With every passing day, speculation over who will lead the Lebanese Republic booms and busts its way through the local media channels. The parliament building is continually plagued by a lack of quorum, fuelling both sides of the political spectrum to exchange mortars of blame while the Lebanese populace watches, restlessly stuck in between. The accusations regularly refer to the “gap,” or what The Daily Star has upped into a “void.”
The nature of this void, and its consequent effects, is often misconstrued. A significant portion of this debate seems to be centered around the administrative issues, or political pitfalls, of having a headless state. Politicians warn of a backlog in administrative affairs, as well as an imbalance in the ideological scale – a scale sensitive to the slightest of political maneuvers.
"The nature of this void, and its consequent effects, is often misconstrued"
The reality of the matter, unfortunately for those capitalizing on these claims, is that in the administrative sense, there is no void. The tasks and responsibilities of the President are supposed to be dissolved and distributed to the Council of Ministers, an ideologically diverse body. Once this mechanism is cleared, a rare lucidity emerges from the Lebanese Constitution – a document often undermined by its own constituents. In essence, it is no secret that Lebanon has spent numerous summers without shot-callers in the government. So if this is not a true danger to the nation, then what is?
Costs are more tangible than most acknowledge. The key concept to consider here is confidence. The lack of a president is significant of a political deadlock, an impasse between the country’s top decision makers. The image portrayed to foreign investors and Lebanese debt holders is that external factors, i.e. the tragic civil war next door and the rise of extremist forces in Iraq, are taking their toll on the country. A devastating indication of this came most recently in a targeted suicide attack on a security checkpoint, resulting in dozens of injuries. Confidence in security, therefore, begins to dissipate.
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Disbelief in the economy will soon follow, if it has not already done so. A recent report published by Byblos Bank, one of Lebanon’s top banks in terms of deposits, points to two risks – investor confidence and the nation’s sovereign credit rating. The report cites banking giant Merrill Lynch as attributing weakening macroeconomic indicators in Lebanon to the unstable political situation. Some of these indicators include Lebanon’s bloating public financing needs, which are at 30% of GDP at $14 billion, as well as a current account deficit of $7 billion.
While Lebanon’s banking sector remains resilient and foreign reserves ample - which according to the report is the only reason as to why the nation’s finances are not more devastating – Merrill Lynch does not believe that the presidential void is not the main driver behind these issues. The reasoning behind this claim is that Lebanon has gone through periods without a head of state, as previously mentioned in this piece.
This, however, is not a valid counterfactual from which to rely on. Lebanon may have survived previously without a head of state, but due to its unfortunate reliance on foreign powers in breaking these deadlocks, its stability is dependent on external events.
"Lebanon's stability is dependent on external events"
The Middle East is currently at a major crossroads, being tugged by extremism in the form of ISIS and its supporters on one end and moderate powers on the other. Lebanon is surrounded by an enemy of the state to its southern end and a country devastated by a civil war in the rest of its borders. A presidential vacuum, regardless of its administrative backlogs, is an unwanted anchor dragging the nation into a battle it simply cannot survive in the long run, either politically or fiscally.
Economic effects have already begun to cascade, with another report from Byblos Bank stating that foreign direct investment flows into Lebanon have decreased by 22% year-on-year from 2013 – down to nearly $2.9 billion. The nation’s current leaders cannot dilute the stinging effect of a presidential absence to an administrative expense. With every missed parliamentary session, additional strain is placed on the Central Bank’s foreign reserves and private banking system. The nation needs a spark, and it needs it soon.