CONTENT PREVIEW
Country Risk

Saudi Arabia's policy failures in Lebanon enhance most Lebanese parties’ incentives to co-operate with Hizbullah

15 December 2017
Saad Hariri greets supporters in Beirut on 22 November 2017. Source: STR/AFP/Getty Images

Key Points

  • Saudi Arabia’s escalation in Lebanon by holding its Prime Minister Saad Hariri and compelling his resignation has had the unintended consequence that Lebanon’s government is now likely to work more closely with Hizbullah.
  • Saudi Arabia and its Gulf allies, the UAE and Bahrain, retain the option of expelling Lebanese foreign workers from their countries, severing banking relations with Lebanon, and divesting from the country, but this would all but end their leverage over the country.
  • Saudi Arabia’s former main proxy, Hariri, now has an incentive to allow government business to proceed in the Council of Ministers, including by facilitating the issuance of contracts for energy exploration following the conclusion of the bidding round in October.

Event

Lebanon’s Prime Minister Saad Hariri withdrew his resignation on 5 December 2017, one month after he had announced the decision.

On 4 November, Saad Hariri announced from Saudi Arabia that he was resigning as prime minister of Lebanon due to Iranian influence in the country and a “credible threat” against his life from Hizbullah. IHS Markit now assesses that the decision was forced, in content and in timing, by Saudi Arabia, notably Crown Prince Mohammad bin Salman, who is escalating a longstanding confrontation with Iran across the region. IHS Markit originally assessed that this would pave the way for extended political instability, as we had not anticipated that Hariri would revoke his resignation. Rumours of his resignation had been published in local media over previous months. Saudi Arabia’s detention of Hariri seems, however, to have backfired badly, with the unintended consequence that Hariri will probably be driven even closer to Hizbullah.

Saudi miscalculation

According to several foreign media reports and IHS Markit sources, countries with key stakes in Lebanon’s stability, such as France and the US, intervened to convince Saudi Arabia to release Lebanon’s Prime Minister and allow him to leave the country with his family.

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