“The Lebanese Government resigned today after two days of nationwide riots over the worst economic crisis the country has experienced in years.

The Prime Minister announced his resignation here after angry demonstrators tried to storm his residence and the neighboring villa of the President. Soldiers and policemen guarding the officials fired over the heads of the protesters to disperse them.

Big clouds of black smoke hung over Beirut after thousands of demonstrators burned rubber tires, and set up roadblocks to stop traffic. All roads leading in and out of the capital were closed and large-scale disruptions were reported in all parts of Lebanon from Tyre in the south to Tripoli in the north. Protests were also held in most Christian districts after a four-day general strike was called by labor unions as of Tuesday. Shops, banks, schools and offices were shut. Marches quickly turned into riots as demonstrators broke up in bands who went around smashing bank signs. Most of the glass doors and windows in a building housing the Chamber of Commerce in mainly Muslim West Beirut were broken.

In the Christian part of town, a crowd of several hundred people tried to attack the residence of the Justice Minister but were turned back by the police. In Tyre, demonstrators on Tuesday attacked and set ablaze the residence of the Finance Minister. […]

The Government’s resignation leaves the country, with its civil war wounds still unhealed, in a power vacuum. Officials said the Prime Minister had not intended to step down until agreement had been reached on a new Cabinet, but that today’s riots, which involved his own home, speeded the resignation.

Popular fury had erupted over the near collapse of the national currency and soaring prices of essential commodities. The value of the Lebanese pound in relation to foreign exchange has been on the decline for the last three months, but in the last two days it slumped to an all-time low, selling at over 2,000 pounds to one American dollar compared to one third that rate at the beginning of the year.

Shops and gasoline stations refused to deal in Lebanese pounds and insisted on being paid in dollars.

An empty treasury after years of civil war plus lack of foreign assistance and reluctance by investors to pour money into the Lebanese market have contributed to what amounts to a real depression. The Government’s inflationary policies, such as increasing the salaries of civil servants by 120 percent at the beginning of the year, have been cited by economists and politicians alike as the real cause for the crisis.”

Close your eyes. Keep them closed. Imagine a small Mediterranean country – Beautiful shores (minus the trash), sunny roadtrips (minus the potholes), majestic landscapes (minus the quarries), friendly people (minus the civil war), beautiful archaeology (minus everything they’re dismantling). You can live with all those things – But you can’t live without money. Now open your eyes, and imagine that country broke. Imagine a devaluated currency. Imagine a government that can’t pay wages. Imagine an economic collapse. Imagine a financial tsunami. Imagine riots. Imagine banks and government offices being burned down.

Can’t imagine all those things? It’s Okay. They say imagination is only abundant among Lebanese politicians on the eve of elections (remember Hariri’s 900000 job opportunities?).

So since you are probably not a Lebanese politician, the quote above, from a New York Times article, was actually describing Lebanon on the 7th of May 1992 – I simply removed the names of the politicians who were in charge back then.

This is how the financial abyss looks like for the Lebanese and their politicians – and it never ends well. A lot has changed since the economic collapse of 1992 , but the only thing that has been stable for the past 30 years in Lebanon has been the Lira. It turns out, however, that you don’t need a 15 year Civil War to destroy a country’s economy. 30 years of corruption, uncontrolled public spending and squandering, chaotic debts and ignorance of the country’s financial woes can apparently lead to the same ending. By the end of 2018, and after more than a decade of ignoring state budgets in favor of bickering who gets to rule the country, Lebanese politicians started to realize that they had left the country in a financial and economic mess in the process – and that they were the ones who had to deal with the situation. Cash-flow was needed – so the CEDRE conference happened, but for the CEDRE funds to be unlocked, reforms were necessary. And for a party that changed the name of its parliamentary bloc from “Change and reform” to ” Strong Lebanon” after 13 years, reform was apparently not supposed to be a priority for the FPM – and yet here we are.

Uneasy Lies the Head that Wears a Crown

Gebran Bassil spent 15 years fighting his way into the Parliament, and it took his father-in-law twice that time to maneuver his way into Baabda palace. But by the first of February 2019, both had finally made it – The FPM controlled the presidency, had the biggest bloc in parliament, the swing vote and the blocking third in the government – and with the help of its allies, was finally in command of the Republic. For the first time in ages, Gebran Bassil’s party had total control and was 3 years safe from a parliamentary election or a parliamentary one. Although it looked as if the Syrian regime was back in command, for the FPM, the war was finally won. But with great power, comes great anxiety. Just like every Maronite who is past the age of puberty, the ambitions of Gebran Bassil don’t stop at the gates of Batroun’s parliamentary seat. You don’t need a PhD in nuclear physics to know that Bassil wants to succeed his father-in-law as President – and three obstacles stand in his way.

• The first obstacle is the agreement that Aoun made with Geagea just before he became President, an agreement that made Geagea the second-in-command in the Christian scene and the de-facto heir to Michel Aoun’s presidency.
• The second obstacle is that Bassil has very little support outside his political party. Geagea sees him as a competition in his own constituencies, Frangieh and Gemayel as an existential threat to what remains of their political influence. For Joumblatt, he’s arrogantly encroaching on the Joumblattist ancestral lands in the Chouf – making major electoral progress in the 2018 elections. For Berri he is a political newcomer who threatens the status-quo that the speaker has established for three decades. For Hariri, he is a timed political bomb in a fractured government, and for Hezbollah, only the heir to a political alliance that defined Lebanese politics for a decade and a half but grows weary with every day passing on.
• The third major obstacle is simply due to bad luck and half a century of mismanagement. Gebran Bassil’s party is taking command at the worst possible timing in Lebanon’s modern financial history: Lebanon’s biggest economic crisis in three decades looms on the horizon, and there are only three ways out of it: The necessary financial and economic reforms will either hurt the ruling elite, the middle and low classes, or both. That is bad news for the Lebanese political clientelist-sectarian oriented system that thrives on the symbiosis of both components. Lebanese politicians have a tendency to get out of Civil Wars stronger and thrive on political crises, but there is one thing they do not come back from, and that is an economic crisis – Just ask Omar Karami.

It is the ultimate goal of any ruling party to stay in power. So with great power comes great political anxiety, and with economic crises a greater political anxiety. With greater political anxiety comes electoral panic, and electoral panic awakens the survival instinct of the Lebanese politicians – the only thing they actually brilliantly excel at: Sectarianism and racism.

Névrose de Destinée

Perhaps it is simply bad luck for Bassil’s party – after years and years of marginalization – to finally be the party in command at a time when everything is falling apart – or perhaps it’s all those years of parliamentary and government freezes that the FPM orchestrated in its quest for power that are finally coming back to haunt them. One thing is sure though: It’s not going to be an easy ride for the FPM now that they’re in power, and no matter what they do to try and fix Lebanon’s economic and financial woes, they will make a lot of enemies in the electoral constituencies where they plan on thriving in the 2022 elections. What elections, you say? Three elections: Parliamentary, municipal and – most importantly – presidential elections. Provided the ruling elite doesn’t postpone any of those elections – 2022 will be a key year in Lebanon, and a financial crash or harsh austerity budgets won’t look good for those who were there when they happened. Which is exactly why those in power had to figure out a way out.

Thor in the Republic

For the past couple of months – and especially since the third Hariri cabinet was formed – Lebanese politicians started curiously focusing on something they had previously ignored for decades: Fixing the electricity sector. Getting 24/7 electricity in the republic had always seemed like a virtual reality headline intended to recruit votes ahead of parliamentary elections, but now the ruling cabinet had been actually working very hard to come up with an electricity plan just a month after the cabinet was formed, and three years and a half before the earliest scheduled election. On April 8, the Council of Ministers finally adopted a new electricity policy paper, aimed at reforming the electricity sector. And while the plan has flaws, isn’t perfect and might very well never be implemented – it represents something very unusual in the way Lebanese politicians deal with things: (1) It’s a plan (2) that is real, (3) that was conceived right after elections, (4) and that has long-term implications. And how long-term are we talking here? 2022 is the big year for the plan. Deir Ammar 2’s output will increase to 550 MW, and power plants at Zahrani and Selaata will both come online, each producing 360 MW. This is the year that the plan forecasts EDL becoming profitable for the first time in decades. EDL’s deficit will shrink from $1.4 billion in 2019, to $574 million in 2020 and $307 million in 2021, and make humble winnings of $118 million in 2022, if everything goes according to plan.

Twenty Two Far for D-Day

But it doesn’t matter if the electricity plan works out before the elections. In Lebanon’s modern history, approximately 3 governments fall during every 4-year parliamentary term, and in Lebanese politics, 2022 is a very distant future for safeguarding our politicians’ survival in power. You can come back in 2022 and flaunt the fact that Nada Boustani’s electricity plan worked and that your party (or government) was the one who brought the the light back to Lebanon, but you’ll need another plan to power through the darkness phase until that happens (Yes, the pun was intended). But what darkness, do you ask?

NOT an Austerity Budget

” Today, it’s a trickle, and at this rate we might have a couple of years, based on published reserve numbers, but if it accelerates, which is looking likely, D-Day would strike in 2020.”

That was Dan Azzi at An-Nahar, trying to predict an approximate opening date for Lebanon’s looming fiscal fiasco. For the past year, the main focus of Lebanese lawmakers was the implementation of an “austerity” budget that would make it easier for the country to unlock the CEDRE funds. The parliament finally approved the budget on the 20th of July 2019 after 6 months of deliberations and negotiations with the representative of the different sectors.

But how do you create an austerity budget in a country like Lebanon where everything is dependent on the clientalism of those in power, and where even during official hiring freezes, thousands of employees are employed?

You don’t. You vote a regular budget and – wait for it – call it an *austerity budget* – Which is exactly what they did.

The 2019 Budget of the Lebanese republic is a lot of things, but there is one thing its is not. Unlike the official story being told by the members of the cabinet, it is not an austerity budget, and – unless a miracle happens – it will hardly influence the crisis on the horizon (for more info on the how the new budget is not an austerity one, I suggest you listen to this great podcast discussing it in detail).

The entire show mightactually be a strategy from the Lebanese cabinet to say that the 2019 “austerity” budget was not enough, as an excuse to actually implement real austerity reforms in the next budget without facing a more aggressive popular discontent than the one the government is currently dealing with. In the end, the 2020 budget should actually be discussed in a couple of months, and only time will tell if stronger fiscal measures will be taken by the government.

Goal-directed Anti-Syrian Sentiment

“Immigration is not intended to do good to mankind, but instead (aims) to harm the diversity and forgiveness in Europe and dismantle the human values that the European Union is built on.”

Lebanese politics is all about patterns and maneuvering. On the 10th of June 2016, Lebanon’s foreign minister at the time, Gebran Bassil, had one thing in mind. There was a presidential election to win, internal elections to influence, and parliamentary elections to prepare for. So he did – like any Lebanese politician would – what he does best: He played the sectarian card, and waited on results. Lebanon had a political crisis, a presidential vacancy, and a trash crisis that undermined the current political elite. For Bassil, the Syrian refugee crisis was not a burden – it was a political tool to rally the Christians around his party and to advance politically. When the foreign minister of Lebanon – a country’s whose diaspora is at least 5 times the size of the local population, a country whose economic system survives on the money coming in from its immigrants, a country that takes pride to be a population of traders and merchants – goes out and says from Finland that immigration is not intended to do good to mankind, it’s that the foreign minister either doesn’t understand how diplomacy works for a nation of immigrants, or that he willingly knows how it works and still chooses to continue with his strategy for the greater goal of personal political success.

Exactly 3 years later, in June 2019, and while Gebran Bassil was waging a different political war – having already won the presidency for his father in-law and the parliamentary elections with the party he leads – his primary strategy in achieving his goals was still the same. On the 8th of June, Bassil tweeted a video showing a crowd of FPM youth gathered outside a restaurant, singing the national anthem, calling for only Lebanese to be employed. While that was not the first time Bassil spearheaded or took advantage of the rising anti-Syrian (refugees) sentiment in the country, it was a major milestone: The FPM had found their new purpose. For years, the main objective of the FPM was centered around the idea of winning back the “Christian rights” – proposing electoral laws that maximized the Christian parties’ influence in parliament such as the Orthodox Gathering Law, blocking the presidential elections for three years in the name of getting a ” Strong Christian President in Baabda”, maneuvering like there’s no tomorrow in order to secure the maximal share of ministers appointed by the Christian parties, and finally waging an electoral battle in the name of claiming back Christian representation in Parliament. The price to pay was allying at times two of Aoun’s major rivals (Hariri and Geagea) while dropping long-term allies such as Sleiman Frangieh. Nevertheless, the FPM emerged from the political maneuvering stronger than ever, winning every single political battle in the past three years. As the leading political party among the Christians, the FPM’s struggle to maximize Christian representation in parliament and in government was naturally also a struggle to increase their influence and power across the political spectrum. And once the political influence was secured, it was time to keep it that way.

Burn the Witch

Lebanon has had Syrian refugees for 8 years now – but never in those 8 years has the anti-Syrian sentiment been so strong. For the past 6 months – curiously around the time the new austerity budget was being discussed – Bassil has been waging a political-diplomatic battle against the Syrian refugee’s presence in the country, tweeting about the issue more than Donald Trump tweets about his wall, touring the country as if it’s elections season, singlehandedly trying to raise (at the same time, in the spirit of sectarianism and coexistence – go figure) the alarm about the risk of “Tawtining the Syrian refugees” – and yes, I used Tawtin as a verb, judge me if you want – before eventually getting to the point: To use the economic alibi of the Syrian presence in the country to his advantage. In his tweet on the 2nd of June, Bassil asked to protect the Lebanese labor force – indirectly (not that indirectly anyway) blaming the unemployment on the Syrian refugees, and – by simple generalization – throwing the entire weight of the Lebanese fiscal and economic crisis on the Syrian refugees. After years of political vertigo, the FPM had finally found their new raison d’être, their distraction and way out of the financial crisis. No more Christian rights to collect? Talk about the refugees. Unemployment problems? Talk about the refugees. Fiscal problems? Refugees. Too much immigration? Refugees. Too much debt? Refugees. Want to distract the entire republic from possible austerity measures? Refugees. For the past two months, The FPM’s politicians, spearheaded by Bassil, have been on an endless adventure focused on the refugee crisis. (See here, here, here, here, here, and here – You might as well check Gebran Bassil’s entire twitter feed that has somehow metamorphosed in the past couple of months into an anti Syrian refugee blog). In fact, Gebran Bassil went so far in his campaign that he started talking about a genetic feeling of belonging to Lebanon that only the Lebanese would understand.

This was not quite Nazi Germany, but in their quest to consolidate their newly-found power, The FPM needed to create a new “witch” for them to burn in times of crisis, a non-Lebanese threat, a scapegoat, something to keep the Lebanese busy with, a new raison d’être – especially that there are no Christian rights to collect anymore. The legend of 1975 also says that using Muslim refugees as a boogeyman is a nice way to unite Christian under your banner.

Choose Your Scapegoat

In fact, the FPM went so far in their anti-Syrian rhetoric that the Washington Post described them in an article on the 26th of June as “ultranationalists“. And the very fact that the FPM politicians were now seen as the right-wingers among the Christian parties did not go well down with the traditional right-wingers, the Lebanese Forces. The FPM has always been seen as the centrist, moderate Christian party, but now it became so ambitious and wanted to gather all Christian factions under its wing – the right wingers and the centrists.

So how would the Lebanese Forces respond to the rising “ultranationalist” side of the FPM? By reminding the country that there was only one true right-wing party among the Christians, and that is the party led by Samir Geagea: In what seemed like a move that was out of the blue, the LF’s representative in the ministry, Camille Abou Sleiman, decided in July to crackdown on illegal Palestinian refugee workers, causing uproar in the camps and leading the Palestinians to go on a general strike. But Abou Sleiman’s move was not a miscalculated one, nor was it out of the blue. Through his sectarian and racist campaign, Gebran Bassil had miraculously activated the dormant Lebanese Forces and started a sick game where the Christian parties would now compete on who can crackdown more on refugees.

Every Lebanese party needs a scapegoat, and it seems the LF and the FPM had found theirs. So if the FPM was going to be seen as the party that led the country to the financial abyss, they might as well blame someone else for it, and show themselves as the ones trying to fix that refugee problem in the process. You only burn the witch after 8 years if you want that devaluated Lira to go unnoticed.

The Silence of the Lambs

While the FPM was gaining grounds in their newly found political purpose, Saad Hariri was surprisingly letting his foreign affairs minister run his affairs unchecked (pun intended, again). Aside from a few critical remarks to Bassil by calling his comments racist, Hariri did absolutely nothing else to contain the anti-Syrian sentiment.

Hariri and Bassil share the same cabinet together, and Bassil’s Machiavellian tactics are intended to save the face of the government that is Hariri’s before anyone else. Is it also that wise to clash with someone who can command a majority of the parliament votes? Hariri lost the elections and his presence in cabinet depends on two things now: The presidential settlement with the FPM, and his achievements towards the public. Providing cover for Gebran Bassil’s maneuvering allows him to consolidate both things; The alliance with the FPM, and a possible distraction in case the financial woes get bigger for the government. In the end, any crisis would hurt the Prime Minister’s career more than anyone else. In any other situation Bassil’s political campaign against Muslim refugees would have led to a divide between Lebanon’s Muslim and Christian parties and would have driven Lebanon to the brink of a Civil War, but this time keeping the PM’s seat will come at a price for Hariri, and if it’s not gonna be the Lebanese Lira, it will have to be Syrian refugees.

Why Have an Economy When You Can Have War

Walid Joumblatt’s PSP has always relied on a careful juggling of alliances between Lebanese politicians. So when the FPM and the FM began their tumultuous love journey ahead of the 2016 elections, it was clear the equilibrium that Joumblatt needed to thrive would be shattered. The fatal blow came however with the new electoral law that only shrunk the PSP’s share in parliament. Under the new political order, what remained of the March 14 alliance only controlled 11 ministers in the cabinet. That carefully calculated number meant that Joumblatt could actually rely in times of trouble on the blocking third by calling upon his closest allies: the LF and the FM. From outside March 14, Joumblatt could only count on Berri to support him in government. But Berri’s share is 3 ministers, and without the support of Hariri’s 5 seats in government, all hell could break loose for the PSP in Lebanese politics: Unable to rely on any blocking third (11 ministers), Joumblatt would lose any political influence he had in the central government.

So when the FM and the FPM started getting close again in the past few months and when it became obvious that Hariri would let Bassil roam free in his political campaign and that Hezbollah was willing to provide any political cover Bassil needed, it became clear for Joumblatt that he had effectively lost any bargaining chip he had. In order to try and sow discontent between the leading members of the ruling coalition, Joumblatt took it upon himself to put an end to Bassil’s increasing influence by calling Bassil racist at the start of June. But when words seemed powerless, Joumblatt tweeted on the 25th of June that he was no longer going to comment on political events through social media. So just when you thought that Joumblatt was calling for a political truce, the PSP decided to protest Bassil’s visit to the Aley district on the 30th of June. The protest turned into clashes, and the clashes led to a bloodbath with the death of pro-Arslan bodyguards. And while Hezbollah quickly tried to calm things down and worked to contain its allies, Joumblatt had sent a clear message to the leaders of the ruling coalition : He is still unpredictable, and isolating him would have major consequences.

As if it was still 1985, the Prince in the Chouf had effectively stopped the convoy of a foreign minister from entering a specific region in Lebanon, but contrary to popular belief, the military clash between the PSP and the LDP/FPM did not escalate quickly. It’s been happening for months, and those months of political maneuvering and scapegoating had to eventually spill over somehow.

The 2019 budget is over, long live the 2020 budget debate.