Qatar challenges Saudi influence in Lebanon
There has been a vacuum created by a decline of Saudi influence in Lebanon that Qatar now seeks to fill.
For years, Lebanon’s economic credentials have been sinking. The country with the world’s third highest public debt to gross domestic product ratio has paid an economic price for the decline in tourism from Gulf Cooperation Council states such as Saudi Arabia and the United Arab Emirates against the backdrop of major financial burdens imposed by the Syrian conflict and refugee crisis.
Within this context, on Jan. 21 Qatar announced that it will bolster the ailing Lebanese economy by investing up to $500 million in Lebanese government bonds. This cash infusion will provide the bond market with assurances following Lebanese officials’ hints at a debt restructuring later this month that spooked markets as Lebanese politicians rushed to convince investors that their money was secure in the country. Whether Qatar plans to purchase foreign-currency bonds or local-currency debt remains unclear.
“Brotherly relations”
Qatar’s decision came one day after the Arab Economic and Social Development Summit held in Lebanon, during which Qatar’s Emir Sheikh Tamim bin Hamad Al Thani and Mauritania’s President Mohamed Ould Abdel Aziz were the only Arab heads of state in attendance. As no other GCC monarch attended, the Qatari emir’s decision to do so and to meet with Lebanon’s President Michel Aoun signaled Doha’s determination to stand by the Mediterranean country in a time of major economic and political challenges.
