Beijing is ready to carve a path for its one belt one road trade corridor in the Levant. It is set to capitalise on a reluctance by the Lebanese ruling class, in which the Iranian-backed party Hezbollah is the most powerful faction, to accept conditions likely to be demanded in return for a $10 billion bail-out from the International Monetary Fund . These include reforming Lebanon’s institutions that are prone to corruption- and benefited most of the leaders of Lebanon’s sectarian system, as well as restructuring the banking sector. IMF’s bailout is conditional on the fulfillment of these conditions, which the political elite have been dragging their feet on.
Instead, Hassan Nasrallah- the chief of Hezbollah who has an overwhelming sway over the current government and a large following among the Shias in the country, suggested investments from China as the solution to Lebanon’s woes. He asked the Lebanese to look for alternatives and move away from a dollar-dominated economy if they want to stop being humiliated by the Americans. “America has given the Lebanese the option- either we give up our weapons or we starve. We will never give up our weapons” said Nasrallah, “nor will we starve.”
As Lebanon's economy continues to fall and the currency touches a new low every day, the Lebanese are debating whether America’s sanction politics on Iran and its allies- Hezbollah and Syria, is punishing them too. Last year, President Trump walked out of the US-Iran nuclear deal and renewed sanctions against the Persian nation. Soon after it intensified sanctions against Hezbollah and entities linked to it. Last month, the US enforced the Caesar act on Syria- named after the Syrian who fled with thousands of photographs of tortured and killed Syrians in the states’ prisons. The legislation sanctioned selected individuals but brought the regime’s backers outside of Syria under its ambit. Traders and bankers in Lebanon now fear the impact on them and by extension the Lebanese economy. Syria is a major trade partner for the Lebanese businessmen and the economies of the two countries are historically interlinked. Both Lebanon and Syria have witnessed an almost simultaneous shortage of dollars and fall in the value of their local currencies.
As Lebanon's economy continues to fall and the currency touches a new low every day, the Lebanese are debating whether America’s sanction politics on Iran and its allies- Hezbollah and Syria, is punishing them too
Some Lebanese businessmen say that the Iran hawks were ill-advising the US government on the long-term impact of policies that impose collective punishment. Such policies run the risk of pushing people away from the US and into the arms of Iran’s allies. Other reasons that Caesar sanctions are specific to the coterie of Bashar al-Assad and Hezbollah and will not impact the Lebanese people. They worry that as long as Hezbollah keeps its arms, neither the US, nor the Sunni Gulf led by Saudi Arabia, will invest in the country.
Economic insecurity is also leading to fears of sectarian tensions flaring up. On June 6, protestors organized the first major demonstration since the Coronavirus lockdown eased. As the protestors marched in the capital, a bunch of counter-protestors- supporters of pro-US and far-right Christian political parties, started to shout slogans and demanded Hezbollah give up its weapons. Hezbollah’s supporters were on the ready in the other street and responded. The two sides threw stones at each other and hurled abuses but later that day shots were fired across the frontline between Christian east and Muslim west during the civil war. Several men were injured reigniting the fear of sectarian riots.
In Lebanon’s crisis, China, however, may have found an opportunity. Until the early 2000s, China had very little to do with Lebanon. But in 2006, as the Chinese-Arab Friendship association was set up and China-funded conferences in tens of Arab countries, it started to develop a relationship with Beirut. Beijing helped Lebanon militarily in the 2006 war against Israel but actively started to court the country in 2013, in parallel with backing Bashar al-Assad at the United Nations Security Council and promising Syria millions of dollars of investments. China’s intentions in the Levant, as in the other parts of the world, are to, firstly, build infrastructure to materialize its One Belt One Road project to facilitate the trade of Chinese goods throughout the Eurasian landmass, and, secondly to slowly but establish itself as a player in the complex theatre of the Middle East, and compete with the US’s hegemony. It publicly admits to the first goal and hides its more deep-rooted ambitions in a way descriptive of the Chinese. Zhang Jian Wei, director-general of the Department of West Asia and North Africa at the Communist Party of China, told the local press that China does not wish to replace the US in Lebanon, “We do not have the capacity to do so because China is still a developing country,” he said, but added, “The US is the largest developed country in the world, with which we do not want a trade war. But if the American insisted, we will fight it till the end.”
Until the early 2000s, China had very little to do with Lebanon. But in 2006, as the Chinese-Arab Friendship association was set up and China-funded conferences in tens of Arab countries, it started to develop a relationship with Beirut
Historically west oriented, the Lebanese are mulling all options.
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