Po­lit­i­cal shock throws Le­banon’s econ­omy back into cri­sis

Leader’s res­ig­na­tion may un­ravel bid to in­still con­fi­dence.

Austin American-Statesman Sunday - - MORE OF TODAY’S TOP NEWS - By Philip Issa

Saudi Ara­bia and Iran. But Le­banon. nese to work in its oil-based Sun­nis. its econ­omy sput­tered on Saudi Ara­bia, Bahrain, econ­omy. “I think those who are un­der a tacit un­der­stand­ing Kuwait, and the United The con­cern now is that in­vested in Le­banon are not among the re­gional heavyArab Emi­rates all or­dered the king­dom and other Gulf go­ing to come and de­stroy weights and their lo­cal prox- their cit­i­zens out of Le­banon na­tions will throw out Le­bev­ery­thing that they did in ies that left Le­banon on the this week, and the Le­banese anese work­ers, as they did terms of re­la­tion­ships and side­lines of that con­test. are won­der­ing and wor­ried with Qatar this sum­mer in as­so­ci­a­tions and cred­i­bil

That may have changed about what’s to come. a rage over that coun­try’s ity,” said Kamel Wazni, an BEIRUT — Just when things Satur­day when the Sau“We don’t know how per­ceived close­ness to Iran. econ­o­mist and some­times were start­ing to look up for di-aligned Hariri an­nounced things will es­ca­late,” said Some 220,000 Le­banese ad­viser to Hariri’s gov­ern- Le­banon’s econ­omy, a new his res­ig­na­tion in a tele­vised Rida Shayto, an as­so­ciate work in Saudi Ara­bia and ment. po­lit­i­cal cri­sis threat­ens to state­ment from the king- di­rec­tor at the phar­ma­ceuti- send back close to $2 bil­lion But t he king­dom and send it crash­ing down again. dom’s cap­i­tal, Riyadh, say­cal man­u­fac­turer Al­go­rithm, in re­mit­tances each year, its pow­er­ful Crown Prince

Prime Min­is­ter Saad Hari- ing Hezbol­lah, Iran’s proxy which does half its sales to ac­cord­ing to Mounir Rached, Mo­ham­mad bin Salman, ri’s shock res­ig­na­tion could in Le­banon, had taken the the Gulf. a se­nior eco­nomic ad­viser to who has made his name by un­ravel the first steps in years cou ntry hostage. It was The de­vel­op­ments have the Fi­nance Min­istry. dra­matic — or reck­less, as to­ward in­ject­ing some cash an un­ex­pected an­nounce- stunned the Mediter­ranean Le­banese are hop­ing Saudi his crit­ics put it — moves, and con­fi­dence in Le­banon’s ment from the pre­mier, who coun­try, which once looked Ara­bia will be too wary of can’t be seen as do­ing nothane­mic econ­omy. formed a coali­tion gov­ern- to Saudi Ara­bia as a pil­lar to the neg­a­tive im­pact on its ing, said Randa Slim, a Leb

Al­ready, the cri­sis is put- ment with the mil­i­tant group its own sta­bil­ity. The king- own econ­omy from such a anese an­a­lyst at the Wash- ting at risk multi­bil­lion-dol- less than a year ago. dom bro­kered the Taif agree- mass ex­pul­sion. Many Le­bing­ton-based Mid­dle East lar plans to re­build de­caySince then, the news has ment in 1989 that ush­ered in anese hold man­age­rial posi- In­sti­tute. ing road and elec­tri­cal and only got­ten worse. Saudi peace for Le­banon af­ter 15 tions, in­clud­ing in the king“They have locked them- com­mu­ni­ca­tion net­works Ara­bia, which feels it has years of civil war. The king- dom’s all-im­por­tant oil sec- selves into an es­ca­la­tory path and get the oil and gas sec- been hu­mil­i­ated by Hezbol- dom has plowed decades of tor, and it would take time with­out giv­ing them­selves tor mov­ing. lah’s ex­pand­ing in­flu­ence in in­vest­ment into Le­banon, to re­fill the posts. An ex­pul- an exit,” she said.

Le­banon has long been Syria and Iraq, says it will not opened mar­kets to trade and sion would also un­der­mine The king­dom could ex­pel buf­feted by blows from the ac­cept the party as a par­ti­cal­lowed gen­er­a­tions of taldecades of Saudi ef­forts to Le­banese Shi­ites and Chris­great-pow­ers rivalry be­tween ipant in any gov­ern­ment in ented and am­bi­tious Leba- cul­ti­vate ties with Le­banese tians, she said. Shi­ites are Hezbol­lah’s con­stituency and some Chris­tian par­ties have al­lied with it. They num­ber 10,000 to 20,000 in Saudi Ara­bia, ac­cord­ing to Rached, the Fi­nance Min­istry ad­viser.

As it is, the big­gest threat now is a re­treat to the po­lit­i­cal paral­y­sis that has crimped growth since 2011.

Le­banon, once a bea­con of free mar­ket growth and joie de vivre liv­ing, was par­a­lyzed for years over how to re­spond to the cat­a­strophic civil war con­sum­ing its neigh­bor and trade part­ner, Syria.

Hariri’s Fu­ture Move­ment, the largest party in Par­lia­ment, wanted Le­banon out of Syr­ian af­fairs, while Hezbol­lah was send­ing its mili­tias there to fight on be­half of Pres­i­dent Bashar As­sad. The po­lit­i­cal log-jam re­sulted in Le­banon not hav­ing a pres­i­dent for more than two years and no eco­nomic vi­sion to at­tract in­vest­ment.

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