As the Lebanese state has entered its 101st year, the country is engulfed in severe political and economic crises, adding new woes to the regional challenges.
Greater Lebanon, whose founding was announced in September 1920, is no longer the “Switzerland of the East”, as it was previously known, as events passed from sectarian conflicts and economic meltdowns.
Lebanon was the financial centre of the Middle East in the 1960s and 1970s, and the banking sector lived in a state of unprecedented prosperity and growth. At the time, one US dollar was worth 3.3 Lebanese pounds; now it is worth about 20,000 pounds on the black market.
Following the Lebanese civil war in the mid-seventies, and the signing of the Taif Agreement, Lebanon entered a new phase in the early 1990s, during which a new framework for the political game was set up. The turbulence continued from the assassination of Prime Minister Rafik Hariri, and the establishment of Hezbollah as a state within the state, after the war that took place with Israel, which destroyed the infrastructure of southern Lebanon in 2006.
Then, protests in Lebanon began to escalate since 2015 with the deterioration of the economic situation, leading to the “You Stink” movement and protests, due to the waste crisis in the streets of the capital, Beirut. The situation remained tense, which escalated with the explosion of Beirut Port about 14 months ago, which some have likened to declaring the collapse of Lebanon. The consequences of the Beirut blast, which still threaten the state.
A few days ago, violent clashes left many dead and injured during protests organised by Hezbollah and its allies in the “Amal Movement” led by Nabih Berri, Speaker of Parliament, against the conduct of the investigation procedures in the port blast case. Several observers viewed the move as a scare tactic against anyone who wants to investigate the matter.
This comes at a time when the new Lebanese government, led by Najib Mikati, is battling with bitter economic and political conditions.
Daily News Egypt interviewed the veteran diplomat Massoud Maalouf, the former Lebanese Ambassador to Chile, Poland and Canada, to get a better understanding of the country’s situation, and the future of the new government.
Maalouf said that whoever obstructs the course of any investigation usually has a direct or indirect relationship to the issue, and whoever seeks to obstruct the investigation into the Beirut port blast “cannot be considered innocent.”
On the economic front, Maalouf said, “I think that the first important step in light of the current economic scene is to lift banking secrecy from all accounts without exception, and to publicly reveal the accounts of senior officials to find out who has wealth disproportionate to his legitimate income.”
He added, in Lebanon, there is an “illegal enrichment” law, which is valid but not enforced, and officials have been playing the people for years by talking about the issuance of a new anti-corruption law, which did not see the light and is not needed. After that, those responsible for bringing the banking situation to the point should be held accountable.
Situation in Lebanon has been tense since the Beirut blast, banking crisis, how do you assess the general conditions of the country now?
The situation in Lebanon is currently very tense. The Lebanese citizen suffers a lot from life’s difficulties, starting with public services such as electricity, water and others, passing through the banking crisis where one cannot withdraw his money deposited in these banks, reaching the fuel crisis, the unprecedented cost of living crisis, the brain drain and the immigration of hundreds of thousands of citizens. All of this of course against the background of the coronavirus pandemic, which has changed a lot in daily life.
In a nutshell, citizens suffer a lot from life’s difficulties, as more than 75% of the Lebanese people are now under the poverty line, according to the World Bank. Lebanon is now considered a failed state in the eyes of the international community.
How do you view the violent clashes amid the protests of Hezbollah and the Amal movement against the investigations into Beirut blast?
It is very unfortunate that this loss of life and property occurred due to the investigation into the bombing of the port.
There is supposed to be a consensus among the masses of the people and the authority, on the need to complete the investigation quickly, especially since this explosion led to the death of more than 200 citizens, the wounding of 6,000, the displacement of 300,000 others, the disruption of the port, and huge losses in the national economy.
Therefore, in my humble opinion, and without direct accusation against anyone, whoever obstructs the investigation usually has a direct or indirect relationship to the issue. Whoever seeks now to obstruct the investigation into the port bombing cannot be considered innocent.
In your opinion what’s the future of the new Lebanese government in light of the current challenges?
With all the current developments, the new government faces huge challenges that many doubt that it will be able to meet. But the existence of a government is better than its absence, and most likely the most that it will be able to achieve is to try to stop the deterioration, and to hold legislative elections next spring.
Can you elaborate on the current banking crisis?
The banking system in Lebanon was one of the best banking systems in the region, and the banks enjoyed complete confidence by depositors, especially the Lebanese expatriates, who deposited a large part of their money in Lebanese banks, which provided a safe haven for depositors with a high-interest rate.
These banks deposited some percentage of the depositors’ money in the Banque du Liban, which used to give these banks high interest, which allowed them to achieve great profits, a significant part of which was transferred abroad. The Banque du Liban financed government projects with bank money, and it seems that a significant part of the funds of these projects went into the pockets of some officials due to the rampant corruption in the Lebanese administration, and these funds were also transferred abroad.
Banks are no longer able to meet the demand for depositors’ withdrawals, and given that friendly countries and international financial institutions have stopped financing projects in Lebanon due to corruption and mistrust of the Lebanese government, hard currency, especially the dollar, has become scarce in Lebanon. This had led to the devaluation of the national currency (Lebanese pound), which lost 90% of its value, knowing that a large part of Lebanon’s consumer goods are imported from abroad, meaning that Lebanon needs hard currency to import.
How can Lebanon overcome this crisis?
I think that the first step should be to lift bank secrecy on all accounts without exception and to publicly reveal the accounts of senior officials to find out who has wealth disproportionate to his legitimate income. In Lebanon, there is an “illegal enrichment” law, which is valid but not enforced, and officials have been playing with the people for years by talking about the issuance of a new anti-corruption law, which did not see the light. After that, those responsible for bringing the banking situation to what it is now and recovering the looted funds should be held accountable, to restore depositors’ confidence so that transfers can return to Lebanese banks.
Banque du Liban Governor Riad Salameh faces criticism for remaining in office despite the crisis. Who protects Salameh from justice?
It seems that Salameh does not need someone to protect him, but rather he protects himself. As he is the governor of the Banque du Liban, he has all the information about what all politicians own in banks, and transfers abroad by name, date and amount for each transfer. Thus, they avoid embarrassing him so that he does not expose them.
There is talk of arrangements with international financial institutions. Can the citizen bear a new devaluation of the Lebanese currency?
When international financial institutions such as the World Bank and the International Monetary Fund intervene to help a country, the advice and treatments they suggest are usually very harsh on citizens. These measures include rationalising the public sector, which means dismissing a significant number of government employees, and sometimes reducing salaries, and liberalising the national currency, raising taxes, stopping subsidies for many consumer items such as medicine, wheat and fuel, reducing imports. If we look at the conditions that the Lebanese citizen is currently experiencing, these measures will be very difficult to bear. However, these measures may constitute a part of the inevitable treatment for the recovery of the Lebanese economy.
Prime Minister Mikati started his official foreign tours to France. How do you evaluate that visit?
It used to be in Lebanon that the first visit of the Prime Minister outside Lebanon would be to Damascus or Riyadh. What is interesting now is that Prime Minister Mikati’s first visit was to Paris, only four days after the government gained the confidence of Parliament. President Macron has played a major role in encouraging the formation of the government since the explosion in the port of Beirut. He visited Lebanon twice, and then sent his Foreign Minister Jean-Yves, who went from the French Senate before his arrival to Lebanon with a resounding cry to the Lebanese leaders, saying to them: “Help yourselves and France and its partners will help you.”
President Macron is trying a lot to help Lebanon in light of the historical relations between Lebanon and France. The visit to Paris by Mikati in these circumstances is a good thing, especially since Syria is in a position that cannot assist Lebanon, and the Kingdom of Saudi Arabia is not satisfied with what is happening and is not ready to provide any assistance at this time. But what is important here is that Macron’s words to Mikati about France’s aid to Lebanon are general, without specifying the type of assistance he intends to provide.
Is Macron able to assist Lebanon now, amid the challenges that he faces as French elections approach?
President Macron needs to polish his image and improve France’s global position, especially within the European Union. From this standpoint, he supported the position of Greece and Cyprus in their dispute with Turkey over gas exploration in the eastern Mediterranean last year and was able to stop Turkey from drilling.
On the other hand, he participated in organising the Baghdad Summit on 28 August with Iraqi Prime Minister Mustafa Al-Kadhimi. Also, he strongly confronted US President Joe Biden and summoned his ambassador from Washington in protest against the tripartite security agreement signed by the United States, Australia and Britain to confront China in the Pacific Ocean and the cancellation of the Australian submarine deal and replacing them with American nuclear submarines, without consulting with France.
This prompted President Biden to contact President Macron and justify the tripartite agreement with a semi-apology from Macron.
These matters have improved the position of Macron and France in the world, especially in the European Union. And from this point of view, he may be able to urge some European and Arab countries to help Lebanon. France can provide some assistance, but President Macron stipulated that Miqati should undertake radical reforms in Lebanon before receiving any assistance. These reforms are required not only from France but from most countries that want to assist Lebanon.
How did you view the Iranian fuel shipment to Hezbollah?
There is a consensus in Lebanon that Hezbollah is in control of the national decision, as we see the party’s followers boast that they are the decision-makers in the country, and their opponents complain about the government’s inability to take any decision without the party’s approval. There is no doubt that the entry of Iranian oil tanks through Hezbollah into Lebanon had a positive impact on the party’s followers and allies, while the party’s opponents blamed the government for its failure to control the borders.
Do you fear that Lebanon may face sanctions as the international community renew Iran’s economic blockade?
It seems that the United States has not yet imposed sanctions on Lebanon due to the entry of Iranian oil, perhaps because it does not want to appear as a bully against a collapsed country and its people need help, not punishment. However, after the arrival of natural gas from Egypt and electricity from Jordan, and if Iranian oil continues to flow, the US may change its position.
How do you view the agreement to provide Egyptian gas to Lebanon?
This is an important decision for Lebanon and Syria. For Lebanon, it will help increase electricity production at a time when the state cannot provide more than three hours of electricity per day, knowing that this will not solve the problem completely. As for its importance to Syria, it is considered an exception to the Caesar Act and may be an indication of some slight shift in US policy towards the regime in Syria.
In any case, Lebanon will be grateful to Egypt for this decision, knowing that Prime Minister Mikati said that Egyptian gas will reach Lebanon in November.
