Political shock throws Lebanon’s economy back into crisis
Leader’s resignation may unravel bid to instill confidence.
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.