Lebanon is still a wildcard in the Syrian deck. The Syrians know it and the Lebanese know the Syrians know it, so they will only have themselves to blame if they allow Damascus an entrée back into Beirut because of their inability to get along. Imagine the shame of being ruled—either directly or by remote control—by a regime they so successfully asked to leave in 2005. Oh, how long ago that heady spring now seems.
Destabilization in Lebanon will almost certainly give Damascus an opportunity to come in from the cold internationally and cut a deal with the US. It would see Damascus distance itself just enough from Tehran, use its influence to ease tensions in Iraq and rein-in the argumentative Lebanese, who by then will have proved they cannot handle fully-fledged independence. Such a deal would also realign Damascus with the Gulf states, who are investing heavily in Syria. The Baath has tasted the twin fruits of liberalization and FDI, and it likes them.
Politics is about pragmatism. Forget the doe-eyed girls in low-cut jeans who were the symbols of the Cedar Revolution. Those who believe the US will stand by a fractured Lebanon forever are dreaming. In 2007, it may be forced to surrender Lebanon—especially a Lebanon that has done itself no favors—to shore up Iraq.
Elsewhere in the region, the economies of the GCC continue to perform like thoroughbreds, and unlike in Lebanese politics, lessons have been learned. The conditions that led to the stock market correction—one that saw so many small investors get badly burned—have been identified. Economic growth has been so rapid that bigger institutional investors are now exposed to unprecedented risk, and measures are being adopted to stop them reoccurring. One way to do this is through wholly embracing the culture of corporate governance (currently the buzzword in regional banking). The signs are that, in the GCC at least, attitudes are changing.
But still there are storm clouds, albeit distant ones. The short and medium term future may be rosy, but the long term still needs to be addressed. Almost all the world’s enlightened nations have recognized the fact that fossil fuels are finite and already dramatically altering the planet with their emissions. For years now, they have invested in alternative sources of energy—wind, solar, water—in preparation for the day when oil becomes too expensive. By then, the GCC should have diversified into enough sectors to enjoy a seamless economic transition. When intensified conflict can send the price of fuel into the stratosphere, such diversification cannot come soon enough.
The nations of the GCC have shown they can adapt. For Lebanon, intransigence may be its undoing.