Diana Moukalled | Lebanese journalist and cofounder and editorial secretary of the Daraj website

The Lebanese government, whose members were chosen by the same old sectarian power brokers, with Hezbollah acting as a state above the state, seems to have decided that the International Monetary Fund could unlock the money that Lebanon needs to survive and rebuild. But that decision is not enough to tackle the core imbalances of the Lebanese economy. Going to the IMF could considerably increase the risk of a complete collapse, since the conditions of the Fund will have severe social and political consequences.

It does not seem that radical solutions are likely to take place before a government of independent political figures is formed to restore the trust of citizens. Unfortunately, the spread of political corruption has wasted hundreds of billions of dollars that have flowed into Lebanon over the past decades. This fact, combined with the reality of deep-rooted regional influence over Lebanese decisionmaking, will make it hard for the government to exercise the needed transparency for any rescue plan.


 

Melhem Chaoul | Lebanese sociologist, former professor of sociology at the Lebanese University

The Lebanese political class is a complex structure built on several levels or strata. Formed around political clans, political parties that are either sectarian or pseudo-secular, and a fragile bourgeoisie, it is dependent on political and social-sectarian structures. It has so far shown a remarkable ability to regenerate and reproduce itself. The most visible political coalition today is the one formed by the alliance of Hezbollah, the Free Patriotic Movement (FPM), and the Amal Movement.

It is obvious that the current ruling alliance cannot and will not implement the reforms demanded by the International Monetary Fund. It will use all the means at its disposal to ensure that the reforms are merely formal and do not affect the inner workings of the system. For this, it can use a range of obstructive otions:

It can take advantage of the revolutionary spirit calling for reforms that emerged last October 17, and use this to employ judicial means and the security services against the enemies of the ruling class. It has the option of setting up a police state and conducting a witch hunt under the guise of “fighting corruption.”

Hezbollah, the FPM, and Amal can restructure the political class by opening up to their traditional opponents within this class, such as the Future Movement, the Lebanese Forces, and others. In this way it would aim for a “new deal” that would redistributed power and interests. This would constitute putting “new clothes on an old body.”

Or it can use security and the threat of military destabilization to blackmail local and regional actors to comply with its requirements. The military apparatus of Hezbollah would intervene to bolster a decrepit political class.


 

Khairallah Khairallah | Former foreign editor of the Lebanese daily Al-Nahar (1976–1988) and former managing editor of the pan-Arab daily Al-Hayat (1988–1998)

Lebanon has reached a point of no return in its dealings with the International Monetary Fund. While Arab countries, specifically Saudi Arabia, have no interest in bailing Lebanon out, the government is also beginning to discover that the IMF has its own conditions that are likely to affect Lebanon’s crisis and its causes.

Until further notice, the Lebanese political class in its majority has been unable to figure out that the IMF is not a charity and that its conditions are bound to be tough. These are linked in one way or another to certain policies that Lebanon cannot implement for obvious reasons—because Hezbollah is calling the shots, and because Michel Aoun is president and Hassan Diab prime minister.

The IMF conditions are unacceptable to a party with an Iranian political agenda that has nothing to do with Lebanon’s interests. There’s no way to reconcile the Iranian agenda with the Lebanese one. We now have two completely different agendas for one country. For instance, in a speech on May 13, Hezbollah’s secretary general, Hassan Nasrallah, was adamant about rejecting a deployment of United Nations forces on the border with Syria. This would help the Lebanese government to control smuggling on that border, as this is likely to be one of the things the IMF will ask Lebanon to implement.

In a country where Hezbollah is defining the rules at all levels and in all fields, Lebanon’s margin of maneuver with the IMF is nonexistent, at least given the balance of power internally and regionally.


 

Jeanine Jalkh | Journalist at the French-language Lebanese daily L’Orient-Le Jour

Lebanon has a narrow margin of manoeuver. A country that has hit rock bottom, as Lebanon has, is not in a position to object much to the conditions that will be set by the International Monetary Fund. The IMF is Lebanon’s last resort, a view shared by a large number of economists. The diagnosis of the country’s “disease” has become crystal clear to the international community, as has the road map out of its dysfunctional financial and economic system.

Unless key sectors of the economy are restructured and thoroughly reformed and the independence of the judiciary restored, no further bargain would be allowed in the current circumstances. Despite the relative flexibility recently shown by the IMF and its willingness to take into consideration the vulnerabilities of states requesting assistance, it apparently won’t be willing to compromise over needed reforms in Lebanon’s case if its bailout plan is to be effective.

The intricacies of the power game shaped by the ruling oligarchy and Hezbollah (a party that has thrived on the ruins of a state of law), and their concealed attempts to obstruct reform so far, leave little leverage in negotiations. Any attempt to contest or further obstruct conditions imposed by the bailout plan—even if potentially defensible under the sacrosanct principle of “sovereignty” defended by Hezbollah—will only expose the obstructers as godfathers of Lebanon’s corrupt schemes and mismanagement. This is a risk that Lebanese politicians need to carefully weigh given the precipitous drop in their popularity.

With the IMF solicited to salvage what’s left of the country’s resources, push has come to shove for the political class. The latter can no longer use so-called stability as a bargaining chip to secure financial support, while getting away with behavior that both the United States and France, both key members of the IMF and concerned with clamping down on Hezbollah, want to see ended.


 

Maha Yahya | Director of the Carnegie Middle East Center in Beirut

Almost none. The complex nature of the crisis and the size of the external funding needed leave little margin for maneuver. Without external financial support Lebanon will collapse. No one country can provide the billions of dollars Lebanon needs to emerge from this crisis, especially in view of the global economic contraction and tightening fiscal space as a result of the Covid-19 pandemic. Nor can countries continue to finance their Lebanese political associates and proxies as before. This leaves Lebanon with the International Monetary Fund and its fiscal reform preconditions as the only option. The IMF’s stamp of approval for the Lebanese government’s plan is also a prerequisite for unlocking additional funding from the European Union and other donors.

Lebanon’s politicians do not want to undertake the requisite reforms as that effectively means cutting off their financial lifelines. All of Lebanon’s political leaders control various state institutions, their revenue streams, and hiring. With the accelerating economic and financial crisis, this modus operandi is no longer viable. They simply cannot maintain the corrupt system that sustained them, nor can they recreate it. Yet they are desperate to maintain a stable and whole Lebanon. Their response so far has been a business-as-usual approach. They continue to bicker over civil service appointments, are playing a blame game as they out each other’s dirty deals, and are engaging in a desperate search for ways to kick the can down road. This only delays the inevitable and makes the adjustment all that more painful for Lebanon and the Lebanese.

Lebanon’s politicians have boxed themselves in. To survive, they must allow Lebanon to recover, and can only do so if they concede that there is nothing left to pilfer. Rather than fight over what is left of their once golden goose, they can focus on improving the existing government recovery plan and ensure equitable burden-sharing that not only protects Lebanon’s most vulnerable citizens but also lays the groundwork for a sustainable economy. This includes fiscal reform as well as socioeconomic policies that consider health and education a universal right for every Lebanese. The road to recovery will be long but the politicians must start now. Their survival depends on it.