Oil, money and Hezbollah: What is at stake in the protests in Lebanon?

Oil, money and Hezbollah: What is at stake in the protests in Lebanon?

In early January, Lebanon was rocked by a new wave of protests. While they were not especially numerous, the protesters were aggressive, attacking the offices of private banks and the Central Bank of Lebanon while putting forward demands for a new government. Their slogans targeted Prime Minister Hassan Diab in particular.

The new government consists of 20 ministers and is currently headed by Diab. The US has already criticized the newly appointed government and issued support for the demonstrators. As Mike Pompeo said in a Bloomberg interview, “We’re prepared to engage, provide support, but only to a government that’s committed to reform.” Mr. Pompeo and senior US officials have pressured the Lebanese Government over the years to confront Hezbollah’s political leaders.

Results of the protests

Mass protests swept Lebanon last October as a result of authorities intention to raise taxes, as well as introduce new ones, including the introduction of taxes on Whatsapp messenger which is popular in Lebanon due to the high cost of cellular communications.

However, the wave of demonstrations not only forced the authorities to abandon their plans, it also led to the resignation of the then head of government, Saad Hariri, on October 29.  He was replaced by the independent politician Hassan Diab but the protests continued nonetheless.

Protest leaders are pushing for the resignation of the current government and new elections, stating their distrust of the political elite as a whole and accusing them of corruption.

The protests in Lebanon did not contribute to the stabilization of the economic or political situation in the country, in fact, the general crisis only worsened. In turn, the worsening economic situation spurred a new wave of protests.

The exchange rate of the national currency, the Lebanese pound, is sharply falling and savings are depreciating. On the black market, $1 is worth about 2,400 pounds, although the official rate at the Central Bank is 1500 pounds per dollar. At the same time, banks have limited how much individuals can withdraw from their accounts in foreign currency. In some cases, the limit does not exceed $100 per week.

Lebanon is on the verge of bankruptcy. Debt currently sits at 150% of GDP, while the budget deficit is 11%.  Moreover, the protests have paralyzed the country’s political life.

Against Hezbollah

One of the consequences of the protests in Lebanon has been growing disagreement between supporters of radical change in the country and the Hezbollah movement.

After the protests began in October, Hezbollah’s leader, Hassan Nasrallah, partially supported the demands of the protesters. However, he subsequently stated that the protests were fueled by foreign embassies.

In December, Nasrallah stressed that the US and Israel are trying to use the protests in Lebanon to pressure Iran and Hezbollah.

“Do the US and Israel want to help the Lebanese people or blackmail them? The US equation for the Lebanese is for the latter to abandon their strength element so that the US helps them… The US and Israel have failed for decades to solve the obstacle which the resistance formed, therefore they are trying to take advantage and blackmail the Lebanese to achieve that,” Hezbollah’s leader declared.

The western media tend to describe the protests in Lebanon as specifically opposing  Hezbollah. Clashes were observed between supporters of the group and the Shiite Amal party as well as protest groups.

After the resignation of Prime Minister Hariri, US Secretary of State Mike Pompeo openly supported the protesters, saying that “The Lebanese people want an efficient and effective government, economic reform, and an end to endemic corruption.”

Former US Ambassador to Lebanon Jeffrey Feltman said that “the demonstrations and the reactions to them by Lebanese leaders and institutions fortunately coincide with US interests.”

The United States wants to change the balance of power in Lebanon. They are not satisfied with Hezbollah’s presence in the country’s parliament and its influence on authorities.

On January 3, the US launched a new wave of confrontation with Iran by killing general the leader of Iran’s Quds Force, Qassem Soleimani. Hezbollah vowed revenge, forcing the US to redirect (at least partially) their resistance structures from external enemies to internal squabbles. By “coincidence”, the new aggravation of protests started exactly when the US needed them.

The protests in Lebanon suspiciously coincided with protests in Iraq and Iran itself. From a geopolitical point of view, the wave of protests is clearly aimed at destroying the Shiite axis in the Middle East and preventing Iran from freely projecting power in the direction of the Mediterranean.

The US and Israel are the main geopolitical beneficiaries of chaos in Lebanon and Iraq.

It should be noted that the United States is largely responsible for the crisis in the Lebanese economy. The harsh sanctions regime which the Trump administration has imposed on banks allegedly associated with the Hezbollah movement, have severely complicated the situation in the country’s economy.

However, Hezbollah itself did not actually suffer from the sanctions, the Lebanese people did. At the same time, the United States and its local minions are trying to shift a significant part of the blame for the problems of Lebanon to Hezbollah. It is significant that the symbol of the protests in Lebanon coincides with the symbol of the Serbian movement Otpor, which has long served as a think tank promoting pro-Western color revolutions around the world.

Lebanon has already experienced a color revolution of its own. The so-called Cedar Revolution in 2005 led to the withdrawal of Syrian troops from Libya. The was followed by a new political crisis and war with Israel.

It is significant that intensified protests activity saw the re-emergence of the pro-American and pro-Israeli Christian Lebanese Forces led by Samir Geagea, who was responsible for the massacres in Sabra and Shatila in 1982. Attempts by external forces to exacerbate disagreements between the ethnic and religious groups of Lebanon could provoke serious destabilization in the country, despite the previous experience of sectarian civil war and its consequences.

Money and Banks

The Lebanese crisis hit the country’s banking sector hard. Both American sanctions and the violence of protesters have had a negative impact on the financial sector. On the other hand, the Central Bank of Lebanon is accused of being closely connected with the State Treasury of the US and structures linked George Soros. In other words, unsuccessful attempts to cope with the crisis likely goes beyond the incompetence of bank managers.

A recession in Lebanon will be beneficial for the country’s regional competitors, as the country had served as the financial center of the region. The United Arab Emirates stands to gain in particular.

It should be noted that in the course of the protests, former Prime Minister Saad Hariri tried to secure new investments from the UAE.

“In October Hamad Saeed Sultan Al Shamsi, the UAE Ambassador to Lebanon declared that “about 29 per cent of the total FDI inflows to Lebanon were from the Middle East, of which the FDI from the UAE constituted 32%.” Problems in Lebanon’s economy in the long term allow investors from the UAE to cheaply buy up large parts of Lebanon’s economy.

Another important component of the economic crisis in Lebanon is that it negatively affects the Syrian economy.

The financial crisis in Lebanon will have a huge collateral effect on Syria. The Syrian pound is falling, depriving the regime in Damascus of primary access to the international financial system. Lebanon is the main source of foreign currency for Syria. When there are no dollars in Lebanon, there is also a shortage in Syria.

Economists note that Damascus and its partners have largely continued to rely on Lebanese business agents. The importance of their role has increased since 2011 when Lebanon became the main source of fuel and commodities in Syria. Thus, by exacerbating the crisis in Lebanon, they can destabilize Syria as well.

The oil factor

The current crisis may be related to attempts by external players to appropriate Lebanese oil. Large hydrocarbon deposits were recently discovered in the Eastern Mediterranean, including offshore Lebanon. However, Israel disputes Lebanon’s rights to this part of the water.

Last year, Lebanese Parliament Speaker Nabih Berri warned that Israel may deplete Lebanon’s offshore oil and gas reserves, licensing two companies to start drilling by April 2020.

According to the estimations of the US Department of Energy “there are potential natural gas reserves of 25 trillion cubic feet located in its offshore territory.”

On January 14, the Acting Minister of Energy and Water Resources of Lebanon, Nada Bustani, extended the deadline for filing applications for exploring oil and gas on the Lebanese shelf from January 31 to April 30, 2020.

In the context of the political and economic crisis, large external players including transnational oil corporations are able to impose their will on the Lebanese state. The weakening of the Lebanese state is economically beneficial for Israel, which will be in a better position to appropriate Lebanese oil resources by taking advantage of the fact that the country is plunging deeper and deeper into the crisis.

In this context, the protesters urge to boycott state structures will only worsen the economic and political situation in the country. The weaker the state, the more likely it will fall victim to foreign predators ready to tear Lebanon to pieces.

United World International

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September 2021