Lebanon’s new PM pledges to stabilise economic meltdown – Gulf News

Holding back tears, Mikati speaks about Lebanese mothers who cannot feed their children
Beirut:  Lebanon’s new Prime Minister Najib Mikati pledged on Friday to gain control of one of the world’s worst economic meltdowns, saying lifting subsidies would be critical for the small country’s government formed after a year of political stalemate.
Holding back tears, Mikati, one of the richest men in the country, said he recognized the pain of Lebanese mothers who cannot feed their children or find aspirin to ease their ailments, as well as to students whose parents can no longer afford to send them to school.
“The situation is difficult but not impossible to deal with if we cooperate,’’ Mikati told reporters at the presidential palace, where the new government line-up was announced.
The agreement breaks a 13-month deadlock that saw the country slide deeper into financial chaos and poverty over the past year.
Lebanon has been without a fully empowered government since the catastrophic August 4, 2020 explosion at Beirut port, which forced the resignation of then Prime Minister Hassan Diab’s government. Rival political groups had been locked in disagreement over the make-up of a new government since then, hastening the country’s economic meltdown.
The new Cabinet of 24 ministers headed by Mikati, a billionaire businessman, was announced by the president’s office, and later by the Secretary-General of the Council of Ministers, Mahmoud Makkieh. Ministers were handpicked by the same politicians who have ruled the country for the past decades, blamed by many for corruption and mismanagement leading to the country’s current crisis.
Many of them, however, are experts in their field, including Firas Abiad, director general of the public hospital leading the COVID-19 fight who has won praise for his transparency in handling the pandemic. A top Central Bank official, Yousuf Khalil, was appointed as finance minister, and Bassam Mawlawi, a judge, is the new interior minister.
Mikati, a businessman tycoon from the northern city of Tripoli, was tasked with forming a new government in July. He is widely considered to be part of the same political class that brought the country to bankruptcy. He served as prime minister in 2005 and from 2011 to 2013.
“I hope we can fulfill people’s aspirations and at least stop the collapse,’’ he said on Friday. He said the government will launch a rescue plan for the country.
It was not immediately clear what sudden compromise resulted in the breakthrough on Friday. The announcement of a new government comes after recent US and French pressure to form a Cabinet, after Lebanon’s economic unraveling reached a critical point with crippling shortages in fuel and medicine threatening to shut down hospitals, bakeries and the country’s internet.
Salem Zahran, a Lebanese journalist and political analyst, said a new government provides a “dose of oxygen’’ for Lebanese whose lives have been upended by the crisis.
“A positive shock has happened, but we have to see how the government will work, and how they will negotiate with the IMF,’’ Zahran said.
In the hours since the government formation, the national currency gained strength in the black market, rising to 15,000 to the dollar down from 19,000.
The currency has lost 90 per cent of its value to the dollar since October 2019, driving hyperinflation and plunging more than half the population in poverty.
The international community has refused to help Lebanon financially before wide reforms are implemented to fight widespread corruption and mismanagement.
Sami Nader, a Lebanese political analyst, argued there was little hope for a breakthrough if the dynamics that prevailed during the cabinet line-up negotiations remained in place.
“The continuation of quota politics and bickering over every reform and decision would mean no departure from what the caretaker government was able to do,” he said.
“It was the same cooks who formed this government, so can they offer a different meal,” he asked.
Very few of the international community’s demands for a broad programme of reforms have yet been met, hampering the disbursement of foreign assistance.
Further stalling the bankrupt state’s recapitalisation has been the government’s failure to engage the International Monetary Fund and discuss a fully-fledged rescue plan.
“The new government will have to prepare legislative elections and ensure they are held on time,” the analyst Nader said.
Parliamentary polls are due next year, with many pinning their hopes on the ballot bringing in fresh blood but others doubtful that an unchanged electoral system can change the game.
“There is practically only one door on which to knock for this government and that is the International Monetary Fund, because there is no other way out of the crisis,” Nader said.

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