Editor’s Note: A frequent contributor to Stimson on Middle East conflicts and diplomacy, Giorgio Cafiero has a particular expertise analyzing the foreign policies of Arab states in the Levant and bordering the Persian Gulf.
By Barbara Slavin, Distinguished Fellow, Middle East Perspectives
A visit by Lebanon’s new president Joseph Aoun earlier this month to Riyadh, where he met with Saudi Crown Prince and Prime Minister Mohammed bin Salman, was the first by a Lebanese head of state to the Saudi capital in eight years. For many Lebanese, the trip also represented a major effort to restore their country’s once-deep ties to wealthy Arab nations whose support is critical to Lebanon’s economic recovery.
Lebanon and the Gulf Cooperation Council (GCC) states have a rich history of mutually beneficial ties. Since the 1950s, highly skilled and educated Lebanese professionals migrated to the Persian Gulf, working in sectors such as business, health, hospitality, media, construction, and tourism. While sending back remittances to Lebanon, these Lebanese expatriates significantly contributed to the Gulf’s development.
Before the Lebanese civil war erupted in 1975, Lebanon was also a regional banking center where Gulf Arabs kept their money. Many bought vacation homes in Lebanon and spent summers there. Once a beacon of free speech in the Arab world, Lebanon was home to popular newspapers that gave platforms to influential Arab journalists and intellectuals who did not have the same opportunities in their own countries. The Gulf states, along with Libya and Iraq, invested in Beirut-based publishing houses and print media. Saudi Arabia and other GCC members provided Lebanon with external support in the form of loans, direct aid, and investments in other sectors from real estate to construction. Gulf monarchies also bankrolled reconstruction in Lebanon after the destructive Hezbollah-Israel war of 2006.
However, over time geopolitical, security, and ideological issues fueled major rifts between Lebanon and the GCC states. Hezbollah’s growing power in Lebanon, combined with poor fiscal and monetary policies and institutional mismanagement, led many Gulf Arab officials to view the Mediterranean country as a “lost cause.”
Most GCC states designated Hezbollah as a terrorist organization, concluding that further investments in Lebanon indirectly supported a group they viewed as a security threat. Then Secretary-General Hassan Nasrallah and other high-ranking Hezbollah figures had also alienated GCC leaders by using strong language to condemn Gulf states’ military intervention in Yemen and harsh crackdown on Bahraini activists amid the 2011 Arab Spring uprising while blaming Saudi Arabia for the rise of the radical Sunni Islamic State group and for suicide bombings in Iraq and Syria that targeted Shi’ite Muslims. Beyond rhetoric, Hezbollah’s direct on-the-ground support for the Houthis in Yemen further informed a GCC understanding of Hezbollah as a major threat. At various times, Gulf governments called on their citizens to leave Lebanon, recalled diplomats from Beirut, and banned Lebanese imports, while Lebanese Shi’ites were arrested in the United Arab Emirates for alleged links to Hezbollah.
Yet, now with new leadership in Beirut, Hezbollah weakened, and Syria’s Ba’athist regime overthrown, GCC states have begun to cautiously repair ties with Beirut.
For two years, Hezbollah had hindered the selection of a new president who was not aligned with the party, deadlocking parliament. On January 9, however, then-Army Chief Aoun, a choice favored by Western countries, was elected president, and Nawar Salam, previously head of the International Court of Justice, was chosen to be prime minister.
Prince Faisal bin Farhan visited the Lebanese capital on January 23, the first such trip by a Saudi foreign minister in 15 years. One day later, GCC Secretary-General Jasem Albudaiwi and Kuwaiti Foreign Minister Abdullah Al-Yahya were in Lebanon conveying messages of support to the leadership in Beirut and expressing their desire to see a restoration of GCC-Lebanon relations.
Aoun’s trip to Riyadh earlier this month was the Lebanese president’s first trip abroad since taking office. While Aoun was in the Kingdom, the two governments announced that Riyadh would review “obstacles” to lifting a ban on Saudi nationals visiting Lebanon and resuming Lebanese imports to Saudi Arabia. In April 2021, Saudi authorities suspended the import of fruits and vegetables from Lebanon, accusing Beirut of failing to take action to prevent drug smuggling into Saudi Arabia through such shipments. Aoun also recently stated that he seeks a resumption of Saudi military aid to Beirut, which Riyadh halted in 2016 due to Hezbollah’s power in Lebanon.
Obstacles to the full restoration of Lebanon-GCC relations remain significant, however.
In general, Gulf Arab states would like to see major economic and banking reforms in Lebanon and a disarmament of Hezbollah before making major investments in the country. But ruling elites would likely resist such reforms, and it is not easy to imagine Hezbollah disarming despite pressure intensifying on the party to do so. As much as developments such as the Israeli assassination of Nasrallah and other top leaders have weakened Hezbollah, the Shi’ite organization retains popularity among large segments of Lebanese society as well as in other Arab-Islamic countries. Nasrallah’s funeral, held in Beirut on February 23, demonstrated continued support for Hezbollah. Information International, a Lebanese polling institute, reported that 700,000-900,000 people attended, among them many Iranians, Iraqis, Tunisians, and Yemenis.
Major shifts in Lebanon and the region — especially the loss of a reliable land route for arms resupply since the overthrow of the Assad regime in Syria in December — have created more difficulties for the organization. But with a U.S. and French-brokered cease-fire proving shaky and Israel continuing to occupy strategic hilltop positions in southern Lebanon, Hezbollah’s resistance ideology will likely remain popular among significant portions of Lebanese society.
Nonetheless, the Gulf Arab monarchies as well as Hezbollah may seek to strike some delicate balances in the next few months. GCC members want to see a strengthening of the Lebanese state and stability across the country. If Gulf money remains contingent on Hezbollah disarmament, the Aoun-Nawaf duo’s political standing may weaken, increasing the risk of instability in Lebanon—an outcome that the GCC states seek to avoid.
Likewise, with many Shi’ite parts of Lebanon destroyed from the war with Israel that erupted after Hezbollah began rocketing the Israeli-occupied Shebaa Farms and later northern Israel in solidarity with Hamas, Hezbollah and another key Lebanese Shi’ite party, Amal, understand that a lack of Gulf money could worsen Lebanon’s economic problems and cost both parties support from their traditional constituents.
As a possible compromise, the Saudis and others in the Gulf could agree to provide limited support to Lebanon after some economic/banking reforms are implemented, even if Hezbollah has not disarmed. Yet, GCC states will want to see that the entities that receive money for reconstructing war-ravaged villages in the south, the southern suburbs of Beirut, and the Bekaa Valley are not associated with Hezbollah.
While GCC states have far fewer vested interests in Lebanon today compared to decades ago, Lebanon remains part of the Levantine puzzle where Saudi Arabia and other Gulf monarchies seek to roll back influence from Iran, Hezbollah’s chief external supporter. The weakening of Hezbollah and the rest of the Iran-backed Axis of Resistance since the Hamas-led attack on southern Israel on Oct. 7, 2023, provides GCC members with a unique chance to reintegrate Lebanon into the Arab world with Gulf Arab states gaining greater influence in Beirut at Tehran’s expense.
There is also a Turkish factor. For now, the Saudis are working with Turkey in post-Ba’athist Syria, with Riyadh and Ankara’s interests appearing to align. However, they might begin competing especially if the Saudi leadership suspects a “neo-Ottoman” agenda on Turkey’s part. Therefore, it is possible that Riyadh will see Lebanon as a country where Saudi Arabia and other Arab states can assert themselves in part to balance Turkish clout in Syria.
While much of Lebanese society is hoping for money from GCC states to alleviate Lebanon’s serious financial problems, they are not looking to simply replace Iran with Saudi Arabia as a dominant outside actor that gives Beirut orders. At the same time, without major reforms, the Gulf states might think new investments in Lebanon would amount to throwing money away in a country where Hezbollah remains outside the state’s control and Iranian influence is still perceived as a security threat. Thus, expectations for a reversal of Lebanon’s fortunes remain tempered for now.
Giorgio Cafiero is the CEO of Gulf State Analytics, a Washington, DC-based geopolitical risk consultancy, and an adjunct assistant professor at Georgetown University.
Will Gulf States Invest in Lebanon Again Amid Hezbollah’s Decline?
By Giorgio Cafiero
Middle East & North Africa
Editor’s Note: A frequent contributor to Stimson on Middle East conflicts and diplomacy, Giorgio Cafiero has a particular expertise analyzing the foreign policies of Arab states in the Levant and bordering the Persian Gulf.
By Barbara Slavin, Distinguished Fellow, Middle East Perspectives
A visit by Lebanon’s new president Joseph Aoun earlier this month to Riyadh, where he met with Saudi Crown Prince and Prime Minister Mohammed bin Salman, was the first by a Lebanese head of state to the Saudi capital in eight years. For many Lebanese, the trip also represented a major effort to restore their country’s once-deep ties to wealthy Arab nations whose support is critical to Lebanon’s economic recovery.
Lebanon and the Gulf Cooperation Council (GCC) states have a rich history of mutually beneficial ties. Since the 1950s, highly skilled and educated Lebanese professionals migrated to the Persian Gulf, working in sectors such as business, health, hospitality, media, construction, and tourism. While sending back remittances to Lebanon, these Lebanese expatriates significantly contributed to the Gulf’s development.
Before the Lebanese civil war erupted in 1975, Lebanon was also a regional banking center where Gulf Arabs kept their money. Many bought vacation homes in Lebanon and spent summers there. Once a beacon of free speech in the Arab world, Lebanon was home to popular newspapers that gave platforms to influential Arab journalists and intellectuals who did not have the same opportunities in their own countries. The Gulf states, along with Libya and Iraq, invested in Beirut-based publishing houses and print media. Saudi Arabia and other GCC members provided Lebanon with external support in the form of loans, direct aid, and investments in other sectors from real estate to construction. Gulf monarchies also bankrolled reconstruction in Lebanon after the destructive Hezbollah-Israel war of 2006.
However, over time geopolitical, security, and ideological issues fueled major rifts between Lebanon and the GCC states. Hezbollah’s growing power in Lebanon, combined with poor fiscal and monetary policies and institutional mismanagement, led many Gulf Arab officials to view the Mediterranean country as a “lost cause.”
Most GCC states designated Hezbollah as a terrorist organization, concluding that further investments in Lebanon indirectly supported a group they viewed as a security threat. Then Secretary-General Hassan Nasrallah and other high-ranking Hezbollah figures had also alienated GCC leaders by using strong language to condemn Gulf states’ military intervention in Yemen and harsh crackdown on Bahraini activists amid the 2011 Arab Spring uprising while blaming Saudi Arabia for the rise of the radical Sunni Islamic State group and for suicide bombings in Iraq and Syria that targeted Shi’ite Muslims. Beyond rhetoric, Hezbollah’s direct on-the-ground support for the Houthis in Yemen further informed a GCC understanding of Hezbollah as a major threat. At various times, Gulf governments called on their citizens to leave Lebanon, recalled diplomats from Beirut, and banned Lebanese imports, while Lebanese Shi’ites were arrested in the United Arab Emirates for alleged links to Hezbollah.
Yet, now with new leadership in Beirut, Hezbollah weakened, and Syria’s Ba’athist regime overthrown, GCC states have begun to cautiously repair ties with Beirut.
For two years, Hezbollah had hindered the selection of a new president who was not aligned with the party, deadlocking parliament. On January 9, however, then-Army Chief Aoun, a choice favored by Western countries, was elected president, and Nawar Salam, previously head of the International Court of Justice, was chosen to be prime minister.
Prince Faisal bin Farhan visited the Lebanese capital on January 23, the first such trip by a Saudi foreign minister in 15 years. One day later, GCC Secretary-General Jasem Albudaiwi and Kuwaiti Foreign Minister Abdullah Al-Yahya were in Lebanon conveying messages of support to the leadership in Beirut and expressing their desire to see a restoration of GCC-Lebanon relations.
Aoun’s trip to Riyadh earlier this month was the Lebanese president’s first trip abroad since taking office. While Aoun was in the Kingdom, the two governments announced that Riyadh would review “obstacles” to lifting a ban on Saudi nationals visiting Lebanon and resuming Lebanese imports to Saudi Arabia. In April 2021, Saudi authorities suspended the import of fruits and vegetables from Lebanon, accusing Beirut of failing to take action to prevent drug smuggling into Saudi Arabia through such shipments. Aoun also recently stated that he seeks a resumption of Saudi military aid to Beirut, which Riyadh halted in 2016 due to Hezbollah’s power in Lebanon.
Obstacles to the full restoration of Lebanon-GCC relations remain significant, however.
In general, Gulf Arab states would like to see major economic and banking reforms in Lebanon and a disarmament of Hezbollah before making major investments in the country. But ruling elites would likely resist such reforms, and it is not easy to imagine Hezbollah disarming despite pressure intensifying on the party to do so. As much as developments such as the Israeli assassination of Nasrallah and other top leaders have weakened Hezbollah, the Shi’ite organization retains popularity among large segments of Lebanese society as well as in other Arab-Islamic countries. Nasrallah’s funeral, held in Beirut on February 23, demonstrated continued support for Hezbollah. Information International, a Lebanese polling institute, reported that 700,000-900,000 people attended, among them many Iranians, Iraqis, Tunisians, and Yemenis.
Major shifts in Lebanon and the region — especially the loss of a reliable land route for arms resupply since the overthrow of the Assad regime in Syria in December — have created more difficulties for the organization. But with a U.S. and French-brokered cease-fire proving shaky and Israel continuing to occupy strategic hilltop positions in southern Lebanon, Hezbollah’s resistance ideology will likely remain popular among significant portions of Lebanese society.
Nonetheless, the Gulf Arab monarchies as well as Hezbollah may seek to strike some delicate balances in the next few months. GCC members want to see a strengthening of the Lebanese state and stability across the country. If Gulf money remains contingent on Hezbollah disarmament, the Aoun-Nawaf duo’s political standing may weaken, increasing the risk of instability in Lebanon—an outcome that the GCC states seek to avoid.
Likewise, with many Shi’ite parts of Lebanon destroyed from the war with Israel that erupted after Hezbollah began rocketing the Israeli-occupied Shebaa Farms and later northern Israel in solidarity with Hamas, Hezbollah and another key Lebanese Shi’ite party, Amal, understand that a lack of Gulf money could worsen Lebanon’s economic problems and cost both parties support from their traditional constituents.
As a possible compromise, the Saudis and others in the Gulf could agree to provide limited support to Lebanon after some economic/banking reforms are implemented, even if Hezbollah has not disarmed. Yet, GCC states will want to see that the entities that receive money for reconstructing war-ravaged villages in the south, the southern suburbs of Beirut, and the Bekaa Valley are not associated with Hezbollah.
While GCC states have far fewer vested interests in Lebanon today compared to decades ago, Lebanon remains part of the Levantine puzzle where Saudi Arabia and other Gulf monarchies seek to roll back influence from Iran, Hezbollah’s chief external supporter. The weakening of Hezbollah and the rest of the Iran-backed Axis of Resistance since the Hamas-led attack on southern Israel on Oct. 7, 2023, provides GCC members with a unique chance to reintegrate Lebanon into the Arab world with Gulf Arab states gaining greater influence in Beirut at Tehran’s expense.
There is also a Turkish factor. For now, the Saudis are working with Turkey in post-Ba’athist Syria, with Riyadh and Ankara’s interests appearing to align. However, they might begin competing especially if the Saudi leadership suspects a “neo-Ottoman” agenda on Turkey’s part. Therefore, it is possible that Riyadh will see Lebanon as a country where Saudi Arabia and other Arab states can assert themselves in part to balance Turkish clout in Syria.
While much of Lebanese society is hoping for money from GCC states to alleviate Lebanon’s serious financial problems, they are not looking to simply replace Iran with Saudi Arabia as a dominant outside actor that gives Beirut orders. At the same time, without major reforms, the Gulf states might think new investments in Lebanon would amount to throwing money away in a country where Hezbollah remains outside the state’s control and Iranian influence is still perceived as a security threat. Thus, expectations for a reversal of Lebanon’s fortunes remain tempered for now.
Giorgio Cafiero is the CEO of Gulf State Analytics, a Washington, DC-based geopolitical risk consultancy, and an adjunct assistant professor at Georgetown University.
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