Lebanon going back to IMF, sidelining Hezbollah: Report
Lebanon plans to go to the International Monetary Fund (IMF) to strike a deal on the country’s financial default and public debt, Reuters reported on Tuesday.
Beirut’s move to the US-backed lender reflects how Lebanon’s new government is breaking with years of positions that Hezbollah advocated for, pulling the impoverished Mediterranean country away from Iran and Hezbollah’s grasp and towards the US.
On Monday, Lebanon's government indefinitely suspended flights to and from Iran after Israel warned it could shoot them down, alleging Iran was using them to resupply Hezbollah.
The Lebanese army fired tear gas on Saturday at Hezbollah supporters protesting the move.
The UN said a convoy of its peacekeepers was attacked going to Beirut's airport. The attack was blamed on Hezbollah supporters. The group appeared to try and distance itself from the attack.
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In 2022, Lebanon reached a draft deal with the IMF but did not deliver the necessary reforms to unlock funds. Hezbollah, along with other parties, resisted the measures. The Shia political party and armed group said Lebanon’s economic revival could only come from exploiting untapped natural gas reserves, not the US-backed lender.
Lebanon’s economy collapsed in 2019. The value of its local currency plunged 98 percent and most of the country has been driven into poverty.
Political parties across the spectrum have been accused of corruption in the country. The government in 2020 unveiled a new anti-corruption law and national strategy, but it has consistently dropped in Transparency International's Corruption Perceptions Index, currently ranked 154 out of 180 countries.
Lebanon’s banking sector collapsed in a Ponzi scheme overseen by former Central Bank governor, Riad Salameh, who was unaffiliated with Hezbollah.
The IMF move comes shortly after a senior US official visited Lebanon, declaring the “end of Hezbollah’s reign of terror in Lebanon”.
“Hezbollah was defeated by Israel, and we are grateful to our ally Israel for defeating Hezbollah,” US deputy special envoy for the Middle East Morgan Ortagus said earlier this month after meeting Lebanon’s President Joseph Aoun in Beirut, in comments that would have been unthinkable just a year ago.
Lebanon is a prime example of how the regional conflict unleashed by Hamas’s 7 October 2023 attack on Israel has upended the balance of power in the Middle East.
Balance of power shifts
Iran has been left reeling, and Israel and the US have been empowered. In Syria, Bashar al-Assad was toppled. Hezbollah has been sidelined by a government formed after Israel and the US imposed a lopsided ceasefire on the battered group.
On Tuesday, Israel pulled out of residential border towns in southern Lebanon as part of a ceasefire but kept troops in five key areas of the south.
MEE reported on Tuesday that France and the United States are trying to encourage Israel to fully withdraw from southern Lebanon by suggesting the deployment of a peacekeeping force or even private security companies in strategic areas. However, Lebanon's Aoun has strongly rejected private contractors.
Hezbollah was a prized member of Iran’s so-called "axis of resistance". It started attacking Israel in solidarity with Palestinians in the Gaza Strip after 7 October 2023.
The US used the promise of Gulf reconstruction funds and Israeli military might to get its preferred candidate, former Lebanese Army General Aoun, elected president after the post sat vacant since 2022. Aoun, a Maronite Christian, selected Nawaf Salam, a scion of a prominent Sunni family, as Lebanon’s prime minister.
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