- + Diab’s freezing policy frenzy as Lebanon’s economy deteriorates.
- + He is caught between the Hezbollah and the protesters’ demands.
- + The struggle to set up a government could force a resignation.
Why is Diab’s heat level freezing?
Answer: Protestors call for his resignation, mid Pandemic lockdown as he fails to provide policy roadmap.
Starting in Tripoli, protesters in Lebanon reached outside the Prime Minister Hassan Diab’s residence in Beirut demanding for his resignation; his policy had taken a turn for the freezing. Lebanon’s crumbling economy, growing debt concerns, falling exchange rates and the COVID-19 related market failure have led to the resurfacing of the ‘old elites versus common population’ conflict.
Hassan Diab was elected as Prime Minister after the population forced the resignation of Saad Hariri by the President Micheal Anon in January 2020. Anon hoped that he would, with his technocratic background, his vast economic policy expertise and massive Hezbollah support, be able to both form a cabinet as well as allow the Lebanese government to function. But his new zeal couldn’t replace his weak economic policy and lack of answers for the protestors. In a sign of the deepening crisis, Diab tried to appease the people by creating a populist approach against the political system to accuse the longtime Central Bank governor, Riad Salameh, of orchestrating the local currency’s crash. He highlighted the “opaque” policies covering up major banking sector losses and capital flight in an attempt to play the blame game and divert attention.
But his government, formed in January, inherited a disastrous economic situation and was faced with the impossible balancing act between the traditional power brokers that is the Hezbollah who voted it in and the common public that wants the elite out. He failed to meet the demand of the protestors. The holy month of Ramadan further sensitized Islamic reaction with the shooting of a 27-year-old protester during his fasting.
Diab ordered the military to come in, which only escalated tensions wherein dozens of protesters gathered outside the Central Bank headquarters in the capital, Beirut, and threw stones toward the building in response. “We’re here to bring down Hassan Diab. He doesn’t represent us. He’s one of them,” said one young demonstrator, referring to the country’s ruling elite. “It’s the revolution that must name the Prime Minister, not them” were some accusations flung at him by the protestors. His inability to calm the situation sent temperatures freezing.
Moreover, in terms of taking an economic policy approach, Lebanon was faced with the task of deciding if he should repay $1.2 billion in Eurobonds due on March 9 to restructure its debt. He chose to restructure the debt with help from an IMF consulting mission and structured a repayment plan with a deal to boost exports and reduce government spending to conserve reserves. This caused the protesters to further protest because this deal increases their burden of the pie as the government reduces subsidy on fuel, wheat and electricity.
Who is changing Diab’s temperature?
Answer: Himself. His lack of action to prevent or relieve the Lebanese situation due to political pressure
The structure of the Lebanese political system makes for different religious groups appointing stakeholders; the Maronite Christians have a lock on the Presidency, the Prime Minister is always a Sunni and the Speaker of parliament Shiite. Diab cannot change this order and while he’s trying to form a cabinet and give his governance a chance, he holds the weight of protecting the Sunni population. The pressure he faces from Hezbollah is preventing policy measures to move Lebanon out of a dire and almost detrimental situation.
The Lebanese national currency has hit a new record low 1,507 Pounds exchange with a black market price going up to 4,000 Pounds exchange. It also faces the highest unemployment and biggest debt in the Middle East. Diab has failed to feed its people because of a corrupt political elite engaged in a clientelistic approach to governance that benefits loyalists instead of ushering in reforms and economic progress for all their people. Diab’s failure to change the situation even remotely is causing a change in temperature
Furthermore, the COVID-19 lockdown measures have been unable to flatten the curve but the numbers are still low at 1,233 cases so far. Yet, this has led to a widespread economic standstill causing a point of no return for both Diab, whose government is fresh of the press, and the Lebanese economy that’s crashing. Diab’s lack of legitimacy, his recency of elections and the call for his resignation are all thus, part of the crisis and temperature freeze.
What is driving Diab’s decision?
Answer: The Hezbollah backed parliament.
To garner international aid, Diab asked the IMF for a $9 billion rescue package and also entreated European nations to release an $11 billion fund promised back in 2018. But the truth of the matter is that the IMF demanded political reforms, which would weaken traditional power. This loss of control is preventing him from making demands from the European world.
This boils down to some factors: Hassan’s decision is driven by his election and those who support it, Lebanon’s political structure as well as the religious divide the country battles.
To outline the same, Diab served as Education Minister from 2011 to 2014 in a cabinet made up of Hezbollah and its allies after which he rose to the position of Vice President and was now in January 2020 elected as Prime Minister. Diab is supported by the two major Iran-backed Shiite factions, Hezbollah and Amal, which make him even less credible in the eyes of the protesters. “Those two groups have in recent days been staging angry, raucous counter-protests, deliberately raising the spectre of sectarian conflict in a country that bears the scars of previous such conflagrations.” said a Bloomberg reporter.
Diab is desperate to protect the existing political order so that he can maintain maximum influence with minimum responsibility. He stands the most to lose as meeting the protestors’ demands of reform will prevent his cabinet from forming.
What does this mean for you?
Answer: The possibility of a political crash due to the Corona induced Lockdown
Lebanon lies on tectonic plates politically, socially and economically. Starting with the fact that it is the epicentre of a refugee crisis and that it shares its borders with both Syria that has seen a seven-year-long civil war as well as Israel-Palestine which is a conflict as old as time. To have another country at the brink of both political and economical collapse in an already unstable region makes for world news as well as international implications in an already vulnerable Middle East.
Moreover, there is a direct co-relational impact of the worsening economy instigated by the strict lockdown and lack of global debt relief on less developed economies like Lebanon. Food import which is primarily the source of Lebanese functioning is now facing the pressure of piling stocks. The reduced banking controls in the country are now forcing everyday average citizens to move to informal buying and black markets with high prices. Change in import-export chains will eventually cause a global impact and an individual one as well.
Hassan Diab, who represents a technocratic regime, shows the vulnerability of governance in our daily decision making. On a personal level, protests in any nation-state are never good news and it means that our import-export chain could take a more expensive turn as countries as a whole have started to fail.