Lebanon is facing its worst economic crisis in a generation, since its fifteen-year-long civil war, complete with the threat of unending poverty and possible violence. After half a year of protest, the country’s ruling class agreed on a new government, whose supporters believe is equal to the historic task at hand: pulling Lebanon back from the brink of economic ruin, and implementing the long-overdue necessary reforms to make Lebanon viable.

But this government has, from the get-go, been branded a “Hezbollah government,” in part because it was formed without the input of any of America’s allies in Lebanon, which has heightened calls in some quarters, including within the U.S. government, to withdraw support to the Lebanese government or even to extend sanctions.

It is true that the new government is woefully inadequate for the task of reforming Lebanon. But it is a mistake to view it as a “Hezbollah government,” as some shrill voices have it. This debate is critical because of its implications for Washington’s misguided sanctions policy. The United States has mistakenly tended to view the competition for influence as a binary contest with Iran, instead of understanding the importance of hedging and balancing. A balanced, engaged policy becomes impossible if the United States brands the entire Lebanese government a “Hezbollah government,” and then backs it into a corner with a version of the maximum pressure campaign that the United States has deployed against Iran, and which has been terrible for Iran, the region—and for U.S. interests.

Critics of Hezbollah, the Iran-backed party and armed group, have claimed that this new government came into fruition solely with the blessing and influence of Hezbollah and its two key allies, the Christian Free Patriotic Movement and fellow Shia party Amal.

This new cabinet is indeed a rare case in which none of the United States’ allies have called any of the shots in its formation.

But do these developments, translate into Hezbollah’s dominance, or even control, of the new cabinet? Hezbollah’s current military and political clout might suggest so. However, to call this a “Hezbollah government,” where the party is the ultimate decision-maker and imposes its political platform and ideological will, is inaccurate.

Hezbollah actually retains a similar amount of influence that it has had in past governments in recent years, and remains constrained by the paralyzing interests of Lebanon’s ruling political parties, including its own allies.

Newly appointed Prime Minister Hasan Diab and the government he has assembled are in fact a status-quo government, just with a new face. His cabinet faces the daunting task of trying to salvage the Lebanese economy without compromising its corrupt economic system and its main benefactors: the country’s elite of warlords and business tycoons.

A Cabinet Born in Crisis

Less than two weeks after mass protests swept across Lebanon over the economic meltdown, then-Prime Minister Saad Hariri resigned on October 29, unable to manage the crisis. His cabinet had already passed a state budget for 2020 (which was billed as an austerity budget but was mostly business-as-usual patronage). As a last-gasp attempt to ease tensions on the street, Hariri issued a blueprint for economic reforms.

The following two months were a political scramble, as Lebanon’s economy worsened with medicine, wheat, and fuel shortages and inflated costs, coupled with strict bank withdrawal limits, and a black market exchange rate between the Lebanese lira and the U.S. dollar dominating the country’s markets.

At the time, Hezbollah and its allies fervently backed another Hariri stint, calling for a hybrid government of political partisans and technocrats. Hariri’s party, the Future Movement, also endorsed its leader’s return, refusing to nominate any other candidate for prime minister from within their ranks.

Hariri meanwhile refused to return unless he would be allowed to assemble a government on his own terms, comprised of what he described as “experts,” commonly referred to as technocrats. The back-and-forth ensued while other candidates such as billionaire Mohammad Safadi were introduced, only to quit following protests against him.

In the middle of an economic crisis, and given that Lebanon’s prime minister must be a Sunni Muslim, Hariri felt that he could score a political victory. Among Lebanon’s ruling elite, there were not many options that could replace Hariri that would help Hezbollah and allies make their case for a “national unity” government. Even Samir Khatib, a close friend of Hariri’s opted out of his candidacy because the Sunni Grand Mufti refused to endorse him.

Hariri and allies eventually opted out of the political process, leaving Hezbollah, Amal, and the Free Patriotic Movement to call the shots.

They endorsed American University of Beirut professor and former vice president Hasan Diab, who had only a brief previous government experience as education minister, eventually forming what he claims is a downsized government of experts in late January.

Though not an independent government as claimed, this status-quo government has made appeals to the ruling elite as a whole, even Hariri and his allies.

Several key ministers have played a crucial role in maintaining the norm in Lebanon. Finance Minister Ghazi Wazni was a key financial advisor to the Parliamentary Finance and Budget Committee, and Energy Minister Raymond Ghajjar has been an advisor to the ministry in various capacities for well over a decade.

In addition, Economy Minister Raoul Nehme is executive general manager at BankMed and chairman of BankMed Suisse, one of the country’s main banks mostly owned by the Hariri family. Meanwhile, Information Minister Manal Abdel Samad, though a ministry with virtually no clout, has amicable ties with Hariri ally and Druze leader Walid Jumblatt.

Diab and his cabinet did not amend the 2020 state budget, drafted during Hariri’s tenure, allowing it to swiftly pass. In addition, his cabinet’s policy statement read like previous ones, with some additional lip service to the popular uprising. And though Hariri and allied MPs did not all attend Parliament session that day, just enough were present to establish quorum and for the Diab government to win a vote of confidence.

Hezbollah and the Sectarian System

In Lebanon’s multi-party semi-democracy, Iran-backed Hezbollah sticks out like a sore thumb. It’s the only party with a military wing—an incredibly sophisticated one that has turned the tide in regional conflicts, notably Syria and Iraq. Designated as a terrorist organization by the United States, the party has also been on the receiving end of sanctions that may further extend to indirect affiliates and political allies.

Hezbollah was a relative latecomer into Lebanese politics, opting to stay out of the political process until after the country’s fifteen-year civil war ended in 1990.

It has since adopted a more pragmatic approach, seeping into the country’s fragile sectarian power-sharing system; its two key allies, fellow Shia party Amal and President Michel Aoun’s Free Patriotic Movement, exhibit significant ideological differences from their senior partner, Hezbollah.

And while Lebanon’s political ruling parties and their alliances have been in a state of tense stalemate, Aoun’s election as president has tipped the scales in Hezbollah’s favor. Hezbollah currently has twelve MPs in Lebanon’s 128-seat Parliament, and two ministers in Diab’s cabinet. Factor in Hezbollah’s two key allies, and they together hold a majority in both.

Lebanon’s sectarian power-sharing political system is thus built on more or less cross-sectarian alliances. These fragile alliances have been built on geopolitics and inter-sectarian competition. As a result, whatever ideological doctrine is held within the party is compromised in practice.

In addition, in light of more U.S. sanctions on Hezbollah—now extending to key political figures such as MP Mohammad Raad—the Free Patriotic Movement and even Lebanese leaders close to Washington such as Hariri have expressed concerns about the sanctions impacting the Lebanese economy as a whole, and have held these discussions with U.S. officials.

Therefore, it comes to no surprise that Hezbollah opposed Hariri’s resignation and was quick to call for his reinstatement. This further contextualizes Hezbollah’s more pragmatic approach to Lebanese politics.

It is by no means an altruistic endeavor, but it clearly has no interest in straying away from the political mainstream.

That’s not to say that political numbers have no meaning whatsoever. Reflective of geopolitical developments across the Middle East, Hezbollah and its Iran-backed coalition do currently have the upper hand in Lebanon, whereas Saudi Arabia–backed Hariri and other allies have certainly lost some of the momentum they have previously gained.

This ultimately shows how Hezbollah’s political clout does not simply come entirely on its own. Its mutualistic relationship with its allies plays a crucial role.

Sanctions Hurt Lebanon, but not Hezbollah

The United States is concerned about what it sees as Lebanon falling entirely under the influence of Iran, the way that Syria has moved completely into the orbit of Iran and Russia. The United States is also concerned about the perceived security of its closest ally in the region: Israel.

As a result, the United States has been trying to counter Hezbollah in Lebanon through development programs and security aid to strengthen state institutions and counter Hezbollah’s military wing and welfare institutions.

The United States is also among fifty-one countries that have collectively pledged over $11 billion in soft loans to Lebanon in 2018 for development and infrastructural projects.

It also imposed sanctions on Hezbollah, its backers, and its facilitators, unlike other sanctions regimes—such as the European Union’s—which only target Hezbollah’s military wing (a distinction that Hezbollah itself does not make).

The United States has until now distinguished Hezbollah from the Lebanese governing class, which includes American allies as well as Hezbollah. Until now, Washington has maintained open channels to the Lebanese government and ruling parties, even while targeting Hezbollah with hardline diplomacy and intensifying sanctions.

The U.S. sanctions regime has not isolated Hezbollah as much as it has weakened the Lebanese economy. A 2017 report by Lebanon’s BLOMINVEST Bank claims sanctions have caused an expansion in the informal economy and money laundering. They anticipate that these sanctions, especially if intensified, would further harm the Lebanese state and its institutions as a whole, considering Hezbollah’s presence in government institutions as a party. They anticipated further disruptions to Lebanon’s “trade chain” and more unemployment. This is especially taking into consideration Lebanon’s worsening U.S. dollar shortage shaking its banks, its markets, and especially its depositors.

While this policy toward Lebanon as a whole is contradictory and counterproductive, those who would bear the brunt of worsening sanctions on the overstated depiction of the Diab government as a “Hezbollah government” would be almost anyone but the Iran-backed party and armed group itself.

“I assure to you that if the country fell into chaos and it couldn’t pay salaries, we could still do,” Hezbollah Secretary-General Sayyed Hassan Nasrallah said last November.

Hezbollah has been able to maintain itself and its powerful network of social services through a wide variety of sources, especially their backing from Iran and facilitators from some of the Lebanese diaspora. Its financial strength lies outside of Lebanese state institutions.

To intensify sanctions and to treat the Lebanese state as a Hezbollah-led state would risk further decimating Lebanese institutions that are already on their last legs. With hundreds of laid off Lebanese workers facing the disappearance of their already meager social security fund, skyrocketing costs, and currency devaluation, coupled with the lack of viable social welfare programs, this strategy would in fact empower the informal economy, and strengthen patronage networks of the ruling elite. Hezbollah, unlike their allies and political rivals, would benefit the most from such a scenario.

Lebanon’s new government is neither a “Hezbollah government” nor is it politically impartial and technocratic. Even though none of the U.S. allies called the shots in its formation, the new government ultimately remains a status-quo regime that caters to the interests of Lebanon’s ruling parties and the banks. And while Hezbollah’s political clout has strengthened in recent years, with credit to its key Lebanese allies, it is false to classify the Lebanese government as a Hezbollah state. This designation is especially dangerous for Lebanon’s fragile working class and disenfranchised communities, who would suffer the most under a hardline American policy based on a misread of Lebanon’s latest reactionary government.

header photo: Lebanese Prime Minister Hassan Diab presides over a meeting. Source: National News Agency of Lebanon.