What political and economic consequences will Lebanon face as a result of the dispute with Saudi Arabia?

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A diplomatic row between Lebanon and Saudi Arabia – sparked by a top Lebanese minister who criticized Saudi military intervention in Yemen – has raised fears that geopolitical flaws in the Middle East will amplify already acute political and economic crises from Lebanon.

Lebanon urged Saudi Arabia to be receptive to “dialogue” on Monday to resolve diplomatic crisis between the two countries, amid Riyadh’s anger at Lebanese Information Minister George Kordahi’s description – ahead of his entry to the government – Saudi Arabia’s involvement in the Yemen war as “absurd”.

Saudi Arabia on Friday stopped imports from Lebanon, after recalling its ambassador from Beirut – a decision imitated by several Gulf countries – and requested the departure of the Lebanese ambassador to Riyadh. This radical sanction dealt a severe blow to a country already reeling from a serious economic crisis.

Kordahi is backed by Hezbollah and has no plans to resign. The newly formed government of Prime Minister Najib Mikati – already shaken by bitter divisions over the investigation into the Beirut explosion in August 2020 – finds itself further weakened by the diplomatic row.

AXADLETM spoke with Karim Sader, political consultant specializing in the Gulf countries, on the causes and consequences of the crisis.

What caused this crisis? And what will probably be the political consequences for Lebanon?

It is important to note that relations between Lebanon and Saudi Arabia have not been good since 2016, when President Michel Aoun was elected – largely due to his alliance with Hezbollah. [the political-military Lebanese proxy of Iran, Saudi Arabia’s Shia arch-nemesis].

Riyadh has struggled to cope with the intensification of power and influence exerted by Hezbollah in Lebanon, a country in which the kingdom has invested heavily. Thus, in this context, the statement of the Lebanese cabinet minister served as a convenient pretext for Crown Prince Mohammed ben Salman. [MBS] to bang his fist on the table and call on his Western allies to harden their positions against Hezbollah.

In his eyes, France and the United States have been far too passive and conciliatory vis-à-vis Iranian influence in Lebanon. Hezbollah leaving a strong imprint on the new Lebanese government is a major snub for the Saudis – not to mention the arrival in Lebanon of Iranian tankers ordered by the Shiite party, ignoring the risk of US sanctions.

MBS was even more inclined to take a hard line as he needs to come out of his absence on the world stage since the election of US President Joe Biden – exemplified more recently by his refusal to attend the G20 summit. Taking this approach to Lebanon allows Saudi Arabia to reassert itself in the Middle East – while demonstrating that Riyadh wields powerful political and economic influence over a country closely linked to the West, France. specifically.

The main lever that MBS can draw in Lebanon is to destabilize the nascent government of Najib Mikati, the fruit of months of laborious negotiations. France and the United States have strongly supported the creation of this new administration, so they do not want to see the slightest risk of weakening or rumors of the Prime Minister’s resignation. But the idea of ​​its collapse has been a frequent topic of conversation in Lebanon since the start of this diplomatic mess.

What are the probable consequences of this new crisis for an already battered Lebanese economy?

It is a terrible context for Lebanon, in great difficulty and deprived of international aid. So Riyadh has chosen its timing wisely. Saudi Arabia lost a lot of influence in Lebanese politics when it broke with the [Sunni] camp of former Prime Minister Saad Hariri. But the economy is Saudi Arabia’s last lever of direct influence over Lebanon.

This diplomatic crisis could cost Lebanon dearly, as it depends on oil from the Gulf countries, mainly Saudi Arabia. Lebanon is also more dependent than ever on remittances from its diaspora – and a large majority of these expatriates earn money in the Gulf monarchies; nearly 550,000 in total, including nearly 350,000 in Saudi Arabia. Lebanon is in dire need of these remittances amid the end of international subsidies and bank restrictions on dollar withdrawals.

Saudi Arabia’s embargo on imports from Lebanon is also a blow; the country could face loss of income of up to $ 300 million per year. It is not an exporting country, but 10% of what it exports goes to Saudi Arabia. So, by hitting Lebanon’s wallet, Saudi Arabia is reminding the country that its complacent attitude towards Hezbollah can literally cost it dear.

What are the possible ways out of this crisis?

Saudi Arabia does not want to overthrow the Lebanese government as this would alienate its Western allies. The Riyadh maneuver is the product of MBS’s instinctive and impulsive approach – which begins with a bold move followed by de-escalation. Of course, everyone remembers when he forcibly detained Saad Hariri in Saudi Arabia before allowing him to return to Lebanon after French President Emmanuel Macron intervened.

In the current situation, Saudi Arabia has already shown how much it can really disrupt Lebanon – so one would expect Riyadh to start tempering its stance towards Beirut: economy.

These expatriates will vote in the legislative elections in Lebanon in March. There is therefore a strong incentive for Saudi Arabia to keep them by allowing them to benefit economically and continue to return remittances.

This article has been translated from the original into French.

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