Beirut: The strike went smoothly in Beirut on Friday, organised by the General Confederation of Lebanese Workers. It served as good rehearsal for what unions, political parties, and NGOs had in store for the country’s ruling elite this January, who have repeatedly failed to address economic woes or agree on a suitable cabinet formation, eight months after parliamentary elections were held last May.
Political bickering has repeatedly delayed formation of a Lebanese cabinet, namely because Hezbollah — allied to both Iran and Syria — came up with a difficult demand, seeking accommodation of its Sunni allies in parliament, through giving them one seat in the cabinet of Prime Minister-designate Sa’ad Al Hariri.
He has repeatedly refused to do so, claiming that their parliamentary bloc is too small and does not merit cabinet representation.
Suggestions to swaps seats with Hezbollah’s allies in the Free Patriotic Movement (FPM) have been flatly rejected by its president, Foreign Minister Gibran Basil.
He claims that the contested seat ought to be a Sunni one, not from the share of Lebanese Christians.
Hariri has also persistently refused to re-engage with Damascus, further adding strain to his relationship with Hezbollah.
Paying the price for the political gridlock are ordinary Lebanese in a service-oriented economy, suffering from cutbacks in tourism, diminishing foreign investment, recession, inflation, and no new jobs on the market.
In addition to political paralysis, they fed up with a chronic garbage crisis that has contaminated the streets — and waters — of Lebanon, topped with 1.5 million Syrian refugees who have been fed, housed, and educated at the expense of Lebanese taxpayers since 2011.
The country’s GDP growth once stood at 9.3 perc ent in 2008 but is now at an all-time low of 1.2 per cent.
Due to all of the above, the first strike was staged on January 4, while another demonstration is scheduled for January 6 organised by the nascent “Yellow Vests,” who are inspired by their namesake in Paris.
A third protest is scheduled for January 12, at the gates of the Ministry of Labour, while a fourth and fifth are signed off by the Lebanese Communist Party.
One will take place throughout the country on January 14, including Hezbollah’s home base in the Bekka Valley, and a second will be staged in the Lebanese capital on January 20, while Arab kings and presidents assemble for an Arab League-sponsored “Economic Summit.”
Friday’s protesters assembled before the Grand Serail in downtown Beirut, demanding more jobs, tax cuts — and a cabinet. The city’s port was shut down and so was the National Social Security Fund and the Electricity Company. For one hour, flights froze at Rafik Al Hariri International Airport.
Mixed reactions
“Beyond the pressing socioeconomic situation, there’s always a political dimension that should not be disregarded, even if it were subtle” said Mona Sukkarieh, co-founder of the Beirut-based consultancy, Middle East Strategic Perspectives.
“Civil society initiated the call for today’s strike and tried to gather a wide support for it from labour unions and business owners. It got mixed results. Some labour unions responded positively, but not business owners.”
Interestingly, most major political components in the country expressed their support for strike — with the notable exception of the two warring heavyweights, Future Movement of Al Hariri and Hezbollah. Both warned supporters against taking problems to the street, fearing that things could easily slip out of control, just like they did back in 2008.
Mario Aoun of the Free Patriotic Movement (FPM) described the timing as “suspicious.”
Other critics included the Chambers of Commerce, Industry, and Agriculture, whose head Mohammad Shuqayr said that the strike was “stupid,” coming at the end of the holiday season, claiming that would cost the country $100 million in revenue loss/day.
“The business community feels like it is being targeted, especially because of the timing” added Sukkarieh. “There is a general feeling among people in these circles that they — and the political factions behind them — are the target of most of these socioeconomic protests.”
Reasons to protest
The country’s national debt has reached a staggering $84 billion — or 155 per cent of GDP — and unemployment stands at 36 per cent. Last year, international donors assembled in Paris had pledged $11 billion for Lebanon but that amount was held up due to the chronic delay in cabinet formation.
“Due to a government decision to increase taxes, inflation is now at an all-time high of 8 per cent, where in the past, it stood at 3 per cent on average,” says Jad Chaaban, Associate Professor of Economics at the American University of Beirut (AUB). “The government said that this increase was to fund wage increase in the public sector. It ended up as political spending and election-related favouritism, however. Speaking to Gulf News, he said: “Purchasing power dropped, inflation rose, and no new jobs were created.”
Chaaban also pointed to a decision by the Central Bank for private banks to give an 8 per cent interest on cash deposits in US dollars, and up to 12 per cent for deposits in Lebanese pounds. Ultimately, this will attract more dollars, they reasoned, and stabilise Lebanese currency.
“What it led to was a contraction in consumption. People were suddenly more interested in putting their money in banks than in spending it. It led to an even greater problem: lack of credit and access to money.”
Finance Minister Ali Hassan Khalil (a member of the Amal Movement) is warning of a potential crash in the Lebanese lira, which has been pegged to the US dollar since 1998. “The (political) crisis has started to turn into a financial one. We hope it will not become a monetary crisis” he said.
“Civil society’s impact is marginal” said Sukkarieh, adding: “Experience shows us not overestimate their actual role and not to underestimate the political “manipulation” behind their actions, even if they are unaware of it.” Indeed, many of the politicians who are to blame for the country’s troubles expressed support for the popular dissatisfaction, and some are already trying to hijack the strikes and turn them into their favour.
