Seven months have passed since the government in Lebanon of Prime Minister Hassan Diab was appointed by a coalition dominated by Hezbollah, the Free Patriotic and the Amal movements, after four months of anti-corruption protests, set against the backdrop of Lebanon’s economic meltdown. Diab was appointed and promised to put in place an expert cabinet filled with technocrats that would bring radical change to the country and work to fulfill the people’s demands.
Yet, nothing seems to have changed.
Despite Lebanon’s economic collapse accelerating following its default on its $90 billion debt in March, the government has failed to intervene to control rampant inflation and a growing number of Lebanese falling below the poverty line. Hyperinflation could be threatening Lebanon’s future as Bank of America predicted that one dollar could amount over 46,000 LL by the end of the year. Before coronavirus hit Lebanon, the World Bank in November 2019 – shortly after mass protests against a deteriorating economy and a corrupt government broke out – predicted that the portion of Lebanese below the poverty line with rise from 30 to 50 percent in 2020.
And still, the government has remained aligned with the interests of the political establishment, rather than focus on making serious reforms needed to attract foreign funding, namely a $10 billion bailout package from the International Monetary Fund. Currently, talks with the IMF have halted, with the IMF saying they will resume when Lebanon begins to make the needed reforms.
Hilal Khashan, a political science professor at the American University of Beirut said that the new cabinet has failed to show any independence from its political sponsors, including Hezbollah the Free Patriotic Movement and Amal.
“The cabinet still applies the policy of mouhassassa to every ministry, regardless of the people’s interests,” he said. Mouhassassa is the division of power based on sectarian and political interest, rather than on merit.
For political analyst Sami Nader, from the Levant Institute for Strategic Affairs, the first signs of a lack of independence were evident with the capital control law that was drafted by Finance Minister Ghazi Wazni presented in March, but was shelved without explanation. Today, capital controls are applied unevenly and arbitrarily by Lebanese banks, barring those in the country access to their bank accounts.
If the law was to be implemented, it would limit outflows and withdrawals from Lebanon on everyone, including the political establishment. Under the current de facto system, small depositors, like the majority of Lebanese, have primarily borne the burden.
The government, under Hezbollah pressure also reversed in May a decision it had made to build two power plants.
In May, with pressure from Hezbollah, the government announced it would build a controversial power plant in Selaata north of the capital Beirut, the birthplace of former minister Gebran Bassil who heads the Free Patriotic Movement and is the son-in-law of President Michel Aoun, Hezbollah’s ally.
The Selaata project is linked to a plan to install Floating Storage and Regasification Units (FSRUs) that allow for natural gas to be used at plants. But the Selaata project would cost around $200 million in land appropriation alone, and some Cabinet ministers have objected the project on these grounds. The project is said to favor the FPM.
A few months ago, the Cabinet also witnessed a tug of war between Speaker of Parliament Nabih Berri and President Aoun over judicial appointments, mainly over judges Ghada Aoun, who is close to the president, and Rahif Ramadan, who is close to Berri.
The appointments were viewed as highly political, and the president has now blocked all the judicial appointments, after their approval by the minister of justice and the Superior Council of the judiciary.
“The same can be said of the financial appointments made recently, which were also highly politicized,” said Nader.
Last month, Lebanon’s cabinet agreed on 18 long-awaited financial appointments, including on four new vice-governors at the central bank including, Wassim Mansouri, Salim Shaheen, Bashir Yaqan and Alexander Muradian.
Ironically, the four vice governors came from local banks with strong links to political parties, such as Bankmed which is said to be tied to the Future Movement, led by former Prime Minister Saad Hariri, and Cedrus which is said to be linked to the FPM.
“Similarly, appointments of the board of directors of the [state-owned utility] Electricité du Liban only took place this week after a meeting between Bassil and Berri and a power sharing agreement between the two men,” points out Khashan.
Without a doubt, the Diab government’s biggest failure, analysts agree has been its negotiations with its IMF, which after 16 rounds have hit rock bottom, with the government and the parliament disagreeing over the total value of losses accrued by the state.
“This government is far from being independent,” said Khashan. “Its loyalty is to the regime in place.”
For Nader, regardless of the government in place, the current political system can in no way reinvent itself.
“The only solution is for it to be overthrown.”