BEIRUT, Lebanon (August 14, 2020) — In the wake of the devastating, deadly explosion in Beirut, the Trump administration just announced it will be dealing another blow to the people of Lebanon: economic sanctions. Haven’t the people of Lebanon suffered enough? This is why we are demanding Secretary of the Treasury Steve Mnuchin rescind the threat of sanctions and stop meddling in Lebanon!
On August 15, Jodie Evans spoke with Lebanese actress and activist Sarah Himadeh, who is on the ground in Beirut right now. They discussed how we can support Beirut and build a local peace economy.
As the people of Lebanon attempt to begin rebuilding their government and cherished capital city, Beirut, they need support and cooperation from the rest of the world. Instead, the US has decided to sanction against prominent Lebanese politicians and business figures, purportedly in an effort to drive a wedge between Hezbollah and its allies. But we know that economic sanctions always end up harming innocent people the most.
This wave of sanctions has the potential to be even more harmful than most. The Trump administration is being quite transparent about its goal of shaping the newly formed Lebanese government. If it succeeds, the people of Lebanon could be stuck with a government that works to serve US interests for years to come.
Any way you slice it, sanctions kill. It is cruel for the Trump administration to impose them on Lebanon at a time when the country is already suffering so deeply.
We Implore You: Solidarity, not Sanctions, with Lebanon
Dear Secretary of the Treasury Steve Mnuchin,
We, the undersigned, write to you out of deep concern for and solidarity with the people of Lebanon. Please, rescind your decision to sanction prominent Lebanese politicians and business figures. By sanctioning the country at this critical and turbulent time in its history, you are putting the Lebanese people at risk of severe economic devastation and political vulnerability, and empowering the corrupt leaders that the Lebanese people want out. The effects of US sanctions will be felt for generations.
Lebanon is clearly experiencing a period of great stress and chaos, and sanctions at this time will be especially harmful. In the wake of the devastating explosion in Beirut, and in the midst of extreme change in the government, the people of Lebanon need support and relief — not even more stress and interference from a foreign government.
Sanctions always do the most harm to ordinary, innocent citizens. By imposing them on Lebanon now, you will simply be adding to the pain and loss the country has already experienced in recent days. The call from the Lebanese people is clear: all armed militias should be abolished! But, the US, with its endless warmongering, is in no position to act as an agent of change in Lebanon or anywhere else. Rather than helping, US sanctions will empower the militias and further entrench the corruption that people have been protesting for more than the past year.
In the time of a global pandemic that continues to reveal we are all in this together, the United States has a responsibility to uplift our neighbors and protect their independence. With sanctions, you will be doing the exact opposite. We implore you to do what will truly help the people of Lebanon and not move forward with sanctions at this time.
From Cuba to Venezuela to Iran: we will never stop fighting for an end to brutal and destructive sanctions. Now, it is time to fight for Lebanon.
Ariel, Ann, Angela, Carley, Caty, Cody, Danaka, Eli, Emily, Izzy, Jodie, Kelsey, Leila, Leonardo, Maxine, Mary, Medea, Michelle, Nancy, Paki, Teri, and Yousef
P.S.Here is the video of the 45-minute converstion plus other actions and webinars from last week.
US Sanctions Are Strangling a Lebanon in Crisis
(August 14, 2020) — The Lebanese economy crashed into the equivalent of a brick wall sometime in the last few months of 2019. The Lebanese pound (or lira), which was pegged to the dollar and appeared to be stable for well over two decades, started to decline at a rate that threatened the complete collapse of the economy. In the meantime, the Trump administration had been busy building a “Great Wall” of sanctions around Lebanon, even as the country as a whole was drowning in a mountain of debt.
The first to be impacted was the powerful financial sector — the crown jewel of the Lebanese economy — which effectively shut down, fearing a run on the banks by panicked depositors seeking to withdraw their life savings, a large bulk of which was in US dollars. Thousands of businesses closed down, laying off hundreds of thousands of workers. Shortages of essential items like fuel and wheat led to long lines at bakeries and gas stations, as the majority of households (around 60%, by some estimates) fell below the poverty line.
The dysfunctional and crisis-ridden Lebanese state was completely incapable of coping with the crisis. By that time, Lebanon was deeply indebted to international lenders and local banks to the tune of $80-plus billion (one of the highest debt-to-GDP ratios in the world), most of which was supposedly spent on reconstruction after a 15-year civil war that completely devastated the country’s infrastructure and economy. In fact, much of that money was either outright stolen by politicians or terribly mismanaged.
As Lebanon faces multiple, overlapping catastrophes, US policies are making them worse.
Lebanon’s electrical power sector is perhaps the most obvious example of the level of corruption and negligence that marked the post-war reconstruction period. A full 30 years after the civil war ended in 1990, Lebanon still suffers from daily blackouts of up to 16 hours in most areas. Even with this extreme rationing of electricity, it still costs the government nearly $2 billion every year to cover a shortfall in the power bill.
The most immediate causes of the current crisis began to appear around 2016, when perennial head of the Lebanese central bank, Riad Salameh, a powerful figure backed by Washington, began what he called “financial engineering” measures to increase the central bank’s hard currency reserves. Since his appointment in 1993, after having worked for Merrill Lynch, Salameh’s prime directive has been to maintain the lira peg to the dollar at all costs.
But by the late 2010s, Lebanon was already a country of runaway consumption, importing roughly $20 billion and exporting approximately $3 billion. To cover such a huge trade deficit and pay off the ballooning foreign debt, while also maintaining a stable lira, Salameh offered high interest rates to attract billions of dollars to Lebanon’s banks.
Already, Lebanon enjoyed several significant streams of hard currency that helped Salameh in his herculean task. The largest of these was remittances from Lebanese working abroad, mainly in the Gulf and West Africa, who sent home around $8 billion annually (not counting what is estimated to be an equivalent amount that came into the country by other means). Billions more came from exports, tourism, international aid and loans, and Arab — particularly Syrian — capital deposited in Lebanese banks.
In 2016, due to a variety of reasons, the flow of hard currency started to dry up at a frightening pace, prompting the central bank’s “financial engineering” measures. This only had the effect of kicking the problem down the road in the hope that the coming years will bring about some sort of reprieve. Instead, the country’s economy continued to deteriorate, and pressure on the lira intensified, until the inevitable reckoning arrived in the final months of 2019.
US pressure, in the form of a wide array of sanctions and increased scrutiny of Lebanon’s financial system, was one decisive factor that made many Lebanese abroad — and any foreign investor, for that matter — think twice about sending money home or depositing it in Lebanese banks. Washington claimed that the Lebanese resistance party Hezbollah and the Syrian régime, both under US sanctions, were using Lebanese banks to launder money or funnel dollars from abroad to fund their activities.
Given that Lebanon’s financial system is heavily dollarized (75% of bank deposits are in US dollars), Washington’s influence over the sector is near total. In just one example, two well-established financial institutions sanctioned by the US Treasury Department — the Lebanese Canadian Bank (accused of laundering drug money for Hezbollah in 2011) and Jammal Trust Bank (alleged to have facilitated the financing of Hezbolah in 2019) — were liquidated without hesitation by the central bank, and without the slightest protest from Lebanese officials.
Sanctions against Hezbollah and Syria have been around in one form or another for decades, but the Trump administration has taken them to new heights. Since launching its “maximum pressure” campaign against Iran in 2018, the administration has unleashed a relentless barrage of wide-ranging and crippling sanctions against Tehran’s allies in Iraq, Syria and Lebanon.
Iran and Syria, with their relatively closed and largely state-run economies, are better able to cope with sanctions than a laissez-faire country like Lebanon that is integrally tied to Western capital.
When Salameh’s sacred peg finally fell and the lira began its descent, popular protests against corruption and mismanagement broke out across the country on October 17 of last year. Washington and its local allies could smell blood in the water, and immediately set about to direct people’s anger against Hezbollah by portraying the group as being responsible for the dismal state of the economy.
Alongside this strategy, the Trump administration sought to tighten the economic noose further by making negotiations with the International Monetary Fund (IMF) the only option for the government to receive any kind of relief, on the condition of course that “reforms” must first be implemented.
No one questions the need for deep and structural change in the Lebanese economy, but the IMF’s usual fare of austerity and privatization has often resulted in countries falling deeper into a cycle of debt and dependency, while increasing the risk of further social discontent.
Ironically, it took the “nuclear” explosion in Beirut’s port on August 4 to open up some cracks in the siege that Washington has been busy weaving over the last few years.
The blast exploded over 2,000 tons of ammonium nitrate stored in Beirut’s busy port for several years, killing and injuring thousands and laying waste to several nearby neighborhoods. The sanctions régime was already beginning to bite, not in bringing Hezbollah or the Syrian régime to their knees, nor in inciting revolts against them, but in driving ordinary Lebanese to economic destitution.
US economic sanctions, no matter how “smart” Washington claims them to be, have rarely — if ever — brought down the targeted régime or group. In most recent cases, they have had the opposite effect of strengthening the hand of the state by impoverishing the population and making it more dependent on government support and assistance.
One only has to look at the 13-year international economic blockade against Iraq after Saddam Hussein invaded Kuwait in 1990. All studies of its impact on the Iraqi population show a deterioration in just about every quality-of-life indicator, including increasing rates of malnutrition. In the end, it took a costly and devastating US military invasion and occupation of Iraq to finally topple Saddam Hussein.
The US stands at a crossroads on how it wants to deal with Lebanon. The coming days will reveal how far Washington wants to take the confrontation with Hezbollah, and at what cost to the rest of Lebanese society.
To date, the sanctions have done little to weaken the Lebanese resistance — politically as well as militarily. The question is, especially after the near-apocalyptic scene around Beirut’s port: Can the rest of the country withstand America’s siege?
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