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How Foreign Powers Could Break Lebanon’s Gridlock

It is well known that factionalism and corruption have long stood in the way of the kinds of structural reforms that Lebanon needs. But an overlooked problem is the inaction of foreign powers that could easily compel domestic changes if they had the right incentives.

OXFORD – Lebanon’s political economy is gridlocked. The country’s political leaders will not commit to the kinds of economic reforms that it needs, because doing so would undermine their own power. For good reason, most published analyses of Lebanon include references to problems such as corruption and institutional decadence. But what most commentaries miss is the role played by external stakeholders who see little reason to push for changes to the dysfunctional status quo.

While foreign powers with interests in Lebanon often do voice support for reforms, they lack the proper incentives to back up their rhetoric with concrete action, because doing so would simply undercut their own influence in the country. Meanwhile, the Lebanese people have been left to suffer at the hands of an oppressive economic structure. In 2021, the country’s GDP was just $20.5 billion, down from $55 billion in 2018. With poverty rates soaring and the currency having lost 90% of its value, the economy is teetering on the edge of collapse, and a humanitarian crisis is looming.

It doesn’t have to be this way. If foreign stakeholders wanted to effect positive change within the country, they would have many tools for doing so. They could easily tie the hands of Lebanon’s political elites by applying existing laws in their home countries, and by leveraging their influence over global financial institutions to hold politically exposed persons (PEPs) in Lebanon to account.

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