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Rebuilding the Port of Beirut: a competition for geopolitical influence

Port of Beirut
A view of Beirut’s port in the aftermath of a huge chemical explosion that disfigured the Lebanese capital, on August 14, 2020. Photo: AFP

By: Marie-Lys Larroque

In the wake of the explosion that devastated the Lebanese capital on 4 August 2020, multiple countries made offers to participate in the reconstruction of the Port of Beirut alongside sending their condolences. Far from being disinterested acts of solidarity, these propositions constitute strategic moves in a geopolitical game for greater influence over the Eastern Mediterranean. France is likely to stand out from the rest of the competition due to its historical and cultural ties to Lebanon, its current involvement in pushing for reforms in the country and its geopolitical position.

What is at stake?

Rebuilding the Port of Beirut, which has partially resumed its activities, is a priority for Lebanon as it is the main access point for imports, on which the country largely depends. The World Bank already estimated that economic losses in the transport sector and port activities would range between $580 and $710 million, on top of the reconstruction cost.

In the aftermath of the explosion, several countries offered to rebuild the Port of Beirut. These statements should not be mistaken for disinterested friendly gestures: they are strategic moves in a geopolitical game for greater influence over the Eastern Mediterranean. Indeed, the Port of Beirut ranks among the 10 most important seaports in the Mediterranean and has long been considered the gateway to the Middle East. As Lebanon is likely to adopt a build, operate and transfer (BOT) scheme to salvage the strategically important infrastructure, this implies that whoever is responsible for its reconstruction will control it and be the main beneficiary of its activities for the years to come.

The players: China

Both regional and international powers are among the contenders. Kuwait quickly offered its help to restart operations at the port and pledged to rebuild its large grain silo, which was originally financed by a Kuwaiti development fund in 1969. Despite the Gulf country’s quick response, its ambitions regarding the Port of Beirut do not seem to extend further.

China is also said to be interested in getting involved. Before the explosion, China Merchants Port was notably eyeing the new public tender to take over the management of Beirut’s container terminal from 2020. As Chinese companies exercise control over several ports in the region – such as Alexandria in Egypt, Haifa in Israel and Piraeus in Greece – securing a foothold in Lebanon would anchor China’s domination over maritime trade routes in the Eastern Mediterranean. Such a move would fit in with China’s Belt and Road initiative and allow it to bypass the complications caused by historic political tensions when shipping goods to Arab countries from Haifa.
Hezbollah’s receptivity to Chinese investments also places the country in a favourable position.

However, many Lebanese are opposed to China managing one of the country’s most essential pieces of infrastructure due to Lebanon’s historical orientation towards the West. Beijing’s takeover of the port of Hambantota for 99 years, following Sri Lanka’s failure to repay a debt of over $8 million to Chinese companies that participated in its construction, is a worrying precedent that reinforces such reluctance.

Accepting a potential proposal from China also runs the obvious risk of alienating the US, which warned its Middle Eastern allies against Chinese investments at the start of the summer. It is worth noting that China has not officially addressed the matter, which might suggest that it is not interested. Especially considering that it already benefits from the current situation: much of the traffic usually passing through Beirut has been redirected to the port of Tripoli, which Beijing has rehabilitated for its own use.

France flag
The French national flag is pictured in front of Beirut’s port on October 26, 2020. Photo: THOMAS COEX / AFP

The players: France

Next up is France, the first country to have expressed its willingness to rebuild the Port of Beirut. Indeed, the CEO of CMA CGM, Rodolphe Saadé, tweeted about it on 7 August while travelling to the Lebanese capital with President Macron. Before the explosion, the French global shipping group was already the primary competitor for the 2020 tender for the container terminal.

Overall, France undeniably stands out as the natural choice due to its historical and cultural ties to Lebanon and the Franco-Lebanese roots of CMA CGM. Moreover, Paris imposed itself as a leading force in managing the crisis: it deployed military capacities to assist Lebanon in the aftermath of the explosion, co-organised an international aid conference with the United Nations and issued a draft proposal for reforms to Lebanon’s political parties.

Additionally, French investments would not provoke tensions with the US or outrage from the population. Thus, France is highly likely to be chosen to engage in the port’s reconstruction, and could potentially join forces with the United Arab Emirates.

The players: Turkey

Turkey’s interest in the Port of Beirut, expressed on 8 August, further increases the likelihood of the reconstruction being funded by France. Since the only Turkish ports in the area are in Turkey itself, Beirut represents an opportunity for Ankara to broaden and solidify its sphere of influence. However, Turkish expansion in the Eastern Mediterranean, from the signature of a Memorandum of Understanding with Libya’s Government of National Accord to increased drilling activities for natural resources near Cyprus and Greece, has so far been met by stark criticism from Paris as well as a naval deployment. France is thus extremely likely to make a move to prevent Turkey from advancing its own pawns.

Playing the long game

Ultimately, the reconstruction process will almost certainly be hampered by the pace of reforms pertaining to the corruption that pervades the port’s management and Lebanese politics in general. Indeed, France, or any other country, is unlikely to invest in the infrastructure before structural changes have been implemented. This will be a long process, as Lebanon is currently back to square one following the resignation of Mustapha Adib, the freshly appointed prime minister, due to his inability to form a government. Even then, France’s prominent role in pushing for reforms places it in a privileged position to unlock the situation and win over the Port of Beirut.

Remark: This article was originally published by https://globalriskinsights.com/ in October 18, 2020.

“The views expressed in this article are the author’s own and do not necessarily express Fanack’s views.”

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