Iran’s foreign minister has promised business deals to Lebanon, while some in Beirut are anticipating aid from Riyadh on the back of a forthcoming visit from a Saudi delegation. Two weeks after Beirut announced the formation of a government following an eight month impasse, the Middle East’s major regional rivalry is playing out in the Levant.
Adviser to the Saudi royal court Nizar Al Aloula was scheduled to arrive in Beirut on Tuesday night to meet top Lebanese officials, hours after the Iranian Foreign Affairs Minister Mohammad Zarif left the Lebanese capital.
A new government was announced two weeks ago in the small Mediterranean country that plays an important role in the two rival countries foreign relations. While Saudi Arabia is Lebanon’s traditional backer, Iran exerts sizable influence through its ally Hezbollah, which is strongly positioned in the new government.
Mr Al Aloula is scheduled to meet the “three Lebanese presidents”, according to local media: President Michel Aoun, Prime Minister Saad Hariri and Speaker of Parliament Nabih Berri.
Quoting anonymous sources, local network MTV reported that during his visit, Mr Al Aloula will unveil a significant financial aid package to Lebanon, which will be “linked in some way to the Cedre conference”.
Several countries including Saudi Arabia, and international organisations pledged nearly $11 billion (Dh40.4 billion) to support Lebanon’s crumbling economy via infrastructure projects during a conference in Paris last April nicknamed Cedre.
Should this financial “surprise” materialise, it would signal a change of Saudi policy towards Lebanon. Because of Hezbollah’s increasing influence on Lebanese politics, Saudi Arabia cancelled a $4 billion aid package to the country’s security forces three years ago.
Any aid tied to the Cedre conference is also conditioned on Lebanon engaging in economic reform as well as respecting a policy of “disassociation” from regional conflicts, which includes the Syrian war.
While the Lebanese government tries to stick to this position, Hezbollah has been actively supporting Bashar Al Assad’s regime since 2012.
“It’s not surprising that Saudi Arabia pledges more money now that the aid is conditional,” argues Sami Nader, director of the Levant Institute for Strategic Affairs, a Beirut-based think tank.
The sources quoted by MTV argued that Mr Aloula’s arrival was planned after the government was formed on January 31 to “congratulate Lebanon and its people” and not in reaction to Mr Zarif’s two-day visit, but analysts differ.
“It’s clear that these visits take place in a context of fight for influence in Lebanon which they view as a transit point towards playing a role in Syrian reconstruction,” says Samir Hassan, a Lebanese analyst close to Hezbollah. As Syria’s war winds down, several major powers are eyeing potentially lucrative contracts to rebuild the country.
But there are other issues at stake for Iran, says Mr Nader. “Mr Zarif’s visit to Lebanon was an attempt to counter its isolation a few days before the Warsaw conference.”
The US-organised conference in Poland later this week is widely expected to be anti-Iranian and will be attended by 11 Middle Eastern countries including the UAE and Saudi Arabia. Lebanon would not attend the summit because of Israel’s presence, according to Lebanon’s Minister of Foreign Affairs Gebran Bassil.
During his visit, Mr Zarif made several offers to Lebanon, including proposing military aid to a country whose army historically relies heavily on US support. This comes a week after Hezbollah leader Hassan Nasrallah – whom Mr Zarif also met during his visit – said that he was ready to secure air defence systems for the Lebanese army from Iran.
Mr Zarif also called for strengthening economic ties between Lebanon and Iran. To avoid sanctions, he suggested a mechanism similar to the “special purpose vehicle” (SPV) mechanism that the EU is setting up to facilitate non-dollar trade with Iran and circumvent US sanctions, according to an analysis published by Al Akhbar. “More importantly, the head of Iranian diplomacy suggested conducting commercial transactions in Lebanese pounds. This proposition would mean that US sanctions were not sufficient to prevent opening new economic horizons for Lebanon,” the piece in the pro-Hezbollah newspaper argued.
This has very little chance of working, argues Mr Nader, the analyst. “The SPV is a barter system. Iran would sell oil to Lebanon for example in exchange for something else. But Lebanon has very few goods to export to an economy as big as Iran.”
This will not stop Lebanon from gradually shifting closer to Iran should Hezbollah maintain its strong parliamentary and ministerial presence, he warns.