Date: Saturday, 16 February 2019
Following the Arab Economic and Social Development Summit in Lebanon, Qatar announced its plans to buy $500 million in government bonds to support the host’s struggling economy. However, this is likely a strategic move for Qatar to increase its soft power in the country. The final objective is challenging the influence of Beirut’s long-time financial patron, Saudi Arabia.
On the weekend of 19th January, Beirut hosted the Arab Economic and Social Development Summit. Its goal should have been to drum up support from Arab States to aid Lebanon in tackling economic challenges. It is one of the world’s most indebted nations, with a credit rating on par with countries such as Gabon, Zambia, and Iraq. Regional crises have resulted in a fall in exports, foreign investment and tourism. All three of which the economy is reliant on. The Syrian refugee crisis saw over 1 million refugees cross into Lebanon, adding further financial strain on the already ailing economy. The country is also facing a political deadlock, with no functioning government. This is hindering the necessary economic reforms the nation desperately needs.
The economic summit would have been an opportunity for Lebanon to initiate programs improving its financial and political stability. However, divisions plagued the event from the very beginning with points of contention raised surrounding Syria’s re-admittance into the Arab League.
Most regional leaders failed to make an appearance at the summit, sending representatives in their place. The low turnout characterises the complete failure of Lebanon’s ability to command influence in the region, as well as highlighting the Arab world’s divisions over a multitude of regional issues.
The attendance of Qatar’s Emir, Sheikh Tamim Bin Hamad Al-Thani, being one of only two Arab leaders to participate in the meeting, was the stand out factor in the overall disappointing summit. His presence sent an important message, particularly to Saudi Arabia. Qatar is willing to stand by Lebanon at a time when no other GCC country offered its support. This is a move that is highly likely to increase Doha’s standing in the eyes of Beirut.
Following the summit, Qatar’s Foreign Ministry announced its decision to invest $500 million into Lebanon’s economy – signalling an attempt to expand its presence and challenge Saudi dominance in the country. Saudi Arabia fired back only a day after Qatar’s announcement, similarly stating that it would support its ally all the way. Nevertheless, Qatar’s move proves that despite the blockade imposed on them, they can undermine Saudi efforts of isolation and extend diplomatic and business ties in the region.
The investment comes at a time when Saudi Arabia’s influence in Lebanon is waning. Qatar will be using this opportunity to their advantage. Saudi Arabia has long supported the Sunni political coalition in Lebanon. However, the relationship has recently come under strain. In November 2017, Riyadh coerced the resignation of Prime Minister Saad Hariri, whom the Saudis believed was warming to Hezbollah – an Iranian ally. Qatar’s decision to invest is therefore likely to capitalise on this damaged relationship. This may lead to Saudi Arabia being replaced by Qatar as Beiruit’s key ally in the Gulf in the long-term.
Saudi Arabia has poured billions of dollars into the reconstruction of Lebanon since the nineties, but this has not been without conditions. In recent years, operating through Prime Minister Hariri and his Sunni political party, Saudi Arabia has sought to counterbalance the increasing influence of Hezbollah and by extension, Iranian influence in the region. But in February 2016, the kingdom suspended a $3 billion security package to Lebanon’s army on the grounds of Hezbollah’s growing involvement and power within Lebanon’s political arena.
In contrast, Qatar thus far has not endorsed a sectarian agenda in Lebanon. In the aftermath of the 2006 war between Hezbollah and Israel, Qatar was the leading donor in the reconstruction efforts that helped rebuild towns and villages destroyed in the conflict. This was without any sectarian conditions or strings attached. The same is true for the recent $500 million investment, demonstrating to Lebanon that Qatar has no sectarian agenda. For a delicately diverse country as Lebanon, this would be extremely detrimental and damaging to the political landscape. Qatar is pursuing an investment opportunity to reach two targets. They are exercising soft power and projecting themselves as a more stable and safer alternative to Saudi Arabia.
Qatar has a history of neutrality in Lebanon, recognising the unique power-sharing agreement between Lebanon’s diverse religious communities. In 2008, Qatar mediated between rival Lebanese leaders, at a time when the country was on the brink of another civil war. Doha had succeeded, where the Arab League, the UN and others had failed, ending an 18-month long political deadlock. Qatar’s diplomatic efforts will not have gone unnoticed, particularly as they incorporated Hezbollah’s role in the country; something which the Saudis have not done. Qatar is likely to rely on its history of diplomatic success in Lebanon. This will further strengthen their ties and prove the viability of having an alternative partner in the Gulf.
Lebanon is yet another arena in which the Saudi-Iran proxy war plays out, a war that threatens to further fracture the already precarious and fragile state of the country. Qatar is no stranger to the divisive agendas of Saudi Arabia, and is aware of how the Saudi-Iranian rivalry has left Lebanon without a government since May.
Qatar’s commitment to Lebanon, both financially and diplomatically, provides strong grounds to increase its soft power in the country. Supporting Lebanon amidst its economic crisis, was but one opportunity for Qatar to strengthen its role in Lebanon.
Hence, Qatar has chosen an opportune moment to expand its influence; seeing the void in Lebanon left by Saudi Arabia’s failings. In spite of this, it is unlikely to fill this void in the short-term future. Saudi Arabia still holds considerable influence across the region. Nevertheless, it is likely to play the long game. The Emirate will be probably making calculated decisions and capitalising on the shortcomings of Saudi Arabia’s policies in Lebanon.
