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Lebanon in a new regional order

The uncertain fate of Beirut and its wounded port

by Khalil Toubia

The Middle East and the Mediterranean are going through great changes that are redefining the region. The countries of the Southern shore of the Mediterranean (Algeria, Tunisia, Libya) are experiencing major transformation with the fall of the old military regimes and the attempts to establish new governance. The countries of the Eastern Mediterranean, Syria, and Lebanon are undergoing a change characterized by instability. In Iraq, administrative divisions on the basis of community sensitivities weaken the country’s security. The countries around the Red Sea, for their part, are experiencing a strong imbalance, whether it is Yemen, Sudan, Eritrea, or Djibouti.

Throughout the region, the US presidential elections were seen as a deadline. President Trump’s mandate was marked by a series of blows that began with a strengthening of the American alliance with Saudi Arabia (May 2017), then by the recognition of Jerusalem as the capital of Israel (December 2017), and then the withdrawal of the United States from the nuclear deal with Iran (May 2018), the meeting with the leader of North Korea (June 2019) and the new trade agreement with China (January 2020). The latest peace agreement concluded between the United Arab Emirates and Israel (August 2020) marks a turning point in the regional conflict.

We are at the heart of a major turntable in the history of the region. One hundred years after the Treaty of Sèvres (August 10, 1920), which sought to give the Arab populations the possibility of independence from the Ottoman Empire, the region seems to be heading towards a new regional order. All of these developments lead us today to reflect on the political choices to be adopted, as four projects are emerging in the region. Each of these political projects involves the imposition of its own economic and social model.

The first of these projects involves the emergence of a new Arab World aligned with the international community. The second consists of the Russian Minority Alliance Project, which uses the Orthodox Church as leverage, and which claims to be able to provide protection to Christians in the East. The Wiliayat al Fakih of the Tehran – Baghdad – Damascus – Beirut axis makes up the third project. And the fourth and final project concerns Sunni political Islam, supported by Turkey and Qatar.

Cut off from its port since the August 4 explosion, Beirut is losing a vital organ around which the city had organized and developed. In addition, the geopolitical developments that occur with this explosion are causing the capital to lose its strategic importance and its primordial function as a hub between the West and the East.

Beirut: born around its port

The Port of Beirut has been a lever for Beirut and the Lebanese economy. Currently, it represents a transshipment hub for major global carriers, including CMA-CGM. The importance of the Port of Beirut and the services developed in its city are the result of an accumulation of skills acquired over decades.

Around 1830, Mohamad Ali, the new ruler in Egypt, arrived at the gates of Constantinopolis. His son, Ibrahim Pasha, occupied Beirut and decided to move the administrative capital from Saida to Beirut. He developed the port of Beirut and built warehouses, established customs, erected the quarantine hospital building, as well as a souk. Attracted to Beirut, the foreign consuls left Saida to settle in the new metropolitan area.

Later, due to growing French influence in the region, and some time before the start of work on the Suez Canal in 1859, Count Edmond de Perthuis obtained the concession of the right to build and operate a road from Beirut to Damascus (1856). The boom in the city of Beirut pushed the various religious congregations to open schools in the capital and to establish a state-of-the-art education system, the two main educational centers being the Syrian Protestant College, now known as the American University of Beirut (AUB) in 1866, followed by Université Saint Joseph (USJ) in 1875. Infrastructure works were then financed and carried out by companies with European capitals, mainly French. Foreign investments in Beirut led to the creation of the Wilaya (state or province) of Beirut in 1888. Beirut thus gained in independence and prosperity. The Régie des Tabacs was granted in concession in 1883, the Compagnie du Port des Quais et des Entrepôts de Beyrouth was created in 1888 then built the ferry terminal, terminus of the Beirut and Damascus railway lines in 1897. This line would have a dual commercial and touristic function since it was used to transport pilgrims to Mecca. Beirut continued to develop with the Company of Tramways and Lighting (1894). With the inauguration of the modern Port of Beirut in 1895, life was organized in the city around this hub. The Ottoman Bank, the Orosdi-Back Department Store, the Khan Antoun Bey Square, the Police Center, and several hotels were established there. Customs warehouses were opened in the port area, as well as a main post office which housed French, English, Russian, Austrian, German, and Italian posts, ensuring direct correspondence with these countries and greatly facilitating trade. This postal service would soon far exceed that of the Ottoman Post, suffering from incompetence. The city of Beirut and its port acquired a quality know-how, which gave them a certain advantage, defying all competition.

The success of the Port of Beirut was an example for other cities with access to the sea and wishing to develop. This would be the case for the Moutassarifate regime (1861 – 1915) which aspired to projects of the same scope in Jounieh. Also, to counter this momentum, the Port of Beirut Company was granted the exclusive right to build and operate other seaports all along the coast.

Following the country’s independence gained in 1943 and the consequences of the events of 1958 in Lebanon, a new governance and a new compromise between the two currents of the time (pro Pact of Baghdad against Pro-Nasserism) was established. During his mandate, President Fouad Chehab (1958 – 1964) developed a Lebanese land-use planning with Father Lebret, the Institut de Recherche et de Formation en vue du Développement (IRFED) plan, according to the country’s capacities, its resources and regional constraints. And given that the city of Beirut, administratively speaking, was becoming crowded, he developed with Michel Ecochard, a master plan for Beirut and its suburbs. In 1960, the management of the Port of Beirut was granted for 30 years to a Lebanese company, the privately-owned Company of Management and Exploitation of the Port of Beirut.

Since the end of the company’s operating rights, the state has been responsible for the management of the port. In 1992, the Damascus-Tehran axis strongly opposed the very strong vision of Prime Minister Rafic Hariri, characterized by the reconstruction of Beirut around the Port, the Airport and the City Center. Any action to open up and develop Lebanon would be strongly reprimanded throughout the post-Taif period by both the Syrian regime and that of Iran. As a result, the role of the Port of Beirut could not be recovered without regaining sovereignty.

From a city limited to less than 1 km² in 1840, to the administrative city of Beirut now covering an area of ​​20 km², the Lebanese capital today tends to expand to cover a larger area, mainly along the Lebanese coast. The economic value of this 240 km-long coastline makes it possible to organize and plan the element of “power” that Lebanon could play. There was a time when Lebanon succeeded in being a pivotal space, thanks to its double opening, on the one hand to the Arab countries, and on the other hand to the countries of the Mediterranean, through the development of other coastal cities from Tripoli to Jounieh and Saida, which linked Iraq but also the Gulf countries with the Mediterranean, thanks in particular to the road to Damascus, the railway line, but also to oil pipelines such as Tapline or IPC. As an example, the Lebanese coast can be compared to the coast of the region of Liguria (Genoa) in Italy (214 km). Liguria is the third smallest region in Italy, 5.421 km², but is also the third most populated region with 300 inhabitants/km². Montenegro, 13.812 km², is administratively subdivided into three regions, the coastal region, 293 km long, the central region, and the northern region. The development of the 240 km of the Lebanese coast represents a single economic unit that could be a considerable competitive advantage for the country.

A hub between East and West

Geopolitical realities will have an impact on the development of the Port of Beirut and the city. In fact, four realities should be noted: The Suez Canal project which cuts the route to India from the British, the Franco-British competition under the 1920 mandate, the boycott by the Arab States of the State of Israel since 1948, and the substitution of the Lebanese state by militias since the signing of the Cairo agreements in 1969.

Napoleon Bonaparte, who wanted to cut the British route to India, led the Egyptian campaign (1798 – 1801). The opening of the Suez Canal in 1869, and the influence that France gained over the eastern Mediterranean, dealt a heavy blow to the British navy, which saw its maritime route modified. With the French mandate in Lebanon and Syria that began in 1920, and despite new governance having been put in place and new geopolitical issues being underway, competition with the British persisted. The Haifa-Baghdad axis was controlled by the British. The capacity of the Port of Haifa was twice that of the Port of Beirut. The construction of a railway line between the Port of Haifa and Amman was also planned. The Iraq Petroleum Company (IPC) pipeline from the Mosul oil fields was supposed to end in the Port of Haifa. The latter was included at one time in the Tapline plan, a pipeline going from eastern Saudi Arabia to the Mediterranean, which was later redirected to the Lebanese port of Zahrani (near Saida) following the decision of King Abdul Aziz Al Saoud and the Arab boycott of the State of Israel. This competition would push the French mandatory force to enlarge the Port of Beirut by adding a second dock basin and developing other infrastructures in parallel.

In 1948, with the creation of the State of Israel, the Arab countries boycotted this new state. They concentrated their trade with the Mediterranean through Lebanon and therefore, through the Port of Beirut. The Port of Beirut reasserted its position as the leading port in the Eastern Mediterranean. Moreover, as Syria, Egypt, and Iraq faced regime changes, followed by nationalization plans and capital drains, Lebanon which was then the only country in the Middle East to have a liberal political and economic regime, succeeded in attracting capital from all over the Middle East, thanks in particular to the establishment of a favorable business environment, reinforced by the banking secrecy law proposed by Raymond Eddé in 1956.

Following the defeat of the Arab armies against Israel in 1967, Lebanon, which had remained outside the conflict, found itself in the spotlight with a Palestinian militia which began to organize from south-Lebanon. Since the signing of the Cairo Agreement in 1969, Lebanon has moved from the domination of one axis to another, under the governance of the dominant militias.

A benched MVP 

Currently, Lebanon is going through its most serious economic and financial crisis, in a climate of regional tension and in the total absence of a state. The Hezbollah militia controls all economic and political life as well as the airport and the Port of Beirut. As a result, Iran has become a full-fledged geopolitical player in the Mediterranean. Lebanon, once the lung of economic, political, financial, and cultural freedom of the Middle East, is being held hostage. It is therefore the very essence of the country’s “raison d’être” that is being questioned, its role, its usefulness for the region and consequently, its constitution and its Arab and international friendships and support.

Today, Lebanon is facing a major turning point in the history of the region. In view of the succession of events that are taking place, what choices must Lebanon make in light of new alliances between the United Arab Emirates and Israel? Will the free forces and private institutions be capable of banking on the competitive advantages offered by the country and rebuilding the country according to the new order that is emerging in the region? How should the Russian, Iranian, and Turkish projects be evaluated? Are they carriers of growth and development, capable of bringing peace and providing prosperity to our country? The free forces, the main vector of economic advancement in Lebanon, must reposition themselves in the face of the various options that are emerging. These should anticipate their future and define their objectives, role, and usefulness for the region according to their skills. One thing is clear: the power of the private sector in Lebanon, the prosperity of Beirut and that of its port cannot be realized outside three invariable pillars: the maintenance of the Lebanese constitution, the Arab natural identity, and the respect for international law and UN resolutions.

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Khalil Toubia

Khalil Toubia is political consultant based in Beirut.

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