1. False Dawn: Lebanon’s Economic Crisis Amidst Improved Saudi-Iranian Relations
- Author:
- David Wood
- Publication Date:
- 03-2024
- Content Type:
- Journal Article
- Journal:
- Brown Journal of World Affairs
- Institution:
- Brown Journal of World Affairs
- Abstract:
- On 17 October 2019, furious protests erupted across Lebanon as citizens came to a shocking realization: the country’s leaders had destroyed the economy. Decades of corruption and mismanagement had emptied the state’s coffers, trig- gering a domestic banking collapse and frittering away many Lebanese residents’ life savings. Now, almost five years later, the situation has only grown worse. The Lebanese lira (LBP) has been devalued to the point of irrelevance, crashing from 1,507.5 LBP for 1 USD to over 140,000 LBP in March 2023. House- holds give up essentials like health insurance to pay for diesel power generators and solar panels, as public electricity provisions—along with many other key state services—barely function.1 Meanwhile, the country’s leaders stubbornly resist implementing much-needed economic reforms, blaming the economic crisis on a wide range of factors, from Syrian refugees to general instability in the Middle East. A regularly proffered excuse emphasizes the role of competition between Iran and Saudi Arabia, whose rivalry has periodically played out on Lebanese soil. This theory argues that Lebanon is a “penetrated society,” inextricably tied to and paralyzed by geopolitical competition, including the Saudi–Iranian con- frontation.2 Thus, Lebanese leaders cannot resolve their disputes until these two regional heavyweights, amongst other foreign powers, reconcile their conflicting interests in Lebanon. Regional competition overlays a domestic political structure already prone to deadlock, which rigidly apportions power between Lebanon’s frequently feuding sectarian communities. Accordingly, various Lebanese politicians hoped that improved Iranian-Saudi relations—facilitated in March 2023 by Chinese mediation—would lead to a breakthrough in their ability to tackle Lebanon’s economic meltdown. Yet, this optimistic reading overestimates the extent of Tehran and Riyadh’s cautious détente, which is unlikely to translate into constructive engagement in Lebanon any time soon. It also downplays the true obstacle to Lebanon’s economic reform process: corruption in the country’s own political and financial elite.
- Topic:
- Corruption, Diplomacy, Economic Crisis, and Regional Politics
- Political Geography:
- Iran, Middle East, Saudi Arabia, and Lebanon