Lebanon continues to stagger on without a new cabinet in place. After almost four months on from the resignation of the incumbent government, the economy is in free fall. With no clear strategy forthcoming, is it time for the country to invite an international team of experts to help stop a complete catastrophe?
The economy is a disaster and poor governance over the years has resulted in billions of dollars wasted on poor infrastructure.
Utilities springs to mind, with electricity supply burdening the economy with billions of dollars in losses since 2005. The Lebanese economist Marwan Iskander estimated costs of $50 billion incurred over the last twelve years.
Infighting among Lebanese politicians highlights the country’s clear divisions that need to be surmounted to get the country on a clear, prosperous path.
With demand for the American dollar increasing, the Lira has slumped. What is the solution? No one in Lebanon seems capable of tackling the issue. Can the IMF help?
What exists of the economy is a damning indictment of the country’s politicians. The foreign policy is vague with no clear direction: Should the country ally with the East or the West? Should it restore relations with the Syrian regime? No one seems to know.
Lebanon has witnessed waves of refugees arrive from Syria, with an estimated 1.5 million already in the country. Top-down strategy and leadership are desperately needed to handle this issue.
Losing large numbers of the local population to brain drain, as they leave to pursue opportunities in other parts of the world in a bid to bring some stability to their lives, will have a severe impact on Lebanon’s future growth, hindering its economy further.
Coronavirus has only aggravated the situation further, leading to the closure of lots of businesses. Retail has been hit hard. With no official data published about the true scale of economic destruction, no less than fifty international brands have shut their doors and left Beirut.
Of course, Lebanon’s divided political community will not encourage the arrival of international economists, and other experts. Some might consider this part of a colonial imperialist conspiracy against the country, while others prefer to keep things as they are, and postpone reforms.
Last year’s port blast illustrated the resistance to international help. The Lebanese President and Iran-backed Hezbollah conspired to block all international investigation attempts of the world’s third biggest port explosion.
The idea of having the UN, IMF or similar organizations in Lebanon to bring stability on several fronts seems far-fetched, but it could be of real benefit to the country.
If the idea of inviting in experts that can help overcome economic problems builds traction, then it will ignite a new political conflict in the country.
When Hezbollah lifted its veto on negotiations with the IMF it paved the way for official talks that never reached a final conclusion. The reason was that Lebanon failed to present unified numbers for the IMF. Indicators and figures presented by the Central Bank were different from the ones presented by the Ministry of Finance. The cabinet resigned, putting the negotiation process on hold. It remains so.
The United Nations Special Coordinator for Lebanon, Jan Kubis, criticized the continued delay in forming the new cabinet and tweeted on Monday: “The economy and financial, banking system is in shambles, social peace starts to crumble down, security incidents on the rise, and the edifice of Lebanon is shaking on its foundations. And political leaders seem to wait for Biden. But this is Lebanon, not the USA.”
This tweet, after many others, reflects how the international community underestimates the capacities of the Lebanese politicians to resolve the current crisis and their reluctance to form a new cabinet.
Claims that it is not in the best interests of the President to sign the decree of cabinet formation because it does not grant him autonomy from the crippling third, a term referring to the process of 11 ministers of the 30 member cabinet resigning, triggering the resignation of the whole cabinet, and paralyzing the group from acting and blocking political action when the agenda does not suit those that resigned.
In the case of a Presidential vacuum, the incumbent cabinet takes over according to the Constitution. Collectively, the Council of Ministers exercise the executive authority fully, and earn the prerogatives usually granted to the President. The President himself, and his party (the Free Patriotic Movement), together with Hezbollah, will not accept granting the rights to the crippling third to other parties.
With all the accumulating problems in Lebanon, and in the absence of any potential political solutions the prospects for the country’s future appear dim.
As the French Initiative fades away as a practical solution, Lebanon should look beyond, and invite international experts to offer strategies that will get the country back on its feet.