Vultures are craving to strip the flesh from Lebanon’s bones. The August 4, 2020 explosion of 2,750 tons of ammonium nitrate in Lebanon port, stored without adopting due safety measures was an industrial disaster waiting to happen, and will represent an extraordinary opportunity for some investors. The explosion shredded an entire neighborhood, killed 190 people, injured more than 6,500 people, left 300,000 people homeless and caused $15 billion in direct damages. The extraordinary nature of the disaster focused the world’s attention not only on the human catastrophe but also on the mechanisms of the international supply chain regarding raw materials and/or processed products transported by sea.
The enormous scale and gravity of variables in the blast illustrates the challenges posed by maritime trade not only from a socio-economic standpoint but also more broadly from an international perspective; although the explosion was centric to Lebanon it however has a broader impact given its impact on thalassopolitics, underscoring the growing strategic importance of oceans spaces, their commercial exploitation and international relations.
Rather than see this event from a micro perspective, and delve into causalities, if one was to broaden the horizon and look at a larger data set of explosions and arson spread across the Middle East, a pattern of chaos emerges with China’s Silk Route emerging as a the saving alternative to the existing multi-polar geopolitical alliances. If you were to look at hidden motives, the obvious question that arises is – who is the primary beneficiary of such widespread chaos? Which country has more to gain economically from the reconstruction of such widespread destruction?
Do keep in mind that those who subscribe to the Hobbesian worldview of Halford Mackinder including Henry Kissinger, Zbigniew Brzezinski, and Bernard Lewis, the Middle East is the “geopolitical pivot” of the world island. Whoever can stabilize or shake the region from its roots, will control the levers of power to the “world island” consisting of Africa, Europe, Eurasia and the Americas.
As Mackinder once said “who controls the world island, controls the world.” Having gained this context let us delve a little deeper into Lebanon’s role.
Hidden players emerge
Lebanon geographic location is such that it is strategically placed between an intersection of all major civilizations of the globe.
In weeks before the Lebanon explosion, Iran was rocked by multiple explosions and arson at various facilities including its Khojir Missile production complex, a medical clinic, Natanz nuclear facility, as well as at its Bushehr Aluminum plant. At the same time, the UAE also experienced its own anomalous fires which ravaged one of its most important markets in Dubai on August 5.
While these tragedies can be pinned on “chance”, they are however form part of China’s BRI-connected agreements, that are currently being negotiated between Russia and China, with both countries known to want to expand their influence in the Middle East.
The long awaited $400 billion China-Iran economic and security pact is being hammered out; it includes infrastructure agreements which will extend the military / security partnership between China and Iran promising to change the “rules of the game” in the Middle East.
Elements of this pact includes sharing of economic, defense and intelligence infrastructure and aims to bolster China’s new digital currency the e-RMB. U.S. trade actions against alleged widespread theft of intellectual property and resources against China has tanked the Chinese economy to its 30-year low. Further, China has increased territorial claims following the global pandemic of COVID-19 which emerged from Wuhan, China.
With its new digital currency e-RMB, Beijing is hoping to escape and circumvent trade sanctions imposed on it.
Eager to gain multibillion contracts to rebuild Syria, Beijing has made its intention clear to support President Bashar Al Assad’s Four Seas Strategy.
“Once we link these four seas, we become the unavoidable intersection of the whole world in investment, transport and more,” Assad had said.
It is in this setting that Lebanon finds herself in the dynamics of global geopolitics. The fact that it shares major border with Syria, and hosts 1.5 million Syrian refugees and has an important port in the Middle East, places it among the keystone players in the emerging zone of developing the Middle East and Africa, where again, in recent years, China’s Belt and Road has emerged as a willful player.
China has extended its offer to include debt-laided Lebanon into its BRI projects, with the Chinese Embassy publicly issuing a statement on June 17, 2020 stating, “The Chinese side is ready to carry out practical cooperation actively with the Lebanese side on the basis of equality and mutual benefit in the framework of joint work to build the Belt and Road… China is committed to cooperation with other nations mainly through the role of its companies, the leading role of the market, and the catalytic role of government and commercial operation. Chinees companies continue to follow with interest the opportunities of cooperation in infrastructure and other fields in Lebanon.”
These offers were eagerly applauded by Hassan Nasrallah, the head’s Lebanon’s Hezbollah and a partner in Lebanon’s coalition government. Since long Nasrallah has advocated Lebanon to free itself from the structural reforms advocated by the IMF. Bailout talks with the IMF is in deadlock, with Lebanese politicians refusing to acknowledge the financial abyss faced by the country, a product of four decades of systemic corruption and looting.
The current coalition government is resorting to blame games and conspiracy theories with Prime Minister Hassan Diab saying, “We know well that there is a big decision to besiege the country. They are preventing any assistance to Lebanon.”
When Lebanon saw its first case of COVID-19 infections in February 21, 2020, China rushed in to deliver medical assistance to the government. The prompt response unmasks Beijing’s intention to gain a strategic foothold in Lebanon. To infect and save a patient from the disease is an old trick in the book. After all the coronavirus has emerged from Wuhan, where China has its only level 4 biological facility.
In 2019, a delegation of Chinese businessmen had visited Lebanon and had offered to fund a number of projects. Incidentally, the visit was away from the media gaze.
The funding of these projects, includes the Arab highway linking Beirut to Damascus and a parallel railway project connecting Beirut to Damascus and then linking that up to China’s $900 billion new Silk Road.
Chinese efforts to gain a foothold in Lebanon is not just through finance but through the culture route as well. In August 2020, Beijing signed a cooperation agreement with Lebanon aimed at establishing cultural centers in the two countries “on the basis of equality and mutual benefit.” The development comes at a time when the United States is banning the operations of such cultural centres, since they were found to be grounds from which Chinese agents carry out routine espionage activities, including, commercial, industrial and military.
According to an agreement signed by Chinese Ambassador Wang and Lebanon’s Culture Minister Abbas Mortada, on behalf of their governments, these centers will provide a “wider platform for cultural exchange and mutual learning between the two countries.”
Despite the promises by China to boost Lebanon’s economic prosperity, trade data reported by China’s Xinhua news agency shows, nearly 80% of Lebanon’s needs are met through imports with 40% of such imports coming from China. The gross value of these Chinese goods is estimated at $2 billion annually. In contrast Lebanon’s annual exports to China is $60 million.
The trade imbalance is a pointer that China serves only herself.
China’s influence operations have also yielded results: there is a growing interest among young Lebanese to learn Chinese.
“Until 2003, Lebanon and China had only formal political relations,” said Dr. Massoud Daher, head of the Chinese-Lebanese Friendship and Cooperation Committee.
“In 2006, we established the Chinese-Arab Friendship Association (CAFA). Since then, we have held more than 15 conferences sponsored by China in various disciplines in 23 Arab countries. The number of Lebanese merchants who have visited China stands at 11,000.”
According to Daher “the Chinese are taking the long view” vis-a-vis the Lebanese economy, its military as well as its banking system which is tied to global financial institutions.
Lebanon has never been more vulnerable than it is now, even when compared by the standards of the calamities that struck it in the 20th century. The COVID-19 pandemic has ravaged global economies and has weakened it with China emerging as a global player comparatively unaffected by the pandemic.
For Lebanon, the option of easy Chinese money is indeed very promising, especially since its economy is projected to further shrink by 12% this year, with 50% of the government’s budget allocated to servicing its enormous debt pile which has ballooned to 170% of its GDP. The share of Lebanon’s population below the poverty line has also jumped to 75%, up from the pre-pandemic level of 50%.
Many describe China’s charm offensive, which includes providing generous finances, as a Trojan horse with many analysts voicing systemic concerns regarding debt-laden trips within China’s multi-billion dollar Belt and Road Initiative (BRI).
Take China’s generous help in Africa for example. According to Muhammed Tandogan, an African expert who holds a Phd in International Relations at Istanbul Medeniyet University, Beijing gives loans and debts in order to sustain its ambitious BRI, which is a framework aimed at paving its way for global leadership in the future. Having offered large generous sums of money, China seizes assets of countries, or forces the country to enter into lease agreements, in order to clear their debts.
While the promise of news roads and ports look very nice, Lebanon needs to safeguard its own interests and ensure that it does not bankroll China’s own trans-continental transport corridor. Notably, China is not interested in recapitalizing Lebanon’s financial institutions and kickstart its economy to get its citizens back to work.
Beijing is only interested in securing its infrastructure projects which employs Chinese engineers and labor, which does not do anything to Lebanon’s runaway 35% unemployment rate.
With Nasrallah doning the attire of a prophet for “going to China to save Lebanon financially and economically,” without spelling out much needed reforms, only goes to compound justifiable suspicion of his motives.
China’s primary motive is to complete its Silk Road route to the Mediterranean and escape global sanctions. This is why it is moving closer to countries which are seen as being close to Iran. By doing so it affectively completes its own agenda of establishing a new Silk Road route which pases through the Mediterranean.
This becomes clear since it has touted these investments as being “sanctions proof”. With this it is trying to play and entice Hezbollah’s leadership.
No wonder many analysts have cautioned “While the Islamic Republic of Iran is still calling the political shots, vultures from Beijing are circling, eyeing tasty infrastructure assets like ports and airports as well as soft power influence through Lebanon’s universities. Meanwhile, Lebanon as a sovereign nation collapses.”
Camille Abu-Suleiman, Lebanon’s former labor minister, was also quick to warn of the dangers surrounding Beijing’s “debt traps”.
Lebanese warlords are notorious for bleeding major projects dry, then leaving the state to pick up the tab. Citizens could wake up one day to find that their nation and its critical infrastructure had effectively been mortgaged to Beijing. Beware of the Chinese Trojan horse…