Ostracised Lebanon sinks deeper into the mire

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Lebanese army in arsal
The Lebanese army and security forces lost the $4 billion in funding by Saudi Arabia last week

*By: Michael Karam

Scythed chariots used by ancient armies had rotating 1-­metre blades projecting from the axles, designed to lop off the legs, or even disembowel, enemy infantry. These deadly contraptions came into my mind last week when I heard news of Lebanon’s rapidly deteriorating relations with the GCC, in particular the kingdom of Saudi Arabia. What is left of our economy is being decimated at every turn.

For those who missed it, Saudi Arabia has threatened to withdraw its deposits in Lebanese banks and withhold US$4 billion pledged to the army and security services. There was also a travel advisory warning citizens about the security risks of travelling to Lebanon. This after Lebanon refused to condemn the January 2 sacking of the Saudi embassy in Tehran at a recent meeting of the Arab League.

The motion, among other things, referred to Hezbollah, which is part of the Lebanese government, as a terrorist or­gan­isation. Lebanon could hardly endorse it, but once again the Lebanese private sector finds itself in another frustrating situation, one that puts the country’s economic foot soldiers – banking, remittances, construction and tourism – on a messy collision course with the deadly chariots of regional politics.

Scythed chariotAmerica has also put Hezbollah in the crosshairs, passing legislation to further scrutinise what it sees as the party’s shadowy global financial activity. This could be the final straw for GCC banks who, given the new diligence requirements, might conclude that having a presence in Lebanon is simply not worth the candle.

That said, losing the $1 billion in deposits – lodged initially to shore up the foreign currency reserves in the aftermath of the disastrous 2006 war between Hezbollah and Israel – is un­likely to send the banking system into a tailspin, while the Leb­anese army, which for the past two years has waged a low-intensity war with Islamic extremists in the border region with Syria, can hang on in there with UK and American aid.

The real danger is the further erosion of what little international confidence in Lebanon remains as well as the precarious position of Lebanon’s Gulf-based expatriate community and the disappearing working capital generated in recent years by Gulf investors.

This, funnily enough, is probably not Lebanon’s biggest problem. The world knows that Lebanon is a basket case. Just ask any of the dozen or so companies trying to get their head around what we want to do with the 1.9 billion barrels of oil and 122 trillion cubic feet of natural gas supposedly lying under the eastern Mediterranean that could provide Norway-like national wealth we can only dream of. Add to that the high cost of doing business – the snail-like bandwidth alone is a deal-breaker – and the horrendous images of rubbish piling up on the capital’s streets that are beamed across the world by CNN. It’s easy to see why most Lebanese aren’t expecting Google or Amazon to open a regional HQ any time soon.

The fate of the diaspora is more worrying and exposes one of the country’s serious fault lines. According to recent media estimates, the Lebanese in the GCC generate roughly $5 billion, the equivalent of 70 per cent of Lebanon’s total remittances. That’s over 10 per cent of GDP. It’s a staggering figure and if we are honest, it is hard to envisage a mass expulsion, but the incident is a reminder of just how reliant we are on our neighbours and how vulnerable we are to regional spasms. Iran, and by extension Hezbollah, is happy to ratchet up the tension. The Shia diaspora is by and large ensconced in Africa and the US, while back home Hezbollah’s network of social services helps to insulate its constituents from economic shocks.

Which leaves us once again with the potential effect on the private sector. Two weeks ago, I wrote that data provided by the ministry of tourism showed that the largest tranche of Arab tourists to Lebanon in 2015 were Iraqis, not the free-spending GCC nationals who made Lebanon their home in the decade after 9/11. Not only are they no longer coming and spending, but there are already whispers many are selling the houses and apartments snapped up on the back of high oil prices in 2008 and 2009.

Quite simply the Lebanese have no one to sell to. And that’s a problem.

*Michael Karam is a freelance writer who lives between Beirut and Brighton.

The National

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18 responses to “Ostracised Lebanon sinks deeper into the mire”

  1. MekensehParty Avatar
    MekensehParty

    If only voices like these echo among the Lebanese who still think they live in the best country in the ME or for many among them, best in the world.

    1. 5thDrawer Avatar
      5thDrawer

      Selling homes at a loss?? People with money can do that. Perhaps the friend who had her home in Tripoli stolen 3 years ago by the ‘pretending-to-buy’ Syrian will get it back when he obtains refugee-status in Germany …. or goes ‘home’ to ASSad … doubtful he’d ever ‘confess’ it. She might not be able to sell it, but she’d have a place to live.
      Although, I seriously think some Lebanese must be waiting for her to die so they can claim it …

    2. dateam Avatar

      Here we go. So what country is the best in the middle east? Are you afraid lebanon will go broke? They called a travel warning? Who are they afraid is going to attack them? Where else will the gcc go and spend their money in the middle east? Have some pride. Lebanon is the best country in the middle east. Beirut recently was voted in the top 10 cities in the world to party this inspite of all that’s happening around us.

      1. MekensehParty Avatar
        MekensehParty

        more dillusion

        1. dateam Avatar

          More dillusion??? Oh sorry I forgot ksa is the best country in the world to visit. You have no pride. No shame. No self respect. Sit like a good little boy and wait for the monarchy of saudia arabia to feed. Be a good boy now!!!

          1. MekensehParty Avatar
            MekensehParty

            that’s the best you can do? inventing words and attributing them to me? lol
            so pathetic…
            does it make you feel better to liken me to a dog and give me commands? Does it remind you of how you are treated by your masters from dahyeh to tehran? were you able to sleep better the past 5 days? You thought I wont come back and shit on you?
            hahahaha

          2. dateam Avatar

            It took you 5 days to come back with that? Where have I likened you to a dog? I said sit like a good little boy? What commands did I give you? It’s seems you have likened yourself to a dog I never mentioned any animals? It’s ok ignorance is bliss. You just shitted on yourself I think? Lucky your a mekenseh you can wipe yourself away!!!

          3. MekensehParty Avatar
            MekensehParty

            i cleaned your home in dahyeh you think a little bit of shit on my underwear is going to scare me
            Pfff

      2. 5thDrawer Avatar
        5thDrawer

        ‘Party’?? … Like the Last Tango, in the Paris of the Middle East … the revellers go down with the ship, in Titanic proportions.

        1. dateam Avatar

          Don’t worry lebanon is unique. We can fight, cry, sing, dance, pray, hide, attack,defend, and still know how to party.!!! But for some reason we still can’t get rid of the garbage.!!!

          1. Well said.

            We can get rid of the garbage. The Zionist M14 clan does not allow it. We all know who owns Sukleen in Beirut.

          2. 5thDrawer Avatar
            5thDrawer

            They are Sucking something ‘Kleen’ … but it isn’t the streets.

          3. That, yes.

  2. 5thDrawer Avatar
    5thDrawer

    Simple Basics. The Babbleda Accord stopped a 25-years civil war between uncivilized gangs.
    That was supposed to give ‘ALL’ Lebanon time to work out a ‘One Country’ Parliamentary Democracy.
    It was called ‘Confessional’ at the time.
    One guy Confessed … and everyone else forgot about doing it.
    Now ‘ALL SECTS’ are recognized as capable of forming a ‘One Country’ Democracy. And no-one confesses anything, especially their incompetence.
    SO … if one sect has their mosques blown up (as in Tripoli), or another has their embassy sacked somewhere else, the ‘Neutral-Running’ theoretically ‘keep all sects safe’ Lebanese Government has only two choices … say nothing about anything that happens anywhere, OR (WHAT WOULD BE BEST) DUMP ON EVERY BLOODY INCIDENT … which they won’t do … even if a ‘Government Minister’ runs a pile of weapons into the Country in his trunk.
    Every Sect totally equally silent …. it’s more safe … (except Nastyrallah who loves to play the ‘religious card’ at any chance for a head-pat from an El Supremo somewhere else.)
    Everyone knows the Lebanese don’t ‘feel Arab’ … even the language is ‘softer’.
    Bottom Line: 25 years on: By this time, with very little in Law to describe ‘One Country’ functionality, they can’t even sort garbage … let alone create an atmosphere for a modern business concept.

  3. DaveTheRave Avatar
    DaveTheRave

    So I skimmed the article as usual to find a cartoon of Assyrian (or Persian maybe) war charioteers. Wtf? Je ne comprend pas. Are the green undershirts on the chariot dudes supposed to to be somehow indicative of a tenuous link to modern Hezbollah? Like the Party of God has been around for 2 and half millenia or so? Between Beirut and Brighton it would seem Monsieur Karam is finding some great sources for his contraband requirements.
    More mad incongruous cartoons please. They’re definitely the future!

    1. 5thDrawer Avatar
      5thDrawer

      It was a reference to chopping off the county’s legs, then disembowelling it.

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