Lebanon has so far avoided an economic and security collapse since the start of the Syrian crisis, but major threats remain. The war in Syria has divided the country politically and Lebanon has been without a president, as its sectarian factions have been unable to agree on a new one for over four months. The influx of over 1.1 million registered Syrian refugees has placed tremendous strains on the already struggling economy. Most worryingly, the government has not devised a clear strategy to deal with the refugee pressures. Worsening the threat, the Islamic State, which now controls large swaths of territory in Syria and Iraq, briefly seized the Lebanese border town of Arsal last month. Many worry the extremist group will make further inroads within a Sunni community feeling increasingly alienated from the country’s political process.

Four experts on Lebanon take an in-depth look at these challenges and their impact on the country’s stability.


Dysfunctional Politics
Ayman Mhanna, director of the Samir Kassir Foundation and executive committee member of the Democratic Renewal Movement.

Rival Lebanese political parties may have finally reached consensus on two issues that have drawn much attention over the last three years: the public sector’s salary scale increase and the management of the Syrian refugee crisis. However, the processes and circumstances that have led to the consensus embody all that is wrong about governance in Lebanon today.

On September 6, 2012, the Lebanese Council of Ministers, led by then-Prime Minister Najib Mikati, approved a bill to increase the wages of public sector employees. Given the absence of an agreement on how to fund the bill—which originally would have cost an estimated $1.9 billion—discussions stalled in parliament. Civil servants and teachers’ unions organized large scale demonstrations and boycotts in response. Graduating students were in turn at risk of being unable to enroll in university the next academic term until the Minister of Education devised a stopgap measure and issued attendance certificates.

But suddenly, political parties that had long clashed over the issue announced in mid-September 2014 an agreement to approve a revised bill. The measure, however, was not in response to citizens’ social concerns; it was the price to pay to secure a new extension of parliament’s term. Speaker Nabih Berri had tied the extension to the resumption of legislative activity; therefore, the Sunni Future Movement-led March 14 coalition, which sought to postpone the parliamentary elections, had to abandon its declared opposition to legislating under presidential vacuum. 

Likewise, political gridlock characterized the government’s response to the Syrian refugee crisis. It took Lebanon two years to begin discussing  a coordinated response, spurred by the recent clashes between the army and Islamist militants in Arsal, followed by the kidnapping of 30 Lebanese soldiers and the subsequent execution of three of them. The first proposal to emerge was to relocate more than 100,000 refugees in Arsal to another area. While commendable in theory, the plan lacks practical implementation mechanisms and any mismanagement might deepen the problems between the Lebanese army and the refugees, with all the dangerous security implications that would ensue.

The salary scale debate and the handling of the fallout from the Syrian war are two key examples of the Lebanese government’s failure to plan ahead. Major policies, affecting the lives of Lebanese and Syrians for decades to come, are decided hastily, either to achieve short-sighted political gains or in response to dramatic developments. While the Lebanese political class has so far managed to avoid a complete collapse of the security and economic situation in Lebanon, its way of doing politics is not sustainable. Lebanon’s leaders ignore its fundamental problems in the hope that negotiations among its regional sponsors would reduce political tensions and magically solve all pending issues. Such an approach might bring about the election of a president, but will neither wipe out the growing budget deficit nor solve the political gridlock and the myriad challenges caused by the influx of over 1.1 million registered Syrian refugees into Lebanon.


An Economy Under Strain
Sami Nader, an economist and columnist at Al-Monitor’s Lebanon Pulse.

The Lebanese economy is facing a major threat. For the third consecutive year, Lebanon’s public debt is growing well beyond its real economy. For instance, although public debt increased by 10.1 percent in 2013, economic growth did not exceed 1.5 percent. This does not bode well. Drastic action is needed at all levels of government in order to reverse the trend, rein in the budget deficit, and deploy effective strategies for growth.

The root causes of the economic crisis largely stem from the deterioration of security amid the three-and-a-half year Syrian crisis, the political paralysis and freezing of public institutions, the lack of inclusive politics, and the absence of much-needed reforms.  

Most of the engines of growth are sputtering. Tourism, which has accounted for more than 20 percent of GDP in past years, is in sharp decline—the number of tourists visiting Lebanon decreased by 6.7 percent in 2013. In the same period, and for similar reasons, foreign direct investment (FDI) dropped by 23 percent, and greenfield FDI dropped by 48 percent, indicative of the government’s failure to channel investments into productive sectors of the economy. This has had a negative impact on the real estate sector, which now suffers from less capital inflow from the Gulf; the number of real estate sales transactions declined by 7.2 percent. 

Other sectors with high growth potential are faced with legal barriers or lack of reform, including electricity and telecommunications, in addition to Lebanon’s offshore oil and gas fields that are still awaiting exploration. Meanwhile, the government does not seem impressed or bothered by the absence of growth and its crippling public finances. It keeps spending at an alarming rate: government expenditures for 2013 rose by 2.4 percent while the budget deficit widened by 3.9 percent.

The Syrian refugee crisis came at the wrong moment for Lebanon. Neither its economy nor its weak infrastructure could withstand such a burden. More than 1.1 million registered Syrian refugees—between one-quarter to one-third of Lebanon’s population—have settled here. Not only does it impose huge costs on the Lebanese economy, but it also endangers the country’s delicate social fabric. To put things in perspective, in a visit to Lebanon early this year the president of the World Bank likened the refugee influx to the entirety of the Mexican population resettling into the United States during a three year period.

In the World Bank’s report presented to the United Nations in September 2013, the cost of the Syrian crisis on the Lebanese economy was estimated at $7.5 billion over three years. It is very likely that the cost to Lebanon will rise several billion dollars more for the 2014 fiscal year.

All of this paints a dire outlook for the Lebanese economy. The only way for Lebanon to cope with the economic fallout is to enact better security measures, make politics inclusive, and implement targeted reforms. All of these seem beyond the reach of Lebanon’s political establishment, which must shy away from the broader regional upheaval and focus on limiting the spread of sectarianism at home.


No Policy for Refugees
Kareem Shaheen, reporter at the Beirut-based The Daily Star.
 


Lebanon and its people have become the victims of three years of government inaction and a lack of strategy to address the influx of Syrian refugees. The result has been a refugee crisis that has stretched the country's infrastructure past the breaking point, brought refugees in competition with poorer Lebanese for jobs, and caused myriad security headaches.
 


Lebanon has over 1.1 million registered Syrian refugees, roughly half of whom are under the age of eighteen. Four out of five refugee children are out of school as the academic year begins. The refugee influx is such that Lebanon has surpassed its projected population for 2050, according to António Guterres, the UN High Commissioner for Refugees.
 


Syrian refugees have had to bear the blame for recent events, including the brief takeover of the northeastern Sunni town of Arsal, near the border with Syria, by militants pledging loyalty to Jabhat al-Nusra and the Islamic State. It is believed that some of the militants were residing in the scattered refugee settlements around the town. The settlements were partially burned in the Lebanese army’s ensuing siege. Since then, following the kidnappings and beheadings of soldiers held captive by the jihadis who attacked Arsal, other settlements have been periodically attacked and raided.
 


Locals in some Christian-majority towns have stepped in to fill the security void left by the government. Many towns have instituted strict curfews on refugees, barring them from leaving their homes at night. Municipalities in Batroun, for example, have called on residents to volunteer with the municipal police, set up observation posts, and take part in patrols targeting the Syrian refugee community there, with some Syrians complaining of abuses and discriminatory treatment. 
 


The government has only recently begun stepping in. A proposal to build refugee camps between Arsal and the Syrian border is gaining momentum, and has emerged as a key demand in the aftermath of the ISIS-Nusra takeover. Even residents who have long supported the Syrian opposition back the proposal, but it has not yet been endorsed by the cabinet. 
 


Building refugee camps was always going to be political dynamite for any Lebanese government, as they are wary of comparisons to the established Palestinian presence in the country and its role in the nation’s 1975-1990 civil war. But supporters of the proposal say it is necessary to bolster security and track Syrian refugees, many of whom are unaccounted for and carry incomplete identification papers. 
 


Amid the influx, both refugees and locals have suffered from years of government inaction. The vast expansion in Lebanon's population has stressed its electricity grid, which has faced more extensive blackouts, and its education system, which no longer has the capacity to absorb Syrian children. Already, 85 percent of Syrian refugees live among the poorest two-thirds of Lebanese—Palestinians fleeing the violence in Syria have, for instance, taken refuge in the Palestinian refugee camps here, overcrowding already dense and impoverished neighborhoods. Harsh conditions are meanwhile prompting the twice-displaced Palestinians from Syria to flee on dangerous migrant boats to European countries along the Mediterranean coast. Some have died en route. 
 


Belatedly, the Lebanese government has taken stopgap measures, including stricter controls on the border and stripping refugee status from Syrians who go back home for visits. But none of these measures will be enough to resolve simmering tensions or the security and economic fallout from the unprecedented refugee crisis. It is unclear if even a proposal as fundamental as establishing refugee camps will solve the crisis this late in the game.


The Aftermath of Arsal
Maha Yahya, senior associate at the Carnegie Middle East Center.

Public fears raised by events in Arsal have generated an anti-Syrian social climate that does nothing to resolve Lebanon’s security issues. The beheading of three Lebanese soldiers by ISIS and Jabhat al-Nusra in the last few weeks has sent shockwaves across the country. Coming in the aftermath of an intense conflict between the Lebanese army and militant Islamists in the border town of Arsal, it raised concerns that the Lebanese army was becoming ever more embroiled in the Syrian conflict. Public reaction is alternating between patriotic support for the army, quieter support for Hezbollah, and xenophobic reactions against Syrian refugees.

In response to the conflict in Arsal and all that followed, Syrian refugees across Lebanese territories have been subjected to blatant and unjustifiable attacks that have increased in tempo and scale amid official indifference. Most critically, this climate has extended across Lebanese territories to areas where Syrians were once welcome. For example, a recent message to Syrian refugees in the city of Baalbek warned them with kidnapping and battery if they did not leave. A number of Lebanese political leaders, including Walid Jumblatt of the Progressive Socialist Party and Hassan Nasrallah of Hezbollah, have condemned these attacks, but they are drowned out by a more dominant depiction of Syrian refugees as a security threat and unbearable burden to the country. Some have gone as far as to claim that “every gathering by Syrians is a sleeper cell.” 

Attacks on Syrians have not been limited to random individuals or groups. In the last week, images have been circulating on social media in which army officers stand over scores of captured male Syrian refugees lying face-down on a sandy road, some adjacent to the burning tents that once housed them. Local reactions to these images have alternated between complete support for the army and condemnation for what looks to be random incarceration and mistreatment of refugees simply for being Syrian. Support for the army was most exemplified in a Facebook post by popular singer Tania Saleh, who told them, “My hand is in your boot.” This unleashed a storm of satirical criticism at her expense. There has also been criticism of the army’s actions against the refugees from scores of journalists and activists, who admonished the army for acting more like a militia than a state institution. For this, these activists were also attacked on social media for their “unpatriotic” sentiments at a moment of national crisis.

The actions of ISIS have raised existential fears for many Lebanese, particularly Christian communities who worry about their safety should the group establish a permanent foothold in the country. Some towns, including Batroun, have taken measures into their own hands by arranging for their own self-defense. 

But this uptick in xenophobia in the name of fighting terrorism is placing thousands of Syrian refugees at risk and may push alienated youth towards radicalism. Already, an increase in radicalization among some youth in Lebanon is becoming apparent, with reports of pro-ISIS graffiti and ISIS flags flown in different parts of the country. Unless Lebanon dials back the dominant narrative that casts all Syrian refugees as potential enemies to the country, they may push some refugees into the arms of extremist groups. And given the stalled political climate, it is on the Lebanese to combat these stereotypes from the bottom up—so Lebanon can focus on eliminating the real threats to its security.

This article is reprinted with permission from Sada.  It can be accessed online at:

http://carnegieendowment.org/2014/10/03/how-is-lebanon-faring/hqzg