On 4 August a massive explosion shook Beirut port when a neglected storehouse of ammonium nitrate blew up, catapulting Lebanon onto the front pages of the global media. The volatile chemical was being stored next to the country’s main grain silos, which were levelled by the force of the explosion along with much of the port. An estimated $15 billion worth of damage was caused to the highly import-dependent Lebanese economy.1 Over 180 people were killed directly by the blast, thousands injured and hundreds of thousands made homeless. The scenes from Beirut were apocalyptic as dazed and bloodied survivors sought treatment in shattered hospitals.
For many Lebanese people, the disaster has compounded a period of catastrophes. The four horsemen of the apocalypse—death, famine, pestilence and war—have reeled through their lives in a deadly danse macabre, arm-in-arm with the corrupt and brutal ruling class that has run the country for decades. That these same politicians failed to act on numerous warnings that the ammonium nitrate stored at the port posed a severe risk to the capital, has enraged but hardly surprised those who are continuing to pay the price for their criminal negligence. The Lebanese economy has been in freefall for more than a year as a result of a severe crisis in the banking system, and the scale of misery already inflicted on ordinary people is immense. At the end of July, Save the Children warned that nearly a million people in the Greater Beirut area were in a situation in which basic necessities could not be afforded. More than half of them were children. “We will start seeing children dying from hunger before the end of the year,” Jad Sakr, the charity’s acting country director, told reporters.2
Between October 2019 and April 2020 over 200,000 jobs in the private sector evaporated, equivalent to 10 percent of the entire labour force; 20 percent of workers in the hotel industry were laid off. Even before the explosion and the Covid-19 pandemic hit, medical supplies were reported to be running short as importers struggled to find the dollars needed to purchase them.3 When the rest of the global economy tumbled off a cliff in April 2020 the Lebanese pound was already hurtling towards the bottom, dragging a large part of the population with it. The Lebanese central bank had accumulated debts of $44 billion, while the banking system as a whole was estimated to have losses of $83 billion.4 In February, the government defaulted on its sovereign debt for the first time in Lebanon’s history, failing to repay $30 billion in foreign currency bonds.5 Talks with the International Monetary Fund stalled in the summer with a dispute over the size of the banking system’s losses and over the question of reform. In the wake of the port explosion, French president Emmanuel Macron seized the opportunity to twist the screws further. He signalled that access to reconstruction aid would be linked to agreement over an audit of the central bank, appointment of a new government with a mandate for economic reform, early parliamentary elections and an open door for Lebanon’s former colonial rulers to help rebuild Beirut’s port.6
In the midst of all this, ordinary people across Lebanon have not sat back or passively accepted their fate. Since October 2019, the country has been gripped by waves of protest that have occasionally scaled up into spectacular confrontations between the state and the masses in the streets. A tax on WhatsApp messages was the trigger for what many activists have labelled Lebanon’s “October Revolution”.7 The resignation of prime minister Saad Hariri on 29 October did not slow the pace of popular mobilisation, which expanded its range of tactics by deploying roadblocks. Leading business organisations even called for a mass shutdown of workplaces and a general strike in order to force the formation of a new government.8 Over the following months, protests and strikes ebbed and flowed—receding due to the Covid-19 pandemic but swelling again as the economic crisis worsened in June and July with mass layoffs. The blast on 4 August brought with it nights of rage, as protesters stormed government ministries and set the Association of Banks headquarters on fire, facing down tear gas and live bullets from the army.9
This article assesses the prospects for further and deeper modes of resistance to what the Financial Times accurately calls the “kleptocrats” and “superannuated warlords” running Lebanon.10 However, unlike the commentators in the international financial media, who derided the Lebanese political establishment once their investment scam collapsed but ignored the source of their venality in a global economic system of institutionalised robbery and violence, it seeks to locate the roots of the current crisis. This means winding back beyond the history of the past 30 years. The inability of the ruling class to find a way out of its impasse points to the bankruptcy of the dominant strategies of capital accumulation adopted through the entire history of the modern state of Lebanon. These strategies centred on the creation of a “bankers’ republic”, creaming off some of the riches flowing through circuits of financial capital accumulation at intersections between their global and regional tracks.
A commercial bourgeoisie, focussed on the import-export trade, and cash-crop landowners with a taste for feudal-style privileges have been important players in this system, but it is the bankers who have had the upper hand. This is underscored by the awe that central bank governor Riad Salamé was treated with, even as his “financial engineering” policies were spiralling out of control. Abandoning any serious attempt to build a productive base for the economy has necessitated an intricate balancing act between competing regional blocs of capital. This is one of the reasons why the intensification of economic, and ultimately military, rivalry between the major states in the region has accelerated the unravelling of the financial boom.
The ideological glue which appears to hold together Lebanon’s rulers is their common investment in a sectarian political system mobilising those below around supposedly shared religious identities. Yet, if we can learn anything from the last 160 years, it should be that class matters in Lebanon. Sectarianism does not simply form in an ideological realm but in the context of bitter and protracted class struggles. The real basis of unity between the thieves, crooks and thugs at the top of Lebanese society is actually their shared class interests in perpetuating the system which enriches them. The current uprising, with its demands to dismantle “the sectarian system” as a whole, offers hope that there is an alternative which can be forged from below.
“All of Them Means All of Them”
The uprising that erupted in October 2019 followed a round of major protests and public sector strikes in 2014-15, and a series of smaller demonstrations in 2011, which were directly inspired by the revolutionary wave then sweeping the Middle East. Although the counter-revolution in Syria had dimmed hopes of change and stirred political tensions between supporters and opponents of the Assad regime in Lebanon, the revival of strikes and protests in 2014-15 marked an important step towards the 2019 uprising. Public sector workers walked out over pay and conditions in 2014, including teachers whose action paralysed public schools for more than a month, and outsourced workers from Électricité du Liban (EDL), the national electricity company, who mobilised to demand job security.11 These strikes were followed by demonstrations over the breakdown of Beirut’s refuse collection system, which had left large parts of the city overwhelmed by mountains of uncollected rubbish. Tens of thousands took to the streets chanting “You Stink!” at politicians.12
However, the protests of 2019 represented both a quantitative and qualitative shift. The numbers involved were larger, the geographical spread was wider and the protests have continued much longer. The mobilisation was no longer concentrated in the capital Beirut, but more widely dispersed across the country, with Tripoli in the north emerging as a key protest centre, and small but highly significant mobilisations across the south in Baalbek, Tyre and Nabatiyyeh, the heartlands of Hezbollah and Amal, the two major Shia Islamist parties.13
There has also been a shift in the way in which protesters present themselves. This can be traced in the evolution of popular protest slogans: “You Stink” in 2015 became “All of Them Means All of Them” and “The People Want the Downfall of the Sectarian Regime” in 2019.14 There have been sit-ins, marches and the repeated roadblocks that have been a particularly noteworthy feature of the current wave of protest. The sit-in in Tripoli was established in one of the main squares, following a motorcycle cavalcade and protest march by young people from two neighbourhoods that were locked in local sectarian conflict only a few years ago.15
The bankers’ republic
Most of the analysis of Lebanon’s economic crisis in the financial press concentrates on the policies of Banque du Liban (BdL), the Lebanese central bank, which fuelled the debt crisis by offering high interest rates in order to attract dollar deposits from abroad in the wake of the 2008 world financial crash.16 Lebanon’s commercial banks also made a killing from the huge flows of money, as did many of Lebanon’s politicians whose personal wealth and power is deeply rooted in the banking system. In 2015, 18 out 20 leading banks had major shareholders linked to political elites.17 Global financial commentators have derided the BdL’s policies as a Ponzi scheme—a scam in which existing investors are paid off with funds collected from new investors, while the organisers cream off a share for themselves.18
Yet to declare that the unravelling of Lebanon’s financial “miracle” is solely the expression of the venality of the local elite is to ignore both the history of the development of the Lebanese banking system within the regional economy and the specific role Lebanese banks have long played in linking the financial circuits of the Middle East and the global economy. Far from acting as passive conduits, their policies have worked to accelerate the flows of finance and expand the reliance of the capitalist system as a whole on the apparently magical process of making money from money.19
Lebanon shares with most of the rest of the Middle East a common experiences of uneven integration into the emerging capitalist market of Europe in the 19th century via the development of cash crop agriculture, followed by direct colonial rule and then a struggle for independence between the two world wars. However, the class structure that developed out of this process, and the strategies adopted by the Lebanese ruling class for perpetuating its economic, social and political power, appear, on the surface at least, to differ significantly from those elsewhere. In contrast to most of the rest of the region, Lebanon’s economy, and especially its financial sector, has consistently been governed by liberal economic policies. It has also remained deeply connected to Western markets, even while many of its neighbours turned towards state capitalism during the 1950s and 1960s. The brief spurt of industrialisation that took place in the 1960s and early 1970s was thus overseen not by the state but by private capital.20
Those private capitalists were, moreover, concentrated in trade and finance, and, compared to their counterparts in larger neighbours such as Syria, were able to establish a firmer grip on the state apparatus. This gave them an effective means to enforce their collective dominion over other social classes. In this manner they survived the transition from the colonial era to a form of political “independence” that nonetheless left them subordinated to Western imperialist powers—particularly France, Lebanon’s colonial-era master, and later the United States. This does not mean that Lebanon’s rulers created a strong state. On the contrary, one peculiarity of Lebanon’s development was that the commercial and financial oligarchies were strong enough to force a weak state on society. Nevertheless, they successfully resisted attempts by other classes to seize power in order to turn it into an instrument for economic development in the state capitalist era.
The persistence of Lebanon’s sectarian political system is a consequence of this process rather than its cause. Sectarianism serves both as a mechanism for sorting out disputes about the balance of power between different sections of the ruling class and a means to bind the loyalty of subordinate classes to those at the top of society ideologically and materially. Rather than simply relying on the ideological pull of a fictitious national “community” in which class divisions are submerged, Lebanon’s rulers have long had the additional weapon of mobilising workers and the poor to compete against each other based on sectarian identities. The system has achieved temporary stability whenever a small proportion of the spoils reaped by the ruling class have been available to distribute through vertical channels to each sectarian “community”. However, when the vagaries of the global market or shifts in the balance of geopolitical power have put the flow of profits under pressure, the ruling class is forced to choose between eating into its collective privileges or making those lower down the system pay for the crisis themselves. At this point, the horizontal cleavages of class begin to reassert themselves, as the degree to which those at the top are partners in crime becomes more apparent to those at the bottom.
Classes, sects and the state
One further factor is crucial to understanding the persistence of sectarianism in Lebanon: the way in which sectarian identities and class divisions have partially coincided at particular historical junctures. This has resulted in languages of sectarian domination and oppression that intermesh with class struggle.21
The Maronite Christian section of the Lebanese bourgeoisie was the driving force behind the creation of the Lebanese Republic out of the Levantine provinces of the Ottoman Empire. It can trace the origins of its rise to power to the violent struggles between largely Christian peasants and their Druze feudal overlords in the first part of the 19th century, culminating in the civil war of 1860-1.22 This process cannot be separated from the integration of the areas that would become Lebanon in the 20th century into the global economy, primarily through the introduction of sericulture—silkworm cultivation—in which silk was farmed as a cash crop to feed the growing demand in France for the silk-weaving trade. Although sericulture had existed in the Mount Lebanon area since Byzantine times, it was 1860 that marked the decisive turning point towards monocrop production for the capitalist market. This set in motion processes creating a dependent relationship between silkworm farmers and French capital, helping to destroy the Levantine silk-weaving industry and tying both the surpluses available to landowners and the livelihoods of ordinary people to the boom and bust cycle of capitalist production.23 The Druze landowners who had dominated agriculture during the pre-capitalist period lost out to a rising class of Maronite farmers. The latter enjoyed better access to French markets both as a result of religious and cultural ties through the activity of French missionaries and through the European capitalist powers’ enforcement of a system of legal, diplomatic and commercial privileges for non-Muslim minorities on the Ottoman state. Modern sectarian identities started to form out of this process of active mediation between local agricultural production and the global market.24
However, it was between the First and Second World Wars that the modern state of Lebanon and the specific character of its ruling class began to consolidate into forms that persist today. The global power overseeing this process was France, which carved the Lebanese Republic out of the former Ottoman provinces. The political centre of gravity in “Greater Lebanon” was still Mount Lebanon. However, French colonial officials gave their Maronite allies power over the port of Beirut and as far north as the Akkar valley beyond Tripoli, as well as the fertile Bekaa valley between Mount Lebanon and Damascus and the southern coast and its hinterland around Tyre. The French Mandate was created not only out of the defeat of the Ottoman Empire, but also of the Arab nationalist movement. This movement had set its hopes on the creation of an independent Arab kingdom centred on Damascus under the leadership of Faysal, son of Sharif Hussein of Mecca, who had thrown his lot in with Britain and France during the First World War. Despite widespread popular agitation and protest against the imperialist carve-up, the Arab Kingdom was crushed by French forces in a battle at Maysalun, near Damascus, in 1920, paving the way for more than two decades of direct colonial rule in both Syria and Lebanon.
French plans for Lebanon were initially supported by only a section of the Maronite ruling class. The Muslim ruling classes in other areas of the new country, by contrast, at first considered the formation of Greater Lebanon an unmitigated disaster and agitated for union with Syria.25 During the 1920s and 1930s, however, the mood swung towards compromise and accommodation with the Maronite ascendancy. Leading figures in the Sunni merchant and agrarian bourgeoisie, such as Riad al-Solh, thrashed out the “gentleman’s agreement” known as the National Pact, which sets out the sectarian rules for the division of the spoils of power within the Lebanese ruling class. Sealed in 1942, the pact parcelled out senior posts in the republic between the different sects. The presidency and military leadership were put in the hands of Maronite politicians, and the prime minister’s office fell to members of the Sunni elite. Seats in parliament were allocated on a ratio of roughly six Christians to five Muslims.26 In later years, the system would be modified to make a space for a Shia fraction of the bourgeoisie but the overall principles would remain intact.
A specific niche within capitalism
During the interwar years, two other important processes emerged that would play a key role in shaping the Lebanese economy. The first was the devastating collapse of Lebanese sericulture due to the rise of East Asian raw silk production, initially in Japan and later China, and the development of artificial fibres. The second was the rise of the Gulf as an oil-producing region in the context of global capitalism’s turn towards an oil-based rather than coal-based form of “fossil capitalism”.27 Even before the end of the Second World War, Beirut was emerging as a clearing house for the financial windfalls that the rulers of Saudi Arabia and the Gulf sheikhdoms had begun to enjoy and as a trusted outlet to the global financial system.28
It was as banks across the Middle East were nationalised, in the 1950s and 1960s, that the Lebanese “bankers’ republic” came into its own. Lebanon provided a route for investments in Western markets for the ruling families of the Gulf, Palestinian diaspora capital and sections of the old ruling classes that were fleeing experiments with “Arab socialism” in neighbouring countries.29 A law passed in 1956 made bank accounts immune from state inspection at the same time as the banking elite emerged as a distinctive group within the ruling class. Over time this financial bourgeoisie became “an organised political community largely immune to state authority,” as Hicham Safieddine puts it.30 The oligarchy of financiers and import merchants that dominated Lebanon at the time could count on the strong support of the US for its championing of laissez-faire policies. This was at a time when much of the rest of the region was governed by nationalist regimes bent on deploying the centralised power of the state to emulate a Soviet model of state capitalism—or at least a local variant. Western financial institutions flocked to Lebanon in the 1960s and early 1970s, making up nearly 75 percent of the total number of foreign companies in Beirut before the civil war began in 1975.31
Yet the streams of wealth flowing through Beirut did not only connect the economies of the Gulf or other states allied to the West. An essential element in the strategy underpinning the bankers’ republic was that its symbiotic relationship with the ruling class in neighbouring Syria survived the shocks of the latter’s turn to state capitalist development in the 1960s. Beirut’s commerce could be choked off from Damascus by border closures, but the Syrian economy was highly reliant on foreign imports and benefitted from transit fees levied on goods passing through to other regional markets. Just as importantly, Lebanon’s construction industry provided vital jobs for around 400,000 Syrian workers who otherwise might have been unemployed.32 The interdependence of Syrian state capitalism and Lebanese free-market capitalism would deepen over the following decades.
The idea that Lebanon could become the Switzerland of the Middle East, with an economy centred around financial services, tourism and trade, was overshadowed by developments elsewhere in the region. The creation of Israel had immediate repercussions for neighbouring Lebanon. Space was made for an exclusively Jewish state through a massive process of ethnic cleansing by Zionist militias, who forced 750,000 Palestinians to flee their homes in 1947-8. Around 100,000 Palestinians fled north and ended up living in refugee camps across Lebanon. During the 1950s and 1960s, a Palestinian nationalist movement, which looked to an armed struggle by guerrillas to liberate their lost homeland from occupation, began building a serious popular base in the camps. The exploits of these Palestinian fedayeen (guerrillas) also attracted the support of the Lebanese left, which saw a prospect of making common cause with them against a ruling class that was deeply committed to its ties with Israel’s imperial patron, the US.
The late 1960s and early 1970s were characterised by the intersection of economic and social crises. The intensification of imperialist competition in the region produced the tensions which would eventually explode into a devastating fifteen-year-long civil war from 1975 to 1990. One sign of the approaching storm was the contrast between the wealth that flowed through the banking system and the poverty and indebtedness of the Lebanese state. As one contemporary account notes:
On the eve of the civil war one could observe the strange coexistence of a banking sector with excess deposits, organising international loans for the likes of Renault and the World Bank, and a public sector in deficit, trying to borrow from external sources and proclaiming its inability to finance social and economic projects.33
Incredible levels of inequality and the lavish lifestyles of the rich were facing sustained challenge from below by the early 1970s. Sharecroppers and rural agricultural workers on the tobacco plantations in the south organised mass protests and occupied the offices of the Regie tobacco monopoly. Waves of strikes demanding the expansion of social security coverage shook manufacturing, which had expanded dramatically during the previous few years. Workers at the Ghandour biscuit factory waged one of the period’s most important battles, demanding wage increases, equal pay for men and women and the right to unionise. When two left-wing activists were shot dead by the police during the Ghandour workers’ protest in November 1972, the General Workers Union of Lebanon (GWUL) called a one-day general strike. Rank and file confidence and organisation grew over the following months, and when the GWUL called off a planned general strike in February 1973, there was a wave of wildcat walkouts.34 Ultimately, however, the pressure from the organised working class and the rural poor was not enough to break the resistance of the ruling class. Instead, the geopolitical aspect of the struggles ripping through Lebanon’s economy and society came to the fore, with attacks by the viciously right-wing Phalangist Christian militia on Palestinian armed groups in Beirut and the descent towards a civil war which would last 15 years.
The complex military, political and economic dynamics of the civil war itself are beyond the scope of this article, but it is important to note that it led to important shifts in both the balance of forces within the struggle for Palestinian liberation and within Lebanese society. Israel invaded Lebanon in 1982 and occupied of the south of the country. The Maronite far right had hoped that this would perpetuate their dominance over a Lebanese society in which Muslims would know their place, “cleansed” of the troublesome Palestinians and the guerrilla fighters they harboured. However, this was not to be the case. The armed Palestinian factions, with the Palestine Liberation Organisation at their head, were indeed forced to evacuate Beirut for Tunis. Nevertheless, the Phalangists’ Israeli allies found themselves bogged down in guerrilla warfare in south Lebanon. There, Hizbollah emerged as the leading force, eventually leading to Israeli withdrawal in 2000.
Hizbollah’s military victory over Israel gave the Shia Islamist group immense leverage within the reconstituted sectarian system that emerged after the end of the civil war. This helped to consolidate the integration of a Shia fraction of the bourgeoisie into the ranks of the ruling class. Yet Hizbollah’s origins in the armed struggle against occupation and its relatively broad social base among Shia workers and the poor, especially in the southern suburbs of Beirut, have also left a legacy of internal contradictions within the party. The self-enrichment of its leading cadres has failed to erase these contradictions.
The sectarian system rebooted
The 1989 Taif Accords that formally ended the Lebanese civil war were agreed by the major Lebanese military and political factions, overseen by regional states with a stake in the Lebanese conflict and its aftermath, such as Syria and Saudi Arabia, and blessed by the “international community” in the shape of the US and the United Nations. The agreement reaffirmed and strengthened the pre-existing mechanisms by which the Lebanese ruling class sorted out its internal differences through the sectarian allotment (“muhassasa”) of state functions. However, it altered the method for calculating how the spoils would be divided by increasing the ratio of Muslims to Christians in parliament and across the public sector. As Bassel Salloukh notes, the Taif Accords deepened the reach of the sectarian quota system within the state:
Much more elaborate than the pre-war system, it came to occupy every nook and cranny of the state bureaucracy and beyond, from entry-level positions, cabinet portfolios, the Constitutional Council, to the boards of directors and vice-governors of independent state bodies, such as the Council of Development and Reconstruction and Banque Du Liban, respectively, and the board members of the newly created Lebanese Petroleum Administration.35
The institutionalisation of the Taif Agreement went hand in hand with a reconstruction process that intensified the polarisation of wealth and poverty. The peace agreement paved the way for the revival of Lebanon’s banks as magnets for regional financial flows and for the fortunes that would be made from the rebuilding of the shattered capital, Beirut. In the 1990s this process was personified by Rafik Hariri, the Sunni construction billionaire who acted as the envoy of the Saudi royal family, played a central role in laying the groundwork for the Taif Accord and became prime minister in 1992. While investment from Saudi Arabia and the Gulf flowed into companies such as Hariri’s Solidere, growing levels of public debt provided the rationale for successive privatisation drives over the following two decades.36 In contrast to the 1950s and 1960s, when recycled petrodollars—surplus wealth generated from the oil economy of the Gulf—mainly flowed outwards through Lebanese banks towards investments in Western markets, the past four decades have witnessed the rise of a dynamic centre of capital accumulation in the Gulf itself. This process has created powerful regional financial institutions, reshaping the financial system around the interests of the Gulf ruling class. Lebanese banks, and a broader section of the Lebanese ruling class, are deeply embedded in this process. The Hariri family, for example, is a major shareholder in Bank Audi (Lebanon’s first-ranked bank, with $47.5 billion in assets in 2019), along with key Gulf families such as the Kuwait Al Sabbahs.37 Rafik Hariri, his son Saad and other family members hold dual Lebanese-Saudi nationality.
The emerging Shia fraction of the bourgeoisie, which gradually gravitated towards Hizbollah’s political leadership, was a partner in the reconstruction process. It gained an important foothold in the banking system, creating its own booming construction businesses in the southern suburbs of Beirut and investing in agricultural production in the Bekaa Valley.38 The global neoliberal assault on the public sector and the drive to turn the state into a commissioner of private services was another way in which the logic of neoliberalism reinforced sectarianism in Lebanon.
The massive growth in Hizbollah’s network of health and education services over the past three decades provides an illustration. Historically, the Shia communities where Hizbollah emerged had suffered from neglect and lack of investment by the state.39 The end of the civil war and the formal entry of the Shia fraction of the bourgeoisie into the governing coalition could have offered an opportunity to redress this imbalance by redirecting state investment to make up the gap. Yet in a context in which state investment in health and education remained stagnant and global economic orthodoxy prescribed privatisation of public services, creating a private infrastructure to serve the interests of the Shia community made both political and economic sense.40 It should be stressed that Hizbollah’s leaders were simply following in the footsteps of their counterparts from other sects, who had already created similarly profitable webs of charities, religious foundations and private companies to cover the gaps in state provision of basic services. The important point here is that the delivery of crucial services by private institutions reinforces the ideological appeal of the sectarian system and reduces opportunities for mixing with people from other religious backgrounds, making it harder to scale the mental walls around the different sectarian communities.
The debt-fuelled reconstruction of Lebanon after Taif also underscored the symbiotic relationship between the Syrian and Lebanese ruling classes, particularly around the question of labour migration and the role played by Syrian workers in the Lebanese economy. The nature of migration from Syria to Lebanon has changed dramatically, depending on whether migrants were fleeing poverty or war—young men being the main group in the first case, women and children in the second. But there is no doubt that Lebanese capitalists have benefitted in both contexts from their labour and from their lack of rights.41 A similar point could be made about the role of Palestinian workers in the Lebanese economy: denied the same rights to work as Lebanese citizens, they have likewise functioned as a source of cheap and disposable labour.
The fossil finance doomsday machine
As the 2008-9 global financial crisis turned into a long depression, a number of factors came together to create the conditions for Lebanon’s spectacular collapse under a mountain of debt.42 In the immediate wake of the 2008-9 crisis interest rates plummeted across the world. However, the BdL, under the Salamé’s chairmanship, set out to attract both foreign capital and the considerable assets of the Lebanese diaspora into Lebanon’s banking system by offering high interest rates.43 The scheme was spectacularly successful for a while as billions of dollars flowed into Lebanon.
The steep drop in oil prices after 2014 brought the reality of the global slump home to the economies of the Gulf, with knock-on effects across the regional economy as a whole. Activity in the construction industry—a major site of investment, which had seen breakneck growth in shopping malls, transport hubs and sporting arenas—crashed to a halt, cutting orders for energy-intensive raw materials such as cement and aluminium (another industrial sector which had flourished “downstream” from oil extraction sites). One of the most high-profile casualties was Saudi Oger, the Hariri family’s construction business. The company collapsed under debts of $3.5 billion in July 2017 as austerity finally took hold in the Gulf.44
The root cause of the crash landings in both the financial and oil markets was the same: a long-term crisis of profitability across the capitalist system as a whole.45 As Chris Harman explained at the time, the drive towards financialisation was “never something separate from what was happening to the productive core of the system, but was a product on the one hand of its internationalisation and on the other of the long drawn out slowdown in accumulation”.46 The foundations for the spectacular growth of financial capital in the 1980s had been laid by the massive flows of petrodollars unleashed when the oil-producing countries partially broke the international oil companies’ monopoly over oil prices in 1973. The US had won the agreement of Saudi Arabia to recycle its prodigious revenues through the US banking system, consolidating the dollar’s global hegemony. The internationalisation of production, and in particular the slow pivot of global manufacturing towards a new centre of accumulation in East Asia from the 1980s onwards, meant new outlets for the vast sums of finance “wandering around the world and looking for any opportunity where it seemed that there might be profits to be made”.47 Yet even the historic shift of the centre of industrial production to China as the “new workshop of the world” was unable to absorb the huge financial surpluses. Instead the gap widened between the value being created in the economy’s productive core, and the “magical” profits created by ever-expanding sums of money capital as they surged towards one new “hot-button” investment opportunity after another. Although East Asia definitely represented a more profitable zone of the global economy than the sluggish US and European economies, it was still not profitable enough to drag the whole capitalist system out of the slump that followed 2008-9.
The double spike in global oil prices in the run-up to the 2008 crash and between 2011 and 2014 was an expression of these tendencies. Oil, like other essential commodities, was subject to speculation, pushing up the price. In the wake of the 2008 crash, non-fuel primary commodity prices also collapsed but quickly rose again, prompting the United Nations’ Food and Agriculture Organisation (FAO) to warn that speculation in commodity futures was intensifying food insecurity and leading to political instability.48
In the case of the global oil industry, the spectacular price rises laid the basis for a classic crisis of overproduction. Middle Eastern oil producers, who benefit from some of the lowest costs of oil extraction, were naturally major beneficiaries of the oil price boom. They were also well-placed to serve the expansion of East Asian industry: by 2014 one third of China’s crude oil came from Gulf Cooperation Council countries.49 However, rising prices also led to the resurgence of competitors in the US, suddenly making the large-scale recovery of “unconventional” oil and gas from shale and tar sands a profitable option for the first time in history. The fracking boom propelled the US to number one position in the global oil producer league tables and appeared to have banished overnight the spectre of US dependence on foreign fuel supplies. The disaster that this represented for the future of the planet cannot be overstated, as it came at the same time as a huge surge in CO2 emissions in China, powered both by Middle Eastern oil and by China’s own coal reserves.50 From the point of view of global oil markets, however, the sudden profitability of previously “uneconomic” and “unconventional” sources of oil helped to drive production towards a glut, leaving soaring prices even more disassociated from the trajectory of the real economy.
Regional polarisation and imperialist competition
The collapse of the gravity-defying oil markets after 2014 took place in a context that was shaped by the marked intensification of military competition between the most powerful regional states: Saudi Arabia and its Gulf allies, Iran, Turkey and Israel. As I have argued previously in International Socialism, Saudi Arabia and the UAE, Iran and Turkey have all been drawn into increasingly ambitious projections of their military power beyond their borders in recent years.51
Israel remains one of the most heavily armed powers in the region but one which has been historically cut off from the most overt forms of military collaboration with the other powers that are also allied with its patron, the US. The growing confidence of the ruling classes of the Gulf in their capacity to intervene militarily in the region’s balance of power—despite becoming bogged down in an interminable and destructive war in Yemen—has started to overcome that barrier. The UAE-Israeli peace accord announced in August 2020 is one recent example of how previously covert ties, particularly around security cooperation against Iran, have come out into the open.52
The ruling class in Iran, for its part, has long regarded its capacity to build military and ultimately economic ties with neighbouring Iraq and with Syria as an essential element in its survival strategy in the face of decades-long hostility and various forms of siege by the US. It has also sought to cooperate with bigger players at a global level, in particular Russia. Both Russia and Iran invested heavily in backing Assad’s regime in Syria, helping to ensure its survival after the revolution of 2011. A crucial further element in this picture is the relative weakening of US power in the region, which has been sapped by the disastrous occupation of Iraq after 2003.
As in the decade before civil war broke out in 1975, a crucial part of the strategy adopted by the Lebanese ruling class since the Taif Accord has been to position itself in the most profitable location between competing regional blocs of capital and the states with which they are associated. From this position, it can charge hefty fees for easing the passage of finance and goods between the regional economy and the global system. However, this balancing act has become increasingly difficult. Hizbollah representatives have sat in Lebanese national unity governments since 2005 without discomforting pre-eminent Sunni members of the bourgeoisie, including those with joint Saudi-Lebanese nationality such as Saad Hariri. Yet in 2017 Hariri discovered dramatically the risks of personal exposure to the brutal norms of internal discipline imposed on the Saudi ruling class by Crown Prince Mohamed Bin Salman (MbS). In a stunning episode, Hariri was kidnapped by MbS and coerced into a televised resignation speech that attacked Iran, which he then promptly rescinded on returning to Lebanon.53
From uprising to revolution?
The scale of mobilisation and resistance from below and the political forms that this resistance has taken, show that increasing numbers of ordinary people are now beginning to grasp that the problem lies with the ruling class as a whole. There is a growing mood that Lebanon’s issues cannot easily be fixed by substituting one or other of its members with less corrupt and violent alternatives. Moreover, at least some of the protestors have clearly understood that this is not an issue of personnel but rather the “old way” in which political and economic power is practised both inside and outside the institutions of the state. One of the chants which caught the imagination of crowds in Lebanon sums this up neatly: “We are the revolution of the people, you are the civil war!”54
Yet there are also limitations to the notions of liberation generated so far by the protest movement, which has largely been coloured with the national flag. The mass mobilisations have created space for demands that challenge some reactionary notions of citizenship. One campaign that gathered pace as the protests spread in autumn 2019 called for the revocation of a law that prevents Lebanese women from passing on citizenship to their children if they are married to a non-Lebanese man.55 Yet the national flag has also served to exclude others, and some protest organisers have asked for the Palestinian flag to be removed from demonstrations.56 Despite the efforts by some activists to build solidarity with Palestinians, Syrians and migrant workers, “there is this really powerful sense of the revolution being for the Lebanese,” according to Sophie Chamas. The mass movement has not yet broken down the pervasive xenophobia in Lebanese society: “of course it has political roots, and economic roots, but you will hear in many spaces a cultural discourse about contamination—physical, biological, cultural, religious contamination—and the fear of the terrorist”.57
This means that the ruling class has been able to continue with its policies of divide and rule between, for example, workers of Lebanese, Palestinian and Syrian origin. Palestinians faced a major attack on their right to work in 2019, when the government announced that they would be subject to the same labour laws as foreigners. A 1952 law insists that Lebanese firms must employ three times as many Lebanese citizens as foreigners, who require work permits, but Palestinians were exempt until now. Palestinians who have lived and worked in Lebanon all their lives were suddenly thrown out of work, sparking a wave of protests that preceded the uprising by several months.58
The popular uprisings have thus had a contradictory effect as far as understanding the nature of the state and its relationship to the ruling class. They have made spaces for the expression of extraordinary and powerful forms of solidarity between ordinary people, breaking down some of the ideological barriers between men and women, young and old and citizens of different religious beliefs. The scale of the mobilisations, their defiance and their tenacity have helped temporarily to counterbalance the vision of the state as a bargaining table for the elites of various sectarian communities to divide their loot. Yet there are also limits to this process, as the inability of the Lebanese popular protests to collectively integrate Palestinians, Syrians and other “forseigners” within the struggle for change from below illustrates. The character of the “new” faces in the governments that have formed in response to the uprisings also shows how far they still have to go in terms of even opening up modest prospects of genuine reform. The lack of concrete progress towards reform is clear when compared to the revolution in Sudan, which has at least made a start in opening up real cracks in the state apparatus—although that too is still relatively limited, and risks falling victim to the illusion that the ruling class will simply negotiate away its power.59
The missing factor, the practical and concrete force that can both reveal the true nature of the state and start to break down the ability of the ruling class to rule, is the organised working class. As Lenin noted back in 1915, the independent action of “the masses” is not enough on its own to transform the potential for revolution into an actual one. It must be “accompanied by a subjective change, namely, the ability of the revolutionary class to take revolutionary mass action strong enough to break (or dislocate) the old government, which never, not even in a period of crisis, ‘falls’, if it is not toppled over”.60
In Lebanon there remains a significant gap between the existing organisations of the working class and Lenin’s idea of the self-realisation of workers as the revolutionary class transforming the potential for revolution into actuality. As Lea Bou Khater argues, both the main trade union federation in Lebanon, the General Confederation of Workers, and the Union Coordination Committee (UCC) that emerged out of the strikes and protests by public sector workers between 2012 and 2017 have proved susceptible to cooption and internal takeover by the sectarian political parties of the ruling class.61 The UCC was in some ways a victim of its own success. Despite leading mass illegal strikes (civil servants are banned by law from taking industrial action in Lebanon) and winning a new salary scale for public sector workers, candidates affiliated to the mainstream political parties were able to oust rank and file trade union activists from the UCC’s leadership in internal elections.62 This has led some activists to argue that the dominance of the roadblock and street protest in the mass movement represents a revolutionary step forward from reliance on general strikes called by traditional trade unions. Elia El Khazen told Historical Materialism in an interview in November 2019:
In this context, decentralised roadblocks are not just temporary alternatives to a call for a general strike by a centralised trade union. Instead, they are aimed at flipping the central and peripheral paradigm on its head. Beirut is no longer the centre that is relied upon to inject revolutionary fervour. The beating heart of this revolution moves from one rural area to the other, following the state’s coercion of roadblocks. Roadblocks become then a monument that celebrates the very refusal of participating in the labour market through sectarian subject formation.
Other activists have outlined a strategy of attempting to rebuild independent trade union organisation. Inspired by the leading role of the Sudanese Professionals Association (SPA) in Sudan’s revolution during 2018-19, five independent associations have founded the Lebanese Professionals Assoication (LPA). These include the associations of university lecturers, journalists and media workers, engineers, workers in art and culture, and medical doctors. The LPA’s goal is “to fill the void left by a co-opted labour movement, and to consolidate the outcomes of the October Revolution”.63 As Bou Khater points out, the current context of crisis and popular uprising represents potentially fertile ground for a new culture of trade union organising to take root:
The October Revolution, the deepening economic crisis, the financial crash and the ensuing pauperisation of the majority of the population have weakened the authority and legitimacy of the ruling elite and traditional patron-client sectarian relations. Like the Arab uprisings, one of the major achievements of the October Revolution so far is the paradigm shift it has generated.64
However, this organising will have to move away from relatively better-paid and highly educated public sector workers and “professionals” and start to win over sections of the manual working class and low-paid civil servants. This is necessary if it is to gain the social weight needed to play a transformative role in the revolutionary process. This leads us back to where we started, watching the four horsemen reel through the region in their apocalyptic dance. There is no guarantee that the misery trailing in their wake will spur the new mass movements from below into a deeper and more lasting confrontation with the ruling class. However, the loosening of the ideological chains binding ordinary people to their rulers, and dividing them from one another, is a real step forward. If it can be connected to social forces that have the power not just to shake out a new bunch of technocrats, warlords and spooks to head up the government, but to break down the state and start to build an alternative, then out of the despair will come hope.
Anne Alexander is the co-author, with Mostafa Bassiouny, of Bread, Freedom, Social Justice: Workers and the Egyptian Revolution (Zed, 2014). She is a founder member of MENA Solidarity Network, the co-editor of Middle East Solidarity and a member of the University and College Union.
1 Nur Duz and Geldi, 2020.
2 The New Arab, 2020.
3 Knecht and Francis, 2020.
4 Financial Times, 2020.
5 Stubbington and Cornish, 2020.
6 Bassam, 2020.
7 BBC News, 2019.
8 Bassam and Osseiran, 2019.
9 MENA Solidarity, 2020.
10 Financial Times, 2020.
11 Civil Society Knowledge Centre, 2016; Daou, 2017, p134.
12 Middle East Eye, 2015.
13 Said, 2019a; Said, 2019b.
14 Majed, 2019; Historical Materialism, 2019.
15 Said, 2019a.
16 Hassan and Panizza, 2019.
17 Hanieh, 2018, p191.
18 Financial Times, 2020.
19 Harman, 2010.
20 Traboulsi, 2012, p158.
21 Chit, 2015.
22 Traboulsi, 2012. The Druze are an Arabic-speaking group who practice a syncretic religion that developed out of the Ismaili branch of Shia Islam.
23 Firro, 1990.
24 Makdisi, 2000.
25 Traboulsi, 2012.
26 Traboulsi, 2012.
27 Angus, 2016.
28 Traboulsi, 2012, p106.
29 Hanieh, 2018, p177.
30 Rose, 2020.
31 Nasr, 1978, p4.
32 Harris, 1985, p11.
33 Nasr, 1978, p4.
34 Traboulsi, 2012, p168.
35 Salloukh, 2019, p44.
36 Daher, 2016, pp37-9.
37 Bank Audi, 2020; Hanieh, 2018, p190.
38 Daher, 2016.
39 Petran, 1987.
40 Daher, 2016.
41 Chalcraft, 2014; Vohra, 2019.
42 Roberts, 2018.
43 Hassan and Panizza, 2019.
44 Hanieh, 2018, p229.
45 Harman, 2010; Roberts, 2018.
46 Harman, 2010, p280.
47 Harman, 2010, p283.
48 Food and Agriculture Organisation, 2010.
49 Hanieh, 2018, p29.
50 Malm, 2016.
51 Alexander, 2018.
52 Cook, 2020.
53 Barnard and Abi-Habib, 2017.
54 Historical Materialism, 2019.
55 Homsi, 2019.
56 Patuck, 2020a.
57 Patuck, 2020a.
58 Patuck, 2020b.
59 Alexander, 2020.
60 Lenin, 1974.
61 Bou Khater, 2020a.
62 Bou Khater, 2020a.
63 Bou Khater, 2020b.
64 Bou Khater, 2020b.