a blow to its once lofty standing in the region.

Future cooperation

Lebanese- Arab and -Gulf relations have never witnessed such lows.

During previous times of tumult, the readiness by both sides to resolve any dispute was always very high. It was unheard of that relations could reach such a low point. Gulf policies towards Lebanon had long been based on maintaining communication with all Lebanese political components without discrimination. Gulf countries were also always very firm in supporting the Lebanese state and containing foreign meddling, especially by influential non-Arab regional powers.

Of course, the attacks and criticism by some Lebanese parties against Gulf countries and their policies have had a major impact on the overall collapse of the historic ties. And this is deliberate. Lebanon is being forced to join axes - which are hostile to the Arab identity - that contradict its structure and natural position in the Arab world. This inevitably demands a review of the political boycott and resumption of natural relations, because this alone will help achieve the desired balance, especially when confronted with the possibility that a new Arab territory could be lost to foreign meddling.

Lebanon and the Gulf are demanded to restore their historic bonds. This starts with rebuilding political ties, which in turn will pave the way for rebuilding economic and social ones and eventually the restoration of investments and businesses. Lebanon cannot breathe without its Arab and Gulf lungs. This is its natural position and it must be restored because the political cost of its loss is much higher than the cost of regaining it.

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