As Lebanon nears a breaking point due to its acute financial crisis, the Trump administration faces a policy dilemma: should it financially support a corrupt ruling faction that is allied with Hezbollah – Iran’s friend and Washington’s nemesis – or should it hold off on aid and watch the country fall apart?
Both options are problematic but there is a better alternative.
The US can prevent Lebanon’s collapse while keeping the pressure on Hezbollah and its allies to implement serious reforms. It can do this by co-ordinating with Gulf and European governments on modest, conditional and targeted economic assistance from which the more vulnerable members of Lebanese society would primarily benefit. Such aid, which would be deposited in an international fund, would provide food and medicine but also launch various small and medium-sized businesses that would be overseen strictly by local non-governmental organisations under the watchful eye of international bodies.
These immediately impactful local community development projects will not fix the economy, which suffers from a combination of structural maladies, but they will help those Lebanese who are most in need.
While limited, this is the best approach for Washington to take in the short term given that a more comprehensive solution – the Lebanese committing to a wholesale and credible reform programme – is not on the cards any time soon. That is because there are deep societal and political divisions in the country, as well as disagreements over the nature of the crisis and the way forward. Some people desire a new social contract that is not based on sectarianism, while others want to preserve the status quo and stick to reform.
Then there is Hezbollah, the dominant political force in the country that is opposed to meaningful change, thus blocking any road to recovery.
Any reform process that seeks to stem corruption and promote good governance would weaken Hezbollah’s cross-sectarian patronage system – and thus its grip over politics. It would also limit its access to arms and illegal sources of revenue reaching them through the Lebanese-Syrian borders, the national airport and its seaports. That is why, even though it has no problem with the International Monetary Fund providing technical advice to the Lebanese government, it has zero interest in any assistance package that would impose transparency and accountability measures.
As long as Hezbollah has the ability to veto any international reform package that it does not like, Lebanon as a whole is stuck in an economic rut and rapidly losing its balance.
To protect its interests in Lebanon and the region, Washington should therefore recognise these realities and try to work around them. While it might be eminently reasonable and understandable for the US to tie economic assistance – either directly or through the IMF – to Beirut's implementation of structural reforms, it will not stave off state collapse.
Lebanon’s descent into chaos, which is only a matter of time in the absence of international assistance, is no laughing matter. It will also hurt US interests.
Let us start with Hezbollah. If the group presents problems for the US now, imagine how much worse those would be if Lebanon becomes a failed state. History offers useful lessons.
Hezbollah came into being in 1982 in the throes of a vicious civil war and an Israeli occupation. With every existential challenge that it has faced since, including its destructive confrontation with Israel in 2006 and the ongoing Syrian civil war that broke out in 2011, it has only grown stronger. Hezbollah stands to gain the most from anarchy in Lebanon because no local actor would be able to challenge its military supremacy and political dominance.
Should Hezbollah further spread its wings in Lebanon, it is likely to draw the opposition of Sunni extremists from all over the region. That is a recipe for a return of ISIS, which will use the country as a base for operations against US interests and its allies. It has done it in Syria and there is no reason why it would not be able to do it in Lebanon. Facing sectarian conflict, the Lebanese army would either take cover or disintegrate, prompting many in Washington to intensify their calls for terminating US military assistance. This in turn would invite further Russian involvement in Lebanon, with Moscow keen to do business with the Lebanese army through multiple offers of arms and money. In the context of great-power competition, this would amount to a setback for Washington.
Then there is Iran. If Hezbollah’s fortunes in Lebanon and the region improve, so will those of Iran. The Trump administration is doing everything it can to weaken Tehran and force it to come to the negotiating table. But if Iran is allowed to control Lebanon unchallenged, it will gain an important lifeline and thus be able to more effectively counter US policy.
Given their size and depth, none of Lebanon’s problems will be solved any time soon. The country as a whole requires much healing. But the US has every reason to maintain its strategic position in the country and the Eastern Mediterranean as well as helping its people confront their old sectarian demons and make the hard choices.
Bilal Y Saab is senior fellow and director of the Defence and Security Programme at the Middle East Institute