As many ten-year olds in this observer's Beirut neighborhood in Dahiyeh (Hezbollah's 'security zone') can articulate more cogently than me, Lebanon's economy continues to weaken as foreign investors pull back, internal sectarian turmoil swells, several of Lebanon's well-known political lords continue to steal a significant chunk of the country's budget, and while the World Bank and the IMF indexes of Lebanon's economic future increasingly reminds one of the 2009 economic shut-down in Greece.
Lebanon is being accused by 5 Gulf Cooperation Council (GCC) member countries, and a growing list of allies regionally and globally, of declaring war on Saudi Arabia by its corrupt leaders essentially deeding the country to Iran. Consequently, the Kingdom of Saudi Arabia (KSA) and other countries have joined in demanding that the Lebanese government choose between peace or allegiance to Iran and Hezbollah. The new reactive strategy appears to include targeting Lebanon's already challenged economy.
On 11/16/2017, Saudi's Foreign Minister Jubeir emphasized that Hezbollah is the root of Lebanon's crisis and "that it has hijacked the Lebanese system." During a joint press conference with his French counterpart Jean-Yves Le Drian, FM Jubeir added that Hezbollah's continuous interferences in Arab countries' affairs will worsen the situation in Lebanon, adding that "the Hezbollah militia is a weapon in Iran's hands" and that Hezbollah's Hassan Nasrallah himself has acknowledged this fact.
The Saudi FM added that Hezbollah threatens the stability of Lebanon and the region and voiced the importance of finding means to deal with the party. He added that there were practical measures in this regard. Many in Lebanon's financial institutions believe the "practical measures" may result in the collapse of Lebanon's already deteriorating economy.
In seeking to combat Iranian influence, Riyadh may indeed shake an already tottering Lebanese economy, thus threatening the country's tenuous calm. On November 6, Saudi Arabia's Minister of Gulf Affairs, Thamer al-Sabhan, announced that henceforth, "The Lebanese government, which is dominated by Hezbollah, the Iran-backed political party and militia, will be treated as if it had declared war on Riyadh." Many in Lebanon, including more than 80% of Sunni, and 65% of Christians, according to recent Pew Research Center and other polls, support the new tougher Saudi position, despite worries about the policy on Lebanon's economy.
Mr. Sabhan's declaration raises the distinct possibility of a GCC "Dahiyeh Doctrine" wherein Saudi Arabia and her allies could take a page from Israel's 2009 "Dahiyeh Doctrine" wherein the occupiers of Palestine are now committed to targeting all of Lebanon in the next war and not just Hezbollah areas. The justification for both "total wars" is claimed to be that the Lebanese government has failed to effectively control or disarm Iran's Hezbollah militia, but instead has ceded Lebanon's sovereignty. Some are suggesting that Saudi Arabia, along with her regional and even some global allies, may well launch an economic "Dahiyeh Doctrine" wherein all of Lebanon's economy is fair game for targeting, much as Iran's continues to be.
Saudi initiatives as well as several other recently announced western and regional measures represent an evolving pro-active and protective "brotherly" Arab policy toward Lebanon. Growing resistance to Iran's absorption of Lebanon may well target Lebanon's economy following decades of the GCC helping shore it up.
When PM Hariri returned to Lebanon on 11/1/2017 after a visit to Saudi Arabia, he met with the Lebanese Council of Ministers to brief them on his discussions in Riyadh. He told the Ministers that the Saudis would support plans for an international conference in Paris to strengthen the Lebanese economy. In addition, Hariri announced that a Rome meeting was being organized from Riyadh to support the Lebanese army and a joint Saudi-Lebanese Directorate was in the works to promote and assure massive foreign investment to shore up Lebanon's careening economy. Saad Hariri, like his late father Rafik, is one of the very few genuinely liberal political leaders the Middle East has ever produced by exposing Lebanon's government for what it truly is--the subject of a hostile takeover by two malevolent foreign powers, one being Iran.
This new GCC approach follows more than a decade of Saudi unsatisfactory efforts to bolster Lebanon's pro-West Future Movement and its allies against Iran's Hezbollah. The region may no longer distinguish between weak local confederates and invertebrate hostiles. Frustrated with Lebanon's Parliament's acquiescence to Hezbollah's increasing influence in Beirut, Riyadh and allies may decide to target all of Lebanon's economy.
LEBANON IS VULNERABLE TO ECONOMIC COLLAPSE
As this observer has noted recently, the Lebanese civil war (1975-90) and postwar reconstruction have had a profound and continuing impact on the state's economy. Since 1990, accumulated debt, structural imbalances, insufficient revenues, widespread endemic corruption and periodic wars have contributed to an economy that many analysts believe is on the verge of collapse. Today, Lebanon's debt-to-GDP ratio is 150 percent, among the world's highest, and the International Monetary Fund predicts that it will increase to 160 percent by 2021. The cost of financing this debt is astronomical. Worse, growth is anemic, about 1 percent, and the regional political situation -- even before the current crisis with Saudi Arabia -- has undermined investor confidence. Accordingly, foreign deposit inflows have slowed, and Lebanon's S&P credit rating has declined from a B to a B-.
There are multiple Lebanese vulnerabilities that Saudi Arabia and her allies have in their quiver to encourage Lebanon to resist what many in the region believe is Iran's more than two decades of executing its hegemonic colonization of Lebanon.
One is pressuring Lebanon's expatriate work force, and two others would likely include targeting Lebanon's financial sector, and its tourism industry.
As seasoned Lebanese journalist and researcher Hanin Ghaddar recently pointed out, according to economists in the region, Lebanon's economy is currently in danger of collapse. For example, more than 15 million expatriate Lebanese are living and working abroad. The remittances sent back to Lebanon account for approximately 16 percent of Lebanon's GDP. During 2016, Lebanese abroad sent home more than $ 7.5 billion. The Gulf Cooperation Council (GGC) states, Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, and Oman create the major employment sources of Lebanese remittances. Approximately two-thirds of the remittances are being generated today in the GCC states, with more than 50% from Saudi Arabia alone.
One KSA measure that has already been taken over the past few months has been the result of the Saudi Vision 2030 initiative, which is aimed at diversifying the KSA's economy and strengthening local employment numbers. One example is that Riyadh dramatically increased the cost of residency permits for foreign workers. As the fees ascended, remittances necessarily descended, along with the numbers of expatriate laborers. The more immediate concern for Lebanon is that Saudi Arabia -- along with the UAE -- might expel Lebanese nationals. Iran has suggested that it would welcome such a move because most of Lebanon's expat workers in the Gulf are Sunni Muslims and Christians not Shia. Plus, such a move would presumably generate criticism of the GCC.