Picking a proxy

Embracing a new era for the Middle East

An architectural rendering of the new U.S. embassy premises in Awkar. The new project will cost approximately $1 billion, according to the US Ambassador to Lebanon David Hale. (US Embassy, HO)
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Lebanon’s economy only grows when the country is given a geopolitical purpose bigger than its size. This country’s first “Golden Era” was arguably ushered in during the presidency of Fouad Chehab. The US loved him and – up until 1967 – viewed Lebanon as a key partner in the fight against Communism in the Middle East, while of course keeping a close watch over our northern pipelines and refineries of the time. The US lost interest after the 1967 Arab-Israeli war and our then nascent banking industry was used by different foreign backed militias to pile up cash that financed their 1975 civil war. We, the people, paid the price.

Skipping our dark days, the proverbial Lebanese economic phoenix began rising again in 1992 only a couple of years after the fall of the Berlin Wall. Once again, the US had a man they could work with in the late Rafik Hariri. Peace in the region actually seemed like a real possibility, and Lebanon once again was part of the bargain. The death of both the peace process and Hariri took its toll and today our economy is barely limping along.

Today, I have the sneaking suspicion that an offer is being put on the table. Last May, US Ambassador to Lebanon David Hale announced his government would be building a new embassy here in Lebanon. The price tag? Nearly $1 billion, up from the $111 million previously announced in 2008. That’s a megaproject equal to around 2 percent of Lebanon’s GDP. Factor in a multiplier for that sort of investment, and the new embassy could boost growth by nearly a percentage point.

I see it as a message. Remember, the announcement of a new embassy came as the Iran deal was being sealed. The Americans like to choose whoever is ruling the roost in the region to push their agenda. Saudi Arabia played that proxy role until the crisis in Syria. With a resurgent Iran, the times are changing. The embassy plans coupled with the Iranian central bank’s decision late August to open an account at our central bank are competing signals. We hope that the US wants stability in this region, and found the Iranians to be reliable partners, but we are always in fear that both countries could be gearing toward another war on our soil.

People here talk with great fear about the Iranian era in the Middle East. I think we’re a few years into it, and it seems the Americans – however reluctantly – are on board. While we remain skeptical of this new reality and our new bigger purpose, poverty rates are growing among resident Lebanese and our various refugee populations.

Unless our economy picks up again soon, no deal will save us from the imminent socio-economic troubles ahead.

One Comment;

  1. George Sabat said:

    Yes, I read you my friend.Correlating the building of a $1 billion Embassy with a decision to support Lebanon during these dark days of our history may indicate that we have begun seeing the light at the end of the tunnel. On the other hand let me say it outright, and for the umpteenth time. As long as the ” force feeding policy”: of our public debt does not change, and no clear cut Reform Program has been agreed upon and adopted, Lebanon’s existence as an independent nation will remain a myth and a figment of the imagination.Our current financial problems, and our incapacity to resolve our waste treatment conundrum, let alone our failure to elect a President are there to support my reasoning.