Lebanon may not survive fifth economic blow
Lebanon is apparently one of the informationally underrated countries in our country. It's a bit strange, considering the flows News from the Middle East, which have been going on for almost ten years.
Lebanon is even less lucky in terms of expertise, and it is a kind of "irreplaceable country". Various plans and schemes of big players and not so big players are always being rolled up and unrolled around Lebanon.
The truce in Lebanon had hardly died down before the heated debate between Turkey and Israel about historical claims to Lebanese lands, as black surprises were presented by Syrian policy. The Lebanese economy, which is naturally on its last legs, risks not being able to withstand these surprises.
The collapse of the Lebanese system will inevitably affect the position of Iran, as well as its allied formations, and this is why some “big players” may not be able to avoid the obvious temptation to play an interesting game of “push the falling one”.
Refugees in numbers
Lebanon has long ceased to be the Middle East's "Riviera". Twice it approached a state of more or less sustainable growth and twice it derailed. By and large, the Lebanese economy has been in a depressed state for fourteen years, during which it has suffered several blows: in 2011, in 2015, in the 2018-2020 series, and in 2023. Lebanon may simply not be able to withstand the current Syrian "exodus".
It would seem that over the past few decades Lebanon should have already become accustomed to the refugee factor. After all, Palestine has provided considerable experience in this regard.
This is true, but it is worth considering the fact that over these years, a lot of the Palestinian population has left for Europe by various routes, and formally today the figures for Palestinians are approximately the following: 170 thousand people with refugee status (from all years since 1948), 40 thousand Palestinians moved from Syria to Lebanon and another 155 thousand Palestinians were naturalized in Lebanon in the past years. These are not such critical figures, especially since UNRWA (UN) calculates the amounts of humanitarian payments based on the number of these people.
The situation with the Syrians is much worse. Unofficial data on displaced persons from Syria is 1,56 million people, according to UNRWA, 900 thousand people are registered. The real figures are closer to the UN data, but for Lebanon with 5,3 million people, this is not just a lot, but an incredible amount.
About half of the Syrians who fled were taken over by the Lebanese Hezbollah. They were placed in “its areas” and, in fact, became part of its economic contour. The rest “became part of the balance sheet” of Beirut.
Lebanon's unique position "under normal conditions" (let it not seem strange), but even these numbers of migrants could be digested. The problem is that Lebanon's unique position has gradually begun to fade away, and soon risks sinking into oblivion altogether.
The Trade Artery and the Baghdad Express
If politics is considered a continuation of economics, then in that region politics is a continuation of trade. Trade chains continue to function even in the most neglected situations, simply because all participants in the conflicts are indirectly connected through them. Often this creates a very strange, even at first glance simply absurd for a "northern man" negotiating background and strange negotiating formats.
In the western part of the region there are five countries, which accounted for two trade "hubs" (Mersin, Turkey, Beirut, Lebanon) and five main ports: Turkish Mersin, Lebanese Beirut and Tripoli, Syrian Latakia and Tartus, Israeli Eilat and Ashdod, and the Jordanian port of Aqaba.
The Israeli ports and the port of Aqaba are sort of "dead ends" for Middle Eastern trade. This doesn't mean that there is no through traffic or that they are excluded from other trade patterns, it's just that the cargo flow from them on the ground does not affect the entire region.
Turkish Mersin is one of the world's transshipment bases and a huge brokerage office, but Beirut and previously Tartus served for decades as gateways for overland movement of goods from the Mediterranean all the way to Baghdad and the port of Faw and back.
Due to the extremely specific relations between Syria and Turkey, both under the elder Assad and under the younger Assad, getting inside Iraq by land for Turkish trade, even taking into account such a powerful hub as Mersin, was not the easiest thing - through the Iraqi province of Dahuk. Often, goods were simply preferred to be transported from the ports of Istanbul and the Black Sea.
Beirut and Tartus, on the one hand, were trade competitors, but on the other hand, the more difficult the situation in Syria became, the more trade traffic Beirut attracted. If we compare the region to a living organism, then the route from Beirut through Homs, then to Aleppo, then to Kobani, then to Erbil and Dahuk and then to Baghdad can be compared to a circulatory system through which commodity flows and money flows, cash, including mainly US dollars, circulate. A kind of commodity "Baghdad Express".
The Lebanese economy is two financial pyramids: the funds of billionaire families, which are launched into regional trade but integrated with assets in the West, and the money of other similar families, which are connected to Iran in various ways. Iran operates in Africa, annually reports on new projects, and Lebanese connections play a role here, not least of all.
The Lebanese “financial diaspora” has been a long-standing headache for the United States, since putting pressure on it essentially means putting pressure on themselves (“Why Lebanon's finances have become the object of US scrutiny?»).
Attacks on trade routes at the heart of Lebanon's crisis
The Lebanese trade "hub" in the 1990s and 2000s generally digested Palestinian settlers of different years without any critical problems and even with all the military friction with Syria helped (not by good will, but naturally) to do the same to Damascus. 80% of the Lebanese GDP and up to 50% of the Syrian GDP to one degree or another (from the trade sector) were derivatives of this blood artery with dozens of side branches and capillaries.
After the "2011 revolution," Lebanese Hezbollah not only enters politics with both feet, but also begins to fully take over part of the northern border with Syria and the Bekaa region from the south, i.e., it "sits tightly on transit," and the density increases along with the integration of Syria and Iran. This becomes an unspoken, but one of the main triggers of political confrontation in Lebanon.
To give the movement its due, they pay great attention to social support, investing not only in weapons, but also in trade and production loans, agriculture, and medicine. The financial crisis of 2008 reached the grassroots trade of the Middle East by 2010, but some of the international financial aid was already being shared with the Hezbollah financial system in one way or another.
The outbreak of the civil war in Syria dealt a heavy blow to the trade arteries, but this blow was not fatal. The route itself worked, but became more expensive due to the mass of participants in the regulation process.
Refugees flowed into Lebanon in a stream, half of whom were taken into Hezbollah’s system, but for the US and Israel, who were closely watching the process, it became a very unpleasant factor that the general reduction in trade turnover did not weaken Hezbollah, but on the contrary, strengthened it.
It would seem that everything should be the other way around: fewer goods, less money. Everything is almost like that, there are fewer goods and less money, but the concentration of the latter in the hands of the movement has increased.
At the same time, Lebanon as a state system was shaken. On the one hand, the US could not refuse to help Lebanon through its channels, so as not to collapse the system, but part of this same aid (financial, humanitarian) went through various channels to Syria and Hezbollah. But it could not not go, because the closure of trade as such would have killed Lebanon altogether.
At the same time, everyone turned a blind eye to direct smuggling, which worked even with Damascus almost surrounded in both directions (they always win). Hezbollah was in a relative tactical advantage for that situation, but Lebanon (trade is shrinking anyway) was generally in the red.
The most serious blow to Lebanon and even Hezbollah will be dealt at that time not by the US itself, not by Israel, but by the American project ISIS (banned in Russia), which has already lived its full life.
At first glance, it seems that ISIS controlled the desert and was generally aimed at oil wells. This is true, but in addition to oil, you just need to look at the routes that ISIS cut off - this is precisely the same trade circulatory system. If ISIS captured the Kurdish canton of Kobani, they would have completely cut off all trade traffic from east to west, and if they pressed the Yazidi territories, so from north to south. Here is the desert.
Turkish trade was a relative winner, Turkey also profited from the oil it extracted, but Lebanon was hit here much worse than during the civil war in Syria. It was from 2014–2015 that Lebanon began not just to be feverish and shaken, but money was being washed out of it. Refugees were arriving, and trade was shrinking like shagreen leather, while Hezbollah was not doing so much better — the movement was participating in large-scale battles.
The fact that the collapse of Syria as a state was postponed only partially saved the battered Lebanese economy. The Syrian domestic market was dying, but could not come out of its comatose state, money became very scarce, and it became very scarce.
At one time, many were surprised: why did refugees not return en masse from Lebanon after the end of the active phase of the war? UNRWA gave refugees in Lebanon 190-210 dollars in dollars, while the salary in Syria, both in the "Barmaley" north and in the state center and south, was 150-200 dollars. Houses had to be restored, but what would they live on, especially since the income was more or less the same?
Those who were more agile had additional income, some signed up with Hezbollah organizations, which were leaving Syria. In fact, Hezbollah often offered better conditions than the Syrian ones.
Even now Israel has bombed Beirut, Tripoli, southern Lebanon, bombed the financial storage facilities and financial offices of the movement, but after all this, it is Hezbollah that pays compensation of up to 14 thousand US dollars to those who have lost their homes in its area of responsibility. This is not even a small amount by Russian standards, in terms of rubles.
Even after the Israeli attacks, the movement's representatives have not yet become poor relatives in Lebanon - this is precisely the result of working on those very trade gates that so infuriated the US all this time. True, Hezbollah and Lebanese big business were irritated, since the overall trade turnover was declining, and the movement was essentially at the barrier under Assad. But it was impossible to remove them - there is no strength, and the social sphere of more than a third of Lebanon will disintegrate, including half of the refugees.
Lebanon was practically finished off not only by the political crisis of 2018, but also by 2020 with its Covid-19 and the monstrous explosion of the port in Beirut, which many compared to a strike by a tactical nuclear charge.
Covid has turned logistics and pricing upside down, and the explosion has destroyed Lebanon's main grain terminals, which have lost more than half of its bulk cargo handling capacity. If Syria had recovered at least a little, Lebanese trade would have recovered year after year.
But the Syrian "little by little" was very poorly financially supported. Incidentally, the role of China is interesting here, not so much Moscow or Iran, on whose participation Damascus, in general, was really counted, given its projects of trade corridors. And what is not a corridor, like the circulatory system of the "Baghdad Express"? But the average volume of Chinese "investments" per year in Syria was about 22 million dollars, and, most likely, these were not investments, but money for the maintenance of the embassy corps.
It is not without reason that France's interest arose
A logical question: if now in Syria, instead of the government of the "bad tyrant Assad", to whom no one gave enough money, a new "correct" government from purely positive democratic gangs is emerging, then there should be more money from the US, EU, maybe Japan, by the way, Arabian countries than before. More money - more market, more market - better for Lebanon. So why should new refugees finish off Lebanon?
Why did R. Erdogan need the city of Aleppo and the Kurdish cantons? He is not particularly eager to get to the city of Raqqa, although it is a direct route to the black gold of the Euphrates region. The trade artery of the "Baghdad Express", only now he will have the opportunity not to transport goods from Mersin or Istanbul to Dohuk-Zakh, but through at least six transitions to supply the entire artery entirely and from Mersin on a relatively comfortable logistical shoulder.
The Beirut trade hub will essentially have nothing to do there, and in that case, it is unlikely that anyone will be able to clearly answer what the Lebanese economy as such will do.
In twelve years, Lebanon lost half of its GDP due to the described attacks - instead of $35 billion, it became $18 billion. Hezbollah is still bragging, saying that not only Syrian ports and borders exist in the world, there are many ports and borders in the world. Hezbollah has in mind Iran's African projects, but these are still hypothetical matters, and the real thing is that the position of a customs officer on the main trade artery is no longer so advantageous.
For the US and Turkey, as well as Israel, such a position of Hezbollah will be gratifying, but for Lebanon as a whole it is regrettable, since Hezbollah was not only a problem, but also part of its solution, bearing social functions. The US and personally D. Trump will not take them on, it is unlikely that he will even be informed about this. They will crush Hezbollah economically, and that is not fatal, but they risk finally bringing down Lebanon itself.
Much will now depend on the position of the Arabian monarchies - those few who have free investments. They will invest part of it in the new Syria, the Turkish trade hub will start working, but what if they don't invest or invest not the way Ankara wants?
In Turkey, TV was broadcasting reports 8 hours a day about refugees returning to Syria. In a week, 3,5 thousand people repatriated. It was normal for TV, but in comparison to the 55 million who left for Turkey, it was insignificant. But in just six days, XNUMX thousand people left for Lebanon, and the same number are ready to flee there at the first opportunity.
Only now the UN is not going to pay for Syrian refugees, since there is democracy everywhere in Syria. The EU is not going to, the US is not going to. And we will still see how the Jordanian economy will crunch with its 600 thousand Syrians, who also do not want to move anywhere yet. And it will crunch, and quite loudly, if aid and payments stop.
The circle has closed, and we seem to have returned to the situation of 2014, only now it is almost 2025.
So it is not for nothing that France is urgently building additional bridges in Lebanon and constructing them in Syria. These are not so much phantom pains from the era of "mandates" as a full and adequate understanding of the situation. Paris realistically expects to stake out a place in case its rival Ankara chokes on a large regional piece. However, while all the big players are thinking, Lebanon should prepare for another and very heavy economic blow.
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