by AFP --- BEIRUT: Talks between crisis-hit Lebanon and the International Monetary Fund are deadlocked, and leaders reluctant to enact reforms. Without a vital multibillion-dollar bailout, is Lebanon headed for “hell“? For months, the Mediterranean country has grappled with its worst economic crisis since the 1975-1990 civil war. Tens of thousands have lost their jobs or part of their salaries, while a crippling dollar shortage has sparked rapid inflation. After the country for the first time defaulted on its sovereign debt in March, the government pledged reforms and in May started talks with the IMF toward unlocking billions of dollars in aid. But 16 meetings later, the negotiations are stalling.

“The IMF has left the negotiating table and talks have stopped,” said a member of the Lebanese negotiating team speaking on condition of anonymity. Another Lebanese source familiar with the negotiations said IMF representatives have “not sensed serious commitment from the Lebanese delegation” toward reform. “Every faction is vying for its own personal interests while the country burns,” they said. Deadlock is common in multi-confessional Lebanon, where politicians have for decades been accused of cronyism, conflict of interest and corruption. As Lebanon seeks help from the IMF, arguments are mounting over the scale of total financial losses for the state, central bank and commercial banks. The government estimated losses at around 241 trillion Lebanese pounds, which amounts to about $69 billion at an exchange rate of 3,500 pounds to the greenback. But a parliamentary committee quoted much lower figures using the old currency peg of 1,507 pounds to the dollar. The IMF considers the government’s figures to be more likely. The discrepancy in the figures shows the great power and influence of a “lobby ready to see Lebanon burn rather than expose what they did to it,” the Lebanese negotiator said.

by By Sirwan Kajjo - voanews.com --  The Lebanese militant group Hezbollah is intensifying efforts to open a new border crossing between Lebanon and Syria, local sources and Arab media reported this week. The Iranian-backed Shiite group has been constructing an unofficial crossing along Lebanon’s eastern border with Syria, according to pan-Arab newspaper Asharq al-Awsat. Workers commissioned by Hezbollah have been working intensively in recent days to pave a road for the crossing, said a local source in Lebanon’s Bekaa Valley region. The source, who insisted on anonymity for fear of retribution from Hezbollah, told VOA that militants affiliated with Hezbollah have been using the route for years to transport fighters and weapons between the two countries, “but it looks like they want to prepare it for civilian use as well.”

Backed by Iran

Hezbollah has been a major actor in Syria’s civil war since 2012, siding with the government of President Bashar al-Assad. With support from Iran, the group has deployed thousands of fighters to Syria in recent years. A voice recording about the development was widely circulated on social media last week. In the clip, a Hezbollah commander purportedly said the construction of this border crossing “is a message to the enemies inside and outside [Lebanon that] soon convoys will pass through here.” VOA couldn’t independently verify the authenticity of the recording. Hezbollah officials have not made any public statements about these reports. Two pro-Hezbollah members of the Lebanese parliament did not respond to VOA's request for comment in time for publication. Jerry Maher, a Lebanese political analyst, said Hezbollah and its networks have long been using illegal routes for smuggling between Lebanon and Syria, but the opening of an “actual border crossing” would likely facilitate further activities by the militant group that violate international sanctions. “Hezbollah benefits from such activities by smuggling certain foodstuffs and medicine from Syria into Lebanon and selling them to its supporters [for] relatively cheap prices,” he told VOA.

by voanews.com -- Rachel Greenland -- WASHINGTON - With its economy continuing a downward spiral and protests reigniting, Lebanon’s crisis keeps growing and so are the warnings that the unrest could explode into a major regional crisis. Many of those warnings have come from the United States, which historically has committed large numbers of troops – including more than 200 who were killed in the 1980s when the U.S. intervened as part of a multi-national force to stop the country’s civil war. But Washington’s response this time has been limited, and analysts say that measured approach is rooted in U.S. fatigue in a region where it has a long history of unsuccessful ventures. “The invasion of Iraq did not go well, our involvement in Syria has not gone well, Afghanistan is still going on, so I think the government is tired of trying to deal with the problems there,” said Larry Korb, senior fellow at the Center for American Progress, a research organization in Washington. “This is really a problem that the international community has to deal with because of the fact [of] the devaluation of the currency, the high unemployment there.”

The U.S. has sought to bring positive change with actions such as stepping up sanctions on affiliates of the Iran-backed Hezbollah, urging Lebanon’s leaders to fix its economic problems, advising the disarmament of militias, and calling on Lebanon to end its involvement in Syria, according to Danielle Pletka, a Middle East analyst at the American Enterprise Institute in Washington. “But the United States, unfortunately, like Israel, like a lot of European countries, looks at Lebanon and just kind of throws its hands up. It’s just too much of a mess, and the effort that will be required to straighten it out is not proportional to the benefits anymore,” Pletka said. “That is a disaster not just for us, obviously, but (for) the Lebanese people.”

BY ANCHAL VOHRA -- foreignpolicy.com -- Beirut’s Little China restaurant is the city’s most prominent establishment that serves authentic Chinese food, and it’s a regular gathering place for people of Chinese origin. It also serves as a symbol of China’s marginal role in Lebanese life more generally. If Hassan Nasrallah, the chief of Hezbollah, has his way, that may soon change. Nasrallah recently declared in a televised speech that Lebanon must “look east” to China for its salvation at its present time of crisis. The implication was clear: Lebanon should not look to the International Monetary Fund. His Lebanese audience was left befuddled. The extent of crisis was evident—the country’s economy has nosedived, to calamitous effect, in recent weeks—but Lebanon, including some of its most reactionary conservatives, has always understood itself as an outpost of Western values and influence in the Middle East. But Nasrallah is not alone among Lebanese policymakers in believing the country may soon have no choice but to enter China’s political and economic orbit. If that happens, political analysts say, it could mark a new and uncertain chapter in the country’s history.

Lebanon’s economy is in shambles, threatening to join Zimbabwe or Venezuela as one of the world’s terminal economic disasters. Since October 2019, the Lebanese pound has lost 80 percent of its value and plummeted from its fixed exchange rate of 1,500 to the U.S. dollar to 8,000 last week on the black market. Salaries earned in the local currency have turned worthless as prices of basic commodities have tripled. Rises in food prices (including for bread) have hit the middle and lower classes especially hard, and electricity cuts have become regular occurrences. Some Lebanese have started resorting to barter, while the young and unemployed are increasingly opting for desperate measures to make a living. A 24-year-old graduate recently walked from shop to shop in a downtown Beirut market popular with expatriates to sell freshly squeezed orange juice. “Hi, will you support me, please,” he asked everyone plaintively. But Lebanon’s ruling elite continue to drag their feet on political and economic reforms meant to halt corruption and restructure indebted banks, measures necessary to procure a $10 billion bailout from the IMF. Two European diplomats told Foreign Policy that division between Lebanese political factions is the reason the IMF loan hasn’t yet come through. Last week, Alain Bifani, one of Lebanon’s top negotiators with the IMF, resigned from his senior position at the finance ministry and was quoted as saying he had reached a “dead end” with the political and financial elite. He said those with vested interests were obstructing the path to change, because any bailout envisioned a haircut of $3 billion on accounts held by the country’s most wealthy. Millions of Lebanese have been braving a de facto haircut since banks imposed capital controls in mid-November 2019 and refused to let them withdraw their money. A few days after Bifani’s resignation, talks with the IMF were suspended entirely.