Will Mikati’s government stop the economic and political paralysis of Lebanon?
By John Solomou |
Update: Sep 27, 2021 9:42 AM STI
Nicosia [Cyprus], September 27 (ANI): Last Monday, Lebanese billionaire Najib Mikati managed to win a vote of confidence in parliament in favor of his 24-member government.
This came after 13 months of absolute political and economic paralysis, which brought Lebanon closer to being named as a failed state. But the big question is whether Mikati will be able to make the necessary reforms and produce a credible economic plan to unlock the billions of dollars pledged by international donors and a bailout by the International Monetary Fund?
“Our government has emerged to light a candle in this deep darkness and light a torch of hope and determination that we are able to combine our most sincere efforts for this beloved country,” Mikati told parliament.
Indeed, the fact that there is a government in Beirut after 13 horrific months is a beacon of hope for ordinary Lebanese, as nearly three quarters of them live in poverty. The economic crisis that Lebanon is currently facing is so acute that the World Bank has ranked the country among the three worst crises in the world in the past 150 years. It is the result of decades of fiscal mismanagement which have exacerbated Lebanon’s economic difficulties.
Bloomberg reports that Lebanon’s annual inflation rate has reached the highest of any country followed by the media conglomerate, overtaking Zimbabwe and Venezuela, as the financial crisis in that Middle Eastern country worsens. The Lebanese currency has lost about 90 percent of its value, causing inflation and almost completely eroding the purchasing power of the population. Waves of protesters have expressed anger at the banks for applying capital controls that do not allow them to withdraw their money. Several banks were set on fire.
Lebanon is short of everything: from fuel and gas to medicine and bread. There are long lines for bread and petrol, long periods of blackouts, and virtually empty pharmacies and supermarkets. As the value of the Lebanese pound has collapsed, essential goods such as food, fuel and medicine are generally sold in dollars, but in recent months, dollars are almost impossible to find.
Consumer prices increased 10.25% from the previous month, while food prices increased 20.82%. The economy in 2020 contracted by around 25%. Unemployment has reached unprecedented highs with the closure of hundreds of businesses, sparking a wave of emigration among the country’s educated youth.
Politicians have done little to stop the collapse that plunged three-quarters of the population into poverty and led to severe shortages of electricity and fuel. The various political parties could not even agree on forming a government for 13 months, as each wanted a larger share in government portfolios, despite the country facing imminent economic collapse. The weak interim government has been unable to push changes through parliament, as power remains in the hands of proxy militias who owe their loyalty to powers outside their own country.
The desperation of the Lebanese people came to a head last August when a huge explosion ravaged the port of Beirut, killing 218 people, injuring more than 7,000 and destroying much of the capital. The explosion was caused by 2,750 tonnes of ammonium nitrate stored in the port, without proper security measures, for more than six years. The material damage caused is estimated at US $ 15 billion.
In December 2020, former Lebanese Prime Minister Diab and three former ministers were charged with negligence in the explosion at the port of Beirut. Judge Tarek Bitar, charged with investigating the port explosion, attempted to question the three former ministers and MPs as parliament followed blocking tactics around the vote to lift their immunity. However, last week Bitar scheduled interrogations for the trio, as their legal immunity is currently lifted until the next session of parliament which resumes on October 19.
As state coffers are depleted, the Lebanese government is unable to subsidize the cost of fuel for consumers and for power plants which now provide electricity for a few hours a day. Families used generators to generate the electricity they needed for a few months, but as their money ran out they have now given up on the effort and are now sitting in the dark. Motorists have to wait many hours at gas stations for fuel if they still have a few dollars to pay for it.
The desperation felt by ordinary Lebanese is so great, that some openly express the wish that a foreign country can occupy Lebanon, so that they can at least have electricity, water and security.
CaludeSalhani, columnist for Arab Weekly, points out: “There is not a lot that a person can handle: lack of electricity, lack of security, widespread corruption in government, low high unemployment, rising cost of living. , pollution, lack of clean air and all the other misfortunes that plagued this once pristine country often described as the Switzerland of the Middle East.
On September 16, the Shia Islamist political party and militant group Hezbollah won a political victory by bringing into the country two convoys of 40 trucks of Iranian fuel which, according to Hezbollah Secretary General Hassan Nasrallah, would be handed over to institutions such as hospitals, the Red Cross, civil protection forces and orphanages.
Prime Minister Mikati traveled to Paris on Saturday where he met French President Emmanuel Macron, saying he went there to reassure Macron that he and his new government were determined to reform. However, it is not at all certain that he will be successful in this task.
As investigative journalist Kareem Chehayeb puts it: “Many experts believe Mikati will struggle to make meaningful changes and that at best Lebanon is considering ‘Band-Aid’ type fixes that do not attack the underlying causes of its current crisis and put the country on a more solid economic footing. “(ANI)