Former Lebanese Prime Minister Saad Hariri in Leidschendam, Netherlands 18 August. Piroschka Van De Wouw/Reuters
Former Lebanese Prime Minister Saad Hariri in Leidschendam, Netherlands 18 August. Piroschka Van De Wouw/Reuters
Former Lebanese Prime Minister Saad Hariri in Leidschendam, Netherlands 18 August. Piroschka Van De Wouw/Reuters
Former Lebanese Prime Minister Saad Hariri in Leidschendam, Netherlands 18 August. Piroschka Van De Wouw/Reuters

Lebanon is being forced to relive its traumas


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Late last week, Saad Hariri, Lebanon’s former prime minister and the scion of the Hariri political and business clan, decided to nominate himself as a candidate to form the next Lebanese government.

Mr Hariri put his name forward unilaterally after Mustapha Adib, a former diplomat, failed in his bid to form a government of technocrats that could push through a raft of reform measures. The measures were sorely needed in order to save the country from economic collapse and unlock a financial aid package from the international community.

These measures were championed by French President Emmanuel Macron, who visited Lebanon in the aftermath of a cataclysmic explosion in Beirut in August, which levelled much of the city and rendered more than 250,000 people homeless. Mr Adib’s bid failed due to the intransigence of Hezbollah and Amal, the main Shia parties, who insisted on naming the new finance minister.

Mr Adib’s failure and Mr Hariri’s self-proclamation coincide with the one-year anniversary of a popular protest movement that began on October 17, 2019. The protesters have called for the removal of a craven and corrupt political class that has brought Lebanon to ruin.

The movement has won admiration around the world for its creativity and – most notably – the absence of sectarianism. Mr Hariri was in power at the time it began, and its popularity was responsible for his resignation.

His return does not bode well for any real departure from the political class that has proved so problematic for Lebanon. A lack of substantive change would be seen as a betrayal of the uprising.

The nominal spark that lit the protest movement in Lebanon was a proposed tax on WhatsApp calls, but it was only the latest stick to break the proverbial camel’s back. The Lebanese had weathered decades of poverty and nepotism under a system that distributed power based on sectarian affiliation.

  • An anti-government protester uses a tennis racket to return a tear gas canister towards riot police near Parliament Square in Beirut on September 1. AP
    An anti-government protester uses a tennis racket to return a tear gas canister towards riot police near Parliament Square in Beirut on September 1. AP
  • An anti-government protester throws a stone towards riot police during a protest near Parliament Square. AP
    An anti-government protester throws a stone towards riot police during a protest near Parliament Square. AP
  • An anti-government protester uses a slingshot to launch a stone towards Lebanese riot police. AP
    An anti-government protester uses a slingshot to launch a stone towards Lebanese riot police. AP
  • Riot policemen beat anti-government protesters near Parliament Square. AP
    Riot policemen beat anti-government protesters near Parliament Square. AP
  • Anti-government protesters try to break open a metal barrier blocking the road to parliament on Sept 1, 2020. AP
    Anti-government protesters try to break open a metal barrier blocking the road to parliament on Sept 1, 2020. AP
  • Anti-government protesters try to break open a metal barrier blocking the road to parliament on Sept 1, 2020. AP
    Anti-government protesters try to break open a metal barrier blocking the road to parliament on Sept 1, 2020. AP
  • Anti-government protesters throw stones at a police car near Parliament Square on Sept 1. AP
    Anti-government protesters throw stones at a police car near Parliament Square on Sept 1. AP
  • Activists help anti-government protesters after being beaten by riot policemen near Parliament Square. AP
    Activists help anti-government protesters after being beaten by riot policemen near Parliament Square. AP
  • Riot policemen beat anti-government protesters during a protest near Parliament Square. AP
    Riot policemen beat anti-government protesters during a protest near Parliament Square. AP
  • Activists help an anti-government protester with her tear gas mask covered in blood after being beaten by riot policemen near Parliament Square. AP
    Activists help an anti-government protester with her tear gas mask covered in blood after being beaten by riot policemen near Parliament Square. AP
  • An anti-government protester throws a stone towards riot police during a protest near Parliament Square. AP
    An anti-government protester throws a stone towards riot police during a protest near Parliament Square. AP
  • Anti-government protesters throw stones towards police near Parliament Square. AP
    Anti-government protesters throw stones towards police near Parliament Square. AP
  • French President Emmanuel Macron and French Foreign Minister Jean-Yves Le Drain meet the military mobilised to help to rebuild the port of Beirut. AP via pool
    French President Emmanuel Macron and French Foreign Minister Jean-Yves Le Drain meet the military mobilised to help to rebuild the port of Beirut. AP via pool
  • Lebanese Parliament Speaker Nabih Berri (R) arrives with Lebanese MP Ali Hassan Khalil to meet with Syrian President Bashar Al Assad at Al Shaab Palace in Damascus in 2008. AFP, File
    Lebanese Parliament Speaker Nabih Berri (R) arrives with Lebanese MP Ali Hassan Khalil to meet with Syrian President Bashar Al Assad at Al Shaab Palace in Damascus in 2008. AFP, File
  • Then Finance Minister Ali Hassan Khalil arriving at the parliament in the Lebanese capital Beirut in 2018. AFP, file
    Then Finance Minister Ali Hassan Khalil arriving at the parliament in the Lebanese capital Beirut in 2018. AFP, file
  • Then Labour Minister Youssef Fenianos arriving at the parliament in the Lebanese capital Beirut in 2018. AFP, File
    Then Labour Minister Youssef Fenianos arriving at the parliament in the Lebanese capital Beirut in 2018. AFP, File

Hezbollah, beholden to Iran, maintained military supremacy, a gun that it wielded to cow its opponents, and sometimes assassinate them. It created a state within a state.

The war in Syria worsened the destitution in Lebanon. One million refugees sought shelter across the border, adding to an existing population of 4 million. Hezbollah’s intervention to secure the regime of Bashar Al Assad in Damascus led to a spillover of violence, including suicide attacks by terrorist groups and sectarian clashes in major cities like Sidon and Tripoli.

Lebanon became the first Arab nation to experience hyperinflation

As citizens suffered, many of the country’s political elites continued to enrich themselves and wield influence to expand their patronage networks and protect their ill-gotten gains, leaving ordinary people without even basic services, like 24-hour access to electricity or water or garbage disposal.

The preeminent slogan of the uprising was “kellon yaani kellon”, or “all of them means all of them”, a brave proclamation that demanded nothing less than the ousting of the entire political class. The movement captured global attention last October with its good humour, musical prowess and sheer joy.

It did not last, largely because the depth of the depravity of most of the ruling class had not yet become apparent. A monumental economic collapse shortly began unravelling Lebanon's entire financial system, the very structure of which was morally corrupt.

Banks were reliant on fictionally high interest rates meant to attract US dollar deposits, which were then loaned to the government. As the state and banks ran out of foreign currency late last year, tens of billions of dollars were transferred abroad, and ordinary citizens paid the price, locked out of their bank accounts to preserve bankrupt institutions.

More people were plunged into poverty as the currency eventually lost 80 per cent of its value, and Lebanon became the first Arab nation to experience hyperinflation.

Then came the explosion in August of thousands of tons of ammonium nitrate that had simply been left unattended in the Beirut Port. The destruction is such that there is no word that quite captures the catastrophic levels of criminal negligence, and yet the same political elites who held power before remained in control after.

Finally, the coronavirus pandemic continues to ravage the country, with thousands of cases reported daily. The country now has over 55,000 officially recorded cases as of this writing.

The jubilation of the protest movement has been replaced by a hopelessness that things could ever change and an overwhelming desire among young people to leave.

Mr Macron’s initiative is laudable but ultimately unlikely to succeed. It may succeed in pushing some limited reforms that would head off further poverty, destitution and food insecurity. But in their essence, his proposals are meant to urge a shift in power away from a political elite that has long profited and cemented its power through the misery of ordinary citizens. Asking them to give it away voluntarily is a fool’s errand.

Mr Hariri himself may not be personally responsible for the calamity the country finds itself in, but he is still considered a member of the elite political class. So, it is difficult to see his return as a signal that meaningful change will materialise.

Kareem Shaheen is a veteran Middle East correspondent in Canada and a columnist for The National

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In numbers

Number of Chinese tourists coming to UAE in 2017 was... 1.3m

Alibaba’s new ‘Tech Town’  in Dubai is worth... $600m

China’s investment in the MIddle East in 2016 was... $29.5bn

The world’s most valuable start-up in 2018, TikTok, is valued at... $75bn

Boost to the UAE economy of 5G connectivity will be... $269bn 

The President's Cake

Director: Hasan Hadi

Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem 

Rating: 4/5

THE LIGHT

Director: Tom Tykwer

Starring: Tala Al Deen, Nicolette Krebitz, Lars Eidinger

Rating: 3/5

Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates
Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.