Hezbollah Monitor Inc.

Lebanon:  Anatomy of a Collapse 
 

Between 2010 and 2019, Lebanon did not simply drift into crisis; it was methodically steered there. A patronage machine, designed rather than improvised, captured the state, raided its coffers, and hollowed out its institutions, all while advertising itself as democracy in a difficult neighborhood.

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Public spending was the chosen weapon. Bloated payrolls, fictitious jobs, padded contracts, and rigged procurement turned the budget into a subsidy for the political class. State-owned enterprises—once meaningful sources of revenue—were slowly bled by partisan appointments and corruption until they ceased to function as anything but vehicles for patronage. The deficit tripled. Public debt doubled. None of this was a surprise; it was a business model.

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At the same time, Lebanon lived far beyond its means. An overvalued peg kept the currency cosmetically stable while the country ran an average annual current account deficit in the tens of billions. Over the decade, roughly $104 billion in hard currency left to pay for imports. Remittances—only a fraction of that—could not plug the hole. Fuel smuggling to Syria further eroded foreign reserves, as imported diesel and gasoline, a third of Lebanon’s net imports, crossed the border and the dollar proceeds rarely re-entered the formal economy. The banking system, celebrated abroad for its “resilience,” was in fact financing a slow-motion run on the country.

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In this landscape, Hezbollah did not simply coexist with a weak state; it flourished because of it. The movement’s political bloc holds the parliamentary upper hand, and its parallel structures—military, social, financial—operate most effectively where the state is absent or discredited. Genuine reform, the kind that would enforce transparency, curb illicit flows, and restore institutional authority, would threaten the ecosystem that sustains Hezbollah and the wider patronage cartel. It is therefore perpetually promised and perpetually deferred.

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Lebanon’s tragedy is not only that it was looted; it is that the looting was structurally incentivized and politically protected. The post-Taif order treated corruption not as a pathology but as the price of keeping the system running. This project traces how that bargain was struck, how it enriched a few, armed a non-state actor, and left an entire country staring into the possibility not of recovery, but of slow decomposition.

Our "Lebanon: Anatomy of a Collapse" project consists of five parts narrated videos, info-charts, and analyzed data that cover Lebanon's fiscal deficit, balance of payment, sovereign debt, currency peg, and various recovery plans, prospects and recovery requirements.