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A political shock throws Lebanon’s economy back into crisis

  • Prime Minister Saad Hariri's shock resignation could unravel the first steps in years toward injecting some cash and confidence in Lebanon's anemic economy
  • The crisis is putting at risk multi-billion-dollar plans to rebuild decaying road and electrical and communication networks and get the oil and gas sector moving

Saad Hariri, former Prime Minister of Lebanon and the leader of the Future Movement party, attends the '2nd General Assembly meeting of Future Movement party' in Beirut, Lebanon on November 26, 2016.Ratib Al Safadi | Anadolu Agency | Getty Images

Just when things were starting to look up for Lebanon's economy, a new political crisis threatens to send it crashing down again.

Prime Minister Saad Hariri's shock resignation could unravel the first steps in years toward injecting some cash and confidence in Lebanon's anemic economy. Already, the crisis is putting at risk multi-billion-dollar plans to rebuild decaying road and electrical and communication networks and get the oil and gas sector moving.

Lebanon has long been buffeted by blows from the great-powers rivalry between Saudi Arabia and Iran. But its economy sputtered on under a tacit understanding among the regional heavyweights and their local proxies that left Lebanon on the sidelines of that contest.

That may have changed Saturday when the Saudi-aligned Hariri announced his resignation in a televised statement from the kingdom's capital, Riyadh, saying Hezbollah, Iran's proxy in Lebanon, had taken the country hostage. It was an unexpected announcement from the premier, who formed a coalition government with the militant group less than a year ago.

Since then, the news has only gotten worse. Saudi Arabia, which feels it has been humiliated by Hezbollah's expanding influence in Syria and Iraq, says it will not accept the party as a participant in any government in Lebanon.

Saudi Arabia, Bahrain, Kuwait, and the United Arab Emirates all ordered their citizens out of Lebanon this week, and the Lebanese are wondering and worried about what's to come.

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