Very useful background to the "negligence" that caused the tragedy in Lebanon by @glcarlstrom of @TheEconomist
economist.com/podcasts/2020/…
economist.com/podcasts/2020/…
The podcast is useful in that it summarizes the dominant narrative on Lebanon - one that is almost universally accepted and which makes sense in explaining why and how such negligence can occur.
But it is at the same time harmful for the same reasons, in that it camouflages, under a plausible story, the reality of how Lebanon reached such a paralysis in institutions, in the political system and how it led to total collapse of the economy and to this tragedy.
It is also dangerous in its diagnosis and implied prescriptions. The total dismissal of a country's political class and financial establishment is a recipe for a disastrous form of populism, a common global phenomenon: The swamp is stagnant and needs to be drained.
"unbelievable negligence even on the scale of the perennially negligent Lebanese government" also described as "almost part of the course" for a government that for more than a decade could not agree on a budget"
"that for almost 30 years allowed the same central banker ... to run a state sponsored Ponzi Scheme to defend a the currency peg" and a "political and economic model that was totally unsustainable" and which "invested hardly at all in basic services".
The explosion is according to the story a catastrophic example of the perennially negligent government and is "of a piece with the behavior of that government over the past 30 years." and goes on to describe the profound economic crisis that is presumably the result of that.
Then it gets really desperate and hopeless, even if it accurately and professionally reflects the mood on the ground and the received wisdom of the majority of Lebanese and observers of Lebanon. It is a most dangerous form of "received wisdom" accurately conveyed by the podcast.
This is not a criticism of @glcarlstrom or @TheEconomist it is an attempt to highlight the gravity of the narrative, the diagnosis it presents and the prescriptions that are implied precisely because they are universally accepted. It represents the tyranny of received wisdom.
The desperate and hopeless conclusion is that there is no alternative to the current government. "if it were to step down it will be replaced by the same cast of characters." the "traditional power brokers" composed of the "sectarian ex-warlords" who divided up the power.
"the power-sharing agreement that was meant to keep the peace" and prevent the return of the civil war was "captured by the elite" this is a fatalistic pessimistic conclusion, it flows naturally from the story. Lebanon's elite are not fit to rule and there is no alternative.
It is not the conclusion that is wrong, it is the story. All the facts are correct but the story needs a lot of context. the missing pieces are the key and affect the diagnosis, the prescription and the fatalistic conclusion.
The lesson is that an open, free and democratic society cannot exist in isolation; the elements that have led to this paralysis and bankruptcy are similar to those that are fueling the crises in Syria, Iraq, Palestine, Yemen in a region divided about an agenda of perpetual war.
The late Mohamad Chatah, former diplomat, minister of finance and close adviser to PM Hariri believed that Lebanon could be isolated from the crises of the region. That the country could be spared from the regional conflict and prevented from becoming its battleground.
Before he was murdered on 27 December 2013, Dr. Chatah was in discreet negotiations with Hizballah. His vision was that there could be no agreement on the larger geopolitical picture which involves Iran, Saudi Arabia, Israel, the United States and is full of complications.
His proposal was to agree to disagree on questions we have no control over and spare the country from the violence, allow the economy to function and the government to provide services. such as electricity and refuse collection. His assassination was the categorical reply.
Former PM Rafic Hariri, assassinated on the 14th of February 2005, subscribed to a similar vision. What followed was string of political assassinations of people on that same side and who subscribed to that vision of the region at peace as opposed to the 'axis of resistance'.
On the 18th of August, the @STLebanon will issue its judgement on part of those assassinations which included journalists, politicians, officials and many civilians. What it will not issue a judgement on is how the whole country was held hostage and paralyzed for 15 years.
The Special Tribunal for Lebanon was set up following demands in the street for an independent investigation and justice system after the assassination of PM Hariri. The principal suspects, the Syrian regime and its allies in the 'axis of resistance' controlled the country.
Hizballah and its allies paralyzed the country at every step until they obtained full control with the election of General Michel Aoun as president in 2016. The country was held hostage for months on several occasions until the other side agreed to compromise after compromise.
The country was dragged into a destructive war in 2006 and kept in a constant threat of war with Israel by repeated every year through speeches by Hassan Nasrallah in what amounts to three regular Orwellian Hate Weeks in May, July and August and on Iran's Quds Day.
The country was hijacked and systematically isolated from its economic partners in the Arab Gulf the source of political support, tourism, investment, remittances, contracts for companies and where over 350,000 Lebanese work. Gradual economic strangulation or Brexit on Steroids.
Hizballah's control of Beirut's Port and Airport are a large part of the problem. Smuggling is a drain on the economy and on government revenue. In May 2008 the government tried to remove an officer at the airport, Hizballah's 'Black Shirts' attacked and terrorized the city.
The constant threat of war deliberately created every summer also has a huge economic cost on the tourist season on investments and on remittances and deposits in the banking sector. It affects the outlook for the future and contributes to brain drain.
The Lebanese Central Bank cannot be dismissed as a Ponzi scheme, it managed to create a stable currency with a peg that allowed the economy to grow from less than 3bn US$ at the end of the civil war in 1990 to just below 60bn before the collapse despite all the challenges.
The Lebanese banking sector is also the distillation of several centuries of Levantine expertise in trade and finance that took refuge in Lebanon from countries such as Turkey, Egypt, Palestine, Syria and Iraq remnants of ancient trade routes.
The Central Bank and the Banking sector financed government debt and was leading it to a sustainable path until the economic crisis with the GCC started from 2012 onward. No bank or financial system can survive a run like that of 2019.
Lebanon's financial collapse is a result of the economic crisis which is a consequence of the political crisis. The country was a hostage to a militia and the ransom kept growing till it was bankrupted.
Lebanon is a hostage much as Iraq, Syria, Yemen and Palestine are also hostages to Iran's Islamic Revolutionary Guards (IRGC) with branches everywhere in the region pursuing an agenda of perpetual war and control through siege, impoverishment and violence.
The story conveyed by @TheEconomist podcast is elegant and simple but reality is a bit more complex and is more accurately reflected in the recent protests in Iran, Iraq and Lebanon by a new generation tired of 70 years of war and free of the baggage that came with it.
Most importantly a narrative that dismisses a country's heritage, political system, institutions and the totality of its establishment is nihilistic and is what led to objectionable populist leaderships in places like India, the Philippines, Hungary, Italy, Brasil, Mexico etc...
The first step towards accepting the idea of "draining a swamp" is to normalize a story that describes a country as a such a swamp. This is again being tested in the US elections later this year.
