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Foreign Aid to Lebanon: Goodwill Marred by Smoke and Mirrors

Lebanon is currently facing an unprecedented multi-pronged crisis that threatens the states very existence. The economic and financial crisis that began to manifest itself since roughly August 2019, when the value of the Lebanese Lira began to decline, has metamorphosed into a socioeconomic collapse, accelerated by the COVID-19 pandemic and a humanitarian crisis resulting from the Port of Beirut blast on August 4, 2020. In May 2020, ESCWA estimated that 55 percent of the countrys population had plunged into poverty—23 percent of whom were in extreme poverty. An increasing number of Lebanese are permanently emigrating, with some desperately trying to cross the sea towards Cyprus with makeshift boats. While there are countless structural factors that have led Lebanon to this precipice, they are all inextricably linked to corruption.

In desperate need for international aid to stymie the crisis-turned-collapse, Lebanon has been ostensibly seeking such assistance over the past several years. Donors pledged $11 billion in soft loans and grants in April 2018 for socioeconomic development projects during the CEDRE Conference, contingent upon implementing structural economic and administrative reforms and anti-corruption measures. As the collapse accelerated in early 2020 and the value of the Lebanese Lira plummeted, the Lebanese government sought a bailout package from the International Monetary Fund, whose delivery is also dependent on meaningful reforms. Following the August 4 blast in Beirut, French President Emmanuel Macron proclaimed his initiative whereby France would mobilize the international community to support Lebanon, on the condition that a new government is rapidly formed and that the aforementioned reforms are implemented.

In January 2021, the World Bank approved a $246 million loan for a 3-year program destined to provide cash assistance to vulnerable Lebanese households. However, the agreement with the Lebanese government stipulates that the cash assistance will be delivered to beneficiaries in Lebanese Liras at a new rate, rather than in dollars, while the Central Bank will use the dollars to further prolong a subsidization program that has largely benefitted the wealthier strata of society. This has prompted well-founded criticism that this loan is just another ploy by Lebanon’s political class to make use of foreign assistance to prolong the decaying politico-economic system that has served them so well.

This loan and the controversy it has generated are unsurprising given the Lebanese state’s flawed track record with foreign aid, much of which has been gobbled up by the political establishment. According to the Official Gazette, over $16 billion have been provided to Lebanon in the form of grants and loans since 1992. However, there has been little transparency regarding how foreign funds are spent, as well as little coordination between donors, leading to much duplication of efforts and questionable results at best.

The following four cases from different sectors across recent years seek to shed light on how foreign aid has at best been provided haphazardly and with poor results—at worse, feeding into the political elites‘ sectarian clientelistic networks.

Reforming the public sector

In the 1990s, the Office of the Minister of State for Administrative Reform (OMSAR) was established, a ministry without any executive powers tasked with rebuilding Lebanons public sector and ushering in much-needed administrative reforms.

Since its establishment, OMSAR has been the recipient of many grants, and much foreign aid has been provided to support the Lebanese public sectors transition to an electronic government(e-government) whereby citizens would be able to access services and carry out governmental procedures easily via the Internet, while civil servants would carry out their work more efficiently.

In 2002, a grant of $40,000 to support the development of an e-government strategy was provided to OMSAR by the United Nations Development Programme (UNDP), while another grant of $100,000 was provided a few months later to support administrative and technical capacities. In October 2003, the National eStrategy for Lebanon was prepared, a comprehensive document that sought to transform the public sector, strengthen Lebanons promising ICT sector and ensure that access to technology was widespread in the country. In February 2004, another UNDP grant of $50,000 was provided for mainstreaming the National E-Strategy for Lebanon”. At the time, according to the UN Global E-government Survey 2003, Lebanon ranked as the 69th most developed country out of 173 in terms of e-government.

However, results have proven to be desultory.

In March 2015—a little over a decade after the strategy was passed—the OMSAR claimed that Lebanon remained far from achieving a proper e-government transition due to an inadequate legislative framework, poor ICT infrastructure, and no action plan. A Digital Transformation Strategy released by OMSAR in 2018 has remained ink on paper. In the UN E-Government Survey 2020, Lebanons ranking fell all the way down to 127 out of 193 countries. Governmental websites are generally not user-friendly and in poor shape with very little useful information provided and few services and procedures that can be done online.

However, this does not mean that Lebanons political class ignored e-governments potential for self-enrichment. A report from December 2020 by local television channel LBCI revealed a conflict of interest whereby a marketing agency founded and headed by the president’s daughter was contracted to develop the websites of many governmental agencies, including ministries headed by members of the presidents party or the National Commission for Lebanese Women, headed by the presidents daughter herself.

Lebanons experience with e-government and administrative reform, despite the substantial grants received throughout the years, provides an idea on why skepticism among the international community exists.

Reforming the security apparatus 

Lebanons security apparatus has long received monetary support, professional training, and equipment from foreign states. The Lebanese Armed Forces (LAF) has received close to $2 billion in assistance from the United States in the form of weapons, ammunition, equipment, and training since 2005. The European Union (EU) has allocated $100 million for counter-terrorism operations and border security since 2006. 

Beyond strengthening military capabilities, security sector reform has been central to foreign assistance. The Internal Security Forces (ISF) (or national police) has received foreign assistance and professionalization training, such as the adoption of a new UNESCO-supported communications strategy. The ISF has also participated in various EU funded projects seeking to enhance its capacity to respond to internal threats and to uphold the rule of law, as well as to promote national cohesion in ways that adhere to international norms and standards.

Recent attempts at such reform include the Policing Pilot Project that sought to promote a community policing approach. This project funded by the American and British embassies from 2014 to 2017 was implemented in the Ras Beirut neighborhood of the capital and sought to drastically transform the Hbeish police station, which has a history tainted by incidents of ISF-led human rights abuses. The project sought to improve relations and social ties between the ISF and the local community. However, contrary to this objective, increased community policing and community engagement through foot and bike patrols has resulted in greater policing of vulnerable communities such as refugees.

Despite the extensive assistance and technical know-how invested into the security apparatus, the LAF, ISF, Riot Police and the Parliament Police have come under scrutiny for their use of excessive force in recent years and their overall increasing militarization. In 2018, Amnesty International reported cases in which human rights activists were forced to sign pledges that they would no longer engage in certain activities related to their work in exchange for their release, such as criticizing public officials on social media. According to Lebanon Support, between October 2019 and October 2020, civil society actors, activists and citizens have mobilized in 4,401 instances, with 485 of these moments of collective action met with excessive and at times lethal force, including the use of rubber bullets metal pellets, tear gas, shoot to harm tactics and torture in detainment. The systematic nature of these abuses violate basic norms and principles of international law that call upon law-enforcement agencies to exhaust non-coercive means and to uphold a duty to minimize restrain” and minimize damage and injury” according to the United Nations’ Basic Principles on the Use of Force and Firearms by Law Enforcement Officials. 

Finally, the emergence of these heavy-handed methods has coincided with a crackdown on civil liberties in the country, enforced through the security apparatus. According to Human Rights Watch, beyond excessive use of force against protestors, a pattern of targeting media outlets and individuals for publishing defamatory content of public figures and institutions has proliferated. The Anti-Cybercrime and Intellectual Property Rights Bureau (Cybercrimes Bureau), a unit within the ISF officially tasked with combating cybercrime and enhancing online security, investigated some 3,599 cases of alleged online defamation, libel, and slander between 2015-2019. Those individuals detained for alleged violations of the countrys defamation and incitement law in recent years have been subject to arbitrary arrest as well as humiliating treatment, unable to contact their relatives or legal assistance. Therefore, despite significant financial and technical expertise poured into the various instruments of the security apparatus in Lebanon, these entities have failed to reform accordingly and act with greater impunity, further securitizing public space and social life.   

Waste management and corruption 

Since the end of the civil war, waste management has been a consistent and primary target of the political class for financial gain and exploitation.

The Council for Development and Reconstruction (CDR), a public agency established in 1977 and tasked with overseeing reconstruction and development projects, contracted waste-management company Sukleen in 1994 for an estimated $3.6 million to carry out waste collection in Beirut (and Mount Lebanon as of 1996)—almost double the cost had municipalities been tasked with waste collection. Moreover, Sukleen imposed a fee of $140 per ton of garbage paid by the Lebanese government, higher than global averages despite the fact that the company did not treat or sort the waste. Sukleens contract was renewed without an open tender by the Lebanese cabinet three times, each time with an increase in collection and processing fees. It has been widely reported that Sukleen enjoyed strong ties to the Hariri family, and that then-Prime Minister Rafik Hariri played a key role in ensuring that CDR offered the contract to the company. Early in 2015, this arrangement came to an end as the landfills Sukleen used were no longer usable while the companys contract expired. The political elites bickered among themselves, each vying for the lucrative waste management contract. The deadlock led to the garbage crisis and subsequent social mobilization, prompting the government to reach an unsustainable temporary solution the following year—a four-year plan costing over $500 million—which did not  address the underlying corruption characterizing this sector.

The EU has offered assistance through waste-management schemes and projects in order to tackle the inefficiency and lack of transparency surrounding this sector. In 2005, funds were provided to open one compost and recycling plant in northern Lebanon. However, the firm contracted ended up building eight non-functioning composting drums, amounting to a loss of 2.5 million euros. Local authorities appealed to Mercy Corps to haphazardly complete the plants construction, which was done at a fraction of the original cost. In 2014, the EU launched a project in northern Lebanon and the Beqaa providing 14 million euros to equip four waste facilities with sorting and composting capacities, and in 2016, the EU launched a project to decentralize and modernize waste management in Beirut and Mount Lebanon at a cost of 21 million euros.

However, whatever positive outcomes these projects were meant to bring about have been massively diluted by political corruption. Various members of the European Parliament have sought to recuperate some 38 million euros from Lebanon back to the European Commission after it was revealed in 2019 that the aforementioned eight composting drums improperly installed had effectively poisoned the groundwater in the region and may be linked to an increase in cancer cases. In November 2019, one of the deputies addressed the European Parliament mentioning the embezzlement of these funds, demanding greater transparency over their distribution in Lebanon. He cited a letter he had received from a Lebanese MP from Tripoli who, in referring to the facility and project in question, claimed the funds never arrived and expressed frustration over the EUs inaction. It is alleged that EU funding for waste management projects have been siphoned off to members of the political establishment and their cronies. Seeking accountability and legal remedy for such cases of theft are crucial in ensuring genuine reform and continued assistance for a Lebanese state that appears to be collapsing under the weight of the political establishments corrupt indulgences.

Post-blast humanitarian assistance and embezzlement

Following the August 2020 blast at the Port of Beirut, financial and in-kind assistance flooded into Lebanon from all across the world to help the country deal with its humanitarian crisis, as thousands were in need of immediate medical assistance while the homes of hundreds of thousands were rendered uninhabitable. A few days after the blast, the international community pledged around $300 million in emergency assistance, yet with noticeable hesitance to channel these funds through the government due to the little trust that exists in its ability to properly handle such assistance and ensure that it reaches those in actual need. Many donors went as far as to say that they would “bypass the state” and provide post-blast aid through trusted local partners or international organizations. Nonetheless, state bodies, such as the Lebanese army or specific ministries, handled the logistics side of in-kind donations, such as food assistance, medical equipment, make-shift shelter equipment etc.

On August 17, the official news agency of Mauritania announced that two planes carrying 12 tons of fish were headed to Beirut, ostensibly in assistance of victims of the blast. Yet, by early September, the fate of the fish was unclear, and a Lebanese journalist launched a social media campaign demanding to know where they were. Following the online backlash, the Lebanese Army rapidly released a statement on September 7 acknowledging that it had received the Mauritanian fish and that it was coordinating with unnamed NGOs to distribute them to those in need.

On August 24, the ambassador of Sri Lanka met with the Lebanese president and [a]s a gesture of solidarity and friendship between [Sri Lanka and Lebanon],” handed over a special consignment of [1675 kilograms of] Ceylon tea.” Rather than being delivered to the blasts victims, journalists uncovered that the tea made its way to members of the presidential guard and their families. Some of the donated tea (explicitly labeled as “not for sale”) made its way to supermarkets in Beirut. The president was derogatorily dubbed tea thief” across social media as well as in the international press, while the presidents supporters argued that the tea was a personal gift that he could use as he wished.

The two incidents highlight the Lebanese state’s lack of transparency and the emboldened manner by which the country’s political elites make use of foreign assistance for their own interests. Given how some shamelessly saw the blast as an opportunity to break Lebanons international isolation and how none have been held accountable for the blast, it is unsurprising that Human Rights Watch called on international donors to not disburse emergency aid, including for housing, food and health care, directly to the Lebanese government given its inability to secure these rights.”

No aid without reforms

Corruption in Lebanon is deeply rooted and heavily ingrained in the state. The Lebanese governments history of managing foreign grants and loans has been mired in controversy, with vast sums earmarked for infrastructural and socioeconomic development ending up being squandered or embezzled.

Before providing any assistance to Lebanese state bodies, the already-reluctant international community should press Lebanons political elites on passing not only the structural reforms that have already been tied to any aid package—such as a forensic audit of the Central Bank—but also concrete anti-corruption measures. These actions should include properly implementing the existing anti-corruption laws (such as the Access to Information Law or the recently passed Illicit Enrichment Law, to name a couple) and the National Anti-Corruption Strategy 2020-2025 formally adopted in May 2020 by the Lebanese government. In addition, lawmakers in donor states must be vigilant about where their governments’ aid is being allocated and how it is being handled, with the investigations led by MEPs over corruption in EU-funded waste management projects in Lebanon offering a potential roadmap for holding Lebanons political elite accountable.

Lebanon continues to sink as a result of an intransigent political class that has evaded accountability at the expense of the population as a whole and failed to pave the way for desperately-needed reforms. As long as the same faces in Lebanon’s political class remain, it is unlikely that the country’s deeply rooted corruption will be eradicated. In the meantime, the people will continue to suffer.

Karim Merhej is a former Nonresident Fellow at TIMEP, focusing on corruption, socioeconomic inequality, and governance in Lebanon and Jordan.

Marie-Christine Ghreichi is a Campaign and Research Assistant with Crisis Action, and specialized in international security with a focus on diplomacy and the Middle East.


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