Econostrum | Economic News in the Mediterranean

Lebanon's political paralysis could be defused

Written by Frédéric Dubessy on Thursday, January 6th 2022 à 15:30 | Read 390 times

President Michel Aoun and his Prime Minister Najib Mikati would have found a common ground (photo: Lebanese Presidency)
President Michel Aoun and his Prime Minister Najib Mikati would have found a common ground (photo: Lebanese Presidency)
LEBANON. Mired in partisan quarrels, Lebanese political life could well experience a revival in a few days. This is what Najib Mikati said after a meeting with President Michel Aoun on Wednesday 5 January 2022. "We will convene the Cabinet as soon as it has received the budget," assured the Lebanese Prime Minister, specifying that this will be effective "in the next two days."

Since October 12, 2021, Hezbollah and its ally the Amal movement have been obstructing the holding of the Council of Ministers. They make their agreement to participate in a new meeting conditional on the dismissal of a judge (Tareq Bitar). The judge is in charge of investigating the explosion in the port of Beirut in August 2020 which caused 215 deaths and 6,500 injured. Eighteen complaints were filed against Tareq Bitar by various politicians while a first judge, Fadi Sawan, was dismissed after having indicted high officials (former ministers, MPs) for negligence. The origin of the disaster is the careless storage of chemical products.

68 billion in financial debts

In this context, the Lebanese Parliament was forced to delay the examination of the approval of the 2022 budget, which should be approved with the Council. This text voted, during an extraordinary parliamentary session, the government, constituted only in September 2021 while the Prime Minister was appointed at the end of July 2021, could then be convened and finally get down to saving the country. "I think that the Cabinet's agenda and the presence of the budget make it more than necessary for the Cabinet to meet, and I don't think that anyone will fail in their national duties", Najib Mikati underlines.

This paralysis prevents the taking of firm and urgent decisions to solve the serious socio-economic problems facing the country. In suspension of payments since March 7, 2020, Lebanon is going through its biggest crisis since its existence, the World Bank even speaking of "one of the worst crises in the world since 1850". Its financial debts (State, banks and Banque du Liban) were estimated by the government at $68bn (€60.2bn) in December 2021.

According to the UN, 78% of the population lives below the poverty line and a third of the Lebanese population lives on less than $4 a day.

The Lebanese pound continues to fall. The national currency reached a historic low on the night of Wednesday 5 to Thursday 6 January 2022 with an exchange rate of 30,000 pounds for one US dollar. That is to say a loss of 95% of its value since 2019.

The resumption of governance is essential to carry out the reforms required by the International Monetary Fund (IMF) in exchange for the release of its financial aid. Members of this institution are expected in Beirut at the beginning of 2022.

At the end of December 2021, Guterres raised his voice after a meeting with Michel Aoun : "I urge the Lebanese leaders to deserve their people and I urge the international community to respond to the generosity of the Lebanese people". The UN Secretary General said that "the Lebanese people expect their political leaders to restore the economy and build effective government and political institutions, end corruption and guarantee human rights."

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