Lebanese leaders scramble to avert economic disaster

Aid talks with IMF continue as Shia movements end boycott of ministerial appointees

Lebanese prime minister Najib Mikati (R) walks with former Lebanese prime minister Saad Hariri (L) after their meeting at the Government palace in downtown Beirut. Photograph: Wael Hamzeh/EPA

Lebanese prime minister Najib Mikati (R) walks with former Lebanese prime minister Saad Hariri (L) after their meeting at the Government palace in downtown Beirut. Photograph: Wael Hamzeh/EPA

 

Lebanon’s cabinet is set to meet on Monday for first time since mid-October with the aim of discussing the 2022 budget while officials resume aid talks with the International Monetary Fund (IMF).

Prime minister Najib Mikati told the Nidaa al-Watan daily that Lebanon can “no longer take loans because we have not paid our debts for two years”. Instead, he stated, “We are now relying on the assistance of the [IMF], the World Bank, the European Union and the United Nations. ”

He scheduled the cabinet session after the powerful Shia Amal and Hizbullah movements ended the boycott of their ministerial appointees on condition that the agenda included only the budget, the recovery plan and economic and social problems.

Mr Mikati responded to their stand by saying, “No one can set the government’s agenda,” adding, “Anyone who refuses to discuss topics other than the budget can abstain from voting.”

The Shia movements objected to the summons of Amal stalwart and ex-finance minister Ali Hassan Khalil issued by judge Tarek Bitar, who heads the investigation into the 2020 explosion of poorly stored ammonium nitrate that devastated Beirut port and nearby neighbourhoods, killed more than 2,000 people and rendered 300,000 homeless.

Under pressure to compromise, he has shifted his focus to the foreign owners of the deadly cargo and the ship on which it arrived.

France and the EU have stepped up pressure on Lebanon’s squabbling political factions to deal with the country’s multiple crises, while civilian suffering has made it difficult for Amal and Hizbullah, which claim to represent traditionally marginalised and deprived Shias, to continue their boycott.

First step

Convening the cabinet is, however, only a first step towards stemming Lebanon’s collapse. The UN-sponsored International Support Group for Lebanon insists the cabinet must initiate essential reforms and agree a budget with the IMF that will enable Lebanon to exit its economic and fiscal crisis.

Until Beirut meets these demands, international donors who met in Paris in 2018 have withheld $10 billion (€8.8 billion) in grants and loans to be delivered over four years and $23 billion over 12 years.

The UN reports that 74 per cent of Lebanese live in poverty, the currency has lost 90 per cent of its value since 2019, electricity and water supplies are erratic, food and fuel prices are soaring and Covid-19 cases are straining overstretched hospitals.

In Lebanon’s cities and towns, scavengers sift through dumpsters for leftovers to consume and scrap to sell while protesters block highways to demand an end to hunger and privation. While the poor burn old clothes and rubbish to keep warm during the present cold snap, the wealthy ski in the mountain resort of Faraya where hotel rooms paid in dollars equal to between four and five months’ depreciated Lebanese currency wages for ex-middle class employees.