Global Insight Perspective

Significance

Almost one week into Israel's military assault against neighbouring Lebanon, the security volatility threatens to drag the region into all-out war as international efforts to end the conflict prove unconvincing.

Implications

Concern over mounting unrest in Lebanon has precipitated a foreign exodus from the country, with governments across the globe drawing up plans to evacuate their nationals as a matter of urgency. As the Israeli offensive continues and the Lebanese Hizbollah movement vows all-out war against Israel, the crisis is fast descending to levels not seen in the region since the darkest days of the Arab-Israeli wars of the 1970s and 1980s.

Outlook

Lebanon has been termed a "destruction zone" by the country's premier Fuad Seniora, whose calls for an immediate ceasefire and demands for international pressure on Israel to cease its military assaults have inevitably gone unheeded. The longer the conflict continues, and the greater the civilian casualties on both sides, the more entrenched the battle lines are expected to become; the region once more is on the brink of war.

Risk Ratings

Given the worsening political and security crisis across the wider region, Global Insight is making the following downgrades to reflect the changing Middle Eastern environment:

Lebanon: political risk from 3.25 to 3.5; economic risk from 3.25 to 4.0; operational risk from 3.25 to 4.0; and security risk from 3.5 to 4.0.

Israel: operational risk from 2.25 to 2.5; and security risk from 3.5 to 3.75.

Syria: security risk from 3.0 to 3.25.

An explanation of the changes is offered in the Outlook and Implications section at the end of this article.

Preparing for the Worst

Governments across the world this morning are drawing up plans for the evacuation of thousands of foreign nationals from Lebanon, in measures reminiscent of the country's descent to anarchy following the invasion by Israel in the early 1980s. That Lebanon is once more facing the same fate, despite years of regeneration and hope, demonstrates the extent to which the Middle Eastern peace prospects have diminished to the lowest ebb in decades. Should the current crisis continue - and there is little indication to suggest it will abate anytime soon - the fruits of recent bridge-building across the region are about to go up in smoke just as Lebanon's own bridges and infrastructure have collapsed under the weight of Israel's assault.

The UN, which has proven largely ineffective since the Israeli-Lebanese crisis exploded last week, is mulling plans for a well-armed "stabilisation force" along the two countries' border. Although there are little details available as to where the troops would come from and how well armed they would be, the reasoning at present appears to be to send a contingency of international troops to prevent the Hizbollah movement from firing rockets into Israel. Global leaders at the G8 summit in Russia yesterday struck a common albeit difficult consensus yesterday in a statement blaming "extremist forces" for destabilising the region, in a reference no doubt to Hizbollah. However, given the sensitivity of the political and security situation, it was perhaps inevitable for critics within the region to slam the G8's position. More alarmingly for the world leaders, the staunchly pro-U.S. and Israel-friendly Egyptian government criticised the G8 statement. According to Egyptian Foreign Minister Ahmed Abul Gheit, the G8 response was "lacking in strength". In an emergency session on Saturday (15 July), the Arab League similarly offered a less-than-reassuring assessment of the burgeoning crisis, when a final communiqué lamented the "death" of the peace process. Arab journalists at the emergency session, however, slammed regional governments for not offering any proactive support to Lebanon. 

Military Barrage Continues

As the international arbitration stumbles from one uncertainty to another, the military operation on the ground in Lebanon and over the border in Israel shows no signs of abating. Such is the intensity of the conflict that the Israeli military and the Hizbollah leadership are now both engaged in a battle of wills over which side can inflict the greater damage. Although Lebanon cannot meet the might of the Israeli air and ground forces, Hizbollah has demonstrated an unprecedented capacity to attack major Israeli population centres, thereby sending Israeli citizens into a state of panic and the armed forces into even greater military overdrive. In the midst of battle, the civilian populations continue to suffer greatly, with around 170 Lebanese and 12 Israeli civilian casualties confirmed in six days of warfare.

Lebanon is now cut off from the outside world, with roads, bridges and the country's only international airport off limits to all but a few daring individuals. As UN and European Union (EU) officials scramble to the country to seek a way out of the crisis, the military operation continues to take precedence over all else. The Hizbollah rocket capability has alarmed Israel, following the faction's rocket fire on the Israeli coastal city of Haifa. At least eight Israeli railway workers were killed in the assault, the first such direct mass civilian deaths within the Jewish state as a result of enemy fire. The Israeli response was firm and immediate; the rules of the game have now changed, thundered Prime Minister Ehud Olmert. "Nothing will deter us whatever far-reaching ramifications regarding our relations on the northern border and in the region there may be", an incandescent premier said. Not to be outdone in the tough-talking stakes, Hizbollah leader Sheikh Hassan Nasrallah vowed to bring further destruction to Israel. "We will use all means", the faction chief told Lebanese radio. "As long as the enemy has no limits, we will have no limits". 

The Hizbollah military response has proven far from surprising, but what has caused further alarm among some Israeli military officials is the movement's continuing use of sophisticated weaponry to target Israeli positions. An Israeli warship enforcing a blockade of Lebanon was hit by a missile on Saturday, killing four sailors. Israeli military observers claimed that the technology was provided by Iran to Hizbollah, further raising the regional stakes in a crisis that threatens to spread beyond the Lebanese border. Following the attacks in Haifa, Israeli cabinet ministers accused Syria of providing weapons to Hizbollah, a charge the latter inevitably denies. However, given the regional ramifications of the worsening conflict, both the Syrian and Iranian administrations have warned Israel not to extend the war beyond Lebanon. Syrian government ministers threatened "an unlimited, direct and firm response using all means necessary" to an Israeli assault whilst the Iranian leadership threatened "unimaginable losses" on Israel should it decide to attack Syria. The current conflict therefore risks spiralling out of control and dragging the region into a war with unforeseen consequences and untold misery.

Outlook and Implications

International efforts at ending the Middle East conflict have bordered on a plethora of statements and calls for restraint, but no real action against either Israel or Hizbollah to end their dangerous offensives. French Prime Minister Dominique de Villepin is expected to arrive in Lebanon later today, to extend France's support for the wounded country. In the midst of the crisis, however, Lebanon is facing both political meltdown and severe economic dislocation, particularly given that the conflict with Israel has hit the peak tourism season on which the country's economy thrives. Although certainly a concern for the government, the economic woes are fast losing importance to both the civilian and emotional costs of a conflict that rekindles fears of mass destruction, on a country that has historically suffered as a battleground for other people's wars.

The battle between Israel and Hizbollah is bound to be a long-term one. The Israeli military has vowed to destroy the movement; however, such an undertaking may require a ground assault, which the authorities in Israel will find considerably problematic. For one, a ground invasion will take Israel back 20 years and into a land where the armed forces were barely six years ago forced to withdraw amid Hizbollah and Lebanese celebration. The Hizbollah dimension within Lebanon is also somewhat unique, given the movement's recognition within the country not only as an armed faction, but a provider of welfare services and political representation. To seek Hizbollah's destruction is to seek the end of Shi'a political influence in a highly sectarian Lebanese political system. Needless to say, any ground offensive would be bound to inflame Arab anger further, with neighbouring states including Syria, Egypt and Jordan increasingly threatened by domestic political unrest. The solution to the current crisis is certainly not a military one, but the lacklustre diplomatic tempo is unlikely to provide much by way of an alternative at this stage.

Global Insight has downgraded Lebanon's political, economic, operational and security risks following the Israeli military offensive. With a fragile political coalition threatened with break-up and the country's economy already suffering under the weight of aerial bombardment, Lebanon's overall risks are likely to increase. Similarly, Israel's security and operational risks have been downgraded in light of the Hizbollah rocket attacks in the north of the country. With Israeli accusations flying against Syria for arming and siding with Hizbollah, the country's security risks have also been downgraded to reflect the tense relations with Israel. Although the threats of a military assault against Syria remain minimal at present, a conflagration with Israel cannot be dismissed entirely.

Raul Dary

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