MS Risk Blog

Hariri’s Resignation – Lebanon Towards a Quagmire of Uncertainty

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On the 4th November, Saad Hariri announced from Riyadh that he is stepping down as Lebanon’s prime minister. His abrupt resignation shocked not only Lebanon but the whole world- with politicians and analysts concerned for a new crisis in fragile Lebanon. Hariri, during his resignation speech from the Saudi capital, accused Iran and Hezbollah of interfering and sowing conflict in Lebanon. He also admitted that he feared suffering the same fate as his father- Rafiq Hariri, Lebanon’s former leader who was killed by a car bomb in 2005, with Hezbollah members indicted for his assassination.

The mystery over his decision to resign had people speculating that he was in fact forced to resign by the Saudi royal family and that his script was written by Saudi officials.
Sources close to Hariri reported that his phone was confiscated when he arrived in Riyadh and the next day he was forced to resign. President Michael Aoun refused to accept Hariri’s resignation until he was back in Beirut, while he also said that Hariri was detained in Saudi Arabia against his will- sparking diplomatic tensions. However, both Hariri and Saudi Arabia denied these allegations, while Saudi Arabia accused Beirut of declaring war against it.

After his two-week visit in the Saudi capital, Hariri left for Paris, invited by French President Emmanuel Macron where they discussed Lebanon’s stability and possible mediations to a solution- even if that meant Hariri rolling back his resignation. Hariri on his way back to Lebanon also visited Cyprus and Egypt for further consultation with their leaders. While, fears over a new crisis in Lebanon were mounting and with Lebanon trying to reassure markets amid the drop of the dollar bond prices, Hariri with his arrival in Beirut, announced that he is suspending his resignation- easing the tensions. After being urged by President Aoun to take more time for consultations Hariri stated in his decision to hold off his decision to step down, hoping “to form a serious basis for a responsible dialogue” while he said it is required to “protect Lebanon from any confronting dangers”.

Hariri’s second term has brought stability in the country over the past year, however Reuters reports argue that Saudi Arabia was unpleased with Hariri’s willingness to compromise with Hezbollah. Nevertheless, if he steps down, Lebanon could be facing a great danger of political unrest. Deciding on a new prime minister could exacerbate sectarian tensions between Sunni and Shi’ite Muslims- paralysing the government. Lebanon has only just recovered in the past decade from its 1975-1990 civil war, whereas the region has spent the last years tackling its economic problems after a two-year period without a president or a functional government. Political uncertainty right now could cripple Lebanon’s economy as it has already been evident with the fall of the bond prices after Hariri withdrew from his post as prime minister, whereas companies that have showed interest in exploring the oil and gas sectors in the area, require a functional government, guaranteed regional stability. Moreover, Lebanon has been trying to stay side-lines with the turmoil of the Syrian war and has accepted more refugees than any other country. Analysts are concerned that the political volatility could aggravate the refugee crisis or even allow militant groups to expand their influence. Furthermore, concern is growing over the tensions between Hezbollah and Israel and although there are no signs of war preparations from Israel’s side, an accidental war is a possible scenario- miscalculations resulted in war between Israel and Hezbollah in 2006. However, it is more than that and just as simple; a regional paralysis will leave Lebanon weak, frail into a proxy- war; on one side Iran-backed Hezbollah and Iran itself which has been trying to gain control over the region, and on the other side Saudi Arabia that has been working against Iran and Hezbollah- while talks over a Saudi-Israeli allegiance, are increasing.

Hariri’s return to Lebanon and his announcement of suspending his resignation has inspired hope, with people expressing their support towards him and with the Lebanese dollar bonds gaining again. Nevertheless, Hariri’s decision to resign, whether it is Saudi Arabia that is behind it or not, has caused plenty of concern, with Saudi Arabia, the UAE and Bahrain urging their citizens to leave the country. As diplomatic tensions are rising with Iran and Saudi Arabia accusing each other of fuelling instability in the region, Lebanon is heading towards a quagmire of uncertainty.