USIP’s Elie Abouaoun explains how this rift impacts Lebanon’s ability to address its economic and political crises and how it can be resolved.

What kicked off this diplomatic row with Saudi Arabia and several other GCC countries?

The recent diplomatic crisis between Lebanon and Saudi Arabia, the UAE, Bahrain and Kuwait is just another reflection of the tense and problematic relationship that most of the Gulf countries have had with Beirut over the last 10 years — a tension that was not always visible to the public as it has been since 2016.

The direct cause of this crisis is a media statement by Lebanon’s current minister of information, George Kordahi, about the war in Yemen months before he was appointed to the current government of Prime Minister Mikati. While many in the media attributed GCC anger to Kordahi’s description of the Yemen war as “futile and pointless,” the fact that Kordahi said the Houthis were “defending themselves against an external aggression” is what both Saudi Arabia and the UAE consider as prejudicial to them, given the Houthis’ military attacks against Saudi Arabia and the support they receive from Iran. The next day, Kordahi exacerbated the situation by saying that Lebanon should not remain “prone to blackmailing,” alluding to an alleged request from the Saudis for him to resign.

This diplomatic row comes less than six months after former Lebanese Minister of Foreign Affairs Charbel Wehbeh’s impetuous statement in which he used derogatory terms to describe the Saudis. Although Wehbeh resigned immediately, many GCC countries are still convinced that Lebanon’s foreign policy is undermining the Gulf’s regional agenda, which looks at Iran as the primary threat. The distrust between Lebanon’s current legislative and executive bodies and some GCC countries is thus deeper than a mere statement by a Lebanese minister. It has to do with a profound disagreement about how to handle Iran’s influence in the Middle East.

Because these countries consider Lebanon’s executive and legislative powers to be fully under the control of Hezbollah, they have dropped their massive financial and political support for Lebanon in the form of grants, subsidized loans, long-term deposits in the Central Bank or through the job opportunities for hundreds of thousands of Lebanese economic migrants. This comes while Lebanon is facing what the World Bank has described as one of the worst economic crises in the world since 1850.

How does this dispute impact Lebanon’s economic and political crises?

If not contained, the crisis will have a significant impact on Lebanon’s collapsed economy and political fragility. According to the Lebanese Chamber of Commerce, Industry and Agriculture, Saudi Arabia and the UAE ranked second and third, respectively, as export destinations for Lebanese goods, despite a significant drop in the total trade value in 2020 and 2021.

It is estimated that around 400,000 Lebanese work in GCC countries and send almost 60 percent of Lebanon’s total remittances. In terms of imports, Lebanon might find alternative sources for the few items imported from the GCC countries. But this will incur additional cost — and delays — at a time when Lebanon’s economy and competitiveness are at a historic low point.

At the political level, the crisis will widen the gap between the Sunni and Shia leaderships in the country. Irrespective of political positioning, no prime minister (who is Sunni per Lebanon’s constitution) can afford to be adversarial with Saudi Arabia. Some have been closer to the Kingdom than others, but no one in the premiership can come out publicly against Saudi Arabia for fear of losing their political legitimacy as the most senior Sunni government official. The fact that this diplomatic crisis comes only few weeks after a brief round of sectarian violence in the streets of Beirut — albeit Christian-Shia violence — will further exacerbate the grievances against Hezbollah’s behavior in Lebanon and its instrumentalization of Lebanon’s politics.

Last but not least, the paralysis of the government and its potential resignation will likely halt efforts to build a consensus around a financial recovery plan that is long overdue and a prerequisite to negotiate a bailout plan with international donors.

How can the Lebanon-Gulf dispute be resolved? Is there a role for the United States?

Unlike in Wehbe’s case in which he resigned immediately, the first official reaction in Lebanon to GCC’s outrage was untactful and outside customary diplomatic practices. Such stand-offs often happen between countries but are resolved through quiet, constructive diplomatic engagement, not by provocative statements such as the one made by Kordahi in the aftermath of the GCC’s reaction. Given that this latest row is just the emerging part of a much bigger iceberg, it behooves Lebanon to address the root causes of the distrust with some its indispensable allies.

While Lebanon does not need to agree with every single GCC countries’ political or military action, it is in Beirut’s best interest to avoid endorsing political positions that are considered adversarial by these countries. The United States and France enjoy good relations with all involved parties and can therefore play a facilitation role. However, I believe that the GCC heavyweights will not respond positively to such a solicitation, even if it led by Washington, given the deep level of mistrust they have in Lebanon’s political class. We saw a similar attempt some months ago when the U.S and French ambassadors traveled to Riyadh to discuss — to no avail — how Saudi Arabia and other GCC countries can help Lebanon mitigate its unprecedented economic and financial crisis. There are no reasons to expect a different outcome this time.