How US stance on Iran could raise price of peace in Lebanon

In marked contrast to the past decade of political deadlock, sectarian strife, and occasional bouts of bloodshed, this tiny eastern Mediterranean country bordering Syria and Israel is enjoying a period of relative stability.

The newfound calm is largely down to the triumph of the powerful Shiite organization Hezbollah and its allies in overcoming their parliamentary opponents in an 11-year power struggle and cementing that win in parliamentary polls in May. Hezbollah performed well in the elections, and, with its allies, now holds a small majority in the 128-seat parliament.

Its parliamentary rival, a coalition backed by the United States and Saudi Arabia, has meanwhile unraveled, leaving its leaders to cut their own deals to ensure continued political relevance.

But while haggling over ministerial appointments for a new government continues, new challenges are looming, as in Washington, President Trump’s administration mulls what it considers the unpalatable reality of a Lebanon dominated by the Iran-backed Hezbollah. Already Lebanon’s important banking sector, fearing US financial sanctions, is sounding the alarm about what could amount to a heavy price that Lebanon would pay for its domestic peace.

Even so, US influence in the region appears to be diminishing while Russia, which along with Iran has backed the winning side in the protracted bloody conflict in next-door Syria, is ascendant, even in Lebanon.

The US once supported efforts by Lebanon’s Western-backed, so-called March 14 coalition to push back against Hezbollah, and it continues to maintain a military assistance program that has seen more than $1.7 billion delivered to the Lebanese Army since 2006. But in the months ahead, the Trump administration’s anti-Iran agenda and the likelihood of additional financial measures against Hezbollah could call that support into question.

“The US government is a vast multi-centered organization and within it there’s a wide variety of opinions on Lebanon,” says Paul Salem, senior vice president for policy research and programs at the Washington-based Middle East Institute. “Much rests on the formation of [Lebanon’s new] government. If Hezbollah has a big share, that could be a red flag for Congress and might affect the issue of funding [for the Lebanese Army]. It doesn’t mean that the relationship would end, but it could reduce some of the funding and equipment.”

Diplomatic and political sources in Beirut say the US has signaled to Lebanese Prime Minister-designate Saad Hariri that Washington would not view with favor a heightened Hezbollah presence in the next government. Hezbollah presently has two ministers holding relatively minor portfolios in the caretaker government. The Iran-backed party is believed to be seeking a deeper role in the next government, including a “services” ministry, such as health, to reflect its success in the parliamentary elections.

Pivot to Russia?

However, Mr. Hariri has a limited ability to deny Hezbollah’s goals in fulfilment of Washington’s cautioning. Despite more than a decade of bitter opposition to the militarily powerful Hezbollah, Hariri agreed in November 2016 to endorse Hezbollah’s candidate for president, ending a two-and-a-half year impasse that had undermined the economy and paralyzed state institutions. In return for succumbing to Hezbollah’s will, Hariri was appointed prime minister.

Michael Young, a leading Lebanese political analyst and senior editor at the Carnegie Middle East Center in Beirut, says he would not be surprised if the “tide is shifting” in Washington’s attitude toward Lebanon, but notes the constraints facing Lebanon’s leaders because of Hezbollah’s dominance.

“It’s easy [for the US] to say ‘do this,’ or ‘don’t do that’ regarding Hezbollah. But Hezbollah is a major player in the state and it would be very difficult for the Lebanese to implement anything on that front,” he says.

Furthermore, Hariri has been showing more interest lately in developing relations with Russia, says a political source in Beirut close to the prime minister-designate’s thinking.

Russia has seen its influence in the region soar since 2015 when it intervened in Syria’s brutal war to prop up the then ailing regime of President Bashar al-Assad. Moscow, today, is the locus of Middle East diplomatic and political maneuverings with top officials from Israel, Iran, and Turkey making frequent visits to win support for their respective – and rival – agendas in Syria.

“Hariri believes that Russia is the only party that can moderate Iran and Hezbollah’s behavior. His basic premise is that he is not going to be the spearhead of American opposition to Iran,” the political source said.

Last year, Russia floated a $1 billion credit line with favorable repayment terms for the Lebanese government to purchase Russian arms and equipment for the Lebanese Army, an offer that drew warnings from the US and Britain that their respective military assistance programs to Lebanon could be jeopardized if Beirut accepted the deal.

While the arms package appears to be off the table for now, it was one of several indicators that Russia could be looking to expand its influence from Syria into Lebanon at the expense of the US. And that could further harden Washington’s attitude toward Beirut.

Cost of coordinating with Hezbollah

“Sympathy for Lebanon in Washington has diminished, in my view, due in part to the election results and Hezbollah’s growing power,” says Elliott Abrams, senior fellow for Middle Eastern studies at the Council for Foreign Relations in Washington.

Abrams has been critical of the military assistance program to Lebanon because of the persistent allegations that the Lebanese Army cooperates too closely with Hezbollah, designated a terrorist organization by the US.

“I do not favor cutting off aid to the LAF, but I favor reducing and strongly conditioning it,” he says, using the acronym for the Lebanese Army. “The message to the LAF and the government should be clear: Every form of coordination with Hezbollah and of Hezbollah influence is noticed and will have a cost. If the LAF meets the tests, it should get all the aid.”

The Lebanese banking sector, the most vibrant economic sector in Lebanon, is in the gunsights of the Treasury Department, which has spent years attempting to locate and sever sources of funding for Hezbollah. New anti-Hezbollah legislation due to be adopted shortly will impose additional measures on the organization and raise further concerns in Beirut of a financial backlash.

“Lebanon’s mix of civilian and military leaders don’t appear to always gauge the stakes or fully appreciate that this administration is actively weighing its relationship with Beirut,” says Aram Nerguizian, co-director of the Program on Civil-Military Relations in Arab States at the Carnegie Middle East Center in Beirut.

“Lebanon’s banking sector is regularly sounding the alarm bell, and Lebanese politicians and leaders need to understand that a larger and multi-faceted crisis of confidence in Lebanon is quite real,” Mr. Nerguizian says.

“Be that as it may, the Trump administration must also understand that damaging Lebanon’s banking sector and demoralizing the LAF will go a great distance to making Lebanon a failed state, and do far more to strengthen, rather than weaken, Hezbollah.”