A demonstrator throws a tear gas canister during a protest in Beirut. The the situation in Lebanon is similar to that in many Arab countries, such as Iraq and Yemen, where militias have confiscated state institutions, including the agencies responsible for the economy. Image Credit: Reuters

We were all saddened by what happened in the once charming city of Beirut, where nearly a third of it was in ruins after that horrific disaster. A catastrophe that could have been avoided had there been an effective government that controls the state’s institutions and managed them professionally.

Unfortunately, the situation in Lebanon is similar to that in many Arab countries, such as Iraq and Yemen, where militias have confiscated state institutions, including the agencies responsible for the economy. In fact, they have become the target of wanton acts being carried out by the militias, whose main role is to loot state wealth and actively supported by foreign powers.

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It is too obvious to ignore that these militias share many commonalities, with their end goal being controlling the infrastructure of the local economy as part of the agenda set out by regional powers supporting them. For example, militias in the three aforementioned countries attempted from the very beginning to fully control the land, sea and air ports.

Alternative powers

In Lebanon, Hezbollah controls Beirut’s sea and air ports, as well as the only land border with Syria, while Houthis in Yemen are controlling Sanaa airport, the port of Al Hudaydah and the land borders as well. The same also applies to Iraq, even as Prime Minister Mustafa Al Kazimi is trying to restore state control over the country’s ports.

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But wait! Why are the pro-foreign militias focusing on ports?

It is because keeping a tight grip on ports allows them to build a shadow economy, one that is perhaps even stronger than the country’s formal one. The parallel economy constitutes more than 60 per cent of the total domestic economic output in some of these countries.

It is also because the militias will be able to easily partake in customs revenues to finance their destructive agendas and facilitate the trade of drugs, money laundering, weapons, and prohibited goods through which handsome returns are derived.

Hands in every till

They will also be able to control the commercial sector from which goods and services flow to the rest of the sectors, including banking. Meanwhile, the state stands either powerless, as is the case in Yemen, or is in league with militias, getting commissions on its silence, as is the case in Lebanon and Iraq.

It goes without saying that the underground fund flows would destroy the national economy and the country’s infrastructure as well as its economic levers.

Ignorance rules

Such militias are led by the inept, most of whom are graduates of underdeveloped religious institutes. Their management of entities is random and dominated by corruption and mismanagement, paving the way for devastating disasters, such as what happened in Beirut last week.

The shadow economy is taking hold of most financial returns, including foreign aid, most of which goes to the pockets of influential militia leaders.

Moreover, the formal economy is deprived of capital necessary for growth, thus leading to shrinking of jobs, inflation and continuous deterioration of living standards for the helpless citizens who do not have the power to stop the looting as the militias can engage in physical liquidation of anyone standing up against them.

This indeed creates a real threat that is difficult to address, unless the state restores its sovereignty over all institutions, ports, borders and components of the economy. They need to put an end to corruption and instead manage the economy in a professional manner through skilled cadres and armed with the laws to protect its resources.

However, the militias currently holding the reins of economy are astoundingly good at looting, killing, sabotage, corruption, and disastrous management of resources.

The coming period will unfortunately witness more events similar to the Beirut disaster, especially as ammonium nitrate and other explosive materials and weapons are haphazardly stored in these countries, which in the event of further disasters will claim lives and cause further economic devastation.

- Mohammed Al Asoomi is a specialist in energy and Gulf economic affairs.