Lebanon is balancing on a knife's edge

The modern States of Lebanon and Syria, carved out of a Levant peopled by majorities with a deep sense of entitlement and embattled and fearful minorities, have long fed off each other’s insecurities and weaknesses. If one sneezes the other catches pneumonia. In fact, it is concern over how each country’s vulnerabilities may be exploited by the other in any future conflict, that has shaped Lebanon’s post civil war relationship with its domineering neighbor. A special relationship evolved framed by the Syria-Lebanon Defense and Security Agreement to ensure elements within Lebanon could never threaten its bigger neighbor and vise versa, at least that is the theory. What evolved was a close relationship that spanned politics, economics, military cooperation and diplomatic synchronicity. But it is hard today to convince a Sunni Muslim in the impoverished Northern Province of Akkar or in Sidon or in villages along the border in the Bekaa to remain neutral towards the bloody events unfolding in Syria today. Many find it hard to swallow or accept that Lebanon continue to have a special relationship with the regime in Syria that is fighting and killing predominantly Sunni rebels.

Only last month Sheikh Ahmad al-Assir, the outspoken imam of the Bilal bin Rabah mosque in Sidon, coined the phrase ‘defeated sect’ when describing how he feels Sunnis in Lebanon are seen and how they are being treated by a Shiite community dominated by Hizbullah and aligned with Alawites and other pro-Syrian-regime political currents in the country. Whether real or imagined, this sense of being disenfranchised is eerily similar to the way many Lebanese Shiites felt in 1975 on the eve of Lebanon’s destructive 15-year-long civil war. To say the country is balancing on a knife’s edge today is no exaggeration. A recent resurgence of violence between pro-Syrian-regime factions in Tripoli’s Jabal Muhsen neighborhood and the majority Sunni Bab el Tabane neighborhood quickly spread and spilled on to Beirut streets. Two separate attacks on Sunni clerics recently, one in the southern suburb of Beirut and the other in the city’s Khandaq el Ghamiq neighborhood, saw angry young men coming out on to the streets blocking roads and chanting “the people want to call for Jihad.”

In a message to the Lebanese people, the absentee Sunni leader and inheritor of the largely secular Future Movement, Saad Hariri, quickly accused the Assad regime of working to inflame hatred between the Sunni and Shiite communities in Lebanon. “Bashar Al Assad wants to save his own regime by spilling the blood of the Lebanese,” Hariri said in a statement, adding that the regime in Syria will use the “filthiest” of means to achieve this end. It’s no secret that Hizbullah members are fighting along side the regime in Syria. Residents of the southern village of Mays el Jabal confirmed to AFP recently that a funeral was held for Hassan Nimr Shartuni, 25, who they said died fighting in Syria. In fact, Hizbullah buried a number of fighters in recent months without disclosing how they died. The news agency said that sources close to Hizbullah said the men died “while carrying out their Jihadist duty.”

For most Lebanese businesses and families ‘waiting for the other shoe to drop’ is the worst part, a situation made worse by continued economic slowdown and post holiday season blues. Lebanon’s tourism sector has been the main casualty of the civil conflict raging across the border. Overland routes into Lebanon via Syria, long seen as an affordable travel option for large middle class Gulf families who love to summer in Lebanon’s lush green mountains, are no longer seen as a safe travel option. Advisories issued by some Gulf countries in May last year discouraging their citizens from traveling to Lebanon hit the sector hard. In the second half of 2012 tourist numbers from Gulf countries dropped by 26.1 percent according to a Bank Audi report. While the holiday season did see sizable inflow of Lebanese expatriates, many of the country’s tourist hotspots sorely missed their Gulf regulars.

Tourism Minister Fadi Abboud tried at the start of the year to revitalize the sector by launching the “50% off for 50 days” campaign whereby airline ticket prices and hotel rates were slashed to attract visitors who usually prefer overland travel to flying. The campaign has done little to stop hotels from closing and restaurants from letting employees go. The campaign itself was overtaken by more disconcerting security developments in the country early in the year. Among the most worrying developments are: the continued influx of large numbers of Syrian refugees with no clear plan to house and care for them, a recent spate of kidnappings in the country, the shelling and rocketing of Lebanese border towns and villages from inside Syria, worsening inflation, a crippling public sector strike action and a resurgence of violence in the North of the country between pro- and anti-Syrian regime factions in Tripoli, the country’s second largest city.

But, according to a VOA report, Lebanon is looking to diversify its pool of tourists beyond the Gulf, reaching out to countries like Russia, and regions with large Lebanese immigrant populations like Latin America, and Africa where a substantial number of Lebanese expatriates have successful businesses. At a recent meeting with Uruguay’s Ambassador to Lebanon, Abboud discussed the possibility of a direct air link between Beirut and Montevideo. Lebanese President Michel Suleiman’s eight-day tour of African countries, where he met with the Lebanese communities there, was yet another effort to strengthen the country’s ties with a pool of wealthy expatriate investors.

In fact, not all news has been bad. According to the Bank Audi report last year exports actually rose by 5.1 percent from the previous year driven by growth in maritime export activity as overland exports continued to contract amidst a worsening security situation in Syria. Agricultural exports rose 10.4 percent due to higher demand from the Syrian market for Lebanese produce, a market which absorbed 20 percent of Lebanon’s agricultural exports. Demand from the Gulf also rose by 9.5 percent to make up for the shortfall in agricultural imports from Syria. The construction sector was hit hard last year as the number of property sales transactions fell by ten percent from the previous year. The slow down in demand also saw developers taking more time to launch projects. Investors continue to put plans on hold and take a wait and see stance.

Lebanese Banks, however, continue to squeeze out substantial end-of-year profits as confidence in the sector remains robust particularly among the country’s expatriate community that sends money to their home country each month. Despite that, bank profits have been hit hard by substantial provisioning as sizable chunks of gross income are being set aside by banks to offset local and regional risks, in particular by those Lebanese banks with Syrian branches. The overriding concern of local businesses apart from the deteriorating security situation is a proposed public sector wage hike which is feared would hit businesses hard as the government would be compelled to raise taxes on businesses and investors to pay for the wage hike.

In short, this is by far not the best of times for this multi-confessional and precariously balanced republic, but it is by far not the worst of times either, at least not yet.