Image credit: European Union (photographer: Bernard Khalil)
By Pouyan Kimiayjan | IPD Research Associate
Lebanon is an important strategic actor in the Middle East and its decline could instigate further regional instability. Canada must avoid politicizing this humanitarian tragedy, engage in constructive talks with the Lebanese government, and provide practical financial assistance to the Lebanese people.
The tragic August 4th explosion in Beirut—which killed 163 people, injured over 6,000, and initially displaced approximately 300,000—has triggered an unprecedented economic crisis in Lebanon. The blast occurred when a suspicious fire ignited a stockpile of 2,750 tons of ammonium nitrate, which authorities left sitting in a port warehouse for years, despite warnings from officials that the stockpile posed a real danger. Already devastated by years of mismanagement, corruption, external pressure, and the spread of COVID-19, Lebanon will undoubtedly suffer more as the country’s main strategic port was raised to the ground.
On one hand, Lebanon has one of the world’s largest public debt burdens, which makes it unlikely that the government will be able to afford the estimated $15 billion in damages. While Lebanon has asked for $10 billion from the International Monetary Fund (IMF), the organization has rejected its request, demanding fiscal reforms and stronger action on tackling systematic corruption. On the other hand, with the destruction of Lebanon’s only large grain silo, major food shortages will exasperate the humanitarian debacle. In addition, wide-spread protests over years of government incompetence have plunged the country into a political crisis, resulting in the resignation of the Lebanese government.
Under these turbulent conditions, Lebanon needs immediate international assistance. This disaster could prove to have significant negative humanitarian implications in the long-run, especially for the many refugees residing in Lebanon. In 2019, it was estimated that 1.5 million Syrian refugees are staying in Lebanon, 914,600 of whom are registered with the United Nations High Commissioner for Refugees. Thus far, several organizations and states have pledged financial aid, including the European Union, Qatar, France, UK, Denmark, Germany, Italy, Norway, Belgium, Cyprus, Canada, Australia, Switzerland, Netherlands, and Brazil. An emergency donor video conference, hosted by French President Emmanuel Macron, raised nearly $398.7 million Cdn in pledges for immediate humanitarian relief, with the response being coordinated by the United Nations.
However, this limited financial aid package will fail to accommodate the estimated $15 billion in damages. Canada initially pledged $5 million and later increased its aid to $30 million following the resignation of the Lebanese government. This potentially politicized change of heart undermines our long-term credibility in Lebanon, where more than 10,960 Canadians currently reside. Moreover, in an ill-advised and undiplomatic announcement, the federal government explicitly announced that the initial $5 million will not go to the Lebanese government and will instead be directed towards “trusted” organizations, demanding fiscal and political reforms.
However, the Lebanese government will be at the forefront of confronting the political and economic ramifications of this tragedy. Currently, the government is unable to finance contracts and subcontracts for reconstruction, and the rebuilding effort will also require major imports of critical equipment and supplies. Excluding the central government in Beirut will only hurt our bilateral relations and most importantly undermine economic and infrastructural rehabilitation in the region.
In this light, it is strategically vital for Canada to play a more constructive and pragmatic role in preventing a looming humanitarian catastrophe. Primarily, Canada can establish a joint consultation committee with the Lebanese government, closely assessing the needs of the Lebanese people and the ways in which the federal government can provide targeted financial aid. Secondly, Canada can finance a team of Canadian engineers to help with the port’s reconstruction. While third-parties will most likely finance large projects, Canadian experts can play a critical role in consulting reconstruction projects in Beirut. Thirdly, the federal government has the capacity to help the government provide more homeless shelters as thousands remain displaced since the explosion. Renovation and rebuilding of damaged homes will take months (if not years) therefore providing shelters for displaced people will be critical as part of our humanitarian aid package. Fourthly, the federal government must engage the United States and demand a temporary lifting of the Caesars Act, the sanctions regime on Syria, which has deprived Lebanon of much-needed trade with its neighbour. Analysts have long predicted that sanctions against the Syrian government will worsen Lebanon’s economic crisis by triggering illicit trade with Syria.
At last, Canada can utilize its influence in international organizations, such as the IMF, the World Bank Group, and the European Bank for Reconstruction and Development in order to convince international aid bodies to provide much-needed financial assistance to Lebanon. In parallel, with respect to our experience in advising the Lebanese Ministry of Finance, Canada can send a delegate of economic advisors to help implement fiscal reforms.
Lebanon is an important strategic actor in the region and its decline can instigate further instability, contributing to a new wave of refugees fleeing the devastated country. Canada must avoid politicizing this humanitarian tragedy, engage in constructive talks with the Lebanese government, and make use of the tools at its disposal to provide practical financial assistance to the Lebanese people.